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Michael L. Boyer

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  • A Day In The Life: Spinning Siegel [View article]
    Hard to say where the market would be without some of those inputs.

    I love the rational, data based "Stocks For the Long Run" (Siegel's great book) ideas.... Great thesis and case for stocks (over the very long term)...

    But where you get in the game and out of the game (your life cycle relative to the bull/bear market cycle) is also key.

    We also have the "Madness of Crowds" and general animal spirits driving much of investing short term.

    Hard to ask people who lost much of their savings (be it 1929, dot.com crash, or more recent financial crisis) to be rational and look at long term stock data and re-enter the market. Too much emotion, too much pain, etc.

    Behavioral economics, group psychology, generational trends, etc. may tell us much about the next market. Alarming numbers of baby boomers have inadequate retirement savings (will they invest in stocks like mad and let it ride on the market or look for stronger government funding for entitlements)....
    Dec 28 12:51 AM | 1 Like Like |Link to Comment
  • A Day In The Life: Spinning Siegel [View article]
    Nice look at issue(s) in above comment from an article I came across today-- on market events and their potential impacts on a generations' asset allocation:

    http://bit.ly/TssbnG
    Dec 27 04:54 PM | 1 Like Like |Link to Comment
  • A Day In The Life: Spinning Siegel [View article]
    I see this theme more and more--looking at real savings patterns, life expectancies, even normal human behavior (like who really invests like clockwork without fail a set % from 20 to 65)... Also, considering human capital is key.

    We may even see generational trends and biases towards asset classes (or lack thereof).

    An example, I recall is inheriting some EE Bonds from a greatest generation era grandparent in 1999 ( a life time US bond & CD) investor. Of course, I was thinking at that time--as a Gen X equity-o-phile- how I wish the grandparent had discovered stocks. Oh the riches and lost opportunities.

    Then I found myself holding those double EE's quite dearly in the dot.com collapse.

    Yes, grandparent had been alive and old enough to understand the market crash of 1929 and seen its impacts. So we may even have to begin looking at market history and the interplay with human psychology, too...

    It is a very complex and nuanced issue--much more than just stocks versus bonds in a race over the last 100 years.
    Dec 27 01:21 AM | 1 Like Like |Link to Comment
  • McDonald's: A Dividend Dream Stock That Has Growth Potential [View article]
    Agree--top leadership could still be an open question short term.

    Longer term the organization seems to produce and attract top talent. Ideally, it can self correct to keep high standards.

    I like the "keep the eyes on the fries" types up from the ranks/ lifetime employees who flipped the burgers and ran operations for decades.

    The long term folks can get some more bang for the drip bucks with dips.
    Nov 27 01:27 PM | Likes Like |Link to Comment
  • McDonald's: A Dividend Dream Stock That Has Growth Potential [View article]
    I'll take mine on a tax deferred/free bun with extra DRIP.....

    Nice stock for us since early 2000's. Now fun to watch the dividends reinvest and buy more.

    They adapt the menu well to new market, as proven in many countries.
    Nov 27 04:38 AM | 3 Likes Like |Link to Comment
  • Preferred Apartment Communities Short Thesis [View article]
    Very well written, detailed analysis.
    Nov 21 05:29 PM | Likes Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Some relevant updates that caught my eye:


    http://bit.ly/RPbodt

    Brief CNBC report that foreclosure values are drying up; relevant because it could bad for those still trying to buy (little/no discount to market) and flip; but it may be positive for first movers--those who bought bulk foreclosures a couple of years ago. Also, even without discount, they could pencil out as rentals, according to report.

    James K. Glassman points out some similar housing plays (for home improvement) in the December Kiplinger's:

    http://bit.ly/WQMIa8

    Some relevant picks in the same vein as above are Lennox Int (LII) for heating and A/C; Mohawk (MHK) for floors; and A.O. Smith (AOS) for water heaters.
    Nov 10 03:35 PM | 1 Like Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    This "flipping" of houses is generally associated with a very short term transaction where a buyer quickly buys the house (often making cosmetic improvements) and then attempting to sell it quickly for a profit. You can find definitions, websites, and even past television shows on the concept online.

    This was very popular during the housing boom with quickly appreciating property values.

    In this context, some comments point to private equity attempting to do this "flipping" as opposed to buying the properties longer term and renting them out.

    The keys being buying at a favorable price, not spending too much in repairs/improvements and--of course-- selling quickly.
    Nov 5 12:36 AM | 1 Like Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Neat points, Wooster.

    Sounds like you are following some firms that are using a strategy to quickly flip the homes or to exchange them in tax deferred ways.

    The flipping strategy could depend more on buying at the right price, keeping improvement costs in line, and quickly finding bulk buyers (and keeping transaction costs in line).

    Of course, they'd miss out on longer term price appreciation--but you don't have to operate the single family homes. There is a neat Reuters article in the comments about a private equity firm selling homes and now expecting lower returns on the venture.

    It would be interesting to find out if the flipping is the plan "b" after seeing the issues with the management of the properties and low cash flow as rentals. Or maybe it is market dependent, with buyers emerging and sales possible.

