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Novation Companies, Inc. Message Board

  • yahoo yahoo May 6, 2005 8:56 AM Flag

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    • "economic" earnings? You mean GAAP
      earnings. Economic earnings in the MREIT world are ONLY Taxable earnings!! GAAP does not affect the REIT's DUTY to pay out dividends. Ever thought of that?

    • res_severa_est_verum_gaudium res_severa_est_verum_gaudium Dec 22, 2004 10:00 PM Flag

      **Really TI is meaningless right now until the portfolio matures and you get a feel for loss development. **

      No. TI is not meaningless. However, the implication is the portfolio must grow for dividends to either remain steady or grow.

      In some respects, MREITs are like E&P companies, where every new well has a natural decline. From a TI perspective, every portfolio will likewise show a decline in eearnings as LLs occur.

      As in the oilpatch, growth requires new equity and new equity investors reequire prospective growth. I doubt there are many prospective equity investors interested in funding the dividend.

    • So now that you determined that nfi is a ponzi scheme to the board are you going to cover??? or be wiped out. (Note: your posting name was a dead givaway right away.) So either you are lying about you believig in this ponzi business, or you cover and be gone.

      Yeah. And don't forget to ponzi up the 2.65 to longs "in" on the scheme on the way out.
      P.S. get yourself an attorney just in case the SEC contacts you for willfully spreading lies on a yahoo board to affect the price on a stock.

    • "TI is meaningless" ??

      Meaningless as a measure of economic earnings. Sorry you have to try to quote things out of context in order to try to support your position. Dealing with the actual facts would be a little too revealing, huh?

    • "TI is meaningless" ?? About as meaningless as the 2.65/sh you're shelling out at the end of the year! Or, I guess no one told you that the dividend is paid directly from TI??

    • real simple example: suppose that the irs said that admin expenses were not deductible, so that taxable earnings went up. as a result, dividend payments based on taxable income would rise. but the company would not have economic earnings to pay the dividend, so the company had to raise capital to pay the dividend. but the dividend payout would rise.

      if we could lobby the irs to disallow admin expenses as a taxable expense to increase the value of the company, would that be a good thing?

    • your discusssion is at odds with what the company says, and at odds with economics. if taxable income frontloads earnings and results in higher dividend payouts now at the expense of later (which is what the company says), then valuation based on front-loaded earnings is as follows: dividend in excess of economic earnings has a multiple of 1; economics earnings a bigger multiple. so sure, it's nice to get cash early, but it results in a reduction in the stock price.

      click.

    • <<You really have a problem with the REIT rule that requires them to pay on Taxable Income, huh?>>

      No, I don't have a problem with it at all. That's one of the stipulations Congress put on them when they created the concept of a REIT.

      <<You refuse to acknowledge that TI, and only TI, is used to come up with the dividend.>>

      No, I fully acknowledge that.

      <<You have this abstract, called "economic earnings">>

      It's not really an "abstract", it's more of a concept.

      <<that is as much if not more of an abstraction than TI>>

      No, not really. It's just a way to determine if NFI's "real" income and whether or not it's enought to support the dividend (which is of course calculated off of TI).

      <<and yet you fail to acknowledge that nobody cares about that metric.>>

      Now I know. Your theory is "I don't care how they pay me the dividend as long as I get paid". Did I summarize it correctly?