Jay

Is the Time REIT for Real Estate ETFs?

I don't think Alan misinterpreted your article. REITs are almost entirely devoted to commercial real estate. Citing residential house prices, housing starts, and an NAR-based comment on commercial real estate is either ignorant or disingenuous, and yields essentially no insight to someone trying to value REITs.

In my humble opinion :)

On May 21 12:34 PM Michael Johnston wrote:

> @ Alan Young
> Alan - you make a good point but I think you misinterpreted this
> article as a ringing endorsement for buying real estate ETFs. As
> I pointed out, there's still a lot of bad news out there, particularly
> with respect to the commercial sector. I'm trying to lay out some
> of the arguments on both sides of the aisle.
>
> I also respectfully disagree that consumer confidence is irrelevant.
> Given that retail REITs comprise a large portion of real estate ETFs,
> increased spending (which results from increased confidence) is definitely
> meaningful.

Stock Market Investor Depression

>>>In my view, equities are teetering on a dangerous “speculative bubble” rally. Isn’t that a bubble, when people buy for no other reason than it just HAS to go up from HERE?

I believe a bubble exists when investors/speculators primarily base their decision on the ability to sell to a greater fool at a higher price, rather than an objective view of timing and riskiness of anticipated cash flows. I don't know what "speculative bubble rally" you're referring to, as all major indices are only a few percent off their lows, which are 50% off their highs.

I see absolutely no evidence of a bubble in any asset class right now, except perhaps gold and US treasuries.

I'm not even sure why I'm responding to this piece of "analysis," except to give myself a reference point to say we're at or near a bottom in US equities.

Why We Can't Take Mortgage Refinances to the Bank Just Yet

I don't think the primary intent of the government's effort was to re-encourage the "house as an ATM" phenomenon, but to help speed the search for the bottom in the housing market.

Also, you're paying down the "principal," not "principle," of the mortgage balance.

Contrarian Update: Time for Bonds and REITs

can we also think through the absolute level of yields? if one believes a rise in the 10-year yield is on the horizon, even a mild tightening in these spreads doesn't bode well for expected returns.

Apple: Great Company with Lofty Valuation - Due for Pullback

In my (likely widely-held) opinion, Apple makes great products (I'm typing on a MacBook, beaming my internet and iTunes music wirelessly via Airport, and will workout to an iPod Shuffle tomorrow morning).

That being said, selfless promoters of growth stocks typically fail to heed what I consider to be the primary rule in economics - reversion to the mean.

Arguing over incremental tax benefits from option exercises is somewhat irrelevant from a value conclusions exercise. Value is determined by growth in excess of the a firm's economic costs of capital. There are way too many smart people out there paying attention to AAPL for me to waste any time coming to my own value conclusion. You all apparently have your own vehement opinions, which is all well and good. Just be cautious when trying to value future growth based on current valuations.

Also, to whoever the person was early in this bitter diatribe against the author that referenced AAPL's cash position as a rebuttal to overvaluation conclusions - cash is not an operating asset.

Aldila: Trading Below Par Value?

i appreciate the long-term perspective and conservative inputs to the valuation. the dividend is temporarily high, however - they paid out a giant one-time dividend earlier this year.

In Praise of the Wealth Effect

Great article, thanks for all the links to original research as well.

Yet Another Reason Not To Sell Your Berkshire Hathaway Shares

That trade must be a bad print from one of the exchanges - look at the intraday trading in brk.b over the last week - that trade didn't occur.

New Home Sales: Revising Their Way Higher

Max - SRS plays the COMMERCIAL, not RESIDENTIAL real estate market. I don't even know why SA allows this "article" to be tagged to SRS.

Geo - the 42.26% of the the SRS portfolio is a particular repo agreement - overnight cash - they're not playing the bond market (or the "financial instrument market") - I'd love to hear about your "definite buy/sell parameters" though.

Financials ETF: The Worst May Be Behind Us

"These results include all write-offs announced to-date, and although the level of profits is severely depressed, at least there are profits, implying that the worst of the financial bleeding may be behind us."

How does the fact that - after all write-offs announced thus far, some level of profitability remains - indicate that the worst is behind us? Someone please enlighten me?

Sigma Earnings Analysis: Shorts Should Soon Have to Cover

57% of their operating expenses went to R&D in the last fiscal year, which should provide some comfort that they can react nimbly to fast-changing industry dynamics.

Click Fraud Claims 28% Of Search Ads

Thanks for including that map. I had always suspected Mongolia was a haven for click fraudsters, but it looks like I was sorely mistaken.

What's Riskier - Hedge Funds or Index Funds?

This argument is ridiculous. How can you compare the risk of assets with two completely different distribution characteristics? An S&P 500 index fund has decades of returns to use in analysis, whereas most hedge funds are 1) less than 10 years old, and 2) suffer from many well-documented biases in the documentation of returns as an aggregate asset class (i.e. survivorship, backfilling). Further, although even the most diversified asset class will exhibit fat tails, hedge funds have the fattest tails around.

While there are obviously extended periods of time (i.e. the 70s) when index funds would've left buy-and-hold investors disappointed, at least they have good old Ibbotson to provide them with a long-term piece of mind. Slick hedge fund marketing can point to a lovely quant strategy that generates simulated returns, and has perhaps generated alpha over a given time horizon, but I think I'd rather rely on time-tested beta than highly unstable and unproven alpha.

Accenture Should Roll-Up Indian Services Companies

What about BE? Are they a lost cause?

Bear Stearns Looking Decidedly Cheap

P/B is problematic when the book value of assets is subject to further writedowns. That being said, I agree with Felix, there's good value at some point, probably not too far from where we're at now.

Further, to those posting above, proper grammar would help the rest of us understand your argument(s) - i.e. difference between your/you're, who's/whose. I recommend Strunk & White.