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

To: Michael Burry who wrote (3011)	1/12/1998 3:02:00 PM
From: Richard Barron	Respond to of 78673

Michael, The are a few things to consider when buying REIT's. 1.) Many of them are consolidators and will grow since the have proven they can do this just like consolidators in any other business that can effectively cut costs and provide good management disciplines. 2.) Each type of REIT is cyclical, and the key is to recognize when overbuilding is likely. Get out a year before the overbuilding is obvious to everyone. Right now, hotels will be facing overbuilding in a year or two, and outlet malls are already experiencing difficulty. Some sectors that seem to be safe for growth for a few years are the warehouses, office buildings and golf courses, since Tiger is helping bring a lot of interest back to the sport. Public storage (mini-warehouses) tend to do well even during recessions as more people are moving or downsizing. 3.) REIT's have traditionally been interest rate plays, similar to bonds and utilities (with less quality, though many of the REIT's have far outperformed the average Utility over a 10-15 year period.). Many are paying higher dividends than Utilities and Bonds and will find the yield chasers. 4.) Real estate experienced a depression in the 1988-1991 rnage with many properties losing 50% or more of their values. Banks and Hotels almost went bankrupt also.For 6-7 years everyone has been saying buy banks. They have been right the whole time until the last 2 weeks. Banks have been recovering for 7 years and consolidating the whole time. Real estate has only been recovering for 2-3 years and could easily last as long as the banks unless the economy tanks big time. If so, real estate will probably be better off than most orther investments. 5.) Any company that is doing business now, will have to be doing it different and better in 10 years or they will be on the ropes. (i.e. Apple Computer, Westinghouse, etc.). On the other hand, Real Estate in a good location can never be created or replaced. New locations will become hot, but no one can get new land closer to a current hot location, which means that well situated real estate properly managed will appreciate. I'm not suggesting anyone keep 60% of their portfolio in real estate, but it may pay to lighten up on some speculative or vastly overpriced blue chips and move 5-10% into real estate. Many REIT's are inexpensive now that have 5-8% yields and appear to be ready to grow 10% or faster in the next year. Richard

To: Michael Burry who wrote (3011)	1/12/1998 7:47:00 PM
From: Paxb2u	Respond to of 78673

Michael, For info purposes, there is a reit board here thats pretty good. Richard Barron is the host and I've been following him for a number of years. I watched him on Prodigy before SI came into existence. Try REITS - Buying 1 - 2 weeks before going ex-dividend. Peter :o)

To: Michael Burry who wrote (3011)	1/12/1998 10:59:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78673

Mike, James Clarke: re REITS, ALEX, TPL. Fundamentals are iffy IMO (but of course I've been wrong on this sector). I think with some of these REITs, since valuation is so site specific, it's tough to analyze the content of a REIT's portfolio. For example REITs with shopping centers all over the midwest or entire country. Here I'd have to go with the record of management and history of the REIT- and the records of some (e.g. GGP) look pretty good. As far as land and buildings being in prime areas being so valuable, I just wonder. Already I'm buying hundreds of dollars of books from Amazon, and I've started buying CD's on-line too. Just anecdotal evidence (the worst kind sometimes -g-), but still the cumulative effect of the Net could be to reduce pressure to purchase real estate - some retail real estate anyway. You have had good luck with Tejon. Maybe another Marty Whitman special -- his fund owns Alexander and Baldwin (undervalued land in Maui) is for you. Texas Pacific Land is a big landowner with oil leases, also undervalued by some alleged experts. Paul