Do you know anything about these 2 companies..?
Not really. They seem to be similar to REITS, I do not invest in them, since I am directly involved in Industrial real estate.
Potentially undervalued and might get some growth as the rotation continues into quality companies. Do they fit into yopur concept of todays markets going forward...?
Not necessarily, that is an opinion that only the market itself can change. The evidence shows that the market does not seem to favor them. Although as a small % of a portfolio can not hurt given their income they yield.
However in looking at their charts, although these companies seem to be stable, they do not seem to be enjoying much appreciation year over year. Appreciation of the actual properties are not materialized until an actual sales take place triggering a substantial taxable event in some instances, (unless exchanging into another like kind property).
I believe that owning real estate these days is attractive only on industrial warehouses since its maintenance is minimal, (mostly paid by the nnn component of the leases), and its management is comparatively much easier than apartment houses, office buildings and certainly houses. (A non-starter) --personally, other than warehouses, any of the other forms of RE I would not touch with a 10 foot pole. They are not "glamorous"... but I like the cash flow, never been a Hollywood type anyway. *g*
Good earnings, yield and dividend.
True.... However, unless the market accepts the same idea, chances are that history will repeat itself. I.e. the price seems to just "sit there"
In my eyes.... I look for companies that are solid in their reputation, track record, and potential continued growth... Earnings... and most important, that their options offer interesting premiums.
I try to create a "risk free" [well, ok, "risk-reduced"] (as much as it can be done), environment for myself with the help of the premiums paid to me on covered calls.
It is a list of 10 - 12 companies (Yes, quite boring, they are the usual suspects) you know the ones: csco, emc, msft, orcl, intc, lu (not lately), sunw, first data, teradyne... etc
From there, I try to buy (supposedly when they have retraced), and sell calls 5-10 points above (if the premium is a fat one, then I may go 15 points). I go 1 to 3 months away. Lately I have also started using naked puts on the ones I like best.
If they call me away... oh well, I just start over again... the idea is to attempt to reduced the use of my cash and use the premiums as much as it is possible.
What I meant in my previous comment by companies with earnings would continue to succeed was that these internut companies w/o earnings and some ethereal future of world dominance without solid prospects of ever turning a profit or even cash flow are dead and will not return from the grave.
I only invested... er excuse me, "speculated" in a couple of them (AMZN and VERT), and I did so with the added safety provided by unbelievably fat premiums received on covered calls... I did ok but... I will stick to my unglamorous and boring strategy of investing (as a "position trader" - to long term investor), in the above mentioned companies.
In my eyes, these "crashes? etc. is mere entertainment value enhanced by the baboons of the media... exquisite entertainment! Better than most of the rubbish the Hollywood puts out... AND it is REAL TIME!!
--Of course, if one is a rapid fire trader then that's different, as one must pay more attention to T/A, hence the sales/buy signals etc become very important indeed.
In short... I believe we go higher because we have people putting money away for retirement, by far, the US economy and the dollar are the strongest, and I think we have a window of 10 years possibly more, in which this situation will not change substantially.
Investors, will become more knowledgeable --you guys are doing a great job in assisting to achieve such-- which means that the ".bomb" manias and similar will happen less often. This is one of the reasons I stick to good solid and "common sense" companies, without ignoring a basic law of "supply and demand" for their shares available.
Remember that the market is always right ! [Even if it seems "irrational", since it has deeper pockets than mine. So, I do not fight it ---> but I do not have to do its craziest things all the time].
Anyway... I did not mean to start rambling.... |
