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First week summary: It was a good week to own REITs, with the Office sector prices going from being up 21.09% to 21.57% year to date. The Industrial sector went from being up 23.64% to 25.18% year-to-date. And the Apartment sector rose from being up 18.86% to 19.50%. Second week summary: It was another good week to own REITs, with the Office sector prices going from being up 21.57% to 24.36% year to date. The Industrial sector went from being up 25.18% to 28.24% year-to-date. And the Apartment sector rose from being up 19.50% to 21.99%. Third week summary: It was a quiet week, with average year-to-date gains falling slightly. The Office sector prices fell from being up 24.36% to 24.15% year to date. The Industrial sector went from being up 28.24% to 27.87% year-to-date. And the Apartment sector fell from being up 21.99% to 21.59%. The FFO estimate revisions caused Office, Apartment and Industrial fundamentals to fall slightly. The slowness of the databases to update expectations - or the slowness of analysts to update thier estimates - is STILL an issue. The average individual investor trades with outdated information. This is an un-reported scandal. What is Spitzer's e-mail address? Shorting Activity: A quick scan of shorting activity [these are old stats from November, but they are the most current in the WSJ database] shows large short ratios [How can a short ratio be large?] in the Office sector for GL [20], OFC [8], VNO [7], HIW and KE [both 6]. In the Industrial sector there were large short ratios for CNT [20] and FR [10]. In the Apartment sector there were large short ratios for HME [26], TCT [23] and SMT [8]. Fourth week summary: The Office sector prices rose from being up 24.15% to 24.88% year to date. The Industrial sector went from being up 27.87% to 29.05% year-to-date. And the Apartment sector fell from being up 21.59% to 21.49%. Shorting Activity: A scan of shorting activity [less old stats, updated for December 18th] shows large short ratios in the Office sector for GL [21], BED [13], and OFC, VNO and HIW [both 6]. In the Industrial sector there were large short ratios for CNT [22] and FR [9]. In the Apartment sector there were large short ratios for TCT [23] and AVB [17]. Novembers notables HME [now 2] and SMT [now 4] both fell off the notable list. Strategy Update: I have posted in the Office update two series of "An Overly Simplistic Investment Strategy Update" which tests the results of different and simple investment strategies. Example: What would happen if you only bought the Office REITs that were rated better than average? The result - you would have done only slightly better than average. The best strategy this year for this sector was buying REITs which had 03 FFO estimate increases during the year. That would be tough to predict for the whole sector, but possible to do if you are only buying one or two. I have an untested theory that analysts underestimate the FFO's farthest from the mean. If that is true, that would be a good guide to forecasting the members of that elite group of gainers. An easy-to-do and only slightly less profitable choice would have been buying those Office REITs with the best (or lowest) dividend/FFO ratio. These logical rules of thumb had to be altered to hold up [somewhat] in the Apartment sector. [And their degree of confirmation was underwhelming in the Retail sector.] I split the Apartment sector using a lower thresholds for both FFO and ratings to split the sector more closely in half. NOTE 1: ASN's 02 FFO had to be estimated (and estimated to reflect an average decrease compared to 03) due to the fact that ASN prefers to use EPS - and I could not find the number in their press releases or annual statements. NOTE 2: In 02, performance ranged from a positive 22.17% to a negative 23.33% - a spread of 45.5 percentage points. Seven of 16 performances were outside of five percentage points of average. In 03, performance estimates range from a positive 10.31% to a negative 22.81% - a spread of 33.12 percentage points. Six of 16 performance estimates are outside of five percentage points of average. For 04, performance estimates range from a positive 8.09% to a negative 0.43% - a spread of 8.52 percentage points as December began. [Now (12-31) the spread is 12.00 percentage points and 4 of the 16 are outside of five percentage points of average - a low, but possible, amount of spread]. My best guess is that the current 04 forecast still under-estimates the results for the future winners and over-estimates the results of the future disappointments. NOTE 3: TCT, while having an analyst[s] that give it ratings, does not have any that are making an FFO forecast. So the one in the table above is home made. It is based on their Q3 earnings from their press release. They have made an FFO of $1.52 year-to-date with $.49 in Q3, so I made a conservative estimate of $2.02 for this year, and a sector average growth of 4% for next year - resulting in $2.10. NOTE: Although the tables below are checked and double-checked for accuracy, and may at times be 100% accurate - do NOT count on that. Please confirm through your own research any numbers on which you are to make a buy, sell or hold decision. Most sites giving this kind of data would say that it's information is for entertainment purposes only. I will not presume that you are that masochistic. I try to be accurate, but I randomly fail. And even accurately replicated and freshly retrieved FFO numbers are often stale. The Price to Revenue INDEX figures, due to rounding errors, are not accurate to 3 digits. They are darn close to accurate. Javascript is expected to be accurate to 5 digits when the calculation is simply x times y. But the complexity of the formula - or a large number of calculations to determine a result - can decrease the number of digits of accuracy. Click here for the Shopping Center, Mall, and Health Care Update page. This months article updates are here. |