anybody know what caused the huge sell-off in REITs around 11:30AM today? i'm assuming it may have been something more than market correlation. See BXP, VNO, CBL, ESS, CGP, CNT, etc... Was there news in this sector??
It was definitely manipulation - I watched them all. They picked on TMA first and as they drove it down I bought and bought till whoever was doing it got tired of that one. IMH also dropped a lot so I sold puts on that one. Then I saw CMO, that had been relatively unscathed up to that point, start to drop fast, while TMA was recovering. Seems like they switched the attack. So I sold my TMA at a profit and then started buying CMO. They eventually gave up on CMO and it recovered a lot at the end and I sold that fo a profit. When it was NLY\s turn to be attacked, I sold puts on that It seems like they picked on different REITs at different times, and if you watched them all, you could figure out which one was being targeted most at any time. Either way, it was great for me not just because I think I beat them at thir own game, being $40k up on the day, but also because I had been aiming to load up on REITs as retirement income-generators anyway, and now the yield is looking great - over 10%
Hope you managed to take advantage and get some good action yourself.
1. Income dependent investors have bid up REIT's to inflated levels recently as rates on T-bonds and MM accounts, etc, decline. Some REIT's now selling in excess of Net Asset Value based on the value of the underlying real estate, especially in the apartment and office sector. Higher vacancies have led to lower operating income and lower valuations in some cases. Question now is, have we reached bottom, or will there be further deterioration in these markets?
2. With the new tax bill, divs from conventional corps are more attractive (lower tax rates) and some are switching.
3. Downgrades by brokers. EQR downgraded or underweighted by CSFB, Deutche and JPMorgan recently -- evidence of problems in the apartment sector.