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Heisenberg Principle

 
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  • REITs: Why The Dividends Are A Mirage [View article]
    STWD went up because their return on capital is very high. The mirage dividends had nothing to do with it. Save for taxes, your return in STWD would have been IDENTICAL even if they didn't pay dividends. In fact, it would have been higher because there would have been less dilution and higher return on overall capital since their marginal return is higher than their overall return.
    Mar 4, 2013. 10:52 AM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    When a company raises $89 million in equity, that's fine for the IRS to tell them $20 million was paid out from earnings, but the economic effect is identical -- it was paid out from dilution.
    Mar 4, 2013. 10:11 AM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    Everything on MITT is available in the financial statements in black and white.

    The REITs in my article re-invest the money they earn from investments. No, it never gets paid out to date. Perhaps at some point in the future it will.

    What you don't get is that the environment they operate in makes things SO accretive that they have no interest in paying legitimate dividends. Why would they? It's better for shareholder value to retain as much capital as possible since the marginal return on assets is much higher than the dividend yield. So these managements are doing the wise thing. Investors should just understand it better.

    I'm seeing a lot of the same angry cluelessness I saw back in 2004-2007.
    Mar 4, 2013. 10:10 AM | Likes Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    Tim Plaehn,

    1. Yes, they raise capital through the equity markets to invest in more properties.

    2. No, they don't pay out dividends from income. They retain ALL of their income AND pay in additional capital. The dividends essentially come from the equity raises. Yeah, sure, they call it net income to satisfy the IRS and avoid taxes. I think my article answers your questions more clearly with actual examples. They raise money via equity in far greater amounts than they pay in dividends -- the amounts above the dividends are spent on new investments and are accretive.

    Example: MITT raised $89 million and paid dividends equal to $20 million. So $69 million ($89 million - $20 million) was plowed into new real estate investments and is likely accretive. The $20 million paid out to shareholders is NOT accretive and is a mirage. $20 milion of the $89 million in equity raise was simply turned around and paid out in a dividend. Clueless shareholders were happy having no clue zero value was created (other than the IRS tax savings).
    Mar 4, 2013. 10:01 AM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    No, ARCP grew despite dividends. The REITs themselves are doing fantastic and gaining value for shareholders. If they weren't paying out dividends the capital appreciation would be much higher. They're diluting you, then paying you a dividend, and you're thanking them for it. lol
    Mar 4, 2013. 09:12 AM | 1 Like Like |Link to Comment
  • Amarin Q4 Call Leaves A Fishy Taste In My Mouth [View article]
    CLSN was a speculative gamble. AMRN short is a sure thing. I'm shorting it much more heavily. This snake oil trash doesn't have a prayer.
    Mar 4, 2013. 09:05 AM | Likes Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    Simple math. Keep believing a company can dilute then pay you a dividend and there's value gained. LOL, why didn't non-REITs think of that?
    Mar 4, 2013. 09:00 AM | 2 Likes Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    The dividends you get are only at the expense of capital appreciation. It's a necessary evil for tax-saving purposes by the REITs, but they are essentially issuing away your capital appreciation in the form of a dividend. There is no free lunch.
    Mar 4, 2013. 08:44 AM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    The problem is the steer hasn't gotten any bigger. Your dividend comes from dilution. It's a mirage.

    Dilute by 10%. Pay a 10% dividend. Nothing has changed.
    Mar 4, 2013. 08:42 AM | 3 Likes Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    Dividends paid = loss in capital. There is no free lunch, otherwise, what a concept! Every company should just dilute the piss out of its shareholders then take that same money and pay dividends with it.
    Mar 4, 2013. 08:40 AM | 2 Likes Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    All correct. But the dividends are a mirage as long as they are raising money while paying them.
    Mar 4, 2013. 08:33 AM | 4 Likes Like |Link to Comment
  • U.S. Recession Probability Is Only 1/5 Of 1% [View article]
    "This year’s first-quarter US GDP is expected to increase 1.9%, based on the The Capital Spectator’s average econometric nowcast."
    http://bit.ly/160kImp

    If you think Q4 2012 was an accurate barometer, I'll have a hit of what you're smoking.

    "For the entire year of 2013, economists expect a 2.4% rise in GDP while most economists surveys feel there's a better chance of a positive surprise with that number than a negative surprise"
    http://seekingalpha.co...

    "We're definitely in a better place now than at this time last year," said Arun Raha of Eaton Corp who was the most accurate individual forecaster for 2012, achieving a near-perfect score under the Journal's methodology, which was developed by economists at the Federal Reserve Bank of Atlanta.
    Mar 3, 2013. 04:27 AM | 2 Likes Like |Link to Comment
  • U.S. Recession Probability Is Only 1/5 Of 1% [View article]
    Wow there really is somebody out there who thinks Q1 GDP will be negative?

    LOL

    GREAT article based on statistical fact. Silly comment #1 based on cherry picked garbage. One can cherry pick far worse worries since 1968 in history. GDP will be very positive for Q1.
    Mar 3, 2013. 03:14 AM | 4 Likes Like |Link to Comment
  • Amarin Q4 Call Leaves A Fishy Taste In My Mouth [View article]
    How much did Lovaza flood the market with free samples? I'd be quite skeptical about the significance of "running ahead of Lovaza" especially since when Lovaza was launched GSK didn't even own it yet. It was a rinky dink different company that GSK bought out. Are you sure about the "smaller sales force" for the Vascepa launch?

    Also keep in mind being 2nd the market will often beat the first to market in initial sales as the world has already been educated about the new product line. The initial Vascepa sales/scripts so far have been below MY expectations.
    Mar 2, 2013. 05:59 PM | Likes Like |Link to Comment
  • Amarin Q4 Call Leaves A Fishy Taste In My Mouth [View article]
    Excellent comment!
    Mar 2, 2013. 05:20 PM | Likes Like |Link to Comment
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