RE:RE:RE:CPI down: Frankie up; Snakey’s Practise acct bust
Frankie10 wrote: I respectfully disagree and this is why:
Take H&R for example, it has an AFFO return of 10.4% (normalized for 1-time event) at a unit price of $9.50. Should H&R's cost to borrow decrease - not only could they develop the US sunbelt residential pipeline more aggressively - AFFO (10.4%) and FFO (12.5%) returns will climb higher. At a time where times are tough - double digit cashflow return seems great to me personally. If BoC cut rates, and CDN REITs dipped along with the broader market, then I would be a serious buyer. I'm going out and looking for money at that point. Many REITs yield above the IBKR margin rate for bal above $130k... just saying.
Im not sure if this was directed towards me.
If so, then what are you disagreeing about? Nobody is telling you to sell. Most of the time, cheap gets a lot cheaper after they cut interest rates. This is my whole argument and it is not based on gut feelings but how it has played out in the past.
Macro forces are much more powerful than individual companies or sectors. In the long run, affo yields matter but they can be tossed out the window when there's panic selling and a recession that may be underway.
My main message is this:
Don't go all in on the Fed dropping interest rates hoping that the worst is behind us.