Focused Investing Perspectives #52
Days when my portfolio is nearly all red warm my heart.
On those days I know that the value I can buy with a dollar is going up. What’s more, I know that Mr. Market will overreact, opening up opportunities for eventual upside.
My portfolio has been nicely in the red for three of the past four days. It is not yet down enough to trigger the passel of limit orders I put in place in early April, but there is now hope for them.
I did invest a bit this past week, moving into an oil midstream and an oil producer with large and secure distributions. So my dividend income actually went up even as my portfolio market value dropped.
The slide in crude oil prices lately is creating opportunities in that area. Just look for the companies that can pay their base dividend through price troughs and that have been priced by Mr. Market to have stupidly high yields.
In contrast to the impression many have, REIT prices have not suffered a lot this year. A fair number have dropped 10% to 15%, but in the big picture that is not so much:
Alexandria Real Estate (ARE) continues to have large negative momentum. It dropped another ten bucks and I bought another tranche recently. Now waiting for $60.
The thing about these big negative momentum plays, like positive momentum plays, is that they feed on themselves so the price keeps moving until everyone prone to depression or euphoria has sold or bought, respectively. This often takes the price far beyond reasonable levels. As to ARE, I will keep buying in tranches as long as the negative momentum lasts.
On net, though, this period is seeing me move funds out of REITs and into energy-related investments. If long interest rates do collapse as some predict, I will have missed some gains in REITs. That’s the breaks, and the energy investments are worthwhile in that scenario too.
Over time, my funds have flowed from REITs to energy or vice versa. The gains from doing that have been significant.
Member News
Looking Ahead
The early Memorial Day in the US snuck up on me or this one would have come out last week. As is my usual practice around major holidays, I will be going mostly offline soon until sometime next week and will engage further comments and the chat at that time.
My analytical work has lately very much been driven by new opportunities and new realizations. At the moment I’m back again to doing a deep dive on VICI Properties (VICI). We will see if that gets completed or if more immediate things again come up.
After that I may look again at Tourmaline (TSX: TOU). It has been awhile since I really dug into them and there has been some reprioritization in production.
Recently published material
Material in the past month has included the following. You can see it all, and search it, at https://focusedinvesting.substack.com/
Recently:
Two Perspectives articles, to all subscribers
Deep dives with no paywall on BXP REIT.
Deep dives with a preview on Rexford Industrial and South Bow
One Brief Note, on Essential Properties Realty Trust, to all subscribers.
Five Alerts, of one kind or another, exclusive to paid members.
A monthly update, exclusive to paid members
Paid members also have access to the Focused Investing Chat.
Other Resources
To find my past articles covering a given company, go to the Focused Investing home page. There is a search function to help look for past articles. Search by name or ticker.
A note on my approach to restricting access: Anything providing details of my trades and portfolio is restricted to paid subscribers, as is anything I consider to be immediately actionable. Most articles with information it seems members may act on have a preview section followed by a paid section where the real meat is.
The Google Sheets (for annual members):
The main attraction on the Google sheet is full disclosure of my live, real-time portfolio. If you are an annual paid member and do not have access, please contact me.
There are in addition a REIT assessment sheet, some data from NAREIT’s REITWatch, and a Midstreams assessment sheet, each a tab. And if you scroll down on the Current Portfolio tab, you can see limit orders, some tickers I track, and some playing with possible portfolios.
Also:
Paid members can also post items of interest on the Focused Investing Chat, which I do often. Check it out and post your own items, please. Comments and questions are always welcome.
It can be challenging to search the chat (for paid members only) or to find past articles on mobile devices. To do so, you have to get into the chat so my picture is on the top left, and then punch my nose with your finger (ouch?). You will see a display with a search emoji and a link to the home page where you can search.
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I'm wondering if the pending regulatory streamlining for nuclear changes your opinion on any of those stocks?
If ARE continues to fall, do you think management is steady enough to stay the course? IOW is the a there a chance (I know, I know, there's always a chance) that they'll cut the dividend in favor of buybacks?