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Strategies & Market Trends : Value Investing
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To: Jurgis Bekepuris who wrote (29891)1/28/2008 12:34:59 PM
From: E_K_S  Read Replies (2) of 78645
 
Hi Jurgis - I was happy to see that MICHAEL H. WINER portfolio manager of THIRD AVENUE REAL ESTATE VALUE FUND increased his position in RAIT Financial Trust Common Stock (RAS) by 1,000,000 shares. This is my speculative REIT pick in my portfolio. I recently doubled my position in this stock on the recent sell off. (http://www.thirdavenuefunds.com/taf/documents/shareholderletters/aboutus-letters-07Q4.pdf)

If Winer likes it, perhaps he sees the same potential value I see. I plan to hedge my position by selling some covered calls because if the dividend is cut, the stock could fall another 25%. The Trust is selling substantially lower than book value (at least according to the company's latest quarterly report). It may take several years for the market to price this value back into the stock but the value investor "bottom fisher" expects this.

It seems like Marty and his management team are trolling the bottom for many of these deep discount value plays but they may be a bit early in the cycle on some of the companies (like the home builders). Also, you also have to look out for those land mines when you do this type of fishing because some of these positions can go BK.

It will be interesting to see what their holdings and sales are in their funds after some time has passed for the market to digest the recent sell off.

EKS
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