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charliezap

charliezap
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  • I Just Got Another Raise: Thanks Realty Income [View article]
    O up another 1.5% today. Looks like a blowoff, with O highly overbought. RSI is near the critical level of 80 (practically guarantees a selloff) and the daily MACD is at the highest level since the taper tantrum. Watch out below!
    Jan 26, 2015. 01:42 PM | Likes Like |Link to Comment
  • A Predictably Profitable Hotel REIT That I Would Like To Own [View article]
    The hotel business is very cyclical. There is a lot of operational leverage. "Leases" are one day at a time. In a recession, cash flow (FFO) can dry up very quickly, and dividends can be cut.

    Right now though, the economy is expanding, and the prospects of a recession in the next 18-24 months are minimal. RevPAR (Revenue per available room) is increasing. But do not expect continually increasing dividends. When the next recession hits, business and personal travel will dry up very quickly, and cash flow will be squeezed.

    Disclosure: I am long HPT (new 12-month high today, yield = 5.9%).
    Jan 26, 2015. 01:12 PM | Likes Like |Link to Comment
  • I Just Got Another Raise: Thanks Realty Income [View article]
    The higher the stock price, the greater the risk, at least for new buyers. O is already at levels on the RSI and MACD where sell offs have occurred in the past. All that's needed is a trigger -- sale of stock, selling after ex-div (on 2/2), or a bond market scare. Its coming!
    Jan 26, 2015. 08:50 AM | Likes Like |Link to Comment
  • Interest Rates Are Coming: My Top REIT Picks For 2015 [View article]
    Jeff, not sure what you mean by "fudging the numbers"; however, the demographics are that more and more "baby boomers" (born 1945-1960) are now getting to be 65+, the traditional retirement age. This is a factor -- we can argue about how much -- in the declining participation rate.
    Jan 25, 2015. 09:41 AM | 1 Like Like |Link to Comment
  • I Just Got Another Raise: Thanks Realty Income [View article]
    This sounds like Brad is preaching to the choir.

    Meanwhile, O's stock price is rushing toward the cliff. Momentum players are rushing in like lemmings, spurred on by the dividend rise news. Expect to see a tumble sometime before or after the ex-div date of 2/2/2014.

    Technical indicators show that O is in overbought territory. The daily MACD is at the second highest level (1.49) in the past 4 years, exceeded only by the "taper tantrum" peak (1.60). The RSI is at 76.5, essentially territory where previous selloffs have occurred.

    If you have to buy this stock (FFO yield under 5%), wait til after the ex-div date!
    Jan 23, 2015. 09:56 AM | Likes Like |Link to Comment
  • Cheap Oil Prices Do Not Benefit The Economy [View article]
    The discussion here is deteriorating. I'm signing out.
    Jan 22, 2015. 07:15 PM | Likes Like |Link to Comment
  • Risk Is Our Business: American Realty Capital Properties [View article]
    Where would you look to find ARCP's taxable income? REITs do not usually disclose this information.
    Jan 22, 2015. 01:56 PM | 1 Like Like |Link to Comment
  • Cheap Oil Prices Do Not Benefit The Economy [View article]
    The excerpts are from Gretchen Morgenson's column in the NY Times Sunday Business section, entitled: "What’s So Bad About Cheap Oil?"
    Jan 21, 2015. 06:08 PM | Likes Like |Link to Comment
  • Realty Income Corp: Why Now's A Good Time To Sell [View article]
    """I require the dividends they pay to live on...to pay my bills....to support our retirement life style. So if I sell, . . how will I make that up? What can I buy to replace the lost income?"""

    Bruce, 2 of the REITs on your list, BXP and SKT are among the lowest yielders in the sector. The average yield on all four (BXP, O, SKT, and VTR) is just 3.1%. Why not sell, assuming these holdings are in an IRA account, and switch to higher yielding REITs. These 4, APTS, HPT, LXP, and SNH, yield an average of 6.5%, more than twice what your current holdings are yielding.

    I happen to believe that there is a considerable degree of interest rate risk in low yielding REITs. Many money market and other fixed income investors have gravitated to the equity market (REITs, MLPs, SBC, utilities, and large cap dividend payers) because of zero or low interest rates. If and when T-bond rates move up again, these investors will sell and go back to treasuries and other fixed income offerings. Low yielding REITs will be more vulnerable than high yielding REITs -- the latter will still have a positive spread over treasuries, but the low yielding ones may not.

