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Mesabi Trust Message Board

  • cmg.cmg1 cmg.cmg1 Mar 31, 2011 1:09 PM Flag

    MSB long or CLF long?

    Putting aside the excellent dividend MSB provides, do you think MSB is a better iron/ore longterm investment than CLF? They both seem to have excellent financials.

    I hold MSB shares and am not sure if it is also worth investing long term in CLF vs. just allocating more to MSB.

    Thank you for any comparables and advice on this!
    best,

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • There is a very basic & important difference between the 2:

      MSB is a royalty trust with complex tax rules surrounding it which may keep you distribution tax free until you sell the MSB

      CLF is a corporation which pays dividends - the same as any other publicly traded corporation. Taxes are paid on them each year at the dividend tax rate, if applicable for the tax return year.

      Apples and oranges are both fruit. MSB and CLF both pay out cash. There is a big difference in how they "taste" to the investor. Research the posts here for details.

      • 1 Reply to PMDonovan1
      • For me not really, I trade inside an IRA. I pay my taxes on the distribution of my IRA. This distribution is ordinary income. I manage to not pay any taxes. My distribution, I am forced to withdraw, is set not to trip any taxable income level. My profits stay in my IRA, when I am 80 I will need it.

        So MSB is a good deal for me.

    • This is the proof that MSB is a better investment. The original investment is the same $9870 for CLF and $9,868.32 for MSB, the number of share is the difference. The profit is 3 times that of CLF after an $13 dollar increase. (12.04% for CLF and 32.47% for MSB) The dividend is 4.6 time bigger for MSB than CLF, $0,14 for CLF and $0.65 for MSB. $0.65 was the last MSB dividend.
      Any question?


      CLF 4/9/2011 price Investment Shares Gain % profit
      1 $98.70 $9,870.00 100
      2 $99.70 $9,970.00 $100.00 1.00%
      3 $100.70 $10,070.00 $200.00 2.01%
      4 $101.70 $10,170.00 $300.00 3.01%
      5 $102.70 $10,270.00 $400.00 4.01%
      6 $103.70 $10,370.00 $500.00 5.02%
      7 $104.70 $10,470.00 $600.00 6.02%
      8 $105.70 $10,570.00 $700.00 7.02%
      9 $106.70 $10,670.00 $800.00 8.02%
      10 $107.70 $10,770.00 $900.00 9.03%
      11 $108.70 $10,870.00 $1,000.00 10.03%
      12 $109.70 $10,970.00 $1,100.00 11.03%
      13 $110.70 $11,070.00 $1,200.00 12.04%

      MSB 4/9/2011 price
      1 $36.96 $9,868.32 267
      2 $37.96 $10,135.32 $267.00 2.71%
      3 $38.96 $10,402.32 $534.00 5.41%
      4 $39.96 $10,669.32 $801.00 8.12%
      5 $40.96 $10,936.32 $1,068.00 10.82%
      6 $41.96 $11,203.32 $1,335.00 13.53%
      7 $42.96 $11,470.32 $1,602.00 16.23%
      8 $43.96 $11,737.32 $1,869.00 18.94%
      9 $44.96 $12,004.32 $2,136.00 21.65%
      10 $45.96 $12,271.32 $2,403.00 24.35%
      11 $46.96 $12,538.32 $2,670.00 27.06%
      12 $47.96 $12,805.32 $2,937.00 29.76%
      13 $48.96 $13,072.32 $3,204.00 32.47%

      Case close

    • I answered this several days ago. It is a matter of money at risk. Calculate the return on investment as a percent of money at risk. Include the dividends. CLF dividend is $0.14, MSB $0.65 and $0.90. I am invested in MSB the unit is half the price of CLF and the dividend is 4 times minimum. MSB dividend is not set on the CLF profits but the amount sold and the sell price.
      MSB is the better investment for the same amount of money at risk.

    • It is a matter of money. You prepare a spreadsheet and lay out your holding in MSB. You research your earning comfort zone. Adjacent to your MSB holding you lay out how much CLF you need to buy to equal your MSB profit and how long it would take.
      Once you have the answer, you judge the risk and the rewards. I have not made the spreadsheet, my guess is that MSB will be more performant with less money at risks.

 
MSB
20.25-1.18(-5.51%)Sep 22 4:02 PMEDT

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