The NYSE rules to let stand all trades in American Electric Power (AEP -1%) and NextEra Energy (NEE -1.2%) but prices for certain "aberrant" trades will be excluded from the high and low prices in data feeds. There were hundreds of trades early this morning in AEP at or below $46.03 and in NEE at or below $76.19, more than 50% below yesterday's closing prices. [View news story]
Have to wonder how these sales stand but during the flash crash my purchases were rescinded???
Must be no big banks or traders lost money on this one!!!
If you buy CWH you better hope that the outside parties win in arbitration and Portney is forced to sell. Otherwise its back to $15.
CWH had a director get voted out at the annual meeting. He resigned. Later that day the board re-appointed him.
CWH regularly sells any building that has appreciated in value - but is depreciated on the balance sheet. And immediately buys another property that will show on the balance sheet at a higher valuation. They do this without regard to tenant quality, revenue streams, location, etc. Its done for the sole purpose of maximizing RMR revenue.
CWH has routinely spun off businesses and used the money to purchase yet more assets to increase RMR fees. As long as I've been a shareholder I've received nothing from these divestitures.
CWH is run for the benefit of RMR and RMR only. And it seems that the law is protecting them from accepting a bid that is 50% more than the stock was trading for when announced. If your a lawyer and can figure out the Maryland laws and how an arbitrator is likely to rule then perhaps the $4 is worth the risk.
But this shareholder has watched the Portney's rob us blind year after year - maybe I'm jaded, but I believe they will worm their way out of this one too!
Also - they cut the dividend 50% last year. Just for good measure.
Stopping asset purchases at once would be too disruptive, says Dallas Fed chief Richard Fisher, appearing on CNBC. The hawk instead calls for the program to be tapered, beginning imminently. "We've made people richer ... the question is what have we done for working men and women in this country." [View news story]
Absolutely nothing.
And thats not all the Fed's fault. Bernanke's greatest failure isn't any of his policies - its that he didn't use his bully pulpit to call out Congress as spending our country into ruin - by not calling out the stimulus as a political giveaway as opposed to a stimulus package - by not rallying the American people to some simple truths about our fiscal policies in this country.
Policies can be changed, updated, tweaked, reversed. The total lack of leadership in Washington DC is something that has proven to be far more lasting.
While Jill Priluck decries "the dark side of shareholder activism" on Reuters, the NYT's James Stewart highlights the "sham" shareholder democracy that has seen directors at dozens of publicly traded companies retaining their positions despite losing elections. The firms include Cablevision Systems (CVC), Vornado Realty Trust (VNO) and medical diagnostics Iris International, where shareholders rejected all nine directors in May 2011. They resigned but then voted to reject their own resignations. [View news story]
Here is a real world example from one of my least favorite investments:
CWH announced today the results from their annual meeting:
Mr. Joseph L. Morea received less than the majority of shares required to be re-elected as an Independent Trustee. As a result, Mr. Morea resigned from the Board. The Board determined that the insufficient vote for Mr. Morea appeared not to be directed at any personal failings of Mr. Morea, but rather to be the result of the positions taken by the Board to oppose the hostile takeover efforts being pursued by Corvex Management LP and Related Fund Management, LLC. In these circumstances, and because the Board's determination that Mr. Morea's continued service and leadership would be in the Trust's best interest, the Board requested that Mr. Morea accept appointment to the vacancy created by his resignation. Mr. Morea subsequently accepted appointment as an Independent Trustee.
We, the shareholders managed to throw the bum out - and the very same day he's back on the board!!!!!
