Looking for Value Among Mortgage REIT Preferred Stock Written By: David Neubert 2007-09-26 15:18:23 During the days of maximum fear around Thronburg Mortgage (TMA), I bought some of the common and some of the preferred of this mortgage REIT after hearing the CEO give what I thought was a very honest and detailed appraisal of their losses. He impressed me. Honest, humble CEO's always do. I realized this company would survive and, after some research, realized that it was being run by someone who understood the portfolio. He had done his homework when he said what he thought the worst case liquidation value was and what the losses would be. He was the first to accept their losses and showed that he understood why they happened.
I've been buying in small bits more of the preferred shares of this REIT that buys the jumbo home mortgages that are too big for Fannie Mae and Freddie Mac guarantees.
Manhattan Real Estate Prices and The Euro Written By: David Neubert 2008-09-22 11:09:00
A reader comment asks:
The dollar still seems low enough that Russians and other non-US buyers may help with your predicted real-estate collapse ... thoughts?
Property Group (SPG): A Bargain for a REIT from a Green-Friendly Company Written By: Miranda Marquit 2007-08-29 12:27:49 Real estate sector stocks and other housing related stocks are struggling on the stock market. For the first time in about 50 years, says Realty Times, housing prices are actually dropping. This means that housing stocks and stocks related to the real estate market (like solar stocks) are taking a bit of a beating. Or even a big beating. But there is a silver lining -such a market often offers investing ideas and opportunities.
I'm willing to make a speculative bet that he will be able to keep Thornburg Mortgage solvent but at a very dear costs to equity holders, but just in case I'd rather buy the preferred stock (TMA_PRC - $4.59, TMA_PRD - $4.55). I'm assuming preferred would still have some value in a liquidation. If there is no liquidation and the company is saved, it could return shooting distance ($19.00ish) of the par value of $25.
I continue to buy overweight financials, especially the big ones like Citigroup (C), Bank of America (BAC), JP Morgan Chase (JPM), Morgan Stanley, Goldman Sachs (GS) and Lehman Brothers (LEH). I'm even short some puts on the Financials ETF (XLF). In the short term, financials have to go higher as hedge funds cover shorts and, more importantly, mutual fund managers buy to correct the underexposure to the financial sector. Most Fed easing cycles imply very good returns if you buy just as they begin. The exceptions? The last one. I'm hold financials for the short run but I'm going to lighten up on these as this rally progresses. Why? The recipe is in place for some stagflation.
Stagflation is a period of inflation and low or no growth in the economy. The last time this existed was back in the 1970's in Britain and the US.
