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Old 08-18-2016, 03:04 PM   #1
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Default Frak me

http://www.investors.com/news/doj-pl...ons-corp-sink/

DH will go BS crazy on my butt. Substantial position in one of these in my retirement account.

US gov't screws me again.
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Old 08-18-2016, 03:49 PM   #2
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Ouch!
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Old 08-18-2016, 03:52 PM   #3
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Unh hunh.
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Old 08-18-2016, 03:59 PM   #4
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Might not be so bad. Feds only about 11% I think. And if Trump wins...

At least I didn't panic and dump it.
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Old 08-18-2016, 04:02 PM   #5
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Can you sell it at a loss this year, (let it stabilize first), then use that to offset a capital gain next year or later?

I've been groaning for months - bought Potash Corps at $46.84/share. I don't even want to look at it today but an attempted hostile takeover of the company & Russian shenanigans as well as a seeming lack of interest in fertilizers, means it's dropped easily 60% from where I bought it.

No need to sell it for a good 3-4 years minimum... hoping it perks up a bit.

As to the prison companies - they may 'repurpose', (rehab?), try operating in different countries or even at the state level.

You're not going to win them all - as long as your gains outweigh your overall losses, you're ahead.
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Old 08-18-2016, 04:31 PM   #6
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No loss-taking...spousal RRSP. Have three years before it's taxed in my hands, not DH's, so the money is destined to stay there a while anyway. Just don't want DH to check the trading platform, and go WTF.

Will ride it out, like you and POT. Could all turn around with Trump as POTUS, too. The one I have is geographically diversified as you mention, and is into rehab.
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Old 08-18-2016, 07:07 PM   #7
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The Feds want the private prisons to empty out so they can use the space to house the ones sticking up for the 2nd amendment.
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Old 08-18-2016, 07:54 PM   #8
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That would truly suck, wouldn't it.

Now that the shock has worn off, I'm wondering what to liquidate to double down.
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Old 08-18-2016, 08:06 PM   #9
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Canadian, US or international equities? Those you want to buy?
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Old 08-18-2016, 08:28 PM   #10
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Sorry Sue, migraine, don't understand your post.
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Old 08-18-2016, 09:01 PM   #11
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When you said "liquidate to doube down" - I thought you meant sell a loser to buy something that would do better. As in... double a position...

No?

Wait until tomorrow; answering with a migraine doesn't sound fun.
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Old 08-18-2016, 10:17 PM   #12
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Thanks, Sue, for the clarification. I meant sell a winner to double down on this stock that's (probably unrealistically) dropped about 45%. I have two I have gained enough to make a bit after fees, and could double or triple my position on this one that tanked. They have great dividends, though, so I'd have to weigh that loss. Chances are the price will rally too quickly, though.

I don't like the idea of locking in losses, since all of our accounts are registered, so no capital loss deduction. Not selling this one.
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Old 08-18-2016, 10:22 PM   #13
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Good thoughts - if the companies have been successful, they'll have back up plans & buying in now might make a great deal of sense. This will not have been a surprise to them - the US government will have been talking to them about this for a while.
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Old 08-18-2016, 11:12 PM   #14
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I presented my dilemma to DH. Before I was done explaining what happened he said, "Buy more.". Unfortunately he's more interested in "singling down" as opposed to my "doubling down".

Will chew on this a bit.

(And thanks for that True North tip. Pulled the trigger on that one a while ago. )
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Old 08-18-2016, 11:22 PM   #15
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Who actually owns the prisons ?

Do they have capital invested in buildings that may now not be used ?

Do they have much debt ?

..
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Old 08-18-2016, 11:47 PM   #16
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Those are questions I'm looking into tonight, Ross.

I also just came upon a law firm release stating there is investigation into a class action lawsuit on behalf of investors for issuing materially misleading info to investing public ("may have issued"). Anyone know if that's routine when a stock drops that fast on news?
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Old 08-19-2016, 12:00 AM   #17
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I'm really happy with True North - got in at an average of $5.87/unit & it's trading at $6.21right now. REITs don't usually move that much but in an increasingly ugly REIT world, it's got some excellent holdings. Hanging on to that one & another because both are giving me an annual yield of over 10%. Because it's a damned trust - can't avoid the tax hit but at least dividends are taxed fairly low. It's cap gains that really make me vomit.

There was an article about a private REIT a few weeks ago that has extensive holdings in Alberta - the latest NAV, (Net Asset Value as opposed to unit price), had a massive writedown; they're latest valuation showed some significant capital losses. I'll try to find that one agan - would help if I remembered the name of the REIT.

I would think there would be some sort of legal review of both those prison companies - first thing they'll look at will be the boards & large share holders... did they move out of the stock recently? I've heard of companies being closely examined after a stock drops that fast & deeply on news but don't know if it's routine.
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Old 08-19-2016, 12:35 AM   #18
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I know which REIT you are thinking of that took the huge writedown, but I forget the name right now, too. I was able to get into TNT at 6.03, fees in.

As for the current stock issue, I did run across info that earlier in the week there was a sell off for about $60,000 or $80,000. Will have to see if I can dig it up again. Reading up on securities class actions right now.
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Old 08-19-2016, 12:49 AM   #19
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Default Found It

***Dream Office REIT turns to nightmare for investors after massive writedown

Growing and expanding a business is always exciting for management and investors.