In a blow to investors seeking to oust the CommonWealth REIT (CWH) board, a Maryland judge rules the dispute must be resolved through arbitration. Corvex and Related sued after the Board rejected their $27/share buyout offer and instead went ahead with a secondary offering at $19. CommonWealth then filed for arbitration as allowed by its bylaws - a process stacked against shareholders, say the plaintiffs. CommonWealth reported earnings today, but the CC dialogue was strictly limited to operations. [View news story]
From the annual meeting results:
Mr. Joseph L. Morea received less than the majority of shares required to be re-elected as an Independent Trustee. As a result, Mr. Morea resigned from the Board. The Board determined that the insufficient vote for Mr. Morea appeared not to be directed at any personal failings of Mr. Morea, but rather to be the result of the positions taken by the Board to oppose the hostile takeover efforts being pursued by Corvex Management LP and Related Fund Management, LLC. In these circumstances, and because the Board's determination that Mr. Morea's continued service and leadership would be in the Trust's best interest, the Board requested that Mr. Morea accept appointment to the vacancy created by his resignation. Mr. Morea subsequently accepted appointment as an Independent Trustee.
A rejection of the Keystone pipeline (TRP) would unleash shock waves through the halls of policymakers in Canada and the U.S. and force producers to find creative solutions. But don't hold your breath: The Obama administration is unlikely to make a decision until late this year or even early 2014, unnamed U.S. officials are telling Reuters. [View news story]
Shouldn't these shock waves already be in existence? How long have we been reading about this nonsense - build the damn thing already. Environmentalists should be glad we'd be modernizing part of our pipeline infrastructure (which in some areas is 40+ years old).
U.S. jobs could return to pre-recession levels by 2014, according to some economists. The latest Wall Street Journal survey of economists, forecasters said they expect employers to add just under 180K jobs a month over the next 12 months, about the same pace as the past two years, but that should pick up as the economy continues to gather steam. For the full year, economists expect 2.4% growth - which is better than the past two years. [View news story]
And adjusted for inflation 9 years?
So, I'm glad we are at least adding jobs each month rather than losing jobs. But lets be honest - we haven't seen a sustained period of robust job growth. We need 6 months of 350-500K jobs to really get the economy going. And personally I don't see that happening with the size of our government.
Until we cut government spending and restore our freedoms and liberties we will continue to experience European like job and labor markets. And the real concern should lie with our youth. I see far too many 24 year olds serving me subs, fries, Big Macs, etc.
Sprott's John Embry: 'The Future For Retirees In America Is Grim' [View article]
Retirement is an individual situation.
Some people want to travel and see the world. Some people want to spend time in their community and work to improve it. Some people just want to be left the heck alone.
Retirement isn't broken as this guy claims. I have no fears of retirement. I've lived responsibly. Others haven't. I guess I might enjoy my retirement more than them. How is that broken?
Who says that all of our seniors should live as well when they aren't working as they did when there were working? If that was important to these people then they would have sacrificed some of their wants when they were 30 and 40 and 50 years old. If they didn't then that is their choice.
The only thing broken is the amount of money we throw at our seniors under the guise of "I paid into the system". Yeah, but you didn't pay enough and you continued to elect politicians that spent everything you sent them plus trillions they borrowed. So deal with it. And if it means we have seniors that spend their time watching tv in a small apartment and going for walks to the park as their entertainment - then so be it. Our children's and grandchildren's futures are far more important than maintaining lifestyles for 70 year olds.
Sprott's John Embry: 'The Future For Retirees In America Is Grim' [View article]
nobody has saved enough ----------------------... This is a patently false statement. A large segment of our society lives within their means - prepares for their retirement - and saves for a rainy day.
Our public retirement programs should only cover the absolute bare minimum IMO. Roof over head in a 1 bedroom apartment and food bought at the grocery store. Anything else? Work, save, invest, live responsibly.
If you want to buy a 80K car when your 35 and cruise around town - great. If you want to take 5 "trip of a lifetime" in your 40's - great. Want to wear expensive clothes, buy antiques, and pretend your a big shot in your 50's - great. Now you turn 65 and want to take 4-5 vacations a year but don't have the money? TOUGH COOKIES.
So tired of listening to the crying and whining about how bad people's lot in life is when there is a 40+ year history of making their own financial decisions. Seniors have lived life. Time to focus our resources on our children's and grandchildren's future and let the old folks age and live according to their life's work.
