Posts tagged investment purposes
Tips To Follow When You Buy Real Estate
Aug 19th
These days, it is seen that people buy real estate for investment purposes and dream of earning high amount of profits. Well there is no harm with the concept of real estate investment, but the way shows portray them is completely insignificant. People in different parts of world watch these shows and think that real estate investing is a simple task. However, you should know that in reality, many issues are involved with this form of investment and you will need to take i…
James Dinan’s Hedge Fund York Capital Files 13D on Sybase (SY)
May 26th
James Dinan’s hedge fund York Capital recently filed a 13D with the SEC disclosing a new position in shares of Sybase (SY). This is the first time we’ve really detailed the portfolio activity out of York Capital so here’s a brief background: Dinan’s firm is a hedge fund that invests in both public equities and fixed income. Their primary focus is companies with catalysts such as mergers & acquisitions, restructurings, special situations, distressed plays, etc. Taken from York’s website, they think that, “While the markets may be efficient on balance, there are pockets of inefficiency that can be exploited by experts who know where to look.” York was founded in 1991 by Dinan and today manages over $12 billion. At the end of the first quarter, we saw that York was up 4.52% for the year in our hedge fund performance post.
Due to activity on May 13th, York has disclosed a 4.2% ownership stake in Sybase with 3,659,183 shares and the aggregate amount of funds used to purchase these securities was $273,603,384. Keep in mind that a 13D filing signifies an activist stake so we’ll have to see what York has planned. Per the filing, Dinan’s firm says they acquired shares “for investment purposes and not with a view towards changing or influencing control of the company.” They bought shares after a tender offer was announced by Sheffield Acquisition Corp for all of Sybase’s outstanding shares.
It looks like York purchased the majority of their position in the $64.xx range on May 12th & 13th. However, they also disclosed a steady stream of sales from May 19th to May 21st, and it’s not clear if they’re still reducing their position. But, the filing does note that on May 21st, York ceased to be the beneficial owner of a 5% stake in the company. While this is just speculation on our part, it’s almost as if they bought a large position which triggered a regulatory filing, but they are already reducing or winding down this position. Unfortunately there is no information as to whether or not they’ve continued selling this week; the filing only encompasses sales up to May 21st.
At a recent investment conference, hedge funds Highbridge and York Capital both said they were taking risk off the table, so maybe this coincides with that, who knows. For those interested, York has disclosed their transaction details of the shares they acquired at the bottom of their 13D filing here. So, we’ll definitely have to keep a close eye on this one. This is a brand new equity stake for York because as of March 31st they did not own any SY shares per their most recent 13F filing.
Taken from Google Finance, Sybase is “
delivers enterprise software and services to manage, analyze and mobilize information. The Company provides open, cross-platform solutions that deliver information anytime, anywhere, providing decision-ready information to the right people at the right time.”
As always, for the latest movements from prominent investment managers, head to our hedge fund portfolio tracking series.
Cash Notes for Sale: Profitable Investment Opportunities
Apr 30th
Real estate investors often invest in cash notes for sale because they can yield a good return on investment. More than sixty types of cash notes are available for investment purposes. The most common include: seller carry back mortgages, structured settlement annuities, business notes, and real estate notes and land contracts.
Real estate poll: Buyers (and sellers) in the wings
Apr 16th
Economists and real estate agents often muse about "pent-up demand" — the number of people who would have bought a home already if not for economic conditions. A new survey by real estate search site operator Move Inc. suggests there’s a lot of people in that group, but it’s not just buying they have in mind.
Nearly half of homeowners surveyed said they’d buy another home right away if they could sell the property they have for at least as much as they paid for it. A lot of Americans are underwater on their mortgages, so there’s definitely some "if only" among those surveyed owners.
Fewer people — 21 percent of those surveyed, current owners or not — said they actually plan to buy within the next five years. Many with near-term plans are first-timers.
