shhughes1116

Right now I am at 15% cash, compared to -15% cash (i.e. on margin) in early January. I find that I am pretty poor at timing the market, so I try to stay pretty close to fully-invested, while not using margin. The last 12 months have been a bit of an exception for me, in both directions.

BNP Paribas, on Oct 4.

Early this morning, I received a message from E*Trade walking back part of the "$0 Commission" move. On the 7th, all stocks moved to the $0 commission structure. Now, they are moving OTC stocks back to the previous commission structure ($5.99 per trade, or something like that.) Most of my trading involves OTC stocks. Anyone seeing this with other brokerages like Schwab, Fidelity, or TD Ameritrade?

Generally agree with this posting. A few additional anecdotes, based on where I am. I own residential property in multiple jurisdictions within Northern Virginia. [And to clarify, I mean the *real* Northern Virginia (Fairfax County, City of Fairfax Arlington County, City of Alexandria, Falls Church). Sorry if I am snooty about this, but I am hearing people way down I-95 suggest they are "part of Northern Virginia", and this proves confusing to those from other parts of the country that are looking for homes/condos to buy. - In the more urban/dense/walkable areas, rents seem to be up 10%-15% in the last 6 months, following the Amazon announcement, and the same for property prices. Rents were generally increasing before this announcement, although at a slower pace (5%-8% per year). - In the more suburban areas (single-family homes with lower density, less walkable), it seems to be hit or miss. In my area (good public schools, very low crime, good access to Beltway, I-95, and I-66), single-family home prices seem to be up about 10% over the last year. Can't speak to rental prices for this segment of the market. A couple of other anecdotes, both personal and second-hand: - All of my property has exceeded the 2006-2007 highs, based on comparable sales, by 15%-20%. And I say that as someone who pretty much top-ticked the housing market with my purchases. Literally could not have picked a worse time, re: purchase price. - In the past month, I have received multiple cold calls from people offering to buy my property. Hard to tell how real this is, but these were real people, with actual numbers. - I have a few friends who have ventured into the housing market recently (houses for them to occupy, not rent), looking for single-family homes in the $750k-$1.25 million range. Apparently the market is so competitive at that range that people are waiving all of their contingencies (i.e. home inspection). - Anecdotally, there doesn't seem to be a whole lot of multi-family construction going on. There are a few big projects I am aware of, but not as much as I would have expected for this area given the prices and interest. There is a bunch of stuff planned near/around the Amazon project, which I think will total a few 1,000 units of multi-family. But this seems like a drop in the bucket for this area. Some of this I am sure is a function of Amazon coming to town. But the general trend has been like this for quite some time, and the Amazon announcement has just accelerated this.

Can you elvatorate on why you think their bond prices would tumble after a dividend cut? In my limited experience investing in this type of debt, it seems like the uncertainty beforehand pushes the bonds down and keeps them in the toilet, but the the dividend cut usually pulls the bonds higher, because more cash flow is retained to service debt instead of supporting dividend payments to common equity holders.

I took my bath today in the Uniti common, sold for about a 25% loss on the original investment. I am surprised that the Uniti management did not throw everything in with the kitchen sink today. Given how their shares reacted today, I think they should have dramatically cut the dividend today also. Instead, by waiting and delaying what I think is inevitable, there will be a second leg down, and lower, in the future. Either this, or I am the dummy at the poker table, and they are very confident that the three remaining OpCo/PropCo deals in the pipeline will get them to a point where the dividend is more secure. Anyways, given all of this, I moved into the Uniti bonds today, also at about a 1% allocation. Bought it at about 80, which is ~14% YTM.

This is a pretty interesting situation. When Windstream did the exchange for this debt maturity, those that exchanged the debt agreed to waive the default claim. I think a majority of the bondholders did the exchange, except Aurelius of course. Will be interesting to see how this “forced default” plays out in court, not only with Aurelius but also with the other bondholders. I suspect this situation will drag out for quite some time. Not sure if anyone here has an actual stake in either Windstream or UNITI. I took a 1% position in UNITI a while back on the belief that they will continue to diversify away from Windstream, the master lease for the fiber assets is unlikely to be rejected in court (and if it is, I have trouble believing the subsequent renogiation will be crushing to Windstream), and the belief that they will slash the dividend and use the cash flow to invest in additional assets to continue diversifying away from Windstream. Given the after hours debacle with WIN and UNITI, I hope UNITI management uses the ensuing storm to slash the dividend now, and put that money to more productive use.