In a blow to investors seeking to oust the CommonWealth REIT (CWH) board, a Maryland judge rules the dispute must be resolved through arbitration. Corvex and Related sued after the Board rejected their $27/share buyout offer and instead went ahead with a secondary offering at $19. CommonWealth then filed for arbitration as allowed by its bylaws - a process stacked against shareholders, say the plaintiffs. CommonWealth reported earnings today, but the CC dialogue was strictly limited to operations. [View news story]
What CWH really shows is how outdated our corporate governance system is. There are people on the board that are truly just friends of the family. This firm has constantly sold off all assets that appreciate - with the sole intent of then buying more expensive properties to increase RMR management fees. Thats the reason they won't release property specific information. It would expose how they have sold properties generating solid cash flow and replaced them with higher priced buildings producing LESSER cash flow. But management fees increase!
I've owned for a long time. They have spun off several companies - I've received ZERO shares from any of the new entities, and I've received ZERO dollars and ZERO cents from any of the spin-offs. Its a legal scam.
The New York City Employees' Retirement System becomes the third pension fund to sell its stake in gun makers Sturm Ruger (RGR -0.8%) and Smith & Wessen (SWHC -0.3%) following the nightmarish school shooting in Connecticut. CalSTRS and New York's Teacher's Retirement System sold their shares in January and February respectively. Comptroller John Liu says the company's products "tear apart families and shatter communities." ( Reuters ) [View news story]
Much like the bureaucratic structure in our schools and government. Tax burdens make family life more difficult. Poor teachers kept in front of students tear apart future families and lessen their economic futures. And our bureaucrats now have the power to indiscriminately seize children from families.
Laws Of Cap Rate Compression And Several REITs With Mispriced Risk [View article]
The recent buying of REITs is simply a hedge against low interest rates for a further sustained time period.
And while I"m inclined to agree that we may be stuck in a low interest rate environment for a long long time (depending on who replaces Bernanke), I also agree that REIT's are generally overpriced currently.
Anyone investing money today should be looking at what increase in AFFO/FFO can be obtained over the next 4-5 years. If you don't think its at least 25% or more then there is no way you should put money in. That said I've been wrong many many times, so perhaps that makes it likely to see a huge surge of M&A in the sector and prices keep going up!
Anyway, things look fairly expensive and sectors like health care, and office look like they carry a lot of risk given the current economic environment. Good article.
"It's almost biblical," says Apollo Global (APO) CEO Leon Black. "There is a time to reap and there's a time to sow ... We are harvesting." The P-E kingpin says Apollo has unloaded about $13B in assets over the past 15 months. "The financing market is as good as we have ever seen it. It's back to 2007 levels. There is no institutional memory ... We're selling everything that's not nailed down." [View news story]
The fairest solution for the 2008 crisis would have been to dilute and nationalize the banking sector, instead of giving it free money. ----------------------... Paulo, Unfortunately - trying to be "fair" is part of the reason they bailed everyone out.
If we had instead relied on the law and our experience with the S&L debacle, we would have let firms go under. The government could have stepped in and guaranteed deposits. They could have taken over the failed banks and sold off the assets. That would have also allowed them to PROSECUTE FRAUD!!! That is the single most glaring failure of the financial crisis. And I mean fraud from the very top (Fuld, Mazzilo, London AIG guy) to the very bottom (liar's loan applications). In the S&L crisis we sent more than 2000 people to jail and many more were fined and given probation.
I laugh when I hear all the talking heads on tv wonder why we don't have stronger growth coming out of the recession. Well, in addition to all the stupid political garbage and increasing regulatory irritations - there comes a point in time when many folks like myself (not rich - but successful and willing in the past to invest locally in small businesses) say enough. And I've reached that point during this fiasco.
Why would I want to start a new business in my community today? Lets see. Local bureaucrats, State bureaucrats, Federal bureaucrats. Nope those aren't reasons to start a business. Obamacare? Nope. Politicians telling me what the minimum wage should be for a high school student on their first job? Nope.
