If You Must Speculate In REITs, Learn The Rules

Whenever I see a ridiculous yield combined with an inherently vulnerable business model, I become suspicious.

Summary

  • If you are foolish and refuse to learn a lesson, it will ridicule you, laugh you to scorn, break you, and toss you to the rubbish-heap.
  • Whenever I see a ridiculous yield combined with an inherently vulnerable business model, I become suspicious.
  • A Wall Street writer is constantly working to sift the real information from the propaganda.
  • If I can convince one reader to steer away from dangerous stocks (including shorting a blue-chip REIT), I have done my job.

Yesterday I got an email from Seeking Alpha asking me to tone down my rebuttals related to other authors. I was somewhat perplexed by the email because I have always tried to respect others, recognizing that my job is to provide value to the readers, not so much other writers.

As I pondered the email from Seeking Alpha, I began to reflect on the growing bifurcation that exists between investors and speculators. Many of the authors that I have debunked are essentially speculators and they can’t be blamed for wanting to “get the best things in life in the quickest possible way”.

Frank J. Williams said it best,

“This is the spirit of America. The stock market seems to offer the most rapid road to fortune.”

It’s true. America is a great country and as a journalist, I have a right to express my opinions, and offer investing advice recognizing that “there is only one narrow trail leading to permanent success in the stock market.” Williams writes,

“Unless traders are prepared to climb that steep path with cautious steps, it would be better for them to stay out of Wall Street and to keep their money in the savings bank.”

To be perfectly clear, I have no animosity with other writers on Seeking Alpha, and the purpose for my writing is solely to assist readers, “if you are intelligent, the market will teach you caution and fortitude, sharpen your wits, and reduce your pride.”

However, “if you are foolish and refuse to learn a lesson, it will ridicule you, laugh you to scorn, break you, and toss you to the rubbish-heap.”

It's important to understand the difference between investing and speculating and today I will provide readers with a few textbook examples.

“An investor is one who buys sound securities where he knows his principal will be safe and he will get a fair return on his money. The speculator is he who buys today with the hope of selling tomorrow or next month at a higher price.”

The Yield Chasers