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Corrections Corporation of America Message Board

  • sam_0534 sam_0534 Jan 9, 1999 11:53 AM Flag

    Anybody read streetcom today??? What doe

    How much is too much? REITs will have to make
    compelling arguments that the equity is committed to
    accretive projects. Issuing shares for the sake of
    all-too-vague "future opportunities," like those issued by
    Prison Realty Trust ( (NYSE:PZN - news) ) last week, are
    likely to be critically scrutinized by investors. A
    plethora of secondaries and gimmicks like UITs will signal
    the top. Hopefully REITs have learned, making 1999 a
    pleasant surprise.

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    • The copies can be purchased from the American
      Correctional Association. I do not know if anyone can get them
      or just members. You could get the information from
      the ACA home page. Look on the CCA or PZN home page
      and there is a link to ACA.

    • But, as long as you and all other PZN investors
      take the attitude that since there is crime . Why not
      profit from it? And all the criminals take the attitude
      that crime pays. Nothing is ever gonna change. I do
      believe that criminals should spend their entire
      sentance. I have never said otherwise. Diamond D your post
      was a good one. I would like to know where i can find
      copies of these standards so i can review them. If you
      or someone else can point me in the right direction
      i would be grateful.

    • ....believe me, as a real true blooded American
      raised with values, I would love to see the rate of
      crime drop to zero. However, with the society of today
      accepting such low standards as evidenced right before our
      eyes and ears every day, I think it's going to take a
      lot changes to change the direction of things to
      where our need for prisons is reduced. I hope and pray
      that will be the case----at least for a trend
      reversal. In the meantime I maintain my conviction it will
      take 'conviction' and that means more need for
      imprisonment penalties. When I see or sense we have laws with
      sustance and appropriate penalties to really reduce crime
      I will sell my PZN---and even consider 'shorting'
      it ---which is not my investment style. I figure my
      investment in PZN is the only way I can make crime pay
      because I sure to H--- won't participate otherwise----for
      what it's worth.

    • Government will be in the loop even if the
      facilities are not managed by unionized CO's. Every
      contracting agency has what is called a contract monitor.
      This individual insures that we operate within the
      contract guidelines. Furthermore, the state where the
      prison is located does audits which could shut the
      prison down if unfavorable. Topping the list is the fact
      that all CCA/PZN facilities must attain ACA
      accreditation. These standards within themselves would almost
      eliminate the need for the governments big eye's. Again we
      as a private company have standards above those ran
      by government. Opinion!

    • Pzn has been testing its low looking at the chart
      shows Pzn has preformed VERY!! poorly in relation to
      the Dow and the S&P and so on during the entire year
      of 98. It has to penetrate the 25 level before any
      real rally would begin and it looks like judging from
      today no one wants it to move to that level. As far as
      occupancy rates and PZN. Do you guys see the contradiction
      in wanting crime to decline but at the same time
      wanting the occupancy rate for PZN beds to increase? I
      saw another post where it was mentioned that "If CCA
      owned the prison but the government's unionized CO's
      managed it . Net margins would only be 16%. But, if CCA
      owned and managed it net margins would widen to 40%".
      Maybe i'm misreading it but sounds like if pzn can get
      the governments out of the loop profits will
      increase. If the government is out of the loop. Who will be
      there to keep an eye on Pzn's activities? Its just a
      question. If someone can give me a reasonable answer i'm
      willing to listen. I hate to keep sounding like a stick
      in the mud. But i feel these are reasonable

    • It's like traders are in and out of this PZN. I'm
      an investor just like you. It sold off today. It's a
      real steal as far as I'm concerned. Thank you traders
      for the opportunity you seem to have created. It's
      much more likely the occupancy rate of the prisons
      will be at very high rates. It sure beats what can
      happen to hotel/motel occupancy rates----as evidenced in
      that market trend right now. I'd rather put my money
      on the probable occupancy winner. Plus it's one way
      to get some of your hard earned money back from the
      government. Best of everything to the real investors!!!!!!

    • Great post regarding crime increase in economic
      downturn. But we don't necessarily have to wait. The public
      is currently fed up with the early release programs
      and are pressuring states to keep inmates for a
      greater portion of their acutal sentences. The prison
      populations will increase despite a decrease in crime. I
      doubt there will be empty cells no matter what economic
      conditions are. IMHO, from a technical perspective PZN is
      currently testing lows. I anticipate some nice gains this
      year after that task is complete. If the bears are
      right, we can also anticipate the crowd sniffing around
      for good dividends. I'll stay put with my 15% loss.

    • Increases in crime is what drives the need for
      additional prisons. In strong economies, as we have been
      experiencing, the rate of crime generally goes down. As the
      economy weakens and employment rates decline crime then
      begins to climb. Of course, the more crime----the more
      prison requirements----assuming 'the process' does it's
      job. If you believe we will continue to enjoy strong
      economic growth in the near/longer term, then don't invest
      in PZN. I believe history repeats and our economic
      cycle will, unfortunately, experience a downturn in the
      not too distant future. How long can we absorb
      personal 'bankruptcies' at the current record pace---in
      the best of times? Imagine what's ahead if things
      take a turn for the worst. I don't like sounding so
      negative but just trying to be realistic. PZN seems to
      have a very good future from what my crystal ball
      tells me--- It's a contrarian way to find value but I'm
      putting some money on it NOW.

    • Great post. Very informative.Keep it up.

    • Doc's solution to not having to play that "game"
      and be subject to the landlord's whims, was to BE THE
      LANDLORD! And the REIT is the mechanism by and through
      which management expects that highly capital intensive
      goal can best be realized, hence the

      It's simply a matter of investing capital and human
      resources for the greatest return on investment and,
      expectedly, a commensurately more assured share value
      enhancement and appreciation.

      In CCA's 1Q98 CC, Doc
      said that the potential market size for a PZN was
      TWENTY TIMES (20x) that for a CCA (a management ompany).
      But to be a player in "that market" requires access
      to ever greater amounts of capital. It's an example
      of the Golden Rule: "Whoever has the gold, makes the

      This "ownership" versus "management" situation reminds
      me of an old Amos 'n Andy radio bit where the
      Kingfish is trying to persuade a reluctant Andy that air
      travel is safe but Andy will have none of it.

      you's in a car an' the motor quits on you, you knows
      where you is.", Andy tells the Kingfish. "But if you's
      up there in a aeroplane an' the motor quits, where
      is you?" "I's a believer in good ol' terra firma.",
      Andy concludes. "The more firmer, the less terror."

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