What do all those things have in common??? "Fairness". People don't like to hear it - but my businesses exist to provide for my family. And yes, along the way, I'm proud of the people I've employed, the contributions we've made to our community, and the solid service and products we've provided. But at the end of the day, no profits for my family - no business.
Fairness??? Things were pretty "fair" in the USSR.
If Tack has invested well and is earning a sizable return I say good for him.
"It's almost biblical," says Apollo Global (APO) CEO Leon Black. "There is a time to reap and there's a time to sow ... We are harvesting." The P-E kingpin says Apollo has unloaded about $13B in assets over the past 15 months. "The financing market is as good as we have ever seen it. It's back to 2007 levels. There is no institutional memory ... We're selling everything that's not nailed down." [View news story]
I lost somewhere around 50% - don't know exactly the time frame. I owned mostly highly rated investments. Leaders in segments. And they all tanked. To give specific examples - two of my biggest "losers" were DOW and IP.
Now, perhaps I'm really stupid and just lucked out. But it became obvious to myself that even though I personally believe that the government should have allowed the banks to go under (nationalize to some extent if necessary - but if so then take over and sell off the parts minus the management) that many businesses were going to survive. And I made some "smart" decisions.
I sold all my DOW and IP once they partially rebounded. I purchased smaller companies that had growth prospects (IMO) in their place. Now I didn't purchase them "at the bottom", but many of these firms had lost 95% of their market cap - so the fact they had rebounded slightly still left them plenty cheap. And I prefer companies that pay back cash flow to shareholders.
Now, my investment actions differ from my personal beliefs and political position. I didn't purchase banks, but did invest in some financial type firms like PSEC - which I still hold and like. I realized that commercial real estate wasn't going to be totally foreclosed on and purchased REITs (even adding to some I had held the whole way through - from $40 to $2).
I agree with Tack on this. Hi yield investments are sometimes hi yield because management is actually working for shareholders instead of themselves. There is nothing wrong with cash cows. Often in unglamorous businesses, that simply do the same thing over and over, and produce free cash flow. I own a couple of small businesses and thats all we do - we do simple things well - we do them again and again - offer good solid service - contribute to our community - and we are successful.
I would add that I take all my yield from these type of investments and invest in other firms. So I'm not putting all my eggs in one basket. And I like to invest in mainly things I can understand. But I am not super diversified. If I like a business I will keep buying. And yes, I am wrong sometimes. But so what.
Just as I have never started a new business to break even - I don't invest to break even either - why do I want to just keep up with inflation or slightly beat it?
The NYSE rules to let stand all trades in American Electric Power (AEP -1%) and NextEra Energy (NEE -1.2%) but prices for certain "aberrant" trades will be excluded from the high and low prices in data feeds. There were hundreds of trades early this morning in AEP at or below $46.03 and in NEE at or below $76.19, more than 50% below yesterday's closing prices. [View news story]
Must be no big banks or traders lost money on this one!!!
REIT Focus: Commonwealth REIT [View article]
CWH had a director get voted out at the annual meeting. He resigned. Later that day the board re-appointed him.
CWH regularly sells any building that has appreciated in value - but is depreciated on the balance sheet. And immediately buys another property that will show on the balance sheet at a higher valuation. They do this without regard to tenant quality, revenue streams, location, etc. Its done for the sole purpose of maximizing RMR revenue.
CWH has routinely spun off businesses and used the money to purchase yet more assets to increase RMR fees. As long as I've been a shareholder I've received nothing from these divestitures.
CWH is run for the benefit of RMR and RMR only. And it seems that the law is protecting them from accepting a bid that is 50% more than the stock was trading for when announced. If your a lawyer and can figure out the Maryland laws and how an arbitrator is likely to rule then perhaps the $4 is worth the risk.
But this shareholder has watched the Portney's rob us blind year after year - maybe I'm jaded, but I believe they will worm their way out of this one too!
