Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: jeffbas who wrote (9291)	12/13/1999 11:33:00 PM
From: James Clarke	Read Replies (3) \| Respond to of 78542

SNH is not a simple story, so I just want to refer you back to previous analysis. I don't know how to hyperlink previous posts - somebody e-mail me privately when they're done laughing at my ignorance - you know how little time I spend on the internet. :) We had a discussion about it here about a month ago, but I would just refer you to Mike's summary of the stock on his valuestocks.net site. That says it all. I did the research from square one and came to roughly the same numbers he did independently. Be careful though - I never said the dividend was secure. I think I said precisely the opposite.

To: jeffbas who wrote (9291)	12/14/1999 7:22:00 AM
From: Q.	Read Replies (1) \| Respond to of 78542

I've said it before, but I think SNH is a lousy choice among REITs. When the blue chips among REITs are trading at bargain-basement valuations, there's simply no reason to go shopping for junk, and that's what SNH is. A first rate REIT, like EQR WRI or KIM, nowadays yields about 8% and has a growth rate of about 8%. Those add to give you an ROI of about 16%. The dividend will assuredly not be cut. A junk REIT, like SNH, has a dividend that might be higher than 16%, but it will have a negative growth rate. That means that your ROI will be less than the current yield. So you might end up with the same 16% ROI or even less. But with more risk and volatility. Why pay for risk and volatility when you don't have to? Just because value investors sometimes have a mindset for bottom-fishing among distressed securities doesn't mean that it's always the best thing to do. In this case, the market has presented us with a better alternative.