Javelin Mortgage (J) is coming tomorrow. It’s a new mortgage REIT from the house of another mortgage REIT called Armour Residential (ARR)):
It will be managed by ARR. It should soon, but not immediately, pay the same 14% dividend yield of ARR. It’s a lot like MITT, which was floated by another REIT with similar terms and conditions. MITT fell initially and then bounced up. It now yields 12.8%.
If J drops below $20, I’d be a buyer. For more, read Javelin’s prospectus. Click here. MITT’s prospectus is here.
Harry’s best guess on The Next Boom.
Buildings for medical purposes – doctors’ offices, imaging centers, medical research, walk-in 24/7 clinics, etc. etc.
The trends are obvious: Obamacare, aging population, escalating costs, etc. etc.
A week with the iPhone 5. Gizmodo’s review concludes:
“The iPhone 5 is the best smartphone ever made. If that on its own isn’t enough to excite you, then it’s your loss.”
Read the full review here.
I’ve avoided Chinese stocks. Always was afraid of buying a pig in the poke. Investing is hard enough without the added problem of figuring China and its wild west. Hence I was amused with this recent piece from Bronte Capital:
Canny Chinese Securities Firms
The WantWant China Times just published a short article under the title Canny securities firms shower fund companies with treats.
What is amazing about the article is how they describe an utterly contemptuous system so blandly.
The article reveals that Chinese securities firms routinely deliver fund managers gifts including “envelopes containing cash” thus “undermining the rigorous research-based approach.”
The article is coy about what it is saying – but here is my interpretation. Fund managers buy securities from brokers without due diligence and those securities may be worthless or dramatically overpriced. The brokers are thus looting the funds. To make this work they are kicking back “envelopes of cash” to the fund managers who are thus participants in the scheme to loot their own funds.
Losers of course are clients.
But it is not just cash that is being delivered to fund managers. The article talks about “attractive saleswomen” delivering “breakfast” to “the manager of a fund company”.
Euphemisms abound. To quote the article:
A recent recruitment ad placed by a securities firm in Shenzhen also spelt out clearly that it was looking to recruit attractive and “open-minded” women as sales representatives.
The system they describe is where “attractive and open minded women” deliver “breakfast” to men responsible for allocating other peoples money and where this will undermine research-based investment.
Are you a client or limited partner in an China based investment partnership or private equity fund?
Are you uncomfortable yet?
Favorite recent New Yorker cartoons.
Harry Newton who says getting old sucks. I had a Charley Horse in the middle of the night. My shoulder still hurts. But… I actually feel the healthiest and most relaxed in years: Three keys: Regular daily exercise, regular naps (sometimes for no more than 10 minutes) and an absolute aversion to getting into excess risk. Maybe I’ve finally listened to myself. A muni bond return of a few percent lets me sleep better than chasing tech high fliers. Perhaps also I’ve figured how to pay my daily expenses with dividends, while keeping a small portfolio to gamble with. Recognizing that the portfolio is deliberately designed for gambling is key. And finally, saying “NO” more often helps enormously. Don’t underestimate the psychological benefit of saying “NO.” … Maybe I wouldn’t be writing this if my Google, my Apple and my mortgage REITs weren’t doing so nicely.
Kris – You took the words out of my mouth. My family doctor’s practice (of three Doctors) had to join a hospital mega-culture to survive because of the way Obama care is or will be operating. My doctor thinks that once most doctors are in the conglomerates, the government will take them over as well and we will all be in government utopia.
Why does your write-up about Chinese investment practices remind me so much of Washington and Wall Street? Sure seems similar.
Harry’s best guess on The Next Boom.
Buildings for medical purposes – doctors’ offices, imaging centers, medical research, walk-in 24/7 clinics, etc. etc.
The trends are obvious: Obamacare, aging population, escalating costs, etc. etc
Harry,
The expansion of medical facilities has been extremely restricted by the Obamacare legislation. The dificulty has been that small providers cannot determine or estimate future payouts for procedures and will not invest in new facilities because of this (through lease or purchase).
Secondarily there is a bifurcated market whereby the Hospital systems get paid 10-40% more for the smae procedures when billed through the hospital. This has led to small practices being bought out because the doctors can be bought out byt the hospital,have all of their capital returned, and still have the same earnings; all while the hospital makes a larger income based on a higher margin for the smale procedures.
There will be opportunites within this, but will genrally need to be onsite medical office developed in partnership with hospitals. The outliers in this that are comming up are free standing urgent care and ER facilites, along with the “doc in a box” general practitioners/family practice that have already been popping up in in more traditionally retail locations.
Hope this helps with your future investing, thanks for writing the interesting column.