Yet another troubled REIT Duke Realty has jumped on the Kimco, ProLogis, etc. Merrill Lynch/BofA orchestrated mass dilution bandwagon, and investors, some confused about what the hell is going on, others like Cohen and Steers, are more than happy to join the great pump and dump even as all REITs face imminent debt maturities, declining lease rates, tenant bankruptcies, and generate less and less cash flows to satisfy their respective debt loads, let alone dividend payments. As for use of[More...]

“I believe I had my first Coca-Cola in either 1935 or 1936. Of a certainty, it was in 1936 that I started buying Cokes at the rate of six for 25 cents from Buffett & Son, the family grocery store, to sell around the neighborhood for 5 cents each. In this excursion into high-margin retailing, I duly observed the extraordinary consumer attractiveness and commercial possibilities of the product. I continued to note these qualities for the next 52 years as Coke blanketed the world. During this period, however, I carefully avoided buying even a single share, instead allocating major portions of my net worth to street railway companies, windmill manufacturers, anthracite producers, textile businesses, trading-stamp issuers, and the[More...]

We might be seeing a rash of financial index component changes down the line that will affect their exchange traded funds (ETFs) as the uncertainty of our banking system continues. For now, the underlying index of the KBW Regional Banks (KRE) fund will have some changes. This ETF has managed to fare pretty well in the ...

Many months ago, I had a debate with an acquaintance who argued that there were major differences between the housing market and the commercial real estate market (CRE). In his opinion, the fundamentals of the latter meant the sector was somewhat immune to the many woes that have plagued the residential property sector. While there had been some speculatiion in commercial property, he argued, most participants are seasoned operators who take a number of key financial and economic considerations into account before they develop and acquire properties. My view was that cheap money, leverage and hubris had undermined the structural underpinnings of virtually all asset markets, including commercial property. While he might be right about the degree to which any downturn in the market for malls, office buildings, and other commercial properties would lag the decline in housing, it will nonetheless be substantial-- well into[More...]