Comments on: I’ll Buy “Stuff” Stocks When… http://ContrarianEdge.com/2008/11/25/ill-buy-stuff-stocks-when/ Vitaliy Katsenelson blog on the economy, stock market, and stocks. Applying Active Value Investing approach. Sun, 21 Mar 2010 14:46:01 +0000 http://wordpress.org/?v=abc hourly 1 By: JP http://ContrarianEdge.com/2008/11/25/ill-buy-stuff-stocks-when/comment-page-1/#comment-166481 JP Wed, 26 Nov 2008 22:32:31 +0000 http://ContrarianEdge.com/2008/11/25/ill-buy-stuff-stocks-when/#comment-166481 Be careful with REITs. Many are highly leveraged which is poison in the current credit environment. REITs must pay out a certain percentage of cash flow in dividends (I think it's 90% but I may be wrong about that) so they cannot accumulate much cash for lean times. Also, many REITs are operators of shopping malls which means their cash flows may be impaired if a prolonged drop in consumer spending wreaks havoc on their main tennants, the retailers. I would say do your due dilligence on the REITs capital structures and look first at apartement and/or health care REITs, whose cash flows are more stable. Also pay attention to location; REITs doing business where the economy is stable or growing (like Washington DC) will fare better than those where the economy may be shrinking (like Detroit.) Be careful with REITs. Many are highly leveraged which is poison in the current credit environment. REITs must pay out a certain percentage of cash flow in dividends (I think it’s 90% but I may be wrong about that) so they cannot accumulate much cash for lean times. Also, many REITs are operators of shopping malls which means their cash flows may be impaired if a prolonged drop in consumer spending wreaks havoc on their main tennants, the retailers. I would say do your due dilligence on the REITs capital structures and look first at apartement and/or health care REITs, whose cash flows are more stable. Also pay attention to location; REITs doing business where the economy is stable or growing (like Washington DC) will fare better than those where the economy may be shrinking (like Detroit.)

]]> By: Sam Marx http://ContrarianEdge.com/2008/11/25/ill-buy-stuff-stocks-when/comment-page-1/#comment-166395 Sam Marx Wed, 26 Nov 2008 14:22:47 +0000 http://ContrarianEdge.com/2008/11/25/ill-buy-stuff-stocks-when/#comment-166395 I and I suppose many others interested in high yields, low price to book value are interested in REITS. I think this would be a dood sector to analyze for future reports. SM I and I suppose many others interested in high yields, low price to book value are interested in REITS.

I think this would be a dood sector to analyze for future reports.

SM

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