The Tasgall Group

The Bernanke rally yesterday seems to have given REITs a bit of a push (today they gave back a little). They’re now within spitting distance of the highs set back in March. Breaking above the recent high would be a bullish technical indicator, and there are potential fundamental influences at work as well (inflation, rising rents, etc.).

For reference, I look at the Dow Jones REIT Index (DJR), the Real Estate iShares (IYR), and the ING Clarion Global Real Estate Income Fund (IGR) to monitor the REITs broadly. The first two are basically broad indexes, where IGR is a closed-end fund and currently trades at an 8% discount to NAV.

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A lot of people think that Japan has finally waken up from its long cold night, and has started a genuine long-term bull run.? With its currency still weak, the import business should continue to do well, and their central bank has a long way to go before interest rates become constrictive.

Right now the Nikkei is in a correction, which means it should be time to buy.? It’s testing the low of June, and if I’m wrong we’ll know very quickly (it will continue to go below the June low).? Now might be a good time to start buying some Japan weighted funds, I prefer EWJ or JOF. EWJ is an ETF that tracks the Nikkei 225.? JOF is a closed-end fund that focuses on Japanese small caps.? While it has typically traded at a premium to NAV, JOF is now at almost no premium (the NAV reporting is delayed, so it’s hard to know exactly).

We’ve spent some time in person discussing “magnet” or “density” points but there hasn’t been any data thrown up on the blog. Given the hooplah over yesterday’s bounce (anybody smell a dead cat?), I thought I’d use it to take a closer look at these little buggers. For example, why did the market, obviously trending up all day, stop where it did? Could a trader have gone into the day with any information that could have helped in making decisions? Let’s see.

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My mortgage is a fixed loan at 5.375%, yet with the tax deductions that mortgage interest carries, my “adjusted” cost of the interest is equivalent to a 4.2% rate.

If we look at the highest yielding money market or CD rates, we can find some as high as 6%*. This means that I have a theoretical carry trade between my mortgage and a money market account. Wow, that’s pretty cool.

This means I am actually profiting if I choose to keep funds in a money market account instead of pre-paying the mortgage.

Now, unfortunately, this is all theoretical… my money market account only yields 4.35%, so I’m clearing my “adjusted” cost, but not the real cost. I’m also curious if money market and CD rates will stay at this level for more than a year or two.

* Ok, the 6% rate is a technicality — it’s an introductory rate, but you can find 5.5% or better for quite a few CDs.

Whether you use Yahoo Finance or MSN Money, you should know about the SEC’s Edgar website. It allows you to search for official SEC filings for companies including their earnings reports, insider transactions, and material agreements.

A couple of times I have seen the price of a stock move dramatically on no news… a quick check to the Edgar site revealed that there was some insider buying that wasn’t properly reported on Yahoo Finance and wasn’t picked up in any news. Relevant information, but I had to go find it for myself.? This happens most with small and mid-cap stocks that don’t get coverage from Wall Street.

Edgar is the source for many of the data points on Yahoo Finance, such as the insider transactions, balance sheets, cash flow, etc.

A new (to me at least) popular trend in blogging seems to be the “linkfest”, a blog post that is essentially a long list of one liner links to other blogs that the person found interesting that day or week.? It’s a great way to get exposed to a lot of information really quickly and to learn about new blogs.? Some blogs in particular seem to use this method often, like Abnormal Returns and The Kirk Report.? By doing this, bloggers help create a tight web of references that allow for quick information flow so I hope it becomes common.? But if everyone starts doing it, who will write the articles?

Since adding all the blogs from Ticker Sense to Bloglines, I’ve been going through them mostly with a virtual machete, finding most to be irrelevant to my style of investing or simply poor and uninteresting.? There are a few that are making a place in my daily coffee routine.? One that caught my eye this morning as likely to be of interest to you fellas is CXO Advisory, not because it’s the best blog ever but because it has a great cohesive structure and some very interesting research to share.? The perform inflationary and market forecasts based on the RTV and REY models (similar to the Fed Model) and give daily updates on the status of the market relative to these models.? They also have a great section called Guru Grades that attempts to quantify the success of internet investment guru’s predictions.? The current long-time leader of the list is Ken Fischer, and they have a very interesting article of his on the site.? All in all, an interesting bag of goodies to explore and chew on.? You will note that the market is currently moving in relative lockstep with the 2 models (which are, I grant you, lagging) and that, if you look at what the Bubble looked like, we aren’t in any way close to that kind of overvalued situation.? But then again, you know that.? At the very least, the articles at CXO are thoughtful in a quant sort of way.

So, I’ve used BigCharts for over 9 years now, but I recently noticed a new feature. You can chart the P/E Ratio, Yield, Rolling EPS, and a few other fields below a price chart. (I’ve known since the beginning about the more traditional technical indicators that can be shown there.)

The data is a bit off in a few cases, but you can get some interesting little charts. (more…)

It was requested that I make mention of the CPA firm that focuses on the needs of active traders and hedge funds. It is Green & Company run by Robert Green, CPA, who literally wrote the book on trader taxes.

There is a guy that does a fairly interesting look at the official statistics released by the US Government over at Shadow Government Statistics. He has taken the official releases, documents, disclosures, and footnotes, and figured out what all the real values would be for the US economic statistics without the adjustments that have become common in the last 10 years. (Both hedonistic and opportunistic adjustments).

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