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cbwang888 (29.79)

Commodities are HOT, REITs are NOT

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May 19, 2009 – Comments (4) | RELATED TICKERS: UYM , SRS , ERX

 

Global ecnomic recovery will come from BRICs that will spend on infrastructure. Basic materials and energy price will get better from here.

US spent trillions to bailout crooked bankers and leave trapped individual consumers far behind. Facing job loss, pay cut, credit cut, shrinking 401K, higher local taxes, underwater home price, and so on, US shoppers are cutting back.

Commodites will be piled up by China. They want no more US T-bonds and USD.  

So long Asian, emerging markets and global companies in US, short REITs.

4 Comments – Post Your Own

#1) On May 19, 2009 at 1:28 PM, JakilaTheHun (99.93) wrote:

Shorting REITs is not necessarily a great idea.  Many of them are priced well below liquidation value.

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#2) On May 19, 2009 at 2:52 PM, cbwang888 (29.79) wrote:

Liquidation value? Com'on, after paying back debts, there is no value left if liquidation happens. Now the solution is more debts and stock sales for many REITs to keep afloat. Longer term things are going to get worse. We'll also see how GGP case play out.

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#3) On May 20, 2009 at 2:15 AM, JakilaTheHun (99.93) wrote:

Cbwang888,

You can invest on that philosophy, but you'll find your portfolio going downward. 

If a company has tangible assets worth $250 Million, $150 million in liabilities, 10 million shares outstanding, FFOs over $2 per share, significant cash flows, and is buying back it's own debt at 40% discounts to face value, then I have no problems buying it's shares at $3.  A company like that is probably worth $12 even in a worst case scenario.  I'm finding a few REITs that look exactly like that right now.

GGP was crap.  There are some other REITs that are crap.  The majority of them, however, are probably undervalued and some of them are significantly undervalued. 

I actually hope the doom-and-gloom sheeps keep driving prices down in the short-term so I can invest in more.

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#4) On May 20, 2009 at 8:37 AM, cbwang888 (29.79) wrote:

Thanks for your points, JakilaTheHun

 

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