Any comment why you choose MAC vs TCO? Both seem to trade at similar valuations (7-7.5% cap rate) and TCO has even higher quality malls and a better balance sheet and way better long term track record. I think they are equally likely to be acquired. First, I agree with you that Taubman has some nice properties, and somewhat superior to Macerich's properties when measured by sales per square foot. However, there are two somewhat related reasons that I chose Macerich over Taubman. These reasons illustrate why I disagree with you that both of these companies are equally likely to be acquired. First, the Macerich CEO just retired. He was at the helm of the ship when Macerich declined the SPG offer and adopted a poison pill. In conjunction with his departure, the company is splitting the CEO and Chairman roles. The Chairman role will now be occupied by the Lead independent director. Generally speaking, I see both of these as positive changes for common shareholders. More specifically, this could open the door to an acquisition. Second, Taubman has a dual-class share structure that facilitates family control. I believe this enabled them to squash an SPG offer in the early 2000's (can't remember the year off the top of my head). I'm not confident they are going to make decisions that put common shareholders first.

I should clarify that I am not suggesting utilities and malls are an apples-to-apples comparison. Just happens that the sentiment seems similar with respect to how a certain innovation or shift will impact the incumbent industry.

I’ve been thinking about this topic for a few months now, trying to figure out whether any of these Class A mall REITs may warrant a place in my portfolio. Every industry is different, and the comparison is not apples-to-apples, but the situation facing Class A mall REITs reminds me a little bit of the situation facing electric utilities a few years ago. SolarCity and similar companies were installing all sorts of rooftop solar, and every expert was shouting from the roof tops that rooftop solar was going to be the death of electric utilities. Turned out that there was a place for electric utilities and solar (utility scale solar, roof top solar, peaker plants, utility scale battery storage, and so on). Utilities have since done very well and added pretty substantial portfolios of utility scale solar facilities, rooftop solar continues to be installed, although I’m not sure the companies have been stellar equity investments. Even in light of this tailwind for utility companies, utilities that have been poorly run or that have allocated capital poorly have not done well (SCANA, PG&E, AltaGas). Thinking about retail, experts have been saying that physical retailers are going to be squashed by “Amazon-ification”. And certainly companies that have weak/absent Omni-channel businesses are not doing well, companies that are poorly run (I.e Sears, ShopKo) are also not doing well, and companies that are poorly run with a weak Omni-channel presence are getting crushed. But, companies with strong omni-channel businesses and/or strong brands are doing just fine, if not well. These companies are doing lots of business online, but their customers still expect a physical presence. I see this anecdotally with spending by my wife and family. Many, but not all, purchases are online. Most purchases are directed towards companies with nearby physical locations, to facilitate quick returns, exchanges, fittings, price adjustments and so on. Additionally, malls are starting to become populated by tenants focused on “experiences” (I.e. movie theaters, dog parks, fitness centers and gyms, bars and breweries, ice rinks, outdoor movies, concerts, office space). The well-run malls in my area (Northern Virginia) made this transition a number of years ago, in my opinion. People go for dinner/movie/etc, and stay to shop. Add full-on redevelopment for the older mall properiteS, often into town centers with a mix of residential, office, and retail, and the optionality is pretty good for the well-located mall properties. For class A malls, the two points above lead me to below that they will do just fine as more retail spending shifts online. There will certainly need to be adjustments to tenant mix, but the location of many of these properties (such as those held by Macerich) are generally in urban areas serving a substantial population, with a lot of optionality. Even as physical spending decreases, there is still a large enough population to warrant having physical retail space. In other words, location-location-location. I am not as sanguine about Class C and Class B malls. There are a lot of malls out there that serve small population centers. As the amount of online retail spending increases, there is no longer a large enough population to support the amount of physical retail spending necessary to keep these malls going, and there isn’t as much optionality for their real estate. I think this is where a lot of the pain will be in mall real estate. The exception may be those companies that started early to transition to experience- focused mall properties, and started handing the keys back to lenders for malls where the prospects are bleak at best. I took a position in Macerich (Class a malls) recently, at around 2% of my portfolio. Generally high-end and well-located portfolio, and I think it will ultimately sell itself to SPG or one of the other larger international mall operators. I also took a position in WPG Preferred D (class b malls and some strip malls) at around 1.5% of my portfolio. I think their valuation borders on rediculous. Things are not great, but they certainly aren’t apocalyptic, which is what their valuation suggests. And if they cut the common shares dividend, which I hope they do, they will have plenty of money for redevelopment and to continue to pay the preferreds. Important to note that they already have the balance sheet capacity to do the redevelopment, but cutting the common shares dividend would enable a lot of this redevelopment to occur with funds from operations. Although a bit different than malls, I also took a small position in Wheeler REIT (preferred D). They are focused on grocery-anchored strip malls. They just got rid of their scummy/moronic CEO, Stilwell is involved so I think there is a reasonable chance of turning things around, and the Wheeler Preferred D issue has a few nice features, above and beyond a normal preferred, that make it worthwhile to take a flier on this. I’d say all three are a bit hairy, especially WPG and Wheeler. But I think that the impending death of physical retail is exaggerated - there will still be a piece of the retail spending pie for physical retail space. And it is the hairy investments, the ones that made me feel a bit sick to pull the trigger and buy, that have worked out best for me in the past.

