Stock Analysis I Did Sometime Back.

Sorry this is a little late but here’s a basic spreadsheet on the components of IYR the iShare Real Estate ETF. SRS is the ultrashort version of IYR. Ultra-short meaning it strives to have a 2x inverse relation to IYR. IYR tracks the Dow Jones Wilshire Real Estate index. Contrary to my previous assumptions all of these stocks are REIT’s (Real Estate Investment Trusts) and commercial real-estate companies. BGIXX is a money market account, which all iShare funds include for optimization purposes. ProShares the managers of most Ultra-short funds use swaps instead of actually holding short positions. IYR is an actively managed fund so each component weight changes and most figures fluctuate due to stock price but was accurate as of the time I researched. SRS is a bit harder to determine due to IYR’s constant changing nature.

As of today, September 2, 2008 SRS is below both each of it’s key support levels (20, 50 and 200 day moving averages). At this point in time things point to a very bearish outlook for SRS and bullish for IYR. Considering the fact that there are no more support levels I’m looking at a low of about 75 for SRS. Despite the current positive outlook for Real Estate dictated by futures, Case-Shillinger and our government, I believe these are short-term bounces that will not continue. The main reason for this is due to higher mortgage rates and the spread in mortgage bonds. The credit card market reported similar spread differences due to fear of defaults.

Addendum: SRS rose above and fell below its 20 Day Moving Avergae, it’s slowly building momentum but could see resistance at the 20 DMA at about $84. I suspect that the Treasury’s plan will face a plethora of gridlock in congress due to its controversial nature as well as the fact that Secretary Paulson’s testimony did not breed confidence.

Despite the fact that SRS/IYR is mainly involved in REIT’s and commercial real estate, I would recommend a small position as a hedge to your current real-estate holdings to minimize loses during this turbulent time. ITB and XHB are two long homebuilder ETFs, judging from its history it may be tough if not impossible to short, you may want to consider the opportunity.

On a side note the components of SRS are not exactly attractive holding options, this sector seems to be plagued with high P/E (Price Earning ratio), moderate leverage (debt to assets ratio), low return on equity, assets and investment capital. These are stocks with P/E levels between 9 and 5190 times. Typically the level lies somewhere between 30 and 60. Leverage is moderate typically with levels between 1 and 3. Return on investment capital seems to be in a range of 2-4 and return on assets seems to fall in between 2 and 5. Price to Book value seems to be more fairly valued for the lesser-known companies at around 1.5x.

The only worthwhile company that is listed on SRS/IYR is Simon Property Group (SPG). It’s more levered than it’s other counterparts, had a higher P/E than I would ever care to see and is more levered than the others it has strong margins and good growth potential. It’s ROE (Return on Equity) is among the higher end of the components.

I was off by about $10, not good not bad.

Link to spreadsheet. v

http://srsanalysis.webs.com/SRS.xls

All I Need From You, Is All Your Love

I've come to the conclusion I'm destined to be an old recluse who continuously attempts to work on three novels at once and listens to Led Zeppelin non-stop. Pink Floyd, Hendrix and the Stones make their way into the rotation but I fucking love LZ. Once I buy a Les Paul I'm learning how to play all of their hits.

Got back from West Point tired as shit, got the cold shoulder from a certain girl from a certain military academy that I'm quite fond of, I did get higher speaker points and made it to out rounds which she didn't. Lost a round or two on some BS calls. 

I found out a friend (and I don't use that term lightly) made a move on a girl I happen to like. He knows and offered me some advice but I'm not liking the turn.

Sometime I Motherfucking hate life. Kind of like now.

Diary of a Mad Black Man

I'm also a lazy black man because I'm copy/pasting from an IM with a friend but this makes me angry. VA drivers are assholes, but NJ drivers are much worse...

7:23:03 PM Me: so i was in a rush to get to the bank before it closed (which I didnt :s)
7:23:27 PM Me: and this dick in an m5 e39 style kept going slow so i kinda tailgated him
7:24:23 PM Me: so the jerkoff just stops in the middle of the road and i slam on the brakes screeching tires and all and barely hit him
7:24:39 PM Me: and then has the nerve to give me a dirty look after so i flicked him off

My Econ Professor is Fucking Awesome

I found this letter to be badass. 

