HalfMeasure
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Posts posted by HalfMeasure
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looks okay to me. i mean definitely some impact, but the apocalypse is at least on the come rather than here. rents are dropping though. see slide 15 with the same store rent changes. -5% to -10%. that's how they're maintaining occupancy.
No position here, but doesn't it seem like a 5-10% rent decline across the portfolio is already priced in at today's levels? Does anyone have a good sense for what kind of cap rate these assets would transact at in normal times on a stable rent base?
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Over the past few days I sold DIS and added to ALX and WFC.
Thanks
Lance
What pushed you to sell DIS?
Hi HM - I still like DIS in the long term, but prefer ALX and WFC for now. I bought DIS between $85 and $80 and would likely start buying again under $90.
Also, added to WFC and started a new position in DOW.
Thanks
Lance
Got it, that makes sense. WFC has been left for dead.
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Over the past few days I sold DIS and added to ALX and WFC.
Thanks
Lance
What pushed you to sell DIS?
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LSXMA. Not sure why noone mentioning this one.....
What's your view here? Looks interesting.
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Comcast
General Dynamics
Alexander's
I also added GD and TRV and restarted CMCSA and ORI.
Strange disconnect in the Market, some stocks go to the moon, others into the doghouse.
It seems there is no tolerance for owning things that "aren't working" (e.g. anything going down is broken), and no tolerance for not owning things that "are working" (e.g. FOMO). Everything feels very momentum driven, whether business/fundamental momentum (businesses doing well must certainly keep doing well) or merely price/sentiment momentum (stocks going up must certainly continue to go up).
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IMO doing all these calculations of debt levels/interest without looking at alternatives does not make sense. Savers have to invest somewhere so as long as the US on a relative basis is better than any other place on earth it does not matter. If there was a large country with a better place for savings/investing I would be concerned but there is not. Since we are all pretty much in the same boat with Coronavirus spending & capital will continue to grow, how has the relative position of the US versus changed? Not much IMO.
Also those countries that have an aged population & large capital base accumulated over the years have a large internal demand for bonds in the local currency. That is why places like Japan have not seen much depreciation/inflation.
Packer
Stocks are great replacement for low-yield bonds, as long as they don't go down :-X
Packer, i agree theoretically with what you are saying.
I think one of the drivers of the increase in stock prices the past few weeks is money starting to shift from bonds to equities. Institutions holding bonds are saying why would i hold a bond paying less than 1% interest? Blackrock talked about this shift happening on its quarterly conference call.
The problem with this strategy is stocks are not bond substitutes (even utility type stocks). If we get a severe recession/deflation lots of pension funds/insurance companies could be in deep shit. Yes, this is low probability. I wonder if asset managers will be communicating this risk to their members?
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Well EQR took in 2.7 billion in rents last year. At an EV of 30 billion. That's a 9% gross rent yield.
Now if you found a property in EQR's markets that gives you a 9% gross yield don't you buy it in a nanosecond?
I'm asking for a friend ;)
This is a great point.
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Anyone seeing any interesting opportunities in the REIT space they're willing to share?
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WFC
Thanks
Lance
What's your view on how the big banks perform amidst the current and prospective rate environment?
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VIAC, where no money has gone before.
What are your thoughts here?
Basically the same thing as set forth here: http://yetanothervalueblog.com/
(including concerns about controlling shareholder...) But I like the funnel in for content with Simon and Shuster and the "selling of the picks and shovels to the miners" kind of strategy for streaming wars (maybe even the cost-plus producing shows they don't own isn't anathema...it works ok for defense contractors); also the single product licensing function for the company seems like a great move; they have historically totally blown it with Star Trek (as compared with Wars) imop. It's obviously cheap AF, even before any "synergies" (assuming they are soon to be destroyed). Seems like there's maybe a catalyst with Bakish talking about re-upping their buyback authorization. I also kind of like Bakish (having watched maybe ten interviews with him) he doesn't seem like a smooth bullshitter, Hollywood ceo.
Thanks, you bring up good points - I was surprised John Malone was so negative on both the "arms dealer" strategy with content (which has worked well for the record labels when it comes to streaming) and the cost-plus arrangements (especially where rights revert back after an initial period), as well your point on product licensing is an interesting one that I haven't seen discussed much elsewhere.
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VIAC, where no money has gone before.
What are your thoughts here?
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this question should not be understood as a bull v bear market test but rather where you are in your investing life cycle (age/objectives etc) imo
Great point - my cash balance is high however the primary drivers aren't necessarily a call on market valuation but rather i) the fact a large portion of the money was saved recently and ii) some is earmarked in case we want to buy a property at some point in the next few years. Earlier in your investing life cycle, a large % also isn't a large absolute $ amount. >50% cash at a <$25,000 net worth would seem to me to be responsible, but >50% cash at a $10M+ net worth might not be unless there was a specific reason.
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More WBA
What are your thoughts on exiting WBA?