But when a company overshoots and the business has to be restructured and scaled back, a different reaction is generated. When will it end becomes the leading question as potential capital losses and dividend reductions become the norm.

Investors in Dream Office REIT have experienced both sets of emotions of late: four years back the units traded as high as $39.73. Since then it’s almost been straight downhill except for a slight bounce, in February, when it announced a three-year strategic plan “to deliver value to unitholders.”

On Thursday, the units closed at $16.92, down $1.67 – a reduction of almost 58 per cent from the high ($39.73) reached in the summer of 2012. At Thursday’s close the units are back to levels they traded at near the end of 2009.

On Thursday investors were reacting to Dream’s latest financial results. They weren’t pretty, with the Trust recording “a fair value loss” of $675.3 million and $748.4 million respectively, for the three and six months ended June 30, 2016.



As a result, the REIT determined its net asset value per unit to be $23.64: three months back it was $30.31 and one year back it was $33.22.

Why the big writedown and why seemingly all of a sudden? “Based on our leasing experiences and external market data, we decided to significantly write-down our Alberta assets in the second quarter of 2016 to reflect a slower and more prolonged recovery for the Alberta office market,” said Dream Office in the release.

Of the $749 million in write-downs, the bulk ($675 million) related to properties in Alberta. That reduction meant Dream Office cut the value of its Alberta properties by 42 per cent: to $931 million from $1.6 billion. Dream acquired its Calgary office properties in stages: in 2006 for instance, it bought six properties from Brookfield, in 2011 it bought five from Blackstone and Slate Properties as part of an almost $700 million purchase.

In a report Neil Downey, a managing director and equity analyst at RBC Capital Markets, said while the REIT’s funds from operations was “just shy-side of consensus, the magnitude of the markdowns will likely surprise just about everyone.” He termed the writedown “somewhat stunning.”

Other observers argue Dream Office’s challenge, given its previous determination to stay the course and ignore the erosion of its asset values, is to convince the market that the net asset value is really $23.64. In other words how fairly does the new value reflect asset values?

That challenge is different from earlier times when the twin activities of buying properties and raising equity was done at a frenetic pace: for instance, over the 18 months to the end of 2010, it spent about $1.5 billion on acquisitions. In that year it raised $593 million of equity and followed up with an additional $629 million of financing in 2011 — all at prices above the current market price. In 2012 when it acquired two-thirds of Scotia Plaza in Toronto it raised another $544 million of equity.

While lots of fees were generated through those acquisitions and financings, investors have not fared well at all. Over the five years ended Aug. 11, 2016, Dream has generated a total return of -21.38 per cent – or 58.52 percentage points below the gain for the S&P/TSX composite over the same period.

We were unable to secure a comment from Dream Office...***


http://business.financialpost.com/in...sive-writedown
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Old 08-19-2016, 12:56 AM   #20
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I should have remembered that...I have a super small position in Dream Industrial. There's actually a thread at the Cdn Money Forum, something like "Riding Dream Office to the gates of Hell".
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Old 08-19-2016, 10:36 AM   #21
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Individual stocks aren't my cup of team (I like sector funds) but I wouldn't get carried away.

11% of one of these seems a little heavy for a portfolio but that is me.

I would "dollar cost average" what I had, within reason.

Too many states, counties and cities use the private jail model. Too many times the same Justice Department have sued/find for the state/county/city owned jails for conditions.

There is no appetite to approve more bonds or taxes to build them to get back into the jail business. So, my guess these political units will keep using them.
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Old 08-19-2016, 11:11 AM   #22
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I thought everyone learned lessons from the apartment, commercial real estate, and natural gas REITs a decade or two ago.
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Old 08-19-2016, 12:12 PM   #23
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Quote:
Originally Posted by Potemkin View Post
I thought everyone learned lessons from the apartment, commercial real estate, and natural gas REITs a decade or two ago.
I was involved in managing the buyout of some of those in the early 90's....we paid about 3 cents on the dollar to the individual owners.
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Old 08-19-2016, 12:21 PM   #24
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Pote, the 11% is the current revenue from BOP, not the stock's weighting in our portfolio.

I woke to a text from DH to buy, with a limit. I could have pushed it, but didn't, so I increased our shares by about 70%. At this point we're up about a buck a share on the new purchase.

Regarding sector funds or indexes, in Canada we have to deal with currency fluctuations and MERs that would make your head spin. Only recently has Vanguard moved in, putting pressure on existing funds' fees, but they're still up there. I use (higher) dividends from individual stocks as they roll in (that I don't own enough of to drip) to purchase lower cost ETFs that are commission free to buy on my platform (my bank). Unfortunately only three Vanguards are available, one of which I hold.

Last edited by rb.; 08-19-2016 at 12:31 PM.
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Old 08-19-2016, 12:57 PM   #25
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Quote:
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I was involved in managing the buyout of some of those in the early 90's....we paid about 3 cents on the dollar to the individual owners.
I had a small percentage of the NG ones in the "Spectulative" portfolio section but not enough to worry about.

Most of them seemed real estate ones seemed skeezy and the overhead was too much.
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