Friday File: “Trophy Assets”

by Travis Johnson, Stock Gumshoe | July 5, 2019 8:15 am


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Answering a reader question about some REITs, plus a few other quick updates
P.S. Stock Gumshoe will be mostly closed for two weeks... expect your next Friday File on July 26.

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Source URL: https://sgumdev.stockgumshoe.com/2019/07/friday-file-trophy-assets/


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stocktimeplusprice
stocktimeplusprice
3 years ago

Have a great vacation. Thank you for your work.

hedy1234
hedy1234
3 years ago

Have a great vacation!

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eleanor
eleanor
3 years ago

Thanks for the analysis Travis. Have a wonderful time with family in the woods. Being in nature is healing and rejuvenating.

👍 180
mvvdoc
mvvdoc
3 years ago

Have a great vacation. You earned it.
Alan

👍 20
Braulio
3 years ago

Enjoy the woods. As a guy returning from a 2 week vacation tomorrow I’ll remind you to bring the bug spray/repellent. Any thoughts on GLRE before you go? It’s on my watchlist because of you and looks like it could be at a buy point?

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3033
👍 15
gdoggcrunch
3 years ago
Reply to  Braulio

Well good ole GLRE popped up on my holiday value (trap?) scan. I noticed this SEC filing:
https://www.sec.gov/Archives/edgar/data/1385613/000138561319000076/form8-kmay312019.htm

Note that it says GLRE is holding the majority of its assets in cash and treasuries. Hardly what I’d pay Einhorn to do. I don’t see much upside if this is what they’re doing.

Even though his first half investment performance has people saying “Einhorn is back”, its 9.1%. I get it, he’s short/long and a value guy. But he is a pro and I shouldn’t be beating him when I’m in cash half the time….and I’m a short/long value Amateur.

But if the core insurance business could actually trade at book, then you’ve got 50% upside. I want to see what they decide on their investment risk portfolio before I do anything. Otherwise its like buying Berkshire and telling Warren to sell all stocks and buy Treasuries.

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👍 93
Braulio
3 years ago
Reply to  gdoggcrunch

Yeah, it’s down for a reason. I’m investigating further too. Will get back to you

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iltrus
3 years ago

Hi Travis,

Enjoy your well deserved vacation with your family !

We will be here to greet you when you are back on July 26.

Best!!!!

👍 168
bunion132
3 years ago

Thank you, Travis, for comparing ESRT vs BXP and throwing in SLG as a bonus. In fairness to Stansberry, he lists both ESRT and BXP as prized stocks to hold during difficult economic times in his book “The American Jubilee”. However, he seems less interested in the valuation of the companies as a whole nor the different properties they manage; instead he hones in on what he considers to be their most intrinsically valuable or iconic (hence, “trophy”) assets. For BXP, that would be the office and retail space in Boston and for ESRT, the Empire State Building. He ranks the latter higher for an unexplained reason, but you’ve covered that in your write up.

Of course his book was written two years ago. Market forces or public sentiment may have changed somewhat for these two companies especially with the need to adapt these old buildings to ever-advancing technology. Based on your analysis, I agree that REITs rather than specific stocks like ESRT or BXP seem to be the better assets to have in a portfolio for now for exposure to real estate. However, in the event that REITS approach a down cycle, or during a major correction, even outright recession, it makes sense to be on the lookout for the fire sale of these “trophy” assets. For who would not want a piece of history at a cheaper price, maybe even paying a dividend?

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cameronwinsor89
cameronwinsor89
3 years ago

Good read as always. I’ve always thought it was a waste of time doing my own research, unless I thought I could put in more time that people who do it fulltime, instead I should just take their advice. Then I got sick of reading ‘stock tip’ books and subscriptions that would promote retail stores just as the online boom was taking flight, and say how overvalued Amazon and the like were and how they would come crashing down. All the while Netflix and Shopify were used my myself and friends, but initially never talked about in stock advise forums. I live in Australia and we simply don’t have the amount of companies and opportunities to jump on board with IMO, so I had been looking for advise in the US market and now trade almost 100% internationally. Its good to read articles that are level headed advice, your page exactly what I have been looking for. You don’t promise to give out 1 stock tip per week as you cant predict when good opportunities will present, you simply share your thoughts – positive, negative, or simply thoughts why you’re still on the pickets. I love how transparent you are with your portfolio and losses, very refreshing to read, don’t sell out on us!

fhcoach
fhcoach
3 years ago

Looking forward your return. Just returned from my vacation.

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