I've used E*Trade for quite some time to buy OTC stocks. In general, I haven't had any problems. Every now and again, when I place an online order for a thinly traded stock or a penny stock, the online ordering platform will prompt me to call E*Trade to speak with a broker in order to complete the order. The broker can see the order you tried to place and will complete the order for you. In these cases, the higher fee for broker-assisted orders are waived and you pay the online fee. Early on, they would ask a few questions - I think to make sure I wasn't crazy or an idiot. Now, they don't ask any questions, they just confirm what I wanted to order, and then place the order for me, which I assume is the result of seeing that I have done this in the past without losing my shirt.

Although not a veteran, I grew up around folks who had served directly in a variety of armed conflicts (i.e. a LRRP in Vietnam, a Huey MedEvac pilot from Vietnam, a Seal XO, a captain in the South Vietnamese Navy, and family members who have served in more recent conflicts such as the ongoing conflict in Afghanistan). These guys would routinely share stores from their wartime experience, but would never talk about the people they killed, their friends who died, or the people they saw die. This was consistent across all generations of veterans that I knew. For lack of a better way to put this, these stories are only shared with those in the "combat veteran club", if at all, since many of these stories are so painful. Would you retell a story that you have spent a lifetime trying to forget? Or retell a story that might lead others to think differently of you? Vietnam was brutal - your father may not want to talk about some of these things, and may have spent the last 40 years trying to forget. I wouldn't ask the question again. If/when he is ready to talk about it, he will.

Yes, things have changed that much, for a few pipelines. ADIT is essentially the difference between income taxes paid, and income tax allowance included in ratemaking (even in the absence of paying income tax, as may be the case for an MLP.) Under the proposed rule, when ADIT is a liability - in other words when the cost-of-service ratemaking includes an income tax allowance but the entity doesn't pay that income tax, the amount of that liability would be removed from the rate base, thereby reducing customer rates and therefore reducing revenue/earnings on the asset (smaller rate base with same allowed ROE). By zeroing out ADIT on the form, when the federal and/or state income tax is zero (i.e. when the entity is an MLP), the rate base remains the same, so the anticipated reduction revenue/earnings for these pipelines is averted, hence the bounce today. This is pretty significant if a pipeline included a 30% income tax allowance in their cost-of-service ratemaking, but doesn't actually pay income tax.

http://lmgtfy.com/?q=Chou+funds+returns incredible, internet wizard Just curious what dyow means? Do Your Own Work

Can you elaborate, what makes you say that? Suggest that you take a specific discussion of DVA to the DVA thread.

