RE:RE:RE:RE:Nice Break out over a previous high.Not Really
So when you exit something and it runs up after wards, you're sort of lazy and not caring about it, as opposed to trying to figure out hmmmm, maybe I should have a slightly more elaborate exit approach or something.
I am an old man (75) with a high level of discipline towards diversification. Whenever a position becomes a larger percentage of our overall portfolio,
it is reduced. Well, I'm not that old, but I'll bet I'm more annoying, irritating, disagreeable and cranky. HAH!
That doesn't sound optimal; based on your rigid so called "displined" approach... in a hypothetical; if you owned a pharma stock and they developped a drug that you thought "holy smokes, this could be worth 10x the current price!" and the SP went up 50% that day... would you be "disciplined" and sell? My wife and I c
onsider MRC, MRT.UN and MRG.UN as one position (Morguard).
Sounds very "disciplined". Diversification > all!!! One owns shopping centers, one is appartments and the other is an real estate asset manager. Yup, sounds the same to me.
If you're that diversified, why not just buy XIU. Need something to do with the spare time I guess ;-)
All three have been hitting new 52 week high almost daily. The overall position had to be reduced and we decided on selling MRC since the two REITs pay a higher distribution.
Ah yeah... the dividend zombie approach. Must... have... dividend...
Honey!!! There's two stocks we can buy, one has an earnings yield of 8% and a dividend of 5%, the other has an earnings yield of 12% and no dividend... which one should we buy honey??? Why baby, the dividend paying one of course! EVERYONE knows how important dividends are! Why even ask such a question! No regrets. And yes, I expect MRC may reach $200 again within a year or two.
Duh, ok, so must sell cuz don't want it to be too high of a % of portfolio. DUH. Diversify = more important than making 33% in a year off a pick. DUHHH
In the meantime I see a stronger possibility of MRC making a (share diluting) move to acquire all units of either MRT.UN or MRG.UN, both trading at deep discounts from "true net asset value".
Time will tell.
Dunno. The guy who runs MRC is a pretty astute value based investor that seems to continually make decisions based on increasing the NAV/share of MRC. He had trouble with the second before last deb offering and had to pay more than he wanted I think, but with the last deb offering I think he rejected the crappy rate the market was offering and instead paid off the latest deb (debenture) with cash on hand and a second mortgage, reducing the interest cost. Not sure how much financial flexibility they have right now to make a big acquisition, especially with some RE values declining and therefore compressing the loan value availability on them. So like you say, a move along those lines would maybe have to be share based. PS - Some of the proceeds from our sale of MRC were invested in another real estate residential REIT:
ERE.UN. Motive is diversification in Europe.
Looks like a REIT set up for suckers who love dividends and diversifications... like you.
Over the very long term ERE.UN will underperform its peer group because its management is motivated to grow the portfolio and not the unit value. This reit has "pet management companies" attached to it, who get a % of the assets to manage it. Which means, to anyone with a brain, that management is motivated to grow the asset base, not to grow the value per unit (i.e. they don't really care about that as much, though they will of course pay it lip service).
We can check back in 10 years from now if MRC out performed ERE.UN, for the reasons mentioned above about each. My guesstimate is that MRC will outperform ERE by 5-10% per year, solely because of different management focus.
I'll bet you a buck.
CU in 10 years.
And no... I don't have to work at being an A Hole, it just comes to me naturally sometimes -)
Along with a sardonic cynical sense of humor. Cheers!