NO DooDahs

REITs vs. Homebuilders -- Not What You Think

Perhaps it's a theoretical issue that REIT ETFs merge residential and commercial classes; I haven't attempted to verify or disprove that any particular REIT ETF does or doesn't. I also don't read the War Street Urinal.

Regardless, it's a simple fact that RWR, a REIT ETF, regardless of its composition, has shown considerable outperformance over the broader market in terms of appreciation. This is not a new trend, it is a trend that goes back for several years and was unaffected - totally unaffected - by the collapse of homebuilding stocks. As long as the price is going up, shorting it is stepping in front of a moving train. It would seem to me that going from 80 to 90 in two months would outweigh the difference in yield from money markets to dividends.

Are you still short them?

Currently I am not long RWR, but I have a couple of positions near their stops and am considering RWR as a replacement. Been 100% long for quite a while ...

REITs vs. Homebuilders -- Not What You Think

Here's a chart of the relative performance of RWR (REIT ETF) over the SPY (S&P500 ETF). It's obvious that REITs and Homeys move in different directions. Consider that REITs as a class can include office buildings, shopping centers, apartments, hospitals, and all kinds of real estate, whereas Homeys are Homeys, and it's intuitively obvious that they shouldn't trade together.

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