Tony Soprano

Are REIT's Fairly Valued?

If the SRS goes to $138 I'll be loading up the truck big time. However, it better do it within 3 to 9 months.

As Building Slowdown Goes Commercial, Ultrashort Real Estate Should Speed Up

TraderMark

I’m glad that these trades have been very profitable for you. Congrats!

You may have been able to get in and out in time. However, some new or inexperienced traders may not. Even experienced traders get squeezed or just caught being short. It’s not easy to execute. You have to stay on top of the market minute by minute and having the right equipment helps as well.

It’s a hard and risky way to make money. Traders cannot go off and play golf or take even a short vacation until they close out their positions. Some traders try to make it look easy. I see a lot of this on the internet. Any trader can say that they got in and out within a certain time. Its misleading for novice traders and not fair for them. During the late nineties we went through a terrible debacle with the day traders. In a way its happening again with ETF’s. ETF’s that double down present new challenges. We cannot take for granted that ever one will understand these types of vehicles let alone where and how to use them.

You said that I said that this was a bad trade. I never said that. You may infer that I said it was a bad trade. But I will let the numbers above speak for themselves. Highly experienced traders need not pay attention.

You made a good argument as to why the commercial real estate market will be hard press as we go into a recession. You laid the groundwork well. Again, it could easy mislead an investor into thinking it would be easy. Especially, if they don’t follow the markets closely. Investors that have a large long stock portfolio should beware, investors that are short beware more, investors that use ETF’s that double down should beware much more.

I have visited your site several times, I have it book marked, and I do find it interesting even though I disagree with some of your data. Good Luck!

As Building Slowdown Goes Commercial, Ultrashort Real Estate Should Speed Up

When published on March 5

the SRS closed at 113.10*

the SKF closed at 125.05*


Today March 18

the SRS closed at 104.00*

the SKF closed at 116.29*

*does not include the cost

Not brilliant for those that got in on March 5th and could not or did not get out in time. What a hard way to make money.

The easy money has been made in this trade. Like many other shorts you are now fighting the FED. It’s not just that the rates are falling. They may buy back the bad debt permanently. Its like they are a trader and what a trader to compete against. They went from holding the bad debt from 28 days to 6 months. We have best Federal Reserve system in the world.

Finally, if you don’t get a big bounce off of 100 or so then watch out. The chart could break down and you will be looking 90. Most of the bad news in ALL the markets is and has been factored in.

Time to Get Serious About Utilizing Short ETFs

To: Richard Shinnick

Rule #6 (never go long stocks) is a bad strategy. Never is a long time! We should be able to use all of the tools that the markets make available to us. For the young and the non experienced investors and traders this type of guidance is a disservice.

I have been long the stock market for over 45 years. There were many, many days, weeks and months of toil along the way. My longest of longs was WPO. The IPO was $25 and it did not take long for it to go to $14. I kept WPO because their circulation was skyrocketing. Evening papers were dying then because of the advent of evening news; this made it easier for morning papers to grow faster. There are many other factoids from Watergate and the Warren Buffet affect that I can give you but I will let the facts speak for themselves.

Below is a very interesting article that may have an affect or our markets and I think it will. We already know that foreign money has been and will continue to move into US and European banks. However, now it looks like foreign funds will be moving into commercial real estate as well.

Foreign buyers see U.S. property as currency play
03/07/2008 07:00 AM EST
Copyright 2008 Reuters

By Ilaina Jonas

NEW YORK, March 7 (Reuters) - For over a year, U.S. real estate has offered bargains to foreign buyers as the euro or British pound gets ever more bang against the sinking buck.

Now, however, a shopping mall, office building, high-rise condominium, or hotel is, to some foreign investors, a vehicle to bet on the dollar.

The trend hasn't escaped Rene-Pierre Azria, chief executive of Tegris, a New York investment bank specializing in cross-border mergers and acquisitions.

Azria has been meeting with investors for Tegris' third real estate fund. The firm plans to raise $300 million in foreign currency in Rossrock Fund III LP to buy the least risky senior portion of distressed commercial real estate mortgages.

While making his rounds to British and European investors, many institutional buyers wanted the funds invested immediately instead of spreading them out for more consistent returns over two or three years.

"They said, 'I want to buy dollars now and get out whenever the fund matures ... (say) in four years, five or six years, because then I'll be making money on the exchange rate,'" he said.

On Friday, the dollar hit a record low of about $1.54 against the euro. The British pound rose to a year's high of more than $2.00.

Commercial real estate investors traditionally have hedged against currency fluctuations.

However, European and British investors remember when the dollar was on top and believe it will happen again as Europe succumbs to an even longer and more painful economic slowdown than in the United States, said Azria, former global partner with investment bank Rothschild Inc.

"Therefore, the exchange rate turnaround is going to happen sooner rather than later," said Azria, whose co-founder Janet Christensen was chief of staff to Blackstone Group LP Chairman Stephen Schwarzman.

"By the time they take their money out of the fund, which is three, four, five years down the road, it will be fully in their favor," he said.

The dollar could begin to strengthen against both currencies in the second half of 2008, said foreign exchange analyst John Normand at J.P. Morgan Securities.

A strengthening dollar could boost the eventual property sales value, as well as the rent, for European property owners who buy now and hold their U.S. investment for several years.

Even half-empty new condo projects and foreclosed houses in Florida have attracted foreign buyers, said Peter Zalewski founder of Condo Vultures, a real estate investment consulting firm in Bal Harbour, Florida.

"They're saying, 'Let's get into dollars simply because we think there's a currency arbitrage play there,'" Zalewski said.

Hedge funds from the Czech Republic, Monaco, Belgium and France, and a Singapore fund looking to recycle pounds earned from London office properties into dollars have contacted him.

One UK fund wanted only single-family homes in southwest Florida markets such as Naples and downtrodden Ft. Myers, he said. "They want to get out of pounds, get into U.S. dollars."

STICK TO WHAT YOU KNOW

Yet many real estate experts recommend that commercial property investors avoid currency plays.

"Real estate investors are not experts in currency," said Michael Pralle, president of real estate private equity firm JER Partners.

"People who get into currency speculation, that's fine, but they should recognize that's exactly what it is," said Pralle, the former head of General Electric Co's GE Real Estate unit. "That's a different business from ... real estate. The people that mix it up, they're fooling themselves."

The U.S. economy also could wipe out any currency gains by driving down rents, said Benjamin Lambert, chairman of real estate brokerage Eastdil Secured, a unit of Wells Fargo & Co .

"For the most part, the activity that we've seen has been from pretty sophisticated people," Lambert said. "A great deal of them are more concerned about a recession."

(See [Link removed for security purposes] for the new global service for real estate professionals from Reuters)

(Editing by Richard Chang)

As Building Slowdown Goes Commercial, Ultrashort Real Estate Should Speed Up

DON'T BE SO PRIDEFUL ABOUT YOUR PREDICTIONS. HERE IS WHY!

Last summer (while drinking K aid) the commodity bubble was not nearly as pressing for the consumer and you and no one else (except for Jim Rodgers) was predicting crude and wheat at record prices. The high cost of food and gas has changed the equation since last summer.

If we do have a lasting recession and with Europe slowing the bubble in commodities may burst. Meanwhile, our population is growing and I don't see people trying to escape into Mexico and the Fed is cutting. In the end we may well end up with stagflation. Both bears and bulls will suffer unless you are happy with the high dividends. I went through the stagflation of the 70's and the only cure was time. If you are long you can sit on your hands collect those fat dividends and of course if you are short you have to pay them out. I'll be buying long and collecting the dividends just like Warren Buffet did in the 1973 and 1974 recession.