U.S. S&P REITs: More Downside

Rising Treasury yields are proving a formidable challenge to the REITS index, a fixed-income proxy.


R EITs are one of the few financials sector subgroups that have trailed both the S&P 500 and the broad U.S. financials sector year-to-date.

The tight inverse correlation in the 10-year Treasury yield and REIT relative performance reflects no wiggle room in valuations, owing to the lagging performance of cash flow drivers. In fact, vacancy rates appear to have troughed, which may reflect burgeoning supply as a consequence of the massive build-out of multi-family apartment units as well as the rush by investors to convert foreclosed homes into rental units. The implication is that rental inflation may face downward pressure. Moreover, the technical picture is also worrying. Relative share price momentum is waning, as measured by the contraction in the 26-week rate of change.

Bottom Line: Our U.S. Equity Strategy team recommends an underweight position in S&P REITs relative to the broad market.

Google Glass, Beppe Grillo And Getting Fit; A BCA Reading List

The Google Glass feature no one is talking about — Creative Good

Google Glass is like one camera car for each of the thousands, possibly millions, of people who will wear the device – every single day, everywhere they go – on sidewalks, into restaurants, up elevators, around your office, into your home. From now on, starting today, anywhere you go within range of a Google Glass device, everything you do could be recorded and uploaded to Google’s cloud, and stored there for the rest of your life. You won’t know if you’re being recorded or not; and even if you do, you’ll have no way to stop it.

Italy’s Political Clown Gets Serious – by Tom Mueller  The New Yorker

Had Occupy Wall Street produced a leader with long-term vision and concrete goals, he might have resembled Beppe Grillo…

Smoking, drinking and living alone: what the General Household Survey tells us about how Britain has changed | News | guardian.co.uk

Why analysts should not be investors, Andy Zaky edition

Felix Salmon   Smart and accurate Apple analysts are in high demand, and Zaky, quite sensibly, decided to monetize his gift. In June 2011 he put his blog behind a paywall, charging first $49 per month and then, in June 2012, $200 per month. With 700 subscribers, that meant a six-figure income per month, just by selling access to his detailed Apple analysis and trading recommendations. …… Bullish Cross Asset Management was launched in late 2011, and by November 2012 some 28 investors had invested a total of $10,607,815 with Zaky. And had lost it all. For Zaky, it turns out, was a truly dreadful fund manager:…. But the most astonishing part of the Andy Zaky story is not that he set up a tiny hedge fund which failed. Rather, it’s the lemming-like way in which the subscribers to his newsletter lost a mind-boggling sum of money — quite possibly well over $1 billion….

Canada’s North, Home to Bears, and Once, Camels

Your Fat Has a Brain. Seriously. And It’s Trying to Kill You. | Fitness – Health and Fitness Advice | OutsideOnline.com

Body fat is just an inert layer of blubber, right? If only. New research shows that it’s more like a toxic parasite that doesn’t want to let go. The good news: if you exercise and eat right, you can force it to.


Independent Investment Research