Seeking Alpha

K202

View as an RSS Feed
View K202's Comments BY TICKER:
Latest  |  Highest rated
  • National Fuel Gas For Rising Dividends And Future Growth [View article]
    Jon - Thank you for adding you observation and the info on the sale by Gabelli. I am puzzled as to why the stock continued lower today other than the market did an about face from being up early. The S&P made a new record high today before noon and then the market swooned on what looked like profit taking.
    Mar 21 06:52 PM | Likes Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    texasbucks - You make some very good points. Real estate is very much about location and no more so in Austin, TX (used to live there). Similar factors are at work in other cities as well. Austin is a city that seems always to be among the fastest growing in the country and for many good reasons.

    You are also correct that generalizations do not work in real estate since it is very regionally focused. Many places in the Great Plains part of the country never noticed the real estate bubble nor did those areas get hammered when the bubble burst elsewhere. So, I didn't mean to imply that the problem would be one that would hit universally.

    I just think that there could be a mismatch in the inventory available compared to the demand in the future and that those who own McMansions many, in some areas, find it very difficult to find buyers at a price that makes them whole. In other areas there won't be such a problem. It's just the dynamics of the real estate market. D.C. and the surrounding area, I suspect will continue to do well as our federal government continues to expand employment in that area. It took a hit during the bubble burst but it was more temporary than what happened in Nevada, Florida and other hard hit areas.

    But the McMansion building trend was widespread enough that I suspect there will be problems ahead for people trying to sell them in some parts of the country. That will also be a temporary (maybe a decade or so) problem that will eventually work its way through the system. I guess my point is that those home builders that specialize in that size home (because the margins are better) may not be a good investment for the time being especially if their operations are in areas likely to experience more retired folks moving away (i.e., colder climates). But again, that will also be a localized phenomena.

    You are right, of course, that patient investors who take all factors into consideration can buy rental properties in areas that will eventually pay off nicely. Location is very, very important. But timing could help as well. If another financial crisis were to erupt there would bargains to be had again in many areas. Then again, that gets back to location again.

    Thanks for sharing your opinion. It was well said.
    Mar 20 02:16 PM | Likes Like |Link to Comment
  • Protecting Your Equity Portfolio For Less - Part XII [View article]
    drftr - Good comment! Your concerns are mine and are the very reason I wrote this series on how to hedge an equity portfolio with only a small portion of your assets so you can continue to hold income producing positions long term. I continue to look for more ways to hedge efficiently and will write about them when I get comfortable through back testing results. The focus of my series is the only hedging strategy that I have employed successfully, so it will always be my primary tool. But I would also like to hear from other readers if they have a low cost hedging strategy that works.
    Mar 19 11:18 AM | 1 Like Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    Good point. Thanks for commenting.

    According to the BLS rental of residences has increased well below the increases in home prices on a national scale.
    Annual increases in rent:
    Year % Chg
    2013 2.9
    2012 2.7
    2011 2.5
    2010 0.8
    2009 0.7
    Mar 19 12:41 AM | Likes Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    NYHorn - I was just down in Austin recently! Water will also be an issue (already is) there. I was amazed at how low the Lake Travis water level has gotten.

    But to your point: I totally agree with the competition for the smaller homes and that is part of the mismatch I alluded to in the article regarding available inventory. The market will be tight in certain strata while, at the same time, it could remain a buyer's market in other price ranges (square footage). That could also cause a significant number of baby boomers to stay put or walk away from the McMansions even though they need to downsize. That would cause more stress on the economy as more of their income goes toward housing that they had planned and the "nestegg" of equity that they were counting on for retirement evaporates (if it hasn't already).

    The next decade or so could prove to be an interesting time to live; maybe not much fun, but interesting nonetheless.

    Thanks for commenting.
    Mar 18 05:40 PM | Likes Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    Classy - Maintenance, vacancies, break-ins (depending on the area), property taxes mount up and eat into the return. True. The small investors may have some lessons to learn and could get hurt. But it isn't the small investor that concerns me.