I second what was said by eclecticvalue. Start with some smaller companies to get your feet wet with 10-Qs, 10-Ks, and S-1s. Then work your way up to larger companies with more complex filing documents. In general, the amount of time I devote to 10-Ks and 10-Qs depends on the company, position sizing, and purpose of my research: - If I am putting together a basket of similar companies (that represent a small portion of my portfolio), I may not spend much time on the 10-K and 10-Q - the basket will generally be based on a simple evaluation of balance sheet metrics or cash flow metrics. - If I have a "conviction" holding (i.e. a single company that represents a meaningful % of my portfolio), then I attempt to read, front-to-back, the last 5-10 years of 10-Ks (if available) and/or the S-1. - If i am trying to expand my circle of competence into a new industry or niche, then I will spend some time reading, front-to-back, 10-Ks for multiple companies within the industry/niche. Since you are new, it is especially important to do a lot of reading. Pick an industry, start with small companies, and make yourself an expert by reading. Then start to expand your circle of competence. It is a slow process, but in the long-run, you will be a better investor.

The retiring baby boomer generation, coupled with relatively rapid technological advancement (particularly in AI, automation, and energy efficiency) are structural factors pushing Western societies into a deflationary trajectory. Loose monetary policy seems to be central banks' solution / band-aid for these structural issues to avoid the deflation bogeyman. So with that in mind, I don't see inflation perking up until the Millennial generation starts to buy houses and have families in earnest. In the meantime, I see our economy bouncing along with low inflation, low interest rates, and a shitty stock market. My fingers are crossed that a lengthy period of time with low interest rates does not impair our banking system. While there are many factors that have supported the rapid growth of the United States, I believe a healthy banking system and property rights are at the top of the list. Low interest rates are causing some bankers to extend duration to keep NIM constant (or to slow the decline), or take on increased credit risk. This may result in an unhealthy/impaired banking system. In case it wasn't obvious, my view is US-centric.

So I have a fairly quantitative, financial background, while my wife does not. I've found that my best performing stuff (I.e. The stuff that outperformed my expectations) are the investment theses that I can write on a napkin and she understands. On the flip-side, the ideas that require a slide deck to explain are almost always the crappy ideas that underperform my expected returns. In practice, this has resulted in a fairly large portfolio of community banks, micro-cap real estate equities, and a few demand-pull MLPs.

Sorry for the somewhat non-constructive reply. My professional background is in environmental health...I spent a lot of time in the past talking people out of fancy water filter filtration systems and/or indoor air systems that were hawked by less-than-savory sales people who prey on irrational fear.

Hard to provide an appropriate recommendation unless you indicate what you are trying to remove from your water. In general, unless there is a particular organic or inorganic contaminant that you are trying to remove (and you have tested the water to verify its presence at an undesirable level), I am not sure water filters are a great investment.

AGO

+1. Documentary was excellent...although his interview with Bill Maher to highlight the release of the documentary was a waste.

One other suggestion. Books will be helpful to build a foundation of knowledge, and that is a great place to start. As you progress in your knowledge/learning, I think in the area of real estate, the insight of a mentor will be priceless for you. I happened to work with someone who became somewhat of a mentor to me in real estate. It benefited me because we both had a similar mindset - very conservative - and a similar background - small part-time real estate investor/operator. He pointed out a lot of pitfalls that I would never have picked up from a book (i.e. finding, screening, and dealing with tenants; picking up on bulls**t when evaluating/buying property).

Muscleman, I suspect there are multiple tax experts on this board, but it is March 31st. I highly doubt they are active on these threads to answer tax questions when the US federal tax deadline is 2 weeks away. All the tax pros that I know are working 18-20 hour days right now, and will continue to do so through April 15.

+ 1. I have a technical job that I very much enjoy (think a combination of food safety, epidemiology, and toxicology). In high school and college, I had some opportunities to work white collar intern jobs, like many of my friends. However, I chose to spend my summers in high school and in college doing plumbing work, electrical work, masonry, and finished carpentry. (In hindsight, it is clear that these white collar intern jobs were of no use to my friends when looking for real jobs...they were basically a coffee/xerox queen.) I view these trades as essential life skills, and think that every man (and women) should be able to do basic plumbing, electrical, masonry, and finished carpentry. These skills will save you a bunch of money over your lifetime. And as Oddball noted above, I met some folks during this work that I would never have met otherwise. To this day, they remind me of the impact that a poor decision can have on your life. They also remind me how lucky I was to be born in the United States...