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

To: Madharry who wrote (9717)	1/23/2000 4:35:00 AM
From: James Clarke	Read Replies (1) \| Respond to of 78741

SNH - The tenants who filed for bankruptcy were expected to file for bankruptcy by anybody with a brain who owned the stock. Not to say there isn't selling based on that "news" - one knew going in that this was going to take a year or so to work out, with a lot of bad news in front of you. Thats why the dividend is so important. One of the tenants who filed for bankruptcy has a year or more security deposit supporting rent payments. That is important. One of the IHS leases is trouble, but I believe is more than fully discounted in the valuation. I've done all kinds of stress tests figuring that all the bad leases default and retenant at market value, and I find that my downside risk is 12-16. The stock trades at 11 and change. When I say risk I mean what is it worth, not where will it trade. A big distinction, but that's what value investing is all about. If my downside risk is at worst 12 based on analysis of the leases, and the stock trades at 11 1/2 and pays a 15%+ dividend once its cut (it will be), I figure I'm going to do alright if I hold this for a year or so. I am still expecting a drop in the stock when the dividend is cut. I am waiting to add on that event at hopefully ridiculous prices.