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NorthStar Realty Finance Corp. Message Board

  • dar200 dar200 Oct 28, 2013 1:09 PM Flag

    This a "sell reits and pipelines" day

    My 10 worst performers so far today consist of 8 reits and the 2 pipelines I own. I watch a screen of about 25 sector etfs. The worst performers of all these sectors are the 3 reit indexes I watch....vnq, rwr and iyr. Of the 6 pipelines I watch, all are down significantly.

    Interest rates have barley budged up today, so actual rates are not the cause. Maybe this computer-driven market is fearful of a fed taper at this week's meeting. IMO, that ain't gunna happen, especially given the drop in contracts to buy houses.

    Soooo, being my usual contrarian self, I think a small (1.5% or so) edge can be had by buying these sectors today. Wednesday will be "no taper" when the fed announces, so these sectors should get a little pop since many of the computer programs are similar.

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    • I was one of the sellers. Sold my entire BWP position early this am after having owned it for over 2 years. Didn´t like this from the conference call: "the development of relatively new unconventional shale basins, especially the Marcellus, has and continues to reorder traditional flows of gas and interstate commerce, resulting in declining basis differentials across our pipeline systems. This declining basin differentials have put pressure on the value of transporting natural gas, which we have seen negatively impact our transportation revenues. In fact, when contracting this year and in the previous 2 years, we have seen reductions both in the rates we've been able to obtain under firm and interruptible transportation agreement and in the total amount of capacity that we've been able to contract. We expect this trend to continue in 2014 productive relative effective put pressure on our transportation revenues in the remainder of 2013 and 2014."

      • 1 Reply to jpschroeder05
      • I got out of bwp a year or so ago because it underperformed relative to most other pipelines I looked at around when I sold. Have not paid attention to bwp since except to look at price which did not do well today.

        Pipelines depend on volume which I expect will continue to increase from domestic production whether consumed domestically or exported. In a couple of years exporting LNG should add a big boost to rising domestic gas consumption. I have lots of time and really like the tax deferred distributions which will become tax free distributions upon death when our kids get a step-up in basis at next to no estate tax cost.

    • PS: Just bought 500 KMP for a distribution flip. It goes ex tomorrow 1.35 which will soon be forgotten.

      Be careful with this in a taxable account. It is a partnership, so flipping means tax reporting complications.
      Flipping in a retirement account is no sweat.

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