    We had a preview of what could happen with the "taper tantrum" episode. Momentum investors bid up O in the November 2012 to May 2013 period, from 38 to over 55. Janet Yellen uttered the word "taper" -- and many REITs tumbled. O went below 38. Now O has pushed up toward 53 and sells at an elevated FFO multiple -- 20.3 X the 2014 estimate. O is now at an overbought level by the daily MACD indicator, just where it was when the taper tantrum hit.

    Watch out below!

    Of course, I know there are many out there who are determined to hold O, no matter what, saying "I don't believe in market timing." I say, when a stock is overbought, caution is the word of the wise.
    Jan 21, 2015. 05:25 PM | Likes Like |Link to Comment
  • Cheap Oil Prices Do Not Benefit The Economy [View article]
    """Total employment in the oil industry — including oil and gas extraction and support services — averaged 528,000 in 2014, . .. “My guess is that in 2014, energy companies spent over $200 billion, mostly on structures but also on equipment,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. He now expects that figure to fall by half or more. That’s not pocket change, but capital spending cuts will be small when set against the overall $17 trillion size of our economy. And even if the industry lost half its jobs — which it won’t — that would be equivalent to less than a single month’s gain for the overall economy, which added about 275,000 jobs a month last year. “That completely dwarfs any hits in the oil business, capital spending and oil services business,” Mr. Shepherdson said."""

    Among professional economists there seems to be little doubt that the oil price decline will lead to significant gains. A further excerpt: """The overall economic benefits of the collapse in oil prices are significant, Mr. Shepherdson said. He predicted that it could add almost one percentage point to real gross domestic product growth in the United States this year. In an economy trending at 2.25 percent annual growth, that’s a sizable gain."""
    Jan 21, 2015. 04:04 PM | Likes Like |Link to Comment
  • Cheap Oil Prices Do Not Benefit The Economy [View article]
    """ . . energy is not used in calculating inflation rates."""

    Nonsense, gasoline, heating oil, etc are components of the CPI, and count in the PCEIP and other measures of inflation. But the Fed also monitors something called "core CPI" that exclude food and energy -- volatile components that can sometimes distort the trend.
    Jan 21, 2015. 03:16 PM | Likes Like |Link to Comment
  • Interest Rates Are Coming: My Top REIT Picks For 2015 [View article]
    user, how on earth did my "political agenda" come into the discussion? Its your opinion that the fed will not raise rates in 2015, and you link to other people's opinions that support your opinion. I have tried to point out certain facts, specifically that job gains have been strong -- over 200,000 in each of the last 11 months, and averaging 254,000 over the past 12 months. I have pointed out that economic conditions have improved drastically since 2010. Unemployment is down to 5.6% and it is headed lower, moving closer to nairu, the "natural rate of unemployment", estimated by the CBO to be 5.2%. If unemployment drops below 5.2%, there will, theoretically, be upward pressures on wage rates. This consideration will finally move the fed to move away from zirp. It is my opinion that the fed move will come this year. It is yours that it wont. You've place your bets. I've placed mine.

    Lets leave it at that.

    http://bit.ly/1GvoSre
    http://1.usa.gov/Kv8U2r
    Jan 21, 2015. 10:59 AM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: China Posts Slowest Growth In Decades [View article]
    buckox, my comment to James was that raising the rate on capital gains would not affect the tax on IRAs, which is taxed at ordinary income tax rates, but only on withdrawals. James did not address my comment directly, saying only that I did not know the PLAN, whatever that is.

    If the Obama "plan" is to raise taxes on the rich and to help the middle class, I can give you my personal guarantee (for what that's worth) that he will not raise the tax on IRAs.
    Jan 20, 2015. 12:11 PM | 2 Likes Like |Link to Comment
  • Wall Street Breakfast: China Posts Slowest Growth In Decades [View article]
    James, you seem confused about taxes. You must have someone else do yours for you. I've done mine for 50 years now. I predict that regardless of Obama's proposals, he will not suggest raising the tax on IRA withdrawals above the ordinary income tax rate. And the 3.8% ACA tax does not apply to IRA withdrawals.
    Jan 20, 2015. 10:30 AM | 4 Likes Like |Link to Comment
  • Wall Street Breakfast: China Posts Slowest Growth In Decades [View article]
    The headline, "China Posts Slowest Growth in Decades", is completely misleading. Although the growth rate slowed from 7.7% in 2013 to 7.4% in 2014, absolute growth in 2014 was greater than 2013. (Calculate it out and you'll see.)

    Besides, 7.4% is terrific growth for any country. Would we complain if the US had 7.4% growth?
    Jan 20, 2015. 09:52 AM | 2 Likes Like |Link to Comment
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