Quote for Today:

 “The only thing we have to fear is fear itself.” 

– Franklin Delano Roosevelt in his inaugural address in 1933

(Source)

Yesterday’s Market Sum mailing from Investopedia was an interesting read filled with optimism overall. It does acknowledge the bubble, mentioning “markets at or near record highs, stretched valuations, and rising long-term bond yields.” But it adds that those “are still not enough to knock the shine off of equity markets.”

That assessment does appear correct for the time being. For my part, I’m not a market timer. I’m an analyst. So I can get onboard with its summation of Morgan Stanley’s idea that the equity markets have “diminished somewhat over the past few weeks as rates have climbed higher, but many of the catalysts that favor the equity markets are still in place.”

And here are some other positive pronouncements the e-letter included:

• 66% “of companies that provided guidance during the fourth quarter guided numbers higher. That percentage is significantly higher than the five-year average of 33%.”
• Janet Yellen says higher taxes and fiscal sanity are coming, but later down the road. For now, more stimulus is the name of the game – something the markets are right back to being happy about.
• Morgan Stanley sees a new business cycle and bull market starting right now thanks to that government spending. “There is simply a lot of liquidity in the capital markets due to historic government spending, and it’s not causing rampant inflation – at least not yet.”

Over here at Wide Moat, meanwhile, I’ll still be looking at numerous factors in any potential purchase. They all boil down to two categories: fundamentals and valuation. If those two don’t mesh, then my money will not go into that stock.

It’s as simple as that.

At the risk of making this blog post all quotes, I’d also like to point out something from TheStreet, which interviewed Fernando De Leon, founder of real estate investment and development firm Leon Capital. The group works with about $3 billion in assets, so it’s not exactly small fry. And De Leon is far from a novice.

Here’s what he has to say about the industry he wheels and deals in:

“I divide the world up into two categories. I call them trophies and train wrecks. And in the trophy category, I think about industrial multifamily, we think about data centers and a little bit of self-storage, which has been pretty defensive. And so, I really don’t see any discount on the trophies. I think prices are actually up probably 10% or so in those asset classes.

“On the train wreck side, I think hospitality is top. You really have to predict where business travel is going to shake out over the next few years. And I think there’s going to be a lot less people traveling for certain kinds of business meetings, and that’ll happen through new technology.”

I appreciate and respect that perspective, which is why I’m sharing it today. I would just add this thought to it, courtesy of Dividend Sensei: Somehow, someway, there are always trophies out there selling for non-trophy prices.

When it comes to assets, that’s what stellar management is always on the lookout for. And when it comes to stocks, that’s what Wide Moat Research is all about: getting the best companies at the best prices possible.

No matter what mood the markets happen to be in.

The World According to Commercial Real Estate

Here’s today’s sample from The Daily REITBeat:

• Monmouth Real Estate (MNR) published its fiscal 2020 annual report, which showed it achieving a 99.4% occupancy rate, its subsector’s highest number. So far in fiscal 2021, that’s jumped to 99.7%. The company also bought five properties for a total of $175.1 million last year and two for $170 million this year.
• Welltower (WELL) had less good news to report, as its occupancy declined 220 basis points last quarter from 78.4% to 76.2%. There appear to be continuing downward pressure on those numbers, unfortunately. Though it did see 97% rent collection from its triple-net tenants and 99% from its outpatient medical tenants.
• Ashford Hospitality (AHT) is fighting back against Cygnus Capital and ThornTree Capital, which it alleges is illegally trying to seize control of its board. The REIT has filed a lawsuit against both.

Oh, the drama!

(Source: Daily REITBeat)

As for what’s still ahead, stay tuned! We’re sure there’s a lot more coming to talk about.

Happy Investing