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  • Myth: Stocks Are In Trouble When Commodities Tank [View article]
    The funny thing is, we import more than we export in Canada. I wonder if our economy would do better if our currency hadn't dropped. We're officially in recession now...

    Just look at Japan. The weaker their currency gets, the weaker their growth gets.

    I subscribe to Backwards-economic-the... If someone teaches you the market reacts in a certain manner, it is because it benefits them for everyone to believe that.

    The best thing that can happen to a nation's economy, is their currency strengthens ridiculously so that they can buy up other nations' assets on the cheap. This seems to lead to periods of economic growth in the decades that follow. There may be a brief spending dip within that nation if too much money pursues external opportunities, but such crashes are usually over quickly, and may be caused by their own assets having ridiculous prices.

    Since investors and companies come out of such situations owning their own assets, plus another nation's assets... and since working people are everywhere... the asset owners now have more people working to improve their asset values. That's a good thing for long term wealth generation.

    Another way to look at it:

    Capitalism. You grow a two carrots for $1. Someone offers to buy them for $2. Someone else offers you $3 for just one carrot. Which do you sell to? You keep one of your carrots and sell the other for maximum profit.

    Why then for the economy, is the current going theory the complete opposite? You drive your currency downward - to attain that economic growth, you chop it in half, really, even though your people need to buy electronics and other global goods. Logic says this is incorrect. It's better to be in a shrinking economy with a currency that strengthens more than it shrinks. If your currency weakens 50%, you need a heck of a lot of growth to get back to your starting point in USD. if your currency strengthens 30%, you can take a lot of negative growth before your slice of the world market dwindles below where it started.

    Look at Brazil - they're just exporting more and more commodities as their currency gets hammered. How does this help them? Economic theory says it should, but reality seems to be quite inverse.

    Look at Canada - much of our food comes from California, and compared to a few years ago we're now at a 40% disadvantage. (I can remember when $1 CAD = $1.10 USD. Now $1 CAD = $0.75 USD) That's a heck of a lot more CAD flowing into USD pockets. People generally spend on food nomatter what, but put off other purchases if necessary.

    If you rephrase generally accepted economic theory to any other market you'd laugh. "The solution to low oil prices is exporting twice as much oil and dropping prices in half, and if that fails export three times as much and drop prices again! Eventually it'll fix everything!"

    Umm... no. The solution is to cut production and maintain higher prices. If you should be so lucky as to have a strong currency, you maintain that rather than damaging it, and then use the difference to take everyone else's lunch money over time.

    If you have a weak currency, you unfortunately have to convince investors to like your currency again. It's hard to defeat that negative momentum.

    Nov 26, 2015. 02:04 PM | 2 Likes Like |Link to Comment
  • Inside Digital Realty's Powerful Model Of Repeatability [View article]
    "It will be interesting to see if we get a FED-move drop in REIT prices. I'm thinking the news is already baked in, so we will not get the buying opportunity I'd like."

    I lean towards this as well. Seems like most REITs hit lows anywhere from 2 to 4 months ago, with most about 3 months back. DFT (another datacentre REIT) was at $25/share... now $33, 32% higher!

    There's still Canadian REITs on sale. Ours generally trade at about a 3% yield discount - so if your O is 5%, ours will be 8%. If your WSR is 9%, our mall REIT will be 12%. If your VTR is 5.5%, OHI 7.5%, ours will be... 9.5%?

    I spotted another Canadian REIT today getting beaten to a pulp:

    According to the motley fool article in its news list, it has 26% oil exposure, which is what has shoved it nearly up to a 13% yield. The only thing that they got wrong was rising rates. They've been dropping in Canada, so REIT debt costs are declining here, despite the fed. Last time I looked, this one still had liquidity, so they very well may repurchase shares at 13%. Not many 13% cap rate acquisitions out there right now?

    Near term debt maturities are actually bullish, since they'll be able to reprice and expand debt, and hopefully offset some of the oil patch weakness. Still, if 26% ends up vacant... youch! That'll sting.

    Canadian REITs do have more factors to consider than focused American ones, especially for American investors. One such factor is currency headwinds. The ideal time to buy is just before a commodity upswing, as that will strengthen our currency and economy, making REIT operating fundamentals more solid and strengthening the yield and share price in USD. If our currency is still falling, then you're losing out when you buy early in USD. What you buy is worth less later.

    To put currency in perspective, not so long ago this REIT was $7.50 CAD: ($5.70 USD), with a fully covered 10.6% yield:

    Today it is $6.60 USD. If Oil rises again, and the Canadian dollar ever strengthens, one day far in the future we might reach parity again. That could be a nice return, since on top of whatever the share price ends up at, it'd be paying out $0.80 USD on a $5.70 buying point... 14%. But if oil stays low for longer, the dollar probably keeps sliding. In that case currency works against you.

    That particular REIT pays out $0.80 CAD in dividends every year, so you convert the monthly payments to USD at whatever the given exchange rate is. Right now it's probably about $0.56 USD per year.

    Sorry for the ramble.

    Nov 25, 2015. 09:42 PM | Likes Like |Link to Comment
  • Callon Petroleum: Top Quality Acreage And Impressive Execution, But Valuation Is Stretched [View article]
    I'm long their preferred shares. No danger in the meantime? Sounds good to me. ;)

    Nov 25, 2015. 09:11 PM | Likes Like |Link to Comment
  • STAG Industrial: Invest For A Fat, Steady Dividend Paycheck [View article]
    OHI is another growing REIT. FFO/share is about 10% higher than when it was at $45/share. I bought more shares at $32 quite confidently...