Also - they cut the dividend 50% last year. Just for good measure.
Invest at your own risk.
Stopping asset purchases at once would be too disruptive, says Dallas Fed chief Richard Fisher, appearing on CNBC. The hawk instead calls for the program to be tapered, beginning imminently. "We've made people richer ... the question is what have we done for working men and women in this country." [View news story]
And thats not all the Fed's fault. Bernanke's greatest failure isn't any of his policies - its that he didn't use his bully pulpit to call out Congress as spending our country into ruin - by not calling out the stimulus as a political giveaway as opposed to a stimulus package - by not rallying the American people to some simple truths about our fiscal policies in this country.
Policies can be changed, updated, tweaked, reversed. The total lack of leadership in Washington DC is something that has proven to be far more lasting.
While Jill Priluck decries "the dark side of shareholder activism" on Reuters, the NYT's James Stewart highlights the "sham" shareholder democracy that has seen directors at dozens of publicly traded companies retaining their positions despite losing elections. The firms include Cablevision Systems (CVC), Vornado Realty Trust (VNO) and medical diagnostics Iris International, where shareholders rejected all nine directors in May 2011. They resigned but then voted to reject their own resignations. [View news story]
CWH announced today the results from their annual meeting:
Mr. Joseph L. Morea received less than the majority of shares required to be re-elected as an Independent Trustee. As a result, Mr. Morea resigned from the Board. The Board determined that the insufficient vote for Mr. Morea appeared not to be directed at any personal failings of Mr. Morea, but rather to be the result of the positions taken by the Board to oppose the hostile takeover efforts being pursued by Corvex Management LP and Related Fund Management, LLC. In these circumstances, and because the Board's determination that Mr. Morea's continued service and leadership would be in the Trust's best interest, the Board requested that Mr. Morea accept appointment to the vacancy created by his resignation. Mr. Morea subsequently accepted appointment as an Independent Trustee.
We, the shareholders managed to throw the bum out - and the very same day he's back on the board!!!!!
In a blow to investors seeking to oust the CommonWealth REIT (CWH) board, a Maryland judge rules the dispute must be resolved through arbitration. Corvex and Related sued after the Board rejected their $27/share buyout offer and instead went ahead with a secondary offering at $19. CommonWealth then filed for arbitration as allowed by its bylaws - a process stacked against shareholders, say the plaintiffs. CommonWealth reported earnings today, but the CC dialogue was strictly limited to operations. [View news story]
Mr. Joseph L. Morea received less than the majority of shares required to be re-elected as an Independent Trustee. As a result, Mr. Morea resigned from the Board. The Board determined that the insufficient vote for Mr. Morea appeared not to be directed at any personal failings of Mr. Morea, but rather to be the result of the positions taken by the Board to oppose the hostile takeover efforts being pursued by Corvex Management LP and Related Fund Management, LLC. In these circumstances, and because the Board's determination that Mr. Morea's continued service and leadership would be in the Trust's best interest, the Board requested that Mr. Morea accept appointment to the vacancy created by his resignation. Mr. Morea subsequently accepted appointment as an Independent Trustee.
A rejection of the Keystone pipeline (TRP) would unleash shock waves through the halls of policymakers in Canada and the U.S. and force producers to find creative solutions. But don't hold your breath: The Obama administration is unlikely to make a decision until late this year or even early 2014, unnamed U.S. officials are telling Reuters. [View news story]
U.S. jobs could return to pre-recession levels by 2014, according to some economists. The latest Wall Street Journal survey of economists, forecasters said they expect employers to add just under 180K jobs a month over the next 12 months, about the same pace as the past two years, but that should pick up as the economy continues to gather steam. For the full year, economists expect 2.4% growth - which is better than the past two years. [View news story]
So, I'm glad we are at least adding jobs each month rather than losing jobs. But lets be honest - we haven't seen a sustained period of robust job growth. We need 6 months of 350-500K jobs to really get the economy going. And personally I don't see that happening with the size of our government.
