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iShares Mortgage Real Estate Capped Message Board

  • edtbird edtbird Mar 25, 2006 12:46 PM Flag

    OT: OldWatchDog

    OldWatchdog, we are thinking about buying more HELX. We have owned Michael's Stores from Irving Texas for years. It's been a great winner for us, but Michael's has put the company up for sale. So we will be looking for a place to put this money, but I'm worried about getting to overweighted in HELX. The future of HELX looks bright. This would be a large investment for us. What do you think?

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    • T-Bird,

      Welcome to the club. With my recent additions over the last 6 mos., I too have truely become overweight in HELX. So has my son, but not as heavyly as me. He is much more disciplined than I am. Other family members have invested, or some, re-invested lately.

      Of course, I was really giddy with the soaring PPS during 2005, particularly with my new additions in mid Oct. By mid Jan. my giddiness calmed down, but as you can tell, not my enthusiasm. I had expected a mild drop with the REM announcement, but to confirm my continual lament of my inability to predict the "Market", the PPS dropped considerably more than I had expected. Yes, I expected some O&G market fluctuations. However, IMO the plethora of good news, incluing all the very timely acquision decisions management made in 2005, just trumps any possible negative situation I can presently see.

      Last year I had been somewhat concerned about CDIS's ability to continue acquiring the quality mature properties when O&G prices was pushing producers to hold on to those leases much further into their productive lives. There was still the "meat" in decommission part, but little extra "gravy" comeing from production end. Understandably, this same situation would hold true for the deepwater leases (PUDs) with the smaller reserves. Yes, there were several good lease acquisations in 2005, but negotations on those were more likely started before the big O&G price spike in late 2005. The REM acquision made those concerns a mute point. The concern now is capital allocation. The table is just so loaded with goodies ! ! !

      Bird, I'm sorry, I started this post with the intent of being more cautionary, and not sounding like a "pumper", but I failed. But you of all people know (1) how I get wound up when I get started, (2) anything can happen in this sector and (3) the "Market" goes in its own direction regardless of what happens. It #3 that really scares me.

      Regrding your Michael's (MIK) stock, it sure seems to be a another one of your winners, even with it's recent swings. My question is why not find a new, good CEO or prepared MIK for this transision by bringing in someone before retiring. Can publicly hunting for a buyer be the best course?? But not knowing "the rest of the story", I should just keep my mouth shut, I haven't kept up with MIK.

      I'd like to wish you the best of luck no matter which directio you go ! ! !

      Old Watchdog

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