Thanks for this. The only helpful addition I could imagine is some data on your perspective for future return. I.e. - what time frame you imagine the stock to take to reach what price. That would allow those of us who prefer to lose our money in options to gauge the potential returns, there.
Great suggestion and I love the wording. With equity REITs it can often be particularly hard to pin down a catalyst. Once in a while we can find something that should clearly impact valuations (predicted the rise of apartments after pandemic and the subsequent decline), but can't nail the period down to a tight enough range. "Probably in 6 months to a year" is about as close as I expect to get most of the time. Not super useful for options traders.
The one exception is if we see a shock with rates falling and equity REITs plunging. In that case, net lease can recover within hours, though it could take a day. Won't happen every time, but it can be a useful trick.
I'm looking at this as a multi-year position. Probably several years. The rally is most likely to happen when rates fall. That happens eventually, but I have no reason to expect it presently. I kept reiterating that the market was expecting more rate cuts than it was likely to get. That's bad for the entire yield curve because short term rates are propping up long term rates.
Eventually bond yields go down or the dollar collapses. Debt to GDP is too high, maturity on Treasuries is too short, and social security is a Ponzi scheme. Factor in all the pension funds that were not adequately funded (stupidly optimistic return projections combined with needing to sell at the same time) and we have a retirement crisis hitting within the next 10 years.
The only way to survive very high debt to GDP is extremely low real yields. Federal Reserve is out there fighting inflation by forcing the Federal government (and state and local governments) to commit to printing more money to pay interest for future years (issuing bonds at higher yields).
Leave it to the government to fight inflation by committing to print more money.
Thanks again. My only follow up: those of us who write LEAPs can work with "this time next year" or "by mid 2025" timeframes for certain stocks, as LEAP options are available to purchase with strike dates that far out and further. If I knew you had conviction that - once rates come in say 50 - 100 bps - (which you expect is "likely" by _____) - I could combine your view on rates and your view on the stock to create an option position of my own. WITH all the provisos that would entail - of which I KNOW there are MANY. My downsides are 1) you're totally wrong on the stock and it continues to sink; and 2) rates don't go down or go up during the next 1 1/2 years. I count on you to be the expert on 1). I KNOW you have NO CONTROL over 2).
Perhaps the time has come to allow creative authorial invention and "REAL" articles to be freely published in their full version here..... :-)) And on SA the "appropriate and correct" ones "I already have another article on the stock in progress. It’s taking a bit longer because I accidentally made it so engaging that Seeking Alpha might object to it. I may need to revise the public version back a bit and just include more of the best parts for our members"
Thanks for this. The only helpful addition I could imagine is some data on your perspective for future return. I.e. - what time frame you imagine the stock to take to reach what price. That would allow those of us who prefer to lose our money in options to gauge the potential returns, there.
Great suggestion and I love the wording. With equity REITs it can often be particularly hard to pin down a catalyst. Once in a while we can find something that should clearly impact valuations (predicted the rise of apartments after pandemic and the subsequent decline), but can't nail the period down to a tight enough range. "Probably in 6 months to a year" is about as close as I expect to get most of the time. Not super useful for options traders.
The one exception is if we see a shock with rates falling and equity REITs plunging. In that case, net lease can recover within hours, though it could take a day. Won't happen every time, but it can be a useful trick.
I'm looking at this as a multi-year position. Probably several years. The rally is most likely to happen when rates fall. That happens eventually, but I have no reason to expect it presently. I kept reiterating that the market was expecting more rate cuts than it was likely to get. That's bad for the entire yield curve because short term rates are propping up long term rates.
Eventually bond yields go down or the dollar collapses. Debt to GDP is too high, maturity on Treasuries is too short, and social security is a Ponzi scheme. Factor in all the pension funds that were not adequately funded (stupidly optimistic return projections combined with needing to sell at the same time) and we have a retirement crisis hitting within the next 10 years.
The only way to survive very high debt to GDP is extremely low real yields. Federal Reserve is out there fighting inflation by forcing the Federal government (and state and local governments) to commit to printing more money to pay interest for future years (issuing bonds at higher yields).
Leave it to the government to fight inflation by committing to print more money.
Thanks again. My only follow up: those of us who write LEAPs can work with "this time next year" or "by mid 2025" timeframes for certain stocks, as LEAP options are available to purchase with strike dates that far out and further. If I knew you had conviction that - once rates come in say 50 - 100 bps - (which you expect is "likely" by _____) - I could combine your view on rates and your view on the stock to create an option position of my own. WITH all the provisos that would entail - of which I KNOW there are MANY. My downsides are 1) you're totally wrong on the stock and it continues to sink; and 2) rates don't go down or go up during the next 1 1/2 years. I count on you to be the expert on 1). I KNOW you have NO CONTROL over 2).
Thanks for your transparency wrt sharing your REIT transactions and holdings. Its useful to see this info.
Perhaps the time has come to allow creative authorial invention and "REAL" articles to be freely published in their full version here..... :-)) And on SA the "appropriate and correct" ones "I already have another article on the stock in progress. It’s taking a bit longer because I accidentally made it so engaging that Seeking Alpha might object to it. I may need to revise the public version back a bit and just include more of the best parts for our members"
I'm looking at ways to do some of that. There are so many restrictions that it can be a pain figuring out how we can navigate the system.