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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (39916)11/4/2010 1:38:48 PM
From: E_K_S  Read Replies (1) of 78717
 
First Industrial Realty Trust, (FR-PK) - I am getting nibbles on my GTC sell order at $21.10/share. That translates to an 8.8% yield based on the $25.00/share 7.5% coupon.

I still hold some of the REIT preferred shares in BDN-C where I am asking for a small premium on the coupon rate of $25.00/share @ 7.5%.

With the QE2 announcement of $600 Billion it seems that investors continue to chase yield and will pay top dollar for anything that yields over 7.5%.

I tempted to peel off my shares in these preferred stocks but do not have very many alternative investments that will generate similar yields w/o higher specific stock risk.

QE2 injections continue to move up commodity stocks (BHP near an all time high) with many of the integrated oil stock rallying. I also notice that (perhaps due to QE2 expectations of falling U.S. $) many of my foreign stocks rallied including those in Brazil (ULTR, PBR, BBD, GGB).

Since QE2 expectations are for continued injections through out the year, it's a little early to sell into the rally. However, when the end game approaches, you really want to be near the exit door or even leave the party early. It's still not too early to be deploying new funds to these sectors but significant value buys are getting hard to find.

As I peel off shares, I will continue to deploy those funds in some of these QE2 plays. It will be important to hold very liquid stocks so a fast exit is possible. Many of these preferred shares and very small cap stocks (several of the E&P companies) can be illiquid in a market melt down and run to the exit door.

EKS

FWIW - Your NOG recommendation broke through $20.00/share an all time high!
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