Friday, January 17, 2014

"Bulldog Targets REITs For Shakeup After Javelin Win"

“Management doesn’t have a lot to stand on if the REIT’s stock is trading at 80 percent of its book value,” he said, referring to the amount assets would be worth if liquidated. In that scenario, every dollar of equity repurchased would yield a 20 percent return.

[...]“How hard is it to run a mortgage REIT?” Goldstein said this month in an interview. “I could run one in my basement.”


Taylor Conant said...

Value trap in REITs or authentic opportunity?

CP said...

I don't know, but getting valuation discounts of CEFs to close is a good strategy.

Interesting how there becomes a self-fulfilling positive feedback loop. The CEF managements see how many times he's won and fold.

The funny thing is that the CEF that Bulldog manages, SPE, trades at a 10% discount.

It's pretty illiquid:

He could probably close that gap down to more like 5% without an inordinate amount of buying. Someone should point that out.

Taylor Conant said...

I nominate you, sir!

Josh said...

Buy SPE at a discount and get shares of other CEFs at a discount. It more than makes up for any expense ratio (Bulldog earns its keep).

One other benefit is that gains/dividends at the end of each year will purchase additional shares at a discount, unless you elect to receive cash.