I am up over 1% today, giving the metrics a good trouncing. This is largely thanks to my new positions, and rebounds in some of my remaining, older ones.
BG is rallying up over 3%, likely thanks to the rest of the world realizing that an agricultural company selling at a discount to its book value, in this atmosphere, is quote – retarded – end quote.
Meanwhile, my REIT positions in CLP and AEC are also doing well. Going into the year, remember what I said. Residential REITs are pathetically undervalued and will surprise investors, be they common retail or institutional. The same people who were assuming at the start of last decade that housing could never go down are the same idiots who are now assuming at the start of this decade that housing related investments will never go up.
Don’t listen to them.
In fact, the only position I have which is down for the day is MGM. But, MGM will be MGM, after all. There is just no reasoning with it. It will stay at these distressed valuations until a buying panic goes into effect. That’s when I’ll be making the real money from the business.
At weeks end, my positions remain: AEC, AWK, BG, CLP, MGM, NRP, TLP, and silver.
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Cain. Another REIT I like a lot and have a bit of is RWT. Not double-digit divvies, but it’s beginning to move for sure recently.
Bon week-end!
hi cain.can you give me your take on why reits are starting to look attractive. i know your not just talking rental apartments,which are starting to shape up somewhat. but i still see alot of new, and empty commercial space. i see newly minted business’ going out of biz also.are you seeing this as a long simmering process,cause its pretty much bottomed? whats the thesis? thanks
Actually I am just talking rentals. It’s very specifically residential REITs that my analysis is centered about.
The reason has to do with how a sound REIT that has heavy rental operations and sound debt should view amortization and depreciation; which is where most of the losses have been concentrated.
Just remember that a good renting operation has already planned on making money from occupancy, at the time of purchasing the land. Theoretical losses after that point don’t matter, and in fact depreciation can be a blessing to a good residential REIT. They can expand more after factoring in repairs on existing properties.
That’s the sum of it. I wouldn’t buy real estate to try and make money off of land appreciation any time soon. I just think a lot of money is to be made in the form of rent.
yea, i asked because i managed a couple of buildings for some folks where the properties were paid off yrs ago, and that is where the money is made.yes you can’t just buy a building today and rent out the flats and make money,it doesnt work that way.but fully works when the property is owned out right. 6 flats and such,or larger.
Article on rental prices:
http://www.cnbc.com/id/41532903
YOUR POST REALLY SUCK.
so does your english…keep up the good work Mr Thaler.
Lol thank you, sir.
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The next time I read a blog, I hope that it doesnt disappoint me as much as this one. I imply, I know it was my choice to read, but I really thought youd have one thing fascinating to say. All I hear is a bunch of whining about one thing that you may repair when you werent too busy looking for attention.
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I agree with the guy above
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