Originally Posted by CanadianCapitalist
Yes, I've been unloading REITs since the summer; paid off all my leverage and then built up a bit of cash too. I wouldn't go so far as to say that they're over-valued, but from this point I don't really expect them to out-perform the broader index, so I figure if I can't have some expectation of that I might as well move the money over to the indexed side of my portfolio.
I've been partly spoiled by the deep value of the beginning of the year, so I've been (perhaps unfarily) sour on almost everything I've looked at lately.
I did buy a single share of BRK.B today -- I don't necessarily think it's trading at a huge discount or anything, but there's been a lot of talk in the news lately about Buffet losing his edge, or Berkshire getting too big to continue outperforming, and that's generally been a positive sign in the past. Pretty weak reason to invest, but I figured that otherwise BRK should be pretty safe.
On RIM: I did buy some (~$70, so I could have done better if I waited a few more months) on the theory that all this noise about competing smart phones is not going to put a stake through their heart any time soon. The TD analyst put it nicely: these competitors will take away their potential market share, but since the overall smartphone market is still growing quite strongly, they will still grow at a nice clip for the next few years. I.e., even if Google and Apple cut RIMs share of smartphones down to X% of the market, the overall smartphone market is still growing so much that their absolute unit sales will keep growing at a decent pace.
On POT: I might just be bitter about cancelling my bid back in the dark days when it was cheap, but I haven't been too keen on it above $100. I don't know what to make of their breakdown of negotiations with China, but I fear the worst and am staying clear.
My ace in the hole: Canexus (CUS.UN). They're an off-shoot of Nexen that produces chemicals for various industries, including pulp & paper and water treatment. They are the low-cost supplier of these chemicals in most of their markets. They don't have very good liquidity, so there's a bonus discount there for the small investor IMHO.
The current yield is just under 10%, with a decent payout ratio. They also are near completion for some plant upgrades that were being funded out of retained cash, which should allow them to further increase volumes/earnings/potential distributions as that capacity ramps up. They weathered the downturn very well since they were the low-cost supplier, which should put them in an even better position as their client industries recover (their competitors have to some extent shuttered production and will probably be slow to respond to the returning demand). That increase in cash production should offset the effect of increasing taxes next year, so I expect the distribution to be maintained in full after a conversion, though I don't recall seeing a press release outlining their plans yet.
The wildcard in my view is Nexen: they still own a huge percentage (67% of the plant itself and then another % of the income trust which owns 33% of the plant IIRC). Nexen has stated that it's interested in selling off their interest in the plant, but no more details about that have come out. I have no idea if that will negatively affect Canexus (the income trust), by either by the presumed vote of no-confidence from Nexen or the sale itself, or if it might mean the income trust part of Canexus would take over ownership and become larger (and more liquid, potentially attracting institutional investors).
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