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

To: ChanceIs who wrote (207841)	6/22/2009 5:09:52 PM
From: Perspective	Read Replies (1) \| Respond to of 306849

<CRE> According to the ol' portfolio sector tabulator, that is presently my number 1 sector exposure. I may be positioned against some of the stronger names in the sector, but I just can't believe that names like SKT and FRT, no matter how relatively strong they are, will skate through this deleveraging without a substantial retracement of the 2000s bull. I like the risk/reward. BC

To: ChanceIs who wrote (207841)	6/22/2009 7:09:08 PM
From: Perspective	Read Replies (2) \| Respond to of 306849

DRI reports on Wednesday. Should be interesting to see if they hit the target. Even more interesting will be if the number gets bought or sold. BC

To: ChanceIs who wrote (207841)	6/22/2009 7:53:07 PM
From: Perspective	Read Replies (1) \| Respond to of 306849

SPG and their ilk fascinate me. Here's a company that has been netting about $500M/yr average, but paying out $1B/yr in divvies. And they've borrowed pretty much every penny that they've paid out in divvies. finance.yahoo.com PERIOD ENDING 31-Dec-08 31-Dec-07 31-Dec-06 NetIncome 599,535 491,239 563,840 Dividends Paid (1,104,146) (1,020,674) (954,159) Sale Stock (2,743) (224,848) (190,448) Net Borrowings 764,839 1,399,320 1,065,403 People speak of "FFO" on all these REITs, but the fact is, FFO ignores the cost of capital. Accounting says that you can either account for the cost of assets used to generate revenue when you purchase them, or you can capitalize the cost over the estimated lifetime of the asset. To say that net income is irrelevant for REITs ignores the cost of capital. I've said this before, and I'll keep saying it until someone can give me a good reason to think otherwise. I think REITs have had a pass on net income purely because their assets have typically gone up in value rapidly enough to make the up-front cost of capital irrelevant. Real estate ALWAYS goes up, ergo the up-front costs don't matter. Perhaps they will now. And if that's the case, many of these REITs trade for very large multiples of income. `BC

To: ChanceIs who wrote (207841)	6/22/2009 8:15:04 PM
From: Perspective	Read Replies (2) \| Respond to of 306849

In the "duh, why didn't I realize THAT earlier" category: I've just read through a bunch of quarterly earnings reports, and virtually every one of them has trumpeted how much debt they've paid down. The massive deleveraging going on isn't just about hedge funds and consumers - it's also highly dependent upon the actions of corporate leaders. And they're paying down debt bigtime. As long as that continues, I think the inflation-bugs are going to be disappointed, even with Obama fire engine spraying around liquidity. `BC