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Cohen & Steers Reit and Preferr Message Board

  • wilsonrusty2 wilsonrusty2 Nov 21, 2008 10:00 AM Flag

    Is This Much Pessimissm Justified?

    Yield-58.2%;Discount from NAV-34%.Conceding a hard time for reits lies ahead this discounts a lot of bad news when you consider 40% of the potfolio or more is in investment grade preferreds.Merrill upgraded some reits this am. Buying op?RRW

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    • I would imagine that it would be a temporary cut until the ratios are in alignment. It is better to have a temporary cut than a permanent capital loss. Good Luck.

    • You are better off selling shares as needed if you need income.

      Otherwise the loss in capital will far exceed any dividend payout.

      In general, dividend payouts do not benefit investors since the stock price drops on the ex-div date. If you use a low cost discount broker, you are better off selling shares as needed.

    • What about those of us who own this for income during retirement. I don't have much long term left and need the income. Hope the new team in DC gets us out of this mess asap.

    • I agree completely I would rather give up divies for a while to pay down debt but this would be hard to do and would at least require a shareholder vote in advance.I have never seen this done but I think it is a good idea for long term investors.I can also imagine some tax issues might complicate this but it would be an interesting and probably a contoversial proposal.I suppose they could also do some type of rights offering to raise funds but they seem content to sell assets.RRW

    • Well, then it seems to me that maybe the best thing to do is to suspend the dividends if need be. Not sell off assets unless the assets are actually impaired versus this market fluctuation. If RNP holds onto to assets, at least there is a chance that the market recoves. I will take the dividend suspension if need be. IMHO.

    • Thanks for the info.They are certainly feeling the squeeze.I am just holding rnp and utf.The latter is not a disaster yet but moving that way. As to rnp no way would I sell with these kind of discounts but I am through adding as investors seem determined to take us close to zero.
      Looking at some of the C&S pure reit funds- they are complete disasters with unbelievable ratios and their closing would be no suprise.Thank goodness for our preferreds maybe liquidation is a viable option as these are clearly worth more than the market price

    • FWIW, because I’ve got money in RNP, RLF, & RPF, I called C&S IR to confirm they will be cutting the divy starting next yr. C&S IR rep would not commit. Stated options were: going out of business, opening the fund, merging w other funds, cutting the divy. Was told the board would meet next month to decide what to do and an announcment will be made as appropriate. Cutting the divy may, or may not, be most likely, but I was told that C&S has not decided.

    • At this point there might not be any pessimism or any other emotion involved in the continuing decline. Many pension plans and mutual funds automatically bail out of anything that goes below $5. Meanwhile hedge funds and mutual funds are selling a little bit of everything they have to raise cash to cover redemptions.

      Buying opportunity? Personally I will wait until it goes back above $10 before I get back in. Trying to catch falling knives has not worked for me recently.

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