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August 22, 2007


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Mike Roach

Good article. It appeals to me as I am a bit of a "contrarian", and it seems to be a good way to "buy cheap and sell dear".

However, it is important to look at the value of real estate funds, not just price. By value I mean price as a multiple of earnings, or inversely you would look at earnings yield when it comes to REITs While prices of REITs have declined in the past year, they have yet to return to anywhere near their historical yields. It is true that they historically have offered low correlation to broader markets, but with excess liquidity and "LBO Premium" in the market in the past couple of years, they need to decline a bit more before they start behaving like an alternative asset class.

The Financial Philosopher


You are absolutely correct and I appreciate your "value added" information. Your points highlight the primary reason I recommend levering the knowledge of experienced mutual fund managers: The average investor does not have the time, resources, or desire to learn or apply the complexities of investing...

As for my fund suggestions, it seems as if The Wall Street Journal read my post as well:

If you are not a subscriber to the WSJ paper or online version, the article states that "some veteran mutual fund managers are finding buying opportunities" and specifically mentions that Third Avenue Value "has a history of finding values in investments others are abandoning." My T.Rowe Price suggestion also has a similar investment philosophy.

My point is that the prudent investor will lever the knowledge of others who possess the capacity, such as yourself, to invest intelligently so they will be able to find more time to enjoy their true passions...

Thanks again. I hope you will visit TFP again in the future and bring your valuable knowledge along with you...


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About Kent Thune

  • Kent Thune is a philosopher who happens to be a money manager and freelance writer... Read More


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