To: fedhead who wrote (46012 ) 4/13/2000 4:41:00 PM From: pater tenebrarum Read Replies (2) | Respond to
Anindo, i actually still own a wee bit of the REITS i bought a few weeks back. apparently the current rotation target du jour is anything that sports a high yield, out of safety considerations. however, i am more inclined to sell the REITs into the current wave of enthusiasm for them and pick them up cheaper again later. let me put it this way: at some point, rotation may give way to wholesale liquidation, as less and less winners are left to rotate into. one of these days t-bills will begin to look mighty attractive to some people out there. at that stage, real estate in general may be subject to some pressure. since most REITs are highly leveraged and collateralized via their properties, the market may become very selective and that is when there may be a chance to pick up some real bargains. that said, many REIT stocks still ARE depressed and you can't fall far from a basement window. but the only TRULY defensive stocks imo are tobacco, utility and food stocks. some money WILL hide in those, a process that has already begun. the problem is only that once the broader market regains its footing, the defensive sectors are ditched again. but for now it's a nascent trend that may still be worthy of a play. luckily i and some other people on SI i know of picked up the main tobacco stocks just about at their lows. with dividend yields ranging from 9 - 17% and an absolutely recession proof product that seemed to be almost a no-brainer at the time.
