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Simon Property Group Inc. Message Board

  • oxledge oxledge Mar 19, 2012 3:23 PM Flag

    Bulls can berate shorts and shorts ridicule the longs

    All this jawboning by the longs about how they are right on SPG and commentary from shorts regarding how overinflated SPG is! The higher the SPG share price goes the more and more I side with the shorts. Longs here should have learned the lesson from the stock market long ago - nothing goes up forever. And the shorts should have learned too the lesson that things can go up to levels well beyond what they are rationally worth (remember GE at 40 times earnings growing 10% per year with cooked books on their huge financing business, or the internet or housing bubble stocks). Likewise, don't the bulls remember what happened to these incredible stocks. These stocks were the only way to make money in the markets at the time, and ended being the way to lose 100% of your money eventually (and when the bottom came out, it came out fast).

    The point here is to make rational and timely decisions based on analysis that has a reasonable margin of safety. Reading all the posts on the board here, I see no rational analysis from the SPG longs. That does not mean they do not have any, just that they have not shared any with the board. In contrast, the shorts in SPG have been very specific and direct in what they think are serious issues regarding SPG and its valuation and why the danger flag should be raised and raised high.

    I guess now the longs are banking on the recent Morgan Stanley price target upgrade to $149. Shares are $144, so there is a whopping 3% upside left! Wow.

    In meantime, 20 year bond rates are going through the roof. Every up move in rate makes SPG so much more exposed to an interest rate valuation correction. SPG's 2-something% yield is looking pathetic and should be +4%, which would put the share price in the $80's.

    SPG froth is due to its large position in the REIT ETF's and bozo excitement that the retailers (and thus mall operators that lease space to the retailers) are going gangbusters.

    Buy who knows. If crappy internet companyies can got to 50 times revenues and 200 times earnings, I suppose SPG could go to a 1% dividend yield or even below that.

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