Thank you to roundrobin for his continued (and appreciated) work on providing a clearer picture as to what BPT is worth.
My question is, since this is a royalty trust, would investors be more inclined to reinvest dividends at present moment (life expectancy of trust, share price) or get cash and reinvest as they see fit.
If you extend it out to the ultimate conclusion, reinvesting of payouts does not make sense for a declining asset as you end up reinvesting in a smaller and smaller asset which ultimately reaches zero. You want to be investing early in the life rather than later.
I understand that its difficult to respond to a BPT post talking about DRIPs, dividends and shares, but the logic that it doesn't make sense to reinvest in a smaller and smaller asset that ultimately reaches zero also makes no sense. It really all depends on the return you will achieve before it reaches zero. It also assumes you hold it until it reaches zero (which it will). Also mentioning investing early rather than later is also not relevant. It is still the return you achieve on your investment. Besides, what is the definition of "later"?