    My concern is the hedge funds buying up thousands of houses for rental. This changes the whole dynamic in the industry and I doubt that it will end well. I expect the hedge funds to walk away with big profits while sticking small investors with all the inventory. But how that will happen is a topic for another article. Thanks for commenting.
    Mar 18 05:32 PM | 1 Like Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    moneytec - Thanks for the comment. Appreciate your sharing another perspective of reality.
    Mar 17 11:33 PM | Likes Like |Link to Comment
  • The Pyramid Scheme Industry: Examining Some Legal And Economic Aspects Of Multi-Level Marketing [View article]
    There are a number of sales oriented businesses that have extremely high churn rates. I had a roommate in college that went to work for an insurance company selling life insurance. They started him out having him list at least 50 friends and relatives and then after he set appointments with as many as possible from the list his "trainer/mentor" (who hired him) went on the appointments with him and helped close as many sales as possible. When that process was done he was on his own to find more prospects. He and most of the others that were hired and started training at the same time were looking for other jobs within the first year. Very few make it there or in the securities business. Lots of churn. But the trainer inherits all the policies and the continuing commissions until cancelled. He/she also gets an override commission on all the sales made during the training. It is a process of using "new hires" working strictly for commissions to build up a prospect list and add new business.

    I am not in MLM, but the same promises of unlimited income, working your own hours and creating continuous streams of income are used to recruit newbies into insurance and other commissioned sales organizations. I am not trying to justify anything about MLM, but just pointing out that even many "respectable" industries have practices that create a lot of churn and pain for the lowest people in the organization.
    Mar 17 06:20 PM | 7 Likes Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    berloe - I do, but not likely for another 15 years. The echo boomers will begin trading up in their late 30s and early 40s. The bulk of the first peak of that generation are just hitting early 20s; not yet ready for the starter homes. There is another peak for that generation that occurred a few years later that will likely keep things going for a couple of decades. It is another large generation and should help the economy get back on its feet when the bulk of them hit stride in the work force. That does not get going for another 10 years. The first few years after entering the workforce none of us are very productive and we don't make a lot of money. Once they've started moving up the corporate ladder they will start making a big difference in consumption trends.

    It's just that gap between the two large generations that will keep our economy mired in slow growth mode. I am hoping that we do not fall into a period of deflation, but the numbers (demographically) would hint at the possibility. That is why I am getting very cautious, especially in real estate.

    Long-term, our kids will have opportunities, too. I just hope we'll be around long enough to give them some guidance and that they will be open to listening. I consider myself lucky in that my kids and I get along very well. I think they will listen. And I check my life expectancy on the Northwestern Mutual site. They seem to think I'll be around until I'm 96. Apparently, I'm doing something right. OTOH, they sell annuities and may be using it as a marketing tool to get people in the right frame of mind for their products.
    Mar 17 03:12 PM | 1 Like Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    Physical - My sentiments also. Thanks for commenting.
    Mar 17 02:58 PM | Likes Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    Good luck with selling. The headlines tell us that all is well, but a lot of us get skeptical when our houses don't sell. I may write about my experience when we get to that point. Hopefully I will have something positive to write about, but my gut tells me it may not be as happy an experience as I would like.
    Mar 17 12:04 PM | Likes Like |Link to Comment
  • U.S. Real Estate - Are We Out Of The Woods Yet? [View article]
    berloe - Thanks for the comment. Even though you use borrowed money from another source you did not take out a mortgage on the new home, if I understand correctly. So, that would be an all-cash sale. Normally about 20% of all sales are all cash and happen in the various ways you mentioned. But with the number doubled I am concerned that it is not sustainable.

    My wife and I are considering downsizing within the next two years, too. We like some yard work and don't mind a little upkeep, but our house demands much more of us than we want to give it. I'd like something where I don't have to use the full length of my 24' ladder every year!
    Mar 17 11:37 AM | Likes Like |Link to Comment
  • McCormick's Future Supported By Demographics [View article]
    frizzo380 and SteveTheHawk - I agree completely. I am selling puts here hoping for a little more downside to give me a better price. I already own some but would like some more.
    Mar 17 09:52 AM | Likes Like |Link to Comment
  • McCormick's Future Supported By Demographics [View article]
    Brad - MKC almost always seems to be valued a little high. I am actually selling puts on MKC here hoping for a little more downside. Over the years I have done that a lot and only got put the stock once. It just doesn't seem to fall as much as the rest of the market. But that is why I like it so much.

    The div is on the lower side but the company has been very consistent in raising it every year. Strong balance sheet & good management so I expect continued raises in the future. I'd rather have a stronger probability of increases combined with the resiliency of the stock price over a few tenths more yield. It is a trade off that I am willing to make. Not all investors would do so. Thanks for the comment.
    Mar 17 09:50 AM | Likes Like |Link to Comment
  • Protecting Your Equity Portfolio For Less - Part XI [View article]
    mound_dweller,

    I will include a detailed explanation in my next article of the series that should be out this week.

    Thanks for the question.
    Mar 16 05:39 PM | Likes Like |Link to Comment
COMMENTS STATS
4,586 Comments
13,627 Likes