Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (168989)	12/4/2008 12:34:23 PM
From: Perspective	Read Replies (1) \| Respond to of 306849

Can ANYBODY explain how people value REITs? How relevant is FFO? Net income? The earnings releases all act like you're supposed to ignore the depreciation and amortization. As if the buildings come for free? Or is it just that some patsy before you paid for the buildings, and you just get to reap the revenue? Take somebody like PSB. Their EPS were $0.67, while FFO was $3.36. That's a 4-fold difference! That tells me that if you count the cost of capital, they are at 40X earnings. Of course, if you ignore the cost of capital, they would just run out the present life of the business they have. It would amount to paying back out the $1.1B in equity they have over the next eight years or so and shutting down, right? But why would you pay more than that for the right to have your money returned to you in a steady stream over the next eight years? Can anybody help me understand REIT valuations? `BC

To: patron_anejo_por_favor who wrote (168989)	12/4/2008 12:59:16 PM
From: NOW	Read Replies (1) \| Respond to of 306849

wow that thing has shed 75% in just 4 days?

To: patron_anejo_por_favor who wrote (168989)	12/4/2008 1:34:10 PM
From: Perspective	Read Replies (3) \| Respond to of 306849

One helluva run out of the homies. Not short any of 'em fortunately. Gave that up a while back. DHI, LEN, CTX - they've doubled in the space of a week. Are the stocks smelling something, or is it just short covering? I guess mortgage rates collapsed after the Fed's latest chicanery. I haven't seen much discussion about the idea that we should be buying the homies thanks to the new round of subsidies for the industry. Should we be buying 'em now? `BC