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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: getanewlife who wrote (34379)	5/26/2003 10:06:13 PM
From: TobagoJack	Read Replies (3) \| Respond to of 74559

Hello Gf, <<I take it you do not worry about short term swing>> ... Yes I do, but only within the context of the big picture script, not in the sense of a day-trade. I do realize the disconnect that, 'if it is difficult to try to see ahead a few days, why is it easier to sense what should happen within 36 months'. But, as I have done satisfactorily for myself on 12-months rolling basis within a 36 months imagination horizon, I will stay with the system until it fails me:0) <<how about buying REITs and TIPS in a US retirement account?>> <<REITs>> I plead ignorance. I used to own, before the days of iDotCom and eSlashNet, the likes of Newhall Land, First Union Realty, and some other names I no longer remember. I believe the real estate capital value cycle in the USD-space is at historic high, the interest rate cycle is at historical low, and together, is not a friendly environment for real estate buys in general. In contradiction to above, I have just committed to buying into a follow-on real estate partnership that is negotiating to buy a 22,500 sft (total floor space) retail/commercial building in Kowloon on Nathan Road. I justify the decision based on: (a) 7.3% yield at 10-year rental/capital value cycle low, (b) Neighborhood improvement midway to completion, (c) Pervasive atmosphere of doom and gloom, (d) Tourism cycle at historic low, (e) The 5-storey building can be redeveloped to the current plot ratio, (f) The street corner building has long street-facing frontage and perfect for billboards and such income enhancing to-do’s (g) Family that owns the building wants out because its members have different plans, (h) So, all considered, it must be time, or close to the time, to loot the burning house. Can the capital value drop more? Yes. Can the rental amount decline further? Yes. Will there be another deal like this, for me? I do not know. <<TIPS>> I do not like TIPS because I do not believe the inflation index to which they are tagged to. <<in ... retirement account>> why not SJT and HGT? Or Argentine shares? or HBC, or Message 18968228 ? Chugs, Jay

To: getanewlife who wrote (34379)	5/27/2003 2:09:20 AM
From: energyplay	Read Replies (1) \| Respond to of 74559

Hi Ge Ying - I would stay far away from US REITs - there is a property glut in most cities, and leases are being signed at lower rates than expiring leases. REITs do best when inflation ends, and lease rates catch up with previous inflation. TIPS are a slightly better choice , especailly in a tax free account. CPI index for Tips is flawed, but better much than nothing, and will track pretty well. There's still a window for buying some of the Canadian Royalty trusts, like ERF, but the values are getting a bit ahead of where they should be, might have a 10-15 % drop. Might want to wait until early June or so... Look at a 1 year chart for SJT - see the run up/drop back in March ? we are getting an echo of that blip ...I expect a simmilar drop back toward trend line. TIAA/CERF has a pretty good track record, too bad they don't offer more choices.