Hedge Fund
Serenity Alternative Investments Blog - REIT Wars: The Fed VS Unemployment
June 2020
Serenity Alternative Investments Blog - REIT Wars: The Fed VS Unemployment
- PERFORMANCE – Serenity Alternatives Fund I returned +0.09% in May bringing YTD returns to -0.1%. The MSCI US REIT index returned +0.19% bringing YTD returns to -20.8%.
- PROCESS – While the stock market has celebrated “improving” economic data, companies still have to deal with the upcoming economic reality of 16% unemployment.
- OPPORTUNITY – A multi-year bull market for REITs is on the horizon, but historically it is better to be late than early.
“That’s no moon” – Obi-Wan Kenobi
Star Wars references two months in a row? Really? Bear with me.
The Millennium Falcon drops out of hyperspace after a firefight at Mos Eisley Spaceport. Luke Skywalker, Han Solo, Chewy, and Obi-Wan find themselves navigating a field of debris amidst what they thought would be a friendly planet. At first, they are confused, until they spot a small moon out ahead of them, which, as they grow closer, turns out to be the Death Star. The massive space station then hits them with a tractor beam, inexorably sucking them into the empire’s clutches.
Out of the frying pan, into the planet-destroying space station.
See the connection to REITs? Allow me to clarify.
The stock market has celebrated as the coronavirus in the United States has come under relative control, and states and cities have begun the re-opening process. Pent-up demand has given companies a bullish narrative to feed investors, with many companies referencing “traffic” or “demand” that was actually UP year over year in May. Does this mean the worst is behind us? Is this the start of a new bull market?
Not so fast.
To view the entire post click here.