Comments on: Seven Notes on Real Estate http://alephblog.com/2007/07/11/seven-notes-on-real-estate/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Sun, 12 Feb 2012 18:05:33 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: David Merkelhttp://alephblog.com/2007/07/11/seven-notes-on-real-estate/comment-page-1/#comment-2224 David Merkel Tue, 24 Jul 2007 19:39:06 +0000 http://alephblog.com/?p=176#comment-2224 Garth, you self-promoter you. Taking imprudent risks is a road to ruin. Selling books on the other had, is an excellent way to get rich, often with little risk. You should know. John, Mortgage REITs are tough to categorize. A lot depends on the amount of leverage employed, whether the debt employed is non-callable in a crisis, and the type of mortgage assets invested in. This is an area, where most of the time, I would favor lower yielding safer plays, over higher risk REITs. Garth, you self-promoter you. Taking imprudent risks is a road to ruin. Selling books on the other had, is an excellent way to get rich, often with little risk. You should know.

John, Mortgage REITs are tough to categorize. A lot depends on the amount of leverage employed, whether the debt employed is non-callable in a crisis, and the type of mortgage assets invested in. This is an area, where most of the time, I would favor lower yielding safer plays, over higher risk REITs.

]]> By: garth gibsonhttp://alephblog.com/2007/07/11/seven-notes-on-real-estate/comment-page-1/#comment-1866 garth gibson Fri, 13 Jul 2007 20:48:30 +0000 http://alephblog.com/?p=176#comment-1866 Your Alt-A paper report conjurs up more Vodoo Credit Score Magic in my mind. The fact that these supposed low risk loans are defaulting an overwhelmingly high number of supposed high risk sub-prime loans ACTUALLY get PAID. Somewhere in the range of 85%. Makes no sense unless the credit rating system is more a bunch of smoke and mirrors than pure science. Having said that real wealth comes from taking risks, often the bigger the better. Stay satisfied with a 2% return in your savings account is not going to build wealth. The name of the financial game IS to take risk. Thus I would many of theose same subprime lenders are doing very well. They borrowers to pay well above margin for their loan when in fact they were a very safe debotr. My Hats off to the subprime lender for having mastered the game of 'perceived' risk. This great example of failure to linking cause and effect to data. Your Alt-A paper report conjurs up more Vodoo Credit Score Magic in my mind.

The fact that these supposed low risk loans are defaulting an overwhelmingly high number of supposed high risk sub-prime loans ACTUALLY get PAID. Somewhere in the range of 85%.

Makes no sense unless the credit rating system is more a bunch of smoke and mirrors than pure science.

Having said that real wealth comes from taking risks, often the bigger the better.

Stay satisfied with a 2% return in your savings account is not going to build wealth. The name of the financial game IS to take risk.

Thus I would many of theose same subprime lenders are doing very well. They borrowers to pay well above margin for their loan when in fact they were a very safe debotr. My Hats off to the subprime lender for having mastered the game of ‘perceived’ risk.

This great example of failure to linking cause and effect to data.

]]> By: John jonsonhttp://alephblog.com/2007/07/11/seven-notes-on-real-estate/comment-page-1/#comment-1855 John jonson Fri, 13 Jul 2007 15:29:40 +0000 http://alephblog.com/?p=176#comment-1855 Do you have any thoughts on the correlation of commercial MREITs to equity REITs? It seems strange to me that equity REIT yields are near historic lows, but commerical MREITs are yielding over 10%. If equity REITs get repriced to a more historic level, do MREITs go down with them? BTW, thanks for your insightful blog! I'm learning--slowly... :) Do you have any thoughts on the correlation of commercial MREITs to equity REITs? It seems strange to me that equity REIT yields are near historic lows, but commerical MREITs are yielding over 10%. If equity REITs get repriced to a more historic level, do MREITs go down with them?

BTW, thanks for your insightful blog! I’m learning–slowly… :)

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