The only way the dice will roll in this stock market casino is Craps. Anyone can cruise and watch the action. It's even possible to walk past the one arm bandits/ Short Traders. If your pockets are full of chips (like mine), it really doesn't matter what they're worth as long as you don't have to cash them in. My Reit chips are worth 4% less than cost, and my yield on cost is almost 10%! 10% in this market casino? Hard to believe, if you ask me. It is possible to beat the casino at their own game if you 1) don't have any debt for them to hound you about, 2) have sufficient liquidity to keep cruising in style, and 3) are willing to wait forever before you go to the window with your chips. There's some good entertainment, good dining, and there's no rush to belly up to the crap table and place a bet.
In right situation (1,2,3 above); you only have to make sure that the casino you're in can keep operating even if their chips lose most of their value. Post? Maybe. There is a disconnect between casinos/ real estate values and chips/ Reit share values.
Although I wouldn't roll the dice in the Post casino, I'll hold my chips in most Reits. Now when a GE yields 7%, maybe I'll swap. 7% in this market casino? Hard to believe, if you ask me. By then, my Reits will probably be yielding 15%. But, I wouldn't bet against it.
Cheers! 7 come 11!!!
If you want to get rich and are a smoker, sue for a billion or two. I'm thinking of suing my city for a couple of trillion, because I've been sucking in the exhaust of their diesel buses for years. That should be worth more than cig's. Don't you just love these casinos? That's why the whole world is beating a path to our door!
Its nice to get a good laugh out of a post, even one that's predicting gloom and doom, at least in the short run.
You are right, this market is more like a casino than any in memory (my trading experience only goes back 35 years). And in a casino (or a bear market) speculators are fighting an impossible house edge.
I agree that shorts, although they have made good money up to now, are facing the possibility of a good spanking when this market turns around. There are so many billions on the sidelines, as evidenced by the yield on money market funds and T-bills.
Longs who buy on margin or buy calls are making a tough gamble, since these trends, up or down, always extend longer than most predict. I think any buyers of puts or calls are facing an almost impossible house edge, in the form of very high comission costs.
I have taken a beating on all of my "blue chip" tech purchases of a couple of years ago, like INTC, MSFT, AMAT, SBC, and IBM. I am happy I had the luck to also buy REITs, although even they are feeling the presure now. I have a moderate loss on my REITs, before counting dividends. I put my biggest bets on apartments, which have taken the brunt of the hit. I figured people would always have to have a place to live, and there is no fear of the loss of a single tennant who accounts for a significant % of income.
Recently I have began to accumulate more apartment REITs (and have a small loss). Yes, I know they are overbuilt in many parts of the country, but you can buy most of them at below replacment cost value. And they have a tangible current value based on valuable assets and dividends. This is an important consideration for boomers like me nearing retirement looking for lower risk investments with a decent return.
Kind of like staying away from the center bets on the craps table and the Keno room.
I remember one Friday recently when a Reit that was down hit my radar. It was one I followed and waited for. The price was right, but on the following Monday it bounced, right off the bell, and I'm not one to chase let alone pay up even a nickel in this market. So, I let it go without a second thought.
This past Friday it hit the news that it was going to be getting really cheap. DDR is buying it at a lower price than I was will to pay. Hard to believe, if you ask me. JDN is in strip shopping centers, and strips are hot -- going for higher cap rates than ever -- since they're recession resistant properties. There definitively is a disconnect between Reit share prices and Reit RE values. Even hot properties.
I've been in this market since '74, and I'm looking at '74 all over again in '02. In '74 I sunk a bundle in a little OTC company that was selling for $1.50 a share and had $1.75 a share in cash in the bank, no debt at all, and a recession resistant business. In this market, such opportunities as that will present again. It's called the silly season, or why Disney Stock is worthless. Who needs to go to Disney Land when Goofy and his pals are in the stock market throwing away stock or in the courts throwing away multi billion dollar awards? That's the difference between '74 and '02. '74 was solemn, but '02 is fantasia. Stay away from the Fruitlands.
Hang in there, the hay ride is going to get as bumpy as hell before the climax. Just enjoy, but don't change your luck with Goofy.