Distinguishing Between Real and Fake Estate

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With headlines everywhere boasting that a double-dip in the housing market has already arrived, the presumption is that related securities would be selling off well in front of the imminent doom. After all, memories of the day in day out floggings that these stocks took in 2008 cannot have already been erased from traders’ minds. However, the above presumption has proven to be quite a costly one for bears, particularly with regard to many REITs.

Regardless of how well-informed you may feel while reading the business section on a Sunday morning at the breakfast table, the fact of the matter is that the market is the ultimate arbiter. If you had been acting on sensationalist journalism over the past several weeks/months/years about the housing market via short-selling REITs, you would be recklessly disregarding the notion that Mr. Market could have easily already priced in years of doom and gloom back in 2008.

Evidence? See the charts below, as well as many other REITs.