Until we cut government spending and restore our freedoms and liberties we will continue to experience European like job and labor markets. And the real concern should lie with our youth. I see far too many 24 year olds serving me subs, fries, Big Macs, etc.
Sprott's John Embry: 'The Future For Retirees In America Is Grim' [View article]
Some people want to travel and see the world. Some people want to spend time in their community and work to improve it. Some people just want to be left the heck alone.
Retirement isn't broken as this guy claims. I have no fears of retirement. I've lived responsibly. Others haven't. I guess I might enjoy my retirement more than them. How is that broken?
Who says that all of our seniors should live as well when they aren't working as they did when there were working? If that was important to these people then they would have sacrificed some of their wants when they were 30 and 40 and 50 years old. If they didn't then that is their choice.
The only thing broken is the amount of money we throw at our seniors under the guise of "I paid into the system". Yeah, but you didn't pay enough and you continued to elect politicians that spent everything you sent them plus trillions they borrowed. So deal with it. And if it means we have seniors that spend their time watching tv in a small apartment and going for walks to the park as their entertainment - then so be it. Our children's and grandchildren's futures are far more important than maintaining lifestyles for 70 year olds.
Sprott's John Embry: 'The Future For Retirees In America Is Grim' [View article]
----------------------...
This is a patently false statement. A large segment of our society lives within their means - prepares for their retirement - and saves for a rainy day.
Our public retirement programs should only cover the absolute bare minimum IMO. Roof over head in a 1 bedroom apartment and food bought at the grocery store. Anything else? Work, save, invest, live responsibly.
If you want to buy a 80K car when your 35 and cruise around town - great. If you want to take 5 "trip of a lifetime" in your 40's - great. Want to wear expensive clothes, buy antiques, and pretend your a big shot in your 50's - great. Now you turn 65 and want to take 4-5 vacations a year but don't have the money? TOUGH COOKIES.
So tired of listening to the crying and whining about how bad people's lot in life is when there is a 40+ year history of making their own financial decisions. Seniors have lived life. Time to focus our resources on our children's and grandchildren's future and let the old folks age and live according to their life's work.
Mart Resources: A 14% Yield And Big Catalysts [View article]
Can you comment on what another poster stated about them only having a service contract and no actual ownership interests in the oil fields?
Thanks for the article.
In a blow to investors seeking to oust the CommonWealth REIT (CWH) board, a Maryland judge rules the dispute must be resolved through arbitration. Corvex and Related sued after the Board rejected their $27/share buyout offer and instead went ahead with a secondary offering at $19. CommonWealth then filed for arbitration as allowed by its bylaws - a process stacked against shareholders, say the plaintiffs. CommonWealth reported earnings today, but the CC dialogue was strictly limited to operations. [View news story]
I've owned for a long time. They have spun off several companies - I've received ZERO shares from any of the new entities, and I've received ZERO dollars and ZERO cents from any of the spin-offs. Its a legal scam.
The New York City Employees' Retirement System becomes the third pension fund to sell its stake in gun makers Sturm Ruger (RGR -0.8%) and Smith & Wessen (SWHC -0.3%) following the nightmarish school shooting in Connecticut. CalSTRS and New York's Teacher's Retirement System sold their shares in January and February respectively. Comptroller John Liu says the company's products "tear apart families and shatter communities." ( Reuters ) [View news story]
Guns are the least of our problems.
Laws Of Cap Rate Compression And Several REITs With Mispriced Risk [View article]
And while I"m inclined to agree that we may be stuck in a low interest rate environment for a long long time (depending on who replaces Bernanke), I also agree that REIT's are generally overpriced currently.
Anyone investing money today should be looking at what increase in AFFO/FFO can be obtained over the next 4-5 years. If you don't think its at least 25% or more then there is no way you should put money in. That said I've been wrong many many times, so perhaps that makes it likely to see a huge surge of M&A in the sector and prices keep going up!
