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JER Investors Trust Inc. Message Board

  • dwshelf dwshelf Nov 3, 2007 12:20 AM Flag

    Why sell?

    >If a person does not need the cash now, why sell.

    Because this is one of the most risky positions one can hold at the moment, and it's not at all clear that the upside potential balances the downside risk.

    JRT could easily be at $5 by the end of the year, and $2.50 by this time next year. A sort of red-dwarf income stock paying zero income.

    For someone attracted to high income, surely the canroys carry far less risk.

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    • The current price of JRT does not reflect the true value of the assets. That said, no one really knows the true value of any companies holdings at the present time due to the credit-liquidity issues. These will pass over time, maybe longer than we wish, however I'm looking to add to my 3k holdings at the beaten down price. I'm down but I will hold and continue to get some handsome dividends every quarter. Roberts most recent purchases were in and around the $8.00 region in August. No less than 787,000 shares! Thats confidence!!!!!

    • look at price targets on yahoo and estimates there as well. a week ago two analysts had an $18.00 target. Now one still does and the other analyst(unidentified by yahoo) lowered the target for the year friday to $10.75. it's right there on yahoo. I am not making this up. Why would I? I am long 3600 shares. I have NO ulterior motives.

    • << and how come this analyst who downgraded the company on friday knows more about the company than roberts? >>

      You keep saying that, although there has been nothing published about any downgrade. Yahoo shows the same ratings now that they have for the past 2 months. The last rating I can see was an upgrade by Thompson/Gradient to buy on October 12. (Yahoo doesn't show this, but Fidelity does.) Also, Fidelity shows 1 buy, 1 outperform, and 2 neutrals. Compared to one month ago, at least one analyst (and possibly 2) have raised their ratings.

      Just like you kept saying that last quarters's conference call was 30 minutes or so after earnings were announced. Several people kept saying you were wrong, and actually showed you the press release to prove it, but you still continued saying that too.

      If there was a downgrade, tell us who, when, or what.

    • roberts also bought it at over $18 a share when I bought it at $17. I lost $8K as a result tho I got the dividends. Now he has also bought all these shares @ over $12 a share. I bought more shares at $11........lost money again. gee does the dividend even count anymore? and how come this analyst who downgraded the company on friday knows more about the company than roberts?

    • >Yes, and industry insiders, by and large, are buying.
      >Not at every company in financials, but at just about
      >every company in this little segment of finance. What
      >do they know that you can't seem to grasp?

      To see if insiders were (not are) buying, one checks out
      price changes.

      Hey, I read here that someone who might be called an
      "insider" bought 6% of JRT at $11.50. I think that's
      evidence this buyer was not an insider (or if an insider,
      one lacking basic skills).

      Large, fast movements in financial stocks are almost always
      driven by insiders.

      The first major drop, beginning in mid July, was driven by insiders
      whose insight is now seen as dead on. How smart does it
      look to have sold at 18?

      The second major drop, during October up until now,
      was also driven by insiders taking advantage of clueless
      optimistics who had driven the price back up.

      We don't know when it will end.

    • >All of which means that this sector dump is just the latest
      >irrationally depressive fad in the stock market. It will end,
      >and sooner rather than later, if only because its an
      >important part of the overall economy.

      The market is frequently claimed to be irrational, but this is at best half true.

      The market can certainly be irrational on the upside, coming
      to value securities at ten times a rational value.

      But on the downside, it's a different dynamic.

      The market prices in risk. This process is quite rational indeed, and to the extent that irrationality participates, it is to overprice highly risky securities based on irrational hope of recovery.

      It's not the case that pointing to examples where some stock went to near zero, only to recover to respectability, can be used as evidence of "irrationality". To show that the security was irrationally underpriced, we would need to show that the apparent risk was misunderstood. If half of the companies which face some trauma fail, while the other half recover, it was not irrational that the successful half endured a period of depressed valuation.

      I think the market's Friday perception of JRT is somewhere around a 50/50 prognosis.

      If it falls more, the prognosis is lower.

    • >All of which means that this sector dump is just the latest
      >irrationally depressive fad in the stock market. It will end,
      >and sooner rather than later, if only because its an
      >important part of the overall economy.

      I'm guessing you're too young to remember Mcorp, the bank holding company.

      I owned some Mcorp, on the theory that the market valuing it so low was irrational,
      and would end, sooner or later.

      Schwab charged $29.95 per trade in those days, and that eventually became a factor
      in my decision to hang on even longer. The time then came when my entire holding
      was worth less than $30, no point in selling at all.

      Eventually, I received a letter in the mail.

      Your security has been deemed worthless....and will no
      longer be shown in your account.

    • If you plot on Yahoo on the same graph the 6-month chart of JRT against the chart of NRF and CSE, it's amazing how closely they track each other, especially recently.

      CSE has 15 analysts predicting earnings, and I doubt CSE will surprise us with their report.

      So this reinforces the view that while JRT may indeed have a bad earnings report, the price drop is independent of this issue, and is due to the general market view of the REIT group.

      • 1 Reply to grleader
      • >So this reinforces the view that while JRT may indeed have a
        >bad earnings report, the price drop is independent of this
        > issue,

        Correct. It's not (much) about earnings this quarter.

        It's about the likelihood that the dividend will be sustained
        over a period of years, and sustained in a responsible
        fashion.

        Earnings this quarter might contain information about that
        question, but the answer does not rest on one quarter.

        If, as is being hinted at here, the very business model
        which was generating the high yield is no longer viable,
        then what this quarter's results are is clearly not the
        problem.

        We're given information regarding the holdings of JRT.

        The information we're not given, but industry insiders
        can deduce, regards the future, not the past. If, for
        example, I'm aware of a major source of capital which
        was being used by a company, and I'm aware that this
        capital stream has dried up, and I can deduce that
        without this (or a similar) capital stream the company
        will decline rapidly, and I (or my grandmother) own some
        shares in that company, then it's time to get out.