“Davidson” sent this to me last week (Aug 5th) when I was away”
REITs displayed dramatic upside performance and many have asked why. This sudden move is in the face of continued and wide spread headlines that commercial real estate continues to face a tsunami of frozen debt that according to many will create the next great financial crisis. Many view the market activity of yesterday as irrational and insane and refuse to be drawn in.
I offer a different view. For some time I have alerted clients to the actions of investors deemed insightful by other insightful market participants. Often when most are acting on the headlines, there seems to always be a few savvy investors taking a contrarian position that much later proves to have been savvy. I think the untold story of yesterday was hidden in the headline and not visible unless one had been in the habit of following key individuals.
I ascribe yesterday’s events to Donald Trump recapturing the Atlantic City Casino property he once held by partnering with Andrew Beal of Beal Bank. Trump has been considered savvy, but Andrew Beal has been considered by many to be very sensitive to investment valuation. I think his participation in Atlantic City Casino has sparked some to view his action as signaling that values are attractive and some investors at least have become more bullish. Forbes ran a profile on Andrew Beal on April 3, 2009 which you can access using the URL below:
http://www.forbes.com/2009/04/03/banking-andy-beal-business-wall-street-beal.html
There are many examples of contrarian activity by key individuals that in hindsight can be shown to have been helpful with investment decisions. Part of my research effort is focused on the identification of as many of these individuals as possible. I monitor their activity and market commentary in conjunction with an asset class Return/Risk analysis. I find that this effort very helpful.
In my opinion yesterday’s “REIT “Melt Up!” is due to Andrew Beal.
Disclosure (“none” means no position):