Originally Posted by OrangeOkie
Originally Posted by duck911
Originally Posted by OrangeOkie
If I had 15K to put in the market right now I would split it equally between EPR and RLJ-A.

EPR is a REIT yielding 18% (4.59 per year) and should recover to around $80 in the next two years.

RLJ-A is a non-callable preferred share (REIT) that yields 10.41% (1.95 per year) and will recover to $25 within a year.



I think you are one of the better, of not best, investors offering advice on this forum.

But can you explain your affinity for REITs? I have some family in real estate and they are getting killed. Hotels will be going BK. Housing starts are stalling. Honestly, hotels and commercial RE are two sectors I am avoiding right now. I don't think they've found a bottom and will still take some big losses. What am I missing?

I am better at oil. Please educate us! I am all ears!

Thanks Okie



Duck, first of all I am not qualified to give investing advice. I am not a fiduciary nor professional/licensed adviser. However, I do have an opinion. Both EPR and RLJ-A were victims of a black swan event . . . namely the coronavirus panic and the shelter in place edict. The resultant steep and fast drop in market price was due to that, and that alone. EPR is an "experiential" triple net lease REIT, flush with a billion dollars in cash. They own properties like theaters, ski resorts, amusement parks, Top Golf, and other pieces of property that draws the millenials for an "experience." Obviously with the shelter in place, social distancing rules now in effect, potential customers are afraid to visit these type of locations. As soon as this panic is over and we return to business, the price of EPR should also return to normal, around $80. (see the 1-year chart below.) I didn't get in at the bottom on EPR, but I did buy in at $20, and I am already up 22% on capital gains, and locking in a magnificent dividend.

[Linked Image]


RLJ-A is a Hotel REIT, but it is a unique preferred share, with a PAR value of $25. It cannot be called and I was able to get in at $15.45 and have an unrealized capital gain of 21%. Again I didn't get in at the bottom, but I expect a relative steep recovery once the corona panic subsides. This one is locking in a fat 10.41% dividend, which cannot be called. Preferreds are safer than common shares. Take a look at this one year chart and you can see this has been trading at PAR or above for the past year, until the black swan event.


[Linked Image]


I think both of these are on the safer, more conservative side and no brainers. I can't think of a better way to get some capital gains, while locking in fat juicy dividend yields for the long haul. These are sort of buy it and forget it type investments. They are not for traders. They are for buy and hold investors looking for income producing stocks. If one is not willing to hold for two or three years minimum, I would not recommend buying. This is a sort of turtle and hare investment, and we are placing our money on the turtle.



Thanks Okie for the detailed response, I really appreciate it. This is really insightful!

Other than oil (which I long and short pretty successfully for reasons I wont go into here) , I am mostly a boring, company 401K conservative buy and hold guy. I always appreciate your perspective.

The DIPCHIT ADD, after a morning of drinking:

You despair, repeatedly, constantly! daily basis?
A despair ninny.
Sack up, despire ninny.