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

To: Spekulatius who wrote (30179)	2/28/2008 2:15:22 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78731

has anyone watched the ALLCO finance disaster from down under? Allco finance was an "hard asset" manager similar to Macquarie, B&B, BAM and others. The difference appears to be that their accounting was not good. the results for stockholders are not pretty: finance.yahoo.com It appears to me that those "hard asset managers are running a risky business. Sure just running assets for others is not a high risk but the reality is not that straightforward. In order to keep growing they constantly purchase new "hard assets" on their own account, bundle them and then resell or IPO (and keep a stub). If this money recycling food chain breaks down, they will sit on those assets just like the banks sit on some of their leveraged buyout or CDO loans. If something goes wrong with a spinoff, these assets may go back to the owner just like SIV go back to the banks. The whole game seems risky because those companies constantly run a lot of leverage. this business is dependent on cheap money, because they earn their money on the difference between the cash flow of the assets they hold and the interest on the debt they pay. If the cost of capital goes up they will be squeezed and that seems to be happening in Australia where interest rates are not going down because the economy is booming. Well, those hard assets are better than CDO^2 of course but i nevertheless suspect a vulnerability.

To: Spekulatius who wrote (30179)	2/28/2008 9:23:11 AM
From: Paul Senior	Respond to of 78731

Hotel stocks. My understanding is they are lagging indicators: business falls off notably after their locales enter recession. If so, we may not have seen the worst of their stock drops. I have FCH on my watch list. I believe in last economic downturn, they eliminated their dividend. Lot of money made if someone (not me) bought at lows of cycle and held through reinstatement of divs and the stock's rise. Many discussions of LHO here--I've held at least a stub position from 1999. I'm holding [t]WYN[/t] since its spin out from Cendant. I like French-based Accor, and have held shares since 2006. I also have Strategic Hotels [t]BEE[/t] for their upscale properties. (I see they are partnering in a business venture with SHO): finance.yahoo.com I have IHR and sold about half yesterday with the pop in its stock price. I have a decent position in AHT: dividend chasing here. Very dangerous. finance.yahoo.com biz.yahoo.com

To: Spekulatius who wrote (30179)	2/28/2008 10:37:46 AM
From: Grommit	Read Replies (1) \| Respond to of 78731

SHO also has a lower P/FFO ratio. For 2008 FFO, SHO = 5.4 and HPT = 7.5. I'll join you in SHO. finance.yahoo.com

To: Spekulatius who wrote (30179)	3/2/2008 3:35:21 PM
From: Grantcw	Read Replies (1) \| Respond to of 78731

I've owned AHT for a month or two now, and in the last 2 weeks I bought small positions in LHO, SHO, and FCH. Maybe I'm early on these HOTEL Reits but most of the positions I entered were at about 35-60% off of the recent highs of the stocks. Maybe we're entering a recession and things are going to turn for the worse, but I'm still seeing hotel prices go up in D.C., where I generally do business as an SAP Consultant. I'm also still seeing strong nationwide business for our company throughout 2008. The owner of my small consulting company takes us to Cancun every year for a business meeting. This was my 3rd trip with them and this was the first year that our hotel had less people from the U.S. than from Europe. I think the exchange rate changes have made traveling to this side of the pond easier for Europeans, and I think that European tourism and appetite to buy hotels has been discounted in the valuation of these hotel reits. But, who knows, we may go down before we go up, but I'm starting to enter positions. cwillyg

To: Spekulatius who wrote (30179)	4/2/2008 9:49:34 AM
From: Spekulatius	Respond to of 78731

HPT - looks like TA (the tenant of HPT's trucking stations) is imploding. if this indeed were to happen, HPT has quite a bit to worry about; 1/3 of their assets will be with a tenant that cannot pay the rent. This is not really a surprise if you followed the story. I was wondering about the reason why HPT was holding up so well, while all other hotel REIT's were getting hammered. it turned out there wasn't any. I think HPT will be a stock with a "2" as a first number somewhere down the road. finance.yahoo.com