Using Veritas to Construct the "Per…

29-04-2017 Hits:84640 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

Read more

The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:79104 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

Read more

What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:78949 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

Read more

Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:83437 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

Read more

This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:80001 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

Read more

What is the Value Proposition For Verita…

01-04-2017 Hits:82308 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

Read more

This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:53284 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

Read more

Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:81315 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

Read more

Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:81315 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

Read more

The Country's First Newly Elected Lame D…

27-03-2017 Hits:81125 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

Read more

Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:86979 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

Read more

The Transformation of Television in Amer…

21-03-2017 Hits:84994 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

Read more

I recently received a link to Ackman's (from Pershing Square) presentation basically pushing retail CRE malls (Ackman's CRE presentation). Several of my subscribers have commented on his success with GGP as well as the upward climb of REITs in general. I decided to go out of my way to create a comprehensive overview of the US commercial real estate market in order to illustrate exactly where my (more bearish than the consensus) views stem from. The following document started out as a reply to the Ackman presentation, but ended up as a full blown white paper. It is free to download here: pdf  CRE 2010 Overview 2009-12-15 02:39:04 2.72 Mb.

I invite all to read both documents thoroughly. It may take some time, but I feel it is definitely worthwhile for anyone with an economic interest in this space to review both the bull and the bear arguments from entities that actually invest in the markets. I welcome any and all "constructive" comments and feedback.

Here are a few choice graphs from the presentation...

gdp_components.jpg

Not to be a killjoy, but the bulk of the GDP boost came directly from government stimulus, which is apparently fading very quickly.

rre_cre.jpg

The fall in single family home values pales in comparison to the fall in CRE values... 

image041.jpg

The US and UK single family home price bubble have outsripped - by far - that of Japan. If real asset pricing bubbles contributed to the lost decade, one can only imagine what we are in for stateside!

image035.gif

image036.gif

For those who are interested, my first exposure to Mr. Ackman was after reading a similar Powerpoint presentation on the monolines. I was stunned at the assertions and the alleged misvaluations. After I and my team went over it, I too jumped on the bandwagon. The man had a very valid point and the stocks were trading in the stratosphere in relation to the risk they carried. That was in 2007 at roughly $80, and they are trading for pennies now. Ackman held his bearish stance for 5 years through some apparently nasty drawdowns, to ultimately have been proven right. Kudos to the man. See my work on the monolines that I shorted in 2007-8:

The next time I came across his work was his special purpose fund dedicated to Target. I patently disagreed with the thesis behind that one. I didn't think the risk concentration of the fund was prudent, and I thought he was much too optimistic about the real estate holdings and the future of land values. It appears that I was right on that one.

One of my subscribers then forwarded to me his work on Realty Income "O". While I think that this company is hiding many problems and probably does not have that bright a medium term future, I believe that there are better short opportunities in the space. The more I look at the company, though, the better a short candidate it appears to be, it is just that there are companies with clearer and more immediate issues at hand. Subscribers can see the comparison between this and my other REIT shorts in a clear comparative analysis:

My subscribers hit the ball out of the park with the GGP short ($60 or so on down to a bankruptcy filing trading under a dollar, depending on where you covered/sold your puts). Pro subscribers can download the 300 page tome here: pdf  GGP composite history 2009-12-10 04:15:45 3.60 Mb . Retail subscribers can find relevant analysis in the commercial real estate portion of the downloads section and non-subscribers can see the html version of the history (minus exhibits and models) here: "GGP and the type of investigative analysis you will not get from your brokerage house". Earlier this week, one of my subscribers pointed out that Ackman hit the ball out of the park with his GGP long, which he did (bought under a dollar, currently trading at about $10). I mentioned to him that GGP is currently trading around where my original analysis had the entity valued. I was not sure Ackman would be able to extract that value out of the company due to the precarious selling and financing situations surrounding CRE after GGP's bankruptcy, but I literally had no idea what his strategy was and never looked into it thus my opinion was unqualified. He pulled off a magnificent trade, although I believe the post bankruptcy share price was assisted by this outrageous bear market rally.  There is value in the GGP portfolio, but it is a bit more muddled than it appears on the surface. Alas, he performed well on this one regardless of the reason and kudos to the man. This brings us to the latest presentation from Ackman, in which he is hyping CRE. Here, as in the Target venture, I believe he is being unrealistically optimistic in the CRE space, possibly due to the following of false positives in the economic "recovery" and more importantly missing the fact that this is a "balance sheet" recession ,  which is not your garden variety economic downturn. Simply ask Japan. As my readers know, I am still rather bearish on CRE (particularly certain companies).There probably will be strong bull plays in the sector, but for now they are simply trading plays and not suited for a fundamental investment, at least in my opinion.