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Cohen & Steers Reit and Preferr Message Board

  • Stock_Aficionado Stock_Aficionado Dec 31, 2007 12:31 PM Flag

    Good times (Part 1)

    Good times.

    I'd like to dedicate this message to Dr. King. Not the civil rights leader, but my friend and business partner who let "fear" scare him out of RNP and other CNS funds. Out just when the REITs are starting to build a base, when non-financial preferred stocks are showing signs of a bottom, and when financial preferred will bottom in the spring.

    It was sad to see that "fear" got the best of him, even after successfully making my case that this is a historic buying opportunity. Because if anyone knows, he knows that "when there is blood on the streets, go shopping" � since that's how �opportunity traders� make "mad money" (he'll get a kick out of my Jim Cramer reference).

    Not that I'm forecasting a total and decisive market bottom, since I've learned that is next to impossible to predict � though it�s fun to try. But that I see deep value in high-quality, income-centric securities that have historically paid very respectable total returns � returns that until recently, have performed under the radar of the average retail investor.

    There are a number of reasons stocks (and funds) have moved seemingly unexplainably. A few that are impacting RNP are:

    1) Tax-loss selling pressure (annual phenomena)
    2) Tight credit markets (real for the consumer, psychological for business)
    3) Contracting multiples (slowing economy)
    4) Post-capital gain distributions adjustments
    5) Media-led recession drum beating (real recession, psychological panic)
    6) Democrats re-taking control of the WH and Congress (another conversation)

    Historically, my friend has traded speculatively with stocks that are mostly under the radar � in and out, in and out. And from what I gather, fairly successfully � though ironically without the assistance of technical indicators, but only gut feelings. I remember in the late 90's and early 00's when the tech sector was fast and furious � I too made and lost tons of money, trading on gut feelings. In retrospect, I realized that we were gambling � mostly randomly with whatever seemed hot that day. Good times!

    (continued)

 
RNP
21.02Aug 23 4:02 PMEDT