The Letter

Back to prepping my files for Richmond, I need to sleep. It's gonna be fun to see how badly I fuck up this weekend.

Hip Fuckin' Hooray our Nation is Fucked.

Since I haven't been able to blog and C hasn't either I haven't had time to bitch and moan about how fucking stupid congress is and how fucked up their stupid bailout plan is. Taking the suggestion of a fellow capitalist I started asking around for thoughts on the bailout which is the purpose of todays post.

First person I asked: a girl who is infatuated with me but annoys me. Her comments were "$70 Billion you gotta be joking" I notified her that it was 700B and she said even worse. I don't know what to say...

I asked my homie T, we share the same general views about capitalism politics and the like. He said "it's bad worsens the economy long term. the problem is the government is pouring out easy credit."

I also asked my dude G, my basketball and poker buddy. about his thoughts. I like the guy, but he just regurgitates to me media lines. Most notably about Obama and my opposition to the guy. He said he didn't like it but it was necessary, nation would become more in debt. I tried to keep my views out of the process so I asked him why, he said because the stock market would crash (paraphrasing) so I had to follow up with since when did the government care about the stock market? he replied with "our government cares when the stock market is in danger. if it goes down our nation is the shitter." After asking how he came to that conclusion he said 29, all the proposals passed afterwards were to prevent it from happening again. He followed up with "how can americans give the government money if there was a depression, how does the economy grow?" I told him the government produces its own money and the economy will grow off exports like they did the last two quarters. he replied that creates inflation (printing money) and left. I didn't even get to give him a little economics lesson :(.

I asked my dude from high school, who cleaned up his act once he got to college about it. His answer wasn't very flattering simply "it's needed or else we're fucked in the end" and "low income people need to stop bitching about it".

I asked a person I had acquaintances with in high school but never considered him a friend or anything of the sort (which has changed in the past year) he first said in a way good in a way not good. He didnt like that CEOs made a lot of money for doing nothing.

I asked my best friend about her thoughts, quite possibly the most impassioned out of the rest. with comments such as "absolute BULLSHIT" "you could have used used that 700 Billion FOR A WHOLE LOT MORE SHIT" "and i'm totally upset"

One of my favorite people to talk to about politics or anything intellectual simply said "screwed if you do, screwed if you don't".

The most surprising of all this is that almost all of them are supporting Obama.

Milk Carton: Callum McCarthy

Hope he didn't get contaminated...

They Fuckin' With My Cash Flow Have Ye' Any Shame?

I'll try to cut down on my cursing but I'm fucking pissed (a little sly pun). This neo-socialist punk group of cocksuckers known as Ben Bernanke, Henry Paulson, Christopher Cox, Charles Shumer and Christopher Dodd are bailing Wall Street out and screwing main street in the ass. Quite frankly I've given up on your country, our politicals everything. It's sad and disgusting what we've become a socialist nation of bailout and aid and giving citizens the middle finger. Fannie/Freddie that was cool, upset me but something had to be done. Lehman failing? Saddening but somewhat the right thing to do. AIG? Integral, but the question is why the fuck is an INSURANCE company levered at about 11x? Makes no sense, I don't see why they were dealing in mortgages anyways strike one two and three: you strayed from your business model.

So now B-52 Ben is running AIG temporarily (since it's a loan and not a full blown takeover) but will we see any of those profits gains because they used our tax dollars? No No No No. Socialize the costs, privatize the gains. I doubt anyone reads this but please write to your congress[wo]man and tell them to vote against the RTC (my dyslexic ass probably mixed up the order but you'll know it when you hear it). 

Chris Cox from the SEC (Securities and Exchanges Commission) is considering banning short selling, my method for making money. I hate this whole system it's rotten, and the only reason why things got bad was because the government intervened with free market capitalism.