    Nov 25, 2015. 08:36 PM | Likes Like |Link to Comment
  • STAG Industrial: Invest For A Fat, Steady Dividend Paycheck [View article]
    FYI, "Massive", "high", "fat", "stable" dividends were mentioned 6 or more times in the article.

    I do not see any analysis on the payout ratio or dividend growth rate, which might interest potential shareholders and better flesh out how this massive-fat-high dividend came to be.

    Nov 25, 2015. 08:34 PM | Likes Like |Link to Comment
  • STAG Industrial: Invest For A Fat, Steady Dividend Paycheck [View article]
    Don't be too apologetic. The internet is a place where anyone and everyone has opportunity. Doesn't mean that you still aren't being compared to those that you stand beside.

    Many of those paragraphs really don't say anything. He needs to have picked a couple points about the company and dug deeper into those. Even if he didn't explore every nuance of STAG, digging deep into something builds a thesis. It's a reason to look further into the company. This article didn't entice me to learn more.

    Ultimately interesting articles are how you build a readership. Delivering quality research or commentary that they find useful. If he wants to take 220 followers to 20,000+, he's going to need to step up his article quality. The only person that'll stop him is himself and his own motivation. There'll be plenty of critiques of his work along the way - some will be justified, some not, but hey... that's the internet!

    Brad still gets razzed by people from time to time. Get used to it. Comes with the territory. Take the useful bits from such critiques and shluff the rest off your shoulder and move on. Focus more on what's important - pumping out GOOD articles.

    Nov 25, 2015. 08:28 PM | Likes Like |Link to Comment
  • STAG Industrial: Invest For A Fat, Steady Dividend Paycheck [View article]
    Agreed. The article didn't go over much. Read this:

    "Because STAG Industrial is so specialized toward acquiring single-tenant industrial properties, the Company can and has become specialized in this particular niche market."

    It could be rewritten:

    Because STAG is specialized in this market, they can and have become specialized in this market.


    A carrot is specialized at being a carrot because it is a carrot?

    I would say the number 1 thing that makes me like STAG more today than earlier in the year, is their stated goal to bring the payout ratio down into the 80% range (safer payout), them delivering real FFO/share growth in a period of heavy lease renewals, and them doing better with heavy renewals than most onlookers expected. They've been saying they're going to thrive during the upcoming 4-year period of heavy renewals - we're starting to get evidence of that.

    Nov 25, 2015. 08:16 PM | Likes Like |Link to Comment
  • STAG Industrial: Invest For A Fat, Steady Dividend Paycheck [View article]
    It likely *was* baked in. But Stag is now 22.2% off its lows for the year.

    It's very possible that your best buying point will have been 3+ months before the hike, even if it does quaver a tad on the actual event.

    Nov 25, 2015. 08:06 PM | 2 Likes Like |Link to Comment
  • Disney ratchets up royalty rate on Star Wars products [View news story]
    Keep in mind that if a product costs $60 to make, 0% royalty, $80 sold to stores is a 33% profit margin...

    At a 30% revenue royalty the $60 product cannot be sold for $80 to stores. Bump it up 30%, selling at $104 to stores... $31.20 royalty, $12.8 profit, 14% profit margin. (vs $60+31.20 cost)

    Maybe sell it at $140 instead. $42 royalty, $38 profit, around 37% profit margin. (vs $60+42 cost)

    Either that or take a hit on profit margins.

    Nov 25, 2015. 01:31 PM | 2 Likes Like |Link to Comment
  • Omega Healthcare Is Being Boringly Great [View article]
    You'll have a 10% yield on cost sooner than you think. (Just 12 months from now, the next four dividend payments (5-8 quarters from now) should add up to $2.50/share. Congrats!

    Nov 24, 2015. 06:52 PM | 2 Likes Like |Link to Comment
  • Omega Healthcare Is Being Boringly Great [View article]
    I just bought a second batch (after a long time waiting) at around $32.

    With OHI I don't use TTM yields, since we already know they're going to bump that dividend 1 penny every quarter. Therefore, forward 12 months are...

    $0.57+0.58+0.59+0.60 = $2.34

    And the 12 months after that...

    $0.61+0.62+0.63+0.64 = $2.50

    $32/share was a "good enough" yield for me. 7.3% forward 12 month yield. After 12 months, it'll have a 7.8% forward yield.

    Nov 24, 2015. 06:47 PM | 1 Like Like |Link to Comment
  • There's Now A Distinct Margin Of Safety With Chatham Lodging [View article]
    Hey Brad, INN seems to be missing from your dividend yield and P/FFO graphs, after being included above.

    Nov 23, 2015. 03:23 PM | 1 Like Like |Link to Comment
  • REIT World Video: Ben Butcher, CEO Of STAG Industrial [View article]
    Nice to see that payout ratio declining a bit!

    Nov 23, 2015. 02:44 PM | 2 Likes Like |Link to Comment
  • Next Hidden Opportunity: The Acquisition Of Campus Crest Communities, Inc. [View article]
    Interesting. Seems like a high probability of closing. Not a bad return.

    Nov 23, 2015. 01:26 AM | 1 Like Like |Link to Comment
  • 25% Allocation To Apple - Too Much Risk? [View article]
    Yes, true.

    "lots of big losses out there look like "act[ing] on opportunity" beforehand..."

    Oy... NADL. You don't have to tell me!

    2013 was kind of my year. I also hit ALU and NOK, plus a few other stocks that also quadrupled. I bought into SWKS at ~$29, for example - sold out in the Oct 2014 panic.

    Like I said, not doing as well since diversifying. There's something to be said for sticking with your core competencies. Use an ETF for everything else. ;)

    Nov 22, 2015. 07:48 PM | Likes Like |Link to Comment