Everyone is having fun trading FNMA today. I, however, have opted for a less exciting afternoon, looking for broad market clues and building a watchlist of stocks that can last the test of time.
The IYR is down another 2.5% today. Let me explain to you why this is happening.
REITs enjoy a very low rate environment. Because of these low rates, they’ve been able to finance projects at extremely low costs. REITs live and die by the credit markets and are valued based upon their NAV, which is based upon their balance sheet. If rates are heading higher, that is a material downside event for their balance sheets and NAV, which in turn means the stock prices need to go down.
But are rates really going higher? Do we really think the Fed will allow this to happen?
I am skeptical of anyone who shorts The Bearded Clam, for he has made me fortunes since 2009. Assuming I am correct, the REITs are great buys down here.
We must take a look at O, SBRA, MPW,JMI, AVIV and other hard hit REITs.
I am going to narrow down my watchlist to a few good REITs and begin buying them soon. I am respectful of market forces and will allow for the stocks to breathe, knowing they’re under extreme selling pressure. Believe it or not, this is typical of May, seeing the REITs get hit. It happened last year and in 2010. Both times the May sell off represented optimal entry points for the industry. I believe buying them from here until mid June will yield the same results.
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CBL worth watching too
Yep.,
if rates begin to rise while REITs take down defaulted property on the cheap NAV still increases and The Clam doesn’t hasten a sovereign weakness –
either way, you win –
WY hit hard today. But their trees are still growing. And they are a reit.
thought you was tied up in FRO, yo?
FRO is presently a gericurl….(no sexual chocolate)
GOV getting its arms and legs blown off for zero reason.
WY, PCL, PCH all finally responding to the carnage in $lumber.
The Utes are a good buy here, same with Nazz as we prepare for markup day tomorrow.
But remember – The Market Has Seen Its Highs for the Year!
Buffett’s famous 1999 speech at Sun Valley is worth a re-read. It helps one cut through the clutter.
http://money.cnn.com/magazines/fortune/fortune_archive/1999/11/22/269071/
RAS was a gift today when it hit 7.61 it has almost fully recovered, currently 8.10!
Fly would you just keep things simple and add to a little VNQ? I thought the mREIT’s would do better when the long tail of the curve rises and the FEd backs off their end market allowing them to buy cheaper. Boy was that thesis wrong!
Speaking of corrections, my son.
“If history is of any GUIDE”
GUIDE, yo, GUIDE!
Ya just can’t get a decent quality of peasant no MOAR, these daze!
Full ban and decapitation.
BANNED!
Like, fully, bro!
{lops off head}
All dead bodies are ground and fed into the generator that powers Fly’s OSC.
Your contribution is appreciated.
So nothing regarding these conditions has changed this afternoon, so the “buy-the-dip” folks are responsible for the turn around?
Did I ever say how much I like the Owl image? If not.. it’s the best ever.
Perhaps the bearded clam is being secretly Fukashima’d by the bandits of the Rising Sun.
I wish to tender my humble apologies, and retract aforesaid statements.
It’s bloody hot in here.
I didn’t realize …
look no further then $MITT and $PMT best in breed for the hybrid mortagage REITS, and honestly, I cant see why you would buy any other type of REIT down here
TheHarper
What is a hybrid mortgage REIT and why is it better than non-hybrids?
I bought RIG, KGC and REM today.
HTA if it fits your approach
Fly I like ACC as well, been watching it for quite a while, this might be the time to take a bite.