Seeking Alpha


Send Message
View as an RSS Feed
View charliezap's Comments BY TICKER:

Latest  |  Highest rated
  • Why Big Oil Will Not Significantly Cut Dividends Even If Oil Prices Remain Low [View article]
    @moon, it was the Republican congress that came up with the dumb idea of selling from the SPR -- just a budget trick to say they are reducing the deficit.
    Nov 20, 2015. 12:05 AM | 3 Likes Like |Link to Comment
  • Why Big Oil Will Not Significantly Cut Dividends Even If Oil Prices Remain Low [View article]
    Yup, it was the Republican congress that came up with the budget that will, starting in 2018, draw from the SPR. Just another stupid Republican budget trick, and a badly timed idea.
    Nov 20, 2015. 12:02 AM | 2 Likes Like |Link to Comment
  • Why Big Oil Will Not Significantly Cut Dividends Even If Oil Prices Remain Low [View article]
    "" Adjusting for currency deppreciation [sic] and other factors oil imports have no [sic] risen and have staganted [sic] or dropped""

    What does currency depreciation have to do with it? If you are talking about the Chinese yuan, it is clear that the volume of demand -- and imports -- is up, despite the depreciating currency.

    Do you have a link showing that demand for oil and oil products in China has dropped?
    Nov 19, 2015. 11:59 PM | Likes Like |Link to Comment
  • Why Big Oil Will Not Significantly Cut Dividends Even If Oil Prices Remain Low [View article]
    " . . the [China] economy is not importing the same levels of oil as several years ago"

    This is wrong. The latest monthly oil market report from the IEA shows that oil demand in China is still trending up, from 9.9 million barrels daily, to 11.1 MBD estimated for 2015. 11.4 MBD is projected for 2016. Meanwhile, Chinese production has flattened out at around 4.2 MBD, so imports must be going up.

    Go to the link below and click on 'Tables'. Then view Table 1.

    Year: 2012 2013 2014 2015 2016
    China: 9.9 10.3 10.6 11.1 11.4

    Source: IEA. Demand data in MBD.
    Nov 19, 2015. 06:53 PM | 2 Likes Like |Link to Comment
  • Housing Stocks To Stagnate [View article]
    A. The chart in this article is rather poor and totally misleading:

    1. There are no scales on the chart, so it is impossible to check the data.

    2. The blue line is labelled "Housing Starts", but it does not depict housing starts. The blue line peaks in January 2013, declines, and then flattens out. In fact, housing starts in January 2013 were 888,000 (Saar). Since then starts have risen. peaking at 1.191 million in September 2015. Starts declined slightly in the latest month (October) to 1.06 million, but permits increased, auguring well for a continuation of the rising trend.,

    Perhaps you intended to label the blue line "Growth in Housing Starts", but you did not, so the chart is in error, and conclusions drawn from it are bound to be wrong.

    B. You say: "There have been a few reasons for the slowdown. The biggest factor has been an increase in mortgage rates." This is also in error. True, the 30-year rate hit a low around 3.4% in Dec 2012, but it has mostly remained below 4.2% since then, very low by historic standards. And average rates on conventional 30-year mortgages have actually declined since July 2015, from 4.05% to 3.80%:

    C. You also say: " . . many consumers have chosen to save their rising disposable incomes as opposed to taking on a mortgage." This is debatable. Many would argue that buying a house and paying a mortgage to do so is a way of saving for the future, versus paying rent. Even paying rent creates demand for housing in apartment type residences. OK, so there are a few millennials with high college loans who are still living with their parents. On the other hand, we have job growth in the past 18 months at an average rate not seen since the late 1990's. Jobs create the wherewithal to leave the parental home, the result being new household formations. Household formations have recently increased quite dramatically:

    As a result of strong demand for housing, housing starts will continue to trend up. Housing stocks will follow.

    Disclosure: I am long CAA, LEN and UCP.
    Nov 19, 2015. 06:17 PM | Likes Like |Link to Comment
  • Hotel REITs Pricing - Who Knows Better, Market Or Managements? [View article]
    The computerized rating system used by Schwab and others are useless when it comes to equity REITs. These systems focus on EPS and book value. Human REIT analysts gave up on these metrics a long time ago. Instead, they focus on FFO per share, and NAV.
    Nov 18, 2015. 02:31 PM | 2 Likes Like |Link to Comment
  • Hotel REITs Pricing - Who Knows Better, Market Or Managements? [View article]
    Excellent article.

    I am patiently long on HPT, and will be considering other hotel REITs. The article makes a convincing case, IMO, that the value will eventually be recognized.

    FWIW, HPT has the highest yield (7.6%) in the group, and the lowest FFO multiple. It also sells at a 21% discount to NAV, making it an excellent value.

    Yes, I know about the RMR issue, and people keep pointing it out in a manner that is becoming tiresome. It has become a non-issue for me, as the RMR management contract was modified way back in 2013 to better align RMR's incentive fees with shareholder interests. More recently, shares of RMR have been spun off and distributed so that RMR will now trade publicly, meaning that there will be more disclosure and a means to participate in RMR's "misdeeds".
    Nov 18, 2015. 12:20 PM | Likes Like |Link to Comment
  • Hotel REITs Pricing - Who Knows Better, Market Or Managements? [View article]

    This time its different.