    Just like individual investors, the main fly in the flipping ointment is finding a quick buyer. And what you do in the interim...
    Oct 31 01:18 AM | Likes Like |Link to Comment
  • The iShares Philippines ETF: Tapping One Of The Last Bull Markets [View article]
    Nice article. Good thesis.

    Could be a better location for low cost manufacturing than China and India....A well educated workforce, low costs, westernized culture, most people speak perfect US-style English, friendlier government...

    It was 2000, and I am riding in a pick up listening to George Strait... Could've been in Texas, but it was Baguio in the Northern PI. Everyone loved country music!

    So it could be a better cultural and even economic fit for manufacturing. We already see the edge for call centers and customer service centers. If the infrastructure improves, it could be a good site for some kinds of manufacturing, too.
    Oct 30 12:37 AM | Likes Like |Link to Comment
  • A 'Damaged Culture' No More? An Investing-In-The-Philippines Reality Check [View article]
    Nice article--very well written.

    What else is in the EPHE (other 34%)? I may check and see if I can find the the complete listing.

    Also, there may be some plays in the call centers and maybe remittances in some other publicly traded firms, but you outline the pure PI plays well.

    For those down on the low lands, maybe try Baguio.
    Oct 30 12:25 AM | Likes Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Brilliant point and addition to the article! Great article. I had not come across this early mover in the market making an exit.

    I have been drafting this idea for many months, especially when working to convert a rental to sale all summer (still on the market), thinking "how are the funds going to do this x 1,000 profitably"). So it looks like this piece supports the thesis of the article; however, Och Ziff may get out "ok" with the price appreciation in that particular area as the article mentioned by ntalebfan notes:

    "But the New York-based hedge fund is looking to sell now because the returns it is generating from rental income are less than expected and it is looking to take advantage of a recent rebound in home prices in northern California, the sources said. It's not clear what kind of return Och-Ziff had expected to earn from renting out homes.

    The average cost of renting a home nationally grew at 0.9 percent in the third quarter from the previous three-month period. That growth rate is down from 1.3 percent in the second quarter, according to Reis Inc., a commercial real estate research firm.

    Meanwhile, the median price paid for all new and resale houses and condos in the San Francisco Bay Area in August was $410,000 -- up 10.8 percent from $370,000 in August 2011, according to DataQuick.

    Och-Ziff's move could indicate that institutional investors may have to dial back their expectations, especially with regards to rental income.

    "It's not surprising that some investors may have overestimated rental returns," said Rick Sharga, executive vice president with Carrington Mortgage Holdings, a division of Carrington Capital, which has been buying and renting foreclosed homes since 2007. "If you are an investor getting into this cold you were probably making assumptions based on models rather than experience"
    Oct 25 02:17 AM | 1 Like Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Very interesting close up look of private equity property management pigdog67(or maybe mismanagement).

    It highlights so many questions. The two insurance companies I use for rental won't allow a long list with certain breeds of dogs (including the one you mentioned). And they visit the place before writing the policy.

    So you can see private equity could lose coverage and face direct liability. Dog bites are top reason for claims--just one of the hundreds of pitfalls in their new venture as landlords. And I am sure a dog bite in a single family home (rented out) or apt could find its way back to the property owner and/or their coverage.

    Some of these larger firms may even be self insuring rather than pay the landlord policies (not sure if an insurance firm would write a blanket policy for a few hundred or even a thousand dispersed homes in bulk; so they'd have to be individually done; the costs could be substantial). This is just a narrow probe on one of a hundred issues the scale creates for oversight, tenant screening, insurance coverage, safety issues, etc.
    Oct 24 11:40 PM | 1 Like Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    More great comments that add to the discussion...

    Benny is right on track with the notion that capital appreciation can bail out the strategy--if it comes soon and is strong. Of course, they'll need appreciation to cover rehab and transaction costs plus cost of capital (and soon).

    And he also notes these firms, through collective buying with billions of dollars, could even impact supply and hence pricing in some markets where they are concentrated. And he also notes private equity could even be middlemen to emerging (see Silver Bay above) single family REITS or existing REITS that seek to get involved in the single family market at scale right away (i.e. need to buy hundreds or thousands of homes); they'd be almost like bulk flippers selling the homes in bulk after a short time to another institutional buyer. Good ideas/exits strategies.

    The apartment complex comments is interesting and may be a better fit for scale for private equity; they'd be able to outsource to existing management firms--more proven and certain cash flows.

    And on the income point. Yes, median income, the job market and lots of economic factors can impact housing prices. Interestingly, this sage comment notes these numbers don't look favorable and flat rents and home prices could be a real problem for this strategy, sticking private equity with real cash flow problems and not many profitable ways out ...
    Oct 24 02:40 PM | 2 Likes Like |Link to Comment
  • Private Equity's Foreclosure Binge (& Purge) [View article]
    Thanks for the great comments!

    I think this may be a situation where the hedge fund whiz kids and high profile private equity pro's left out a key person from the table: the regular, experienced landlord in overalls.

    Yet that person and that skill set may be as important to the success of this strategy as almost any other factor.
    Oct 23 06:35 PM | 4 Likes Like |Link to Comment
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