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Why do some seem to think that Tsy and FHFA will agree to execute an IPO 5x the size of the largest IPO of all time under terms that are unreasonable and not certain to garner full private capital buy-in (i.e. unreasonably high capital requirements)?
These guys aren't going to close their eyes and hope for the best under this much spotlight. If they genuinely go with recap approach they will acknowledge reality. Reasonable capital requirements and treat prior private capital fairly while providing a decent rate of return for new investors.
I can't do chaos math theory but if you remove the noise and think about this using first principles, incentives, and invert the final outcome - what are you worried about?
There won't be a failed IPO attempt - just isn't a plausible downside scenario.
Maybe Im just drinking the kool aid but Ill let everyone else worry too. I dont think at this point the worry should be whether or not this all goes through but on ultimate return at these prices. Second on my list of worries is just how long it will take to ultimately realize the final upside return and that is only because crazy or not Im contemplating buying more on margin.
My biggest prfd holding is trading at 47% of par. In bedded in final return could be a sweetener conversion to common, dividend turn on? (unlikely). At a 7% margin rate borrowing at these prices and holding for a year you would break even on a 50% of par final pay out.
So what is coming up?
1. Treasury plan by end of June to end conservatorship?
2. FNMA proposed capital rules by July-Augustish?
3. Amendment by Calabria by fall with treasury to stop sweep by end of year?
4. IPO/recap starting in winter spring of 2020.
So 1 year from now you need 50% of par to break even buying on margin at 7% with FNMAH. Ill take that bet all day this point. :)
As many has mentioned Calabraia has diarrhea of the mouth and mentioned conversion to common and do prfd holders get par. He also mentions he is very confident he can get to an agreement with Mnuchin. Well of course like Otting said everyone has signed off remember? He speaks and I listen.
I would think the NWS needs to end and capital rules need to be established first before ending conservatorship.
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if I was running the recap, I would first do an institutional private placement, before doing a public underwriting, and ask brk to backstop the PP...giving him warrants to agree to buy any amount not raised in the PP. maybe PP=$20B. then with that as a successful first step, I would do a follow on $30B public offering. that would be a very good two step. so I can see Buffett being very helpful and willing, for a pound of flesh
Yes, please.
I reckon Buffett would be willing to buy the whole business if he were allowed. I think he's very fond of the core mortgage guarantee business.
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For everyone replying, if you had to encapsulate financial independence as a net worth threshold, what would the $ amount be?
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anyone sniffing aapl?
Not yet, would like to see it lower given the app store news. Do you have a view on the app store antitrust concerns?
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Today is the first time I've reached my First Million dollars at the age of 30, just before my 31st birthday! ;D
I am very grateful to the mega bull market in the US for the past 10 years (started investing since 2009) and all the wonderful learning opportunities on this forum!
Some people say the first million is the hardest to make. Do you remember when you first become a millionaire?
Congrats! That's an incredible accomplishment. Would be curious to hear more if you're comfortable sharing - this used to be a goal of mine ($1mln by 30) but I did a Masters degree and started to work 2 years later than I originally expected which has made the math a lot harder. Any idea how your net worth splits between savings vs. investment gains? Would also be curious to hear about how your journey has progressed by age/year. Any abnormal gains or inflows, or has it just been a steady grind?
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Hi HalfMeasure - I like them both. Re MO - its more diversified than PM - e.g. Anheuser holdings, wine, etc. - and its cannabis moves are interesting. RE PM - the currency impact is something I think about quite a bit and I like their reduced-risk products.
Thanks Lance, appreciate the color.
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PM
Thanks
Lance
Lance, seeing as you've been opportunistically adding to both, what are you views on PM vs. MO?
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First, in order to get a fair offer, reject the 30K. That's terrible. Then, have your attorney ask them to make another offer, but with one condition, which will almost always ensure you are getting a fair offer... The condition is, whatever their offer is, if you don't like it, you can turn around and buy them out at that price.
Seems an extremely intelligent way to proceed.
This is fantastic advice - can't think of anything more parsimonious than this.
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I’d buy Vanguard’s total US stock index
Why not the worldwide one?
Gotta display some home bias to keep the economists employed.
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Not a PM, but from what I've seen the PM/team you'll be working with is the most important factor. Each of the business models has its pros and cons. It also depends on the stage in your career and what you're looking for personally and what stage you're at in your career (e.g. brand differences matter less if you're planning to stay long term).
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So who are the most important Government stakeholders in everyone's opinion, in terms of a decision on GSE reform? FHFA, OMB, Treasury, anyone else?
High Quality Multi-family REITs - EQR, CPT, ESS, AVB
in General Discussion
Posted · Edited by HalfMeasure
Agree with this line of thinking. Building on this, if a REIT's underlying assets have supply constraints and demographics on their side (hypothetical for now), and thus likely has inflation protection built in, isn't it more comparable to a TIPS-type security vs. a nominal bond? Further, if the REIT has a well termed out cap structure with reasonable leverage, they're effectively short nominal bonds while their underlying that they are long behave more like inflation-protected bonds. It's a very attractive structure with the right assets, cap structure, and management.