Anyway, things look fairly expensive and sectors like health care, and office look like they carry a lot of risk given the current economic environment. Good article.
"It's almost biblical," says Apollo Global (APO) CEO Leon Black. "There is a time to reap and there's a time to sow ... We are harvesting." The P-E kingpin says Apollo has unloaded about $13B in assets over the past 15 months. "The financing market is as good as we have ever seen it. It's back to 2007 levels. There is no institutional memory ... We're selling everything that's not nailed down." [View news story]
----------------------...
Paulo, Unfortunately - trying to be "fair" is part of the reason they bailed everyone out.
If we had instead relied on the law and our experience with the S&L debacle, we would have let firms go under. The government could have stepped in and guaranteed deposits. They could have taken over the failed banks and sold off the assets. That would have also allowed them to PROSECUTE FRAUD!!! That is the single most glaring failure of the financial crisis. And I mean fraud from the very top (Fuld, Mazzilo, London AIG guy) to the very bottom (liar's loan applications). In the S&L crisis we sent more than 2000 people to jail and many more were fined and given probation.
I laugh when I hear all the talking heads on tv wonder why we don't have stronger growth coming out of the recession. Well, in addition to all the stupid political garbage and increasing regulatory irritations - there comes a point in time when many folks like myself (not rich - but successful and willing in the past to invest locally in small businesses) say enough. And I've reached that point during this fiasco.
Why would I want to start a new business in my community today? Lets see. Local bureaucrats, State bureaucrats, Federal bureaucrats. Nope those aren't reasons to start a business. Obamacare? Nope. Politicians telling me what the minimum wage should be for a high school student on their first job? Nope.
What do all those things have in common??? "Fairness". People don't like to hear it - but my businesses exist to provide for my family. And yes, along the way, I'm proud of the people I've employed, the contributions we've made to our community, and the solid service and products we've provided. But at the end of the day, no profits for my family - no business.
Fairness??? Things were pretty "fair" in the USSR.
If Tack has invested well and is earning a sizable return I say good for him.
"It's almost biblical," says Apollo Global (APO) CEO Leon Black. "There is a time to reap and there's a time to sow ... We are harvesting." The P-E kingpin says Apollo has unloaded about $13B in assets over the past 15 months. "The financing market is as good as we have ever seen it. It's back to 2007 levels. There is no institutional memory ... We're selling everything that's not nailed down." [View news story]
Now, perhaps I'm really stupid and just lucked out. But it became obvious to myself that even though I personally believe that the government should have allowed the banks to go under (nationalize to some extent if necessary - but if so then take over and sell off the parts minus the management) that many businesses were going to survive. And I made some "smart" decisions.
I sold all my DOW and IP once they partially rebounded. I purchased smaller companies that had growth prospects (IMO) in their place. Now I didn't purchase them "at the bottom", but many of these firms had lost 95% of their market cap - so the fact they had rebounded slightly still left them plenty cheap. And I prefer companies that pay back cash flow to shareholders.
Now, my investment actions differ from my personal beliefs and political position. I didn't purchase banks, but did invest in some financial type firms like PSEC - which I still hold and like. I realized that commercial real estate wasn't going to be totally foreclosed on and purchased REITs (even adding to some I had held the whole way through - from $40 to $2).
I agree with Tack on this. Hi yield investments are sometimes hi yield because management is actually working for shareholders instead of themselves. There is nothing wrong with cash cows. Often in unglamorous businesses, that simply do the same thing over and over, and produce free cash flow. I own a couple of small businesses and thats all we do - we do simple things well - we do them again and again - offer good solid service - contribute to our community - and we are successful.
I would add that I take all my yield from these type of investments and invest in other firms. So I'm not putting all my eggs in one basket. And I like to invest in mainly things I can understand. But I am not super diversified. If I like a business I will keep buying. And yes, I am wrong sometimes. But so what.
Just as I have never started a new business to break even - I don't invest to break even either - why do I want to just keep up with inflation or slightly beat it?
No risk - no reward.