    1) New construction has lagged rising demand and occupancy continues to go up.

    2) According to the consensus of economists, the chances of a recession in the US economy in the next 18 months are minimal. This means that both leisure and business travel will trend upward in the foreseeable future, reinforcing the RevPAR forecasts above. There is uncertainty in overseas markets, but REITs with a concentration of hotels in the US should do well.
    Nov 18, 2015. 12:08 PM | Likes Like |Link to Comment
  • Income Inequality Is Coming, Are You Prepared? [View article]
    @ Smoozingdaryl, who has yet to provide a bio.

    The issue is not income inequality, but extreme inequality, such as we have now. Income inequality in the US has risen continuously since 1970, and now the US trails only Chile, Mexico, and Turkey on the Gini index. Income inequality in the US is greater than that in any European country.
    Nov 17, 2015. 06:24 PM | 1 Like Like |Link to Comment
  • Do Retail REITs Provide Acceptable Exposure To The Consumer Discretionary Sector? [View article]
    In my simple opinion, O, NNN, and WPC are not participants in the Consumer Discretionary sector. These are "triple net" REITs that provide a means of financing retail stores and other property. O, NNN, and WPC have no direct participation in store revenue. Instead, their revenue is derived from long term (10-15 year) leases with limited fixed rent escalations.

    On the other hand, REITs that own shopping centers could be put into the Consumer Discretionary sector. Shopping center leases are often short term (3-5 years), and they usually contain participation clauses ("percentage rents"). In other words, shopping center REITs do benefit from upswings in consumer spending. Examples of large cap shopping centers REITs include SPG (Simon Property Group, malls), FRT (Federal Realty, community centers) and SKT (Tanger Factory Outlet Centers, outlet centers).
    Nov 16, 2015. 11:03 PM | 5 Likes Like |Link to Comment
  • Digital Realty closes on new 126-acre Virginia site for $43M [View news story]
    In 1978, Mobil Land Development Corporation bought all the remaining (unsold) land in Reston, Va., in adjacent Fairfax County, for just $30 million. The purchase comprised about 3,200 acres of the total area of Reston, which was 6,000 acres. My guess right now is that about half of the purchased land was zoned residential, and about half commercial, that is, office and retail.

    Wow! Land values sure have appreciated since then!
    Nov 16, 2015. 08:39 PM | Likes Like |Link to Comment
  • Income Inequality Is Coming, Are You Prepared? [View article]
    """Inequality has existed since Adam and Eve."""

    True, but in the USA inequality has become much worse, compared, say, with 1960, which is the year I arrived on these shores. Back in 1960, the US had an improving middle class, and the American dream was alive. Many European countries were much more unequal, income wise. Now the scene has switched, and income inequality in the US is greater than all European countries.

    Aside from the fact that more people are slipping into poverty in the US, aside from the struggles of the middle class, one of the biggest problems with inequality is that it slows growth. The privileged few in the upper bracket recirculate less (proportionately) of their income back into the economy than us ordinary folk. Instead, they "save" by investment in Caymen Island based hedge funds (example, Mitt Romney). These funds, in turn, largely do not invest in say, USA manufacturing -- instead, the funds go into currency bets and other foreign investments. Little of it goes into growth endeavors in the USA.
    Nov 16, 2015. 10:00 AM | 4 Likes Like |Link to Comment
  • North Dakota oil well backlog surpasses 1,000 for the first time [View news story]
    """they won't be touched ...until repubs get in office"""

    How will repubs improve things for the oil industry? How will they get the oil price up?

    Not by providing more tax incentives for drilling! Not by leasing more on public lands! Not by opening up the naval oil reserve in Alaska! So how?

    Perhaps we should bring back the Texas Railroad Commission ( to limit oil production. But Saudi Arabia would just turn it on more!

    Perhaps you are suggesting we should start another war in the Middle East? Invade Iran? How? (Population of Iran is 2 1/2 times that of Iraq.)

    Don't tell me the "repubs" will get the economy going at a faster clip. If you check the numbers, you will find that both the economy and the stock market have done better under both Clinton and Obama than under GW Bush.
    Nov 14, 2015. 11:52 AM | 30 Likes Like |Link to Comment
  • REITs under pressure as rates soar [View news story]
    LMH, the great ones are overvalued, and some of them are quite low yielding. Lower quality, higher yielding REITs are currently a better value. Here are 5 equity REITs in different sectors, with current yields:

    DFT (6.1%), digital storage
    HPT (7.7%), hotels and truck stops
    LXP (8.4%), net lease
    SNH (9.7%), healthcare
    WSR (11.8%), community shopping centers.

    The high yields give some protection from increasing interest rates, and the diversification gives added protection.
    Nov 11, 2015. 12:59 AM | 1 Like Like |Link to Comment
  • Adding Downside Protection To Exxon Mobil [View article]
    Sorry, but my prediction is that the NY AG case will go nowhere. Suing big oil companies is regarded as a free lunch by the politically connected and others.

    XOM is now at a level that is over 22% above the low set in August, and the stock price seems to be following the crude oil price. Hedge if you think crude oil prices will go to new lows in the near term future (I don't), but buying puts on account of the lawsuit will be a waste.
    Nov 11, 2015. 12:42 AM | 2 Likes Like |Link to Comment