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

To: James Clarke who wrote (5825)	1/22/1999 1:27:00 AM
From: Jurgis Bekepuris	Respond to of 78744

James, I agree with you that REITs are undervalued, but I don't have much more to say. I have some money in LHO. Won't have much capital inflows in coming months, so I won't buy it or anything else. Take a look at the latest Third Avenue funds report. You may find some interesting ideas. Marty Whitman and Co. are buying some REITs and real estate cos. They bought JOE (again?). :-) Good luck Jurgis

To: James Clarke who wrote (5825)	1/22/1999 2:41:00 AM
From: Paul Senior	Respond to of 78744

Jim, I read your real estate post several times. Many of the selections you had mentioned earlier, and were commented on then - PSA CCG. I will go up against you again on these picks. In spite of my being wrong every other time I have done this on every other stock -g-. I like my choices better. PSA -- sure is a clearcut mention in media articles I see. I prefer UHAL though. You can rent 'em trailers and you can store their stuff. Chelsea Realty (CCG). Traffic jams at some of their properties? Try MLS. Factory outlets cum entertainment centers. No. 2 draw in Florida (or so I've read) after Disneyland. I say designed right --with no traffic jams (so I've read). Close to a 10% dividend yield. Further, I don't understand the subjective criteria you apparently think are critical for success in your selections. CLP: "most honest... management". EGP: "These guys are good people". LHO: "I can personally vouch for management's honesty". So you are saying honesty is vital and you are comfortable with their honesty - and I infer then, that since I certainly cannot interview management, that therefore I should have to trust your judgment? (I will assume YOU are honest of course -g-.) And you have a way of evaluating honesty of management? And you've 'tested' everyone in management who possibly could be dishonest and so might hurt the stockholders? Of course honesty is important. My point is,if you are saying... relax,these guys (real estate developers and managers) are honest (trustworthy), I say that certainly makes me unrelax -g-. Paul

To: James Clarke who wrote (5825)	1/22/1999 3:13:00 AM
From: Tapcon	Read Replies (1) \| Respond to of 78744

>>>The sector is objectively cheap. There is asset value to back that statement up and to cushion downside in a bear market. Jim and Paul, I've been lurking here for a while, since I'm anxiously looking for some value plays. I've put some of your REIT recommendations on my watch list. But I have a couple of questions: 1. When the bubble breaks, are these REIT's going to hold up much better in terms of asset value and payout? I notice CLP, CCG, and PSA all dropped considerably during the July-October period when we were starting to feel like a bear market. Asset-backing in the REITs can still depreciate in value, which would happen if this 94 month economic expansion falters. If this happens, do these particular companies have a history of paying dividends thru the down cycle? (If there is a site which provides a history of the payouts going WAY back since the last downturn, would like to know --otherwise, a trip to the library to check out Value-Line or Moody's?) 2. What am I missing here: when I look at these stocks on Yahoo, I see most with earnings/share MUCH less than dividend/share. How is this sustained over time? I'll tell you, if I could get something close to a guaranteed 8-9% going forward for the next 12-18 months, I'd take it right now!! So I'm interested in hearing your reply.

To: James Clarke who wrote (5825)	1/22/1999 7:24:00 AM
From: Wallace Rivers	Respond to of 78744

In agreement totally - bought Sunstone Hotel (SSI) last October. I like it better than Lasalle (LHO), but only because it is bigger, and thus more diversified. Dividend on SSI is well covered by FFO. I recall reading once where the only instance that the dividend would not hold would be if the lodging segment had occupancy rates drop more than they ever had in the past 15 years (this is from memory, and the facts may not be totally correct). Basically, business would need to fall totally out of bed (no pun intended) for the dividend not to hold. It still trades at a significant discount to NAV. Risks are overbuilding, which I have heard has abated somewhat (this makes some sense, as the currency often used for new builds is stock i.e. the proceeds from secondaries - well, there haven't been that many secondaries, because of depressed stock prices), and a general slowdown in the economy. I recall that The Mad Bomber, Ken Heebner, at one time was quite bullish on SSI prospects, and owned the stock. I would suspect (but don't know for certain) and hope that he still holds the stock. Does anyone know what his holdings are? One sees his adds a lot on CNBC - the CGM Realty Fund, I believe. And, fellow value investors, on another matter, what I mentioned about PMOR yesterday - surprise! biz.yahoo.com

To: James Clarke who wrote (5825)	1/22/1999 8:35:00 AM
From: LarryD	Read Replies (1) \| Respond to of 78744

How about a neglect index? Here is one I came up with when I noticed that Prologis, a $2.7B warehouse REIT, only had 9 messages on Yahoo. Dividing the market cap in millions, 2700, by the message number of 9 gives a neglect index (NI) of 300. Here are the NIs of other REITS I am following: BDN 7 HCN 4 HPT 15 ASN 60 HRP 4 UIRT 1 EGP 8 AER 4 FCH 8 LHO 6 CLP 33 FFA 35

To: James Clarke who wrote (5825)	1/22/1999 10:50:00 PM
From: Bob Rudd	Respond to of 78744

REITs Jim, I had asked your opinion on ETT on a recent post...13% dividend yield, major risk factor is large exposure to GHV [One of Paul's positions at one time], but Merrill report indicates dividend coverage is good [139% vs 125% for healthcare and 136% for the overall REIT universe] and insiders are buying GHV pretty heavy. There's some good posts on yahoo GHV area on ETT. I'm long since early this month. Not without risk, but looked like a good value to my untrained eye. Would love a 2nd or 3rd opinion. Also looked at GRT with 12.7% dividend but payout ration of 2x and high debt ratios stopped my analysis in it's tracks. Besides retail is going to be hurt by the rise in internet sales..demand for retail space isn't going away, but it's going to be significantly affected IM0.

To: James Clarke who wrote (5825)	1/23/1999 3:26:00 PM
From: Worswick	Respond to of 78744

Well. I always read what you write and print it out. Hey, we're just at a point when people are making a 100% a week in the market and who cares about 8%? How do you think REIT'S will do in a roaring deflation?? I'm quite interested in historical examples if you know of any. My best to you and think you're just great James. Clark