Random thoughts

Industry Discussions Real Estate Inv. Trusts: REITs
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When BRX hit $27, I was seriously wondering whether I should lighten my position or at least sell some $30 covered call, but didn’t move quickly. Here are my thoughts around that:

I think the days of stocks going up straight is over; We are going to experience lots of volatility. Volatility doesn’t mean it is gong to crash, but going to be rally and sell-off, etc

Why I think of volatility, I think the Fed has a huge balance sheet and have pumped Trillions and suddenly they are going to stop pumping those trillions and raise rates? May be they don’t raise rates, but even the act of not pumping trillions is like hiking 5 or 6 rate hikes or increase 1.5%. The rate increase or not, the stopping of purchases and any QT (that is Fed reducing their balance sheet) is going to create huge disruption in the market.

So it is time to be nimble. Take some profits, keep some cash ready to deploy.

Are you raising cash?

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I raised a little cash a few weeks back. Looking to deploy that cash currently, but am not especially in a hurry to do so.

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Hi Kingran!

It’s been a while since I have posted here (or any where else in Fooldom as former Fool TMFWysocki).

My cost basis on BRX is $12.46 and my dividend yield on cost is a whopping 7.7% and the dividend growth is just starting with BRX. Being a geezer (70) with income first and foremost on my mind, I am not inclined to cash in on BRX’s gains even if it means foregoing some excellent total returns. Where else would I go with the proceeds (a rhetorical question)?

And BRX’s management is top notch. So, being the long-term investor that I am, I am inclined to stay put.

There you have it. And I remember that you are the Fool that turned me on to BRX. For that, many thanks!

David

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David,

Welcome back. You have to invest according to your needs and situation. See my earlier post on this name, where I have shared my 3 year estimate (fancy name for hope). Yes, I see for the near-term dividends will grow. I totally appreciate the effective yield, I have couple of names where the effective yield is 10%.

If you have not yet, look into treasure i-bonds, you are getting 7% now. I think Fed has overplayed its hand and the inflation is going to be staying with us for another 3 to 6 quarters, depending on how aggressive Fed wants to fight and COVID waves.

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Good to hear from you, Kingran.

Can’t say I agree with your inflation prognostication but who really knows? (The Shadow!) I think it will start deflating by mid-year. But, again, who knows?

My REIT portfolio has really grown since I left Fooldom. And I am a subscriber to the Fool’s Real Estate Winners premium service which is only $299 annually. Pretty good picks, but most of which I had already owned.

My REITs as of today: ABR, BRX, CUBE, EPR, KIM, MPW, NNN, O, PFE, ROIC (still!), SLG, SRC, STAF, STOR and WPC.

Also, own WD (Real Estate but not a REIT) since about April or May 2020 and it has been phenomenal! (It was a recommendation of one of the other Fool premium services.) And just recently bought some shares in DFH (a small cap non-REIT) which aspires to be another NVR.

Looking at BOMN (another non-REIT), which is a newbie conglomerate that includes some real estate companies. Also, looking at PINE, a new, tiny cap REIT.

My overall portfolio is doing very well and weathering this downturn well with very little “red” to show because I have been in most of the companies for so long.

I like being a long-term investor who doesn’t trade much.

(One of my big time gainers that I have owned since 2013 is AAPL (obviously, a non-REIT); up 990% as of today. It’s in my taxable account so I am loathing the day when I might sell because of the long-term cap gain taxes but will do so (one of these days) incrementally.)

David

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Can’t say I agree with your inflation prognostication but who really knows?

Who knows! It is all a guess. We have seen since 2008, Fed is quick to open the liquidity fire hose, but very slow, deliberate to turn it down. Even now, they are planning to keep buying till March. When they stop buying that is almost equivalent to 4 to 6 rate hikes, and they have talked themselves into hiking rates (so they may do few symbolically) and QT (running down the balance sheet), these are all massive deflationary things.

It is still not clear how much of the inflation is due to supply constraints versus structural (like wage inflation, housing inflation) which are lot permanent.

They may talk but may actually do less is my guess. Fed will do lot of FOMC, Federal Open Mouth committee.

Even if I am wrong, I am just tying up $20K. I am sure I can do lot worse than that. :slight_smile:

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