Other interesting results from the survey:
A year ago, less than 6 percent of potential buyers told Move that they intended to snap up a home for investment purposes soon. Now, it’s 17 percent. (About one in eight of those intending to buy investment property have the war chest to pay entirely with cash.)
And, Move says, "Just over two-thirds (69.1%) of homeowners who have delayed selling their home reduced their daily living expenses in order to pay their mortgage."
Does reading about a survey fill you with envy that you weren’t asked to participate? Here — try this one:
Housing’s ‘New Normal’: More Renters, Slowing Home Appreciation
Jan 28th
- Superstock
- Dreamland no more: The disillusionment over homeownership could last for decades, Mr. McIlwain writes.
With so much focus on determining whether housing has finally hit bottom, little thought has been given to the future of housing, post bubble. Here’s a potentially sobering prediction: “The old ‘normal’ will not return,” predicted John K. McIlwain, senior resident fellow at the Urban Land Institute, at a presentation in Washington this week.
It must have been a grim talk. Mr. McIlwain said overall home prices will likely fall another additional 10% this year, fueling even more foreclosures and underwater mortgages, which could hit 21 million by the end of the year. With more people owing more than their home is worth “the growing number of consumers who are choosing to walk away from those mortgages suggests a fundamental change from the long-held notion of homeownership as the ultimate American Dream,” Mr. McIlwain predicts. “This disillusionment over homeownership as a way to build wealth could persist for decades to come, as those entering the housing market will be more apt to rent longer, and to place more emphasis on buying for shelter rather than investment purposes.”
In the decade ahead, he thinks home appreciation will slow to 1% or 2% annually, while the home ownership rate of 67% will fall as low as 62%. “The age of suburbinization and growing homeownership is over,” he says. That, of course, means more people will stick with renting – whether by choice or necessity. Mr. McIllwain says that housing in and around major cities will remain unaffordable for many who work there. (We’ve previously reported that some 42% of those who once purchased, but don’t currently own, do not think they’ll own again.)
Mr. McIlawain’s presentation comes from this 24-page report, brimming with interesting housing stats and discussion.
Readers, do you agree with Mr. McIlwain? How do you picture the new landscape?
Follow Dawn on Twitter at www.twitter.com/dwotapka
Related Blogs
- Related Blogs on Housing’s ‘New Normal’: More Renters, Slowing Home Appreciation
Investing Your Student Loans– What You Need To Read
Jan 20th
I’ve met fellow students in some of my college classes in the past that were very ambitious/ aggressive with their investment strategies. Usually I approve of this. But there’s one investment strategy I wasn’t too crazy about. This one investment strategy that I repeatedly heard of caught me off guard.
What is this investment strategy?
Using the money from college student loans for investment purposes.
There are two common scenarios:
1.) Using the money left over from student loans (after paying rent & college related costs) for investment purposes.
or
2.) Your parents pay for the majority, if not all of your education, and you then apply for a student loan so that you have the money needed for investments.
Yes I know that there are many low interest rate student loans out there. In theory you can obtain a student loan at a low interest rate, invest it in the stock market, make some profit, and then payback your student loans when the time comes. Keeping the extra money for yourself, of course.
In theory this is the perfect plan. In application- not so perfect.
Investing student loans IS a risk
No matter what anyone tells me, investing your student loans IS a gamble. You’re essentially taking a chance (even if it’s a minor one) with money that you need to pay back.
Even if you go the conservative route and invest your student loans into an online savings account at ING Direct, the rates can change. Interest rates always fluctuate. They go up and down. Is it worth investing your student loans for a small percentage?
But that’s assuming you’ll never be tempted to touch the money or spend it on something. You now have thousands of dollars available to you within a few clicks. What are the odds that you won’t want to touch this money when shit hits the fan?
The process can also be mismanaged. I have no problem admitting that there are many people reading this that know 20 times more than I do about investing money. The problem is that the best of us mess up at times.
You also don’t want to run the risk of messing up your credit score at such a young age.
Can you handle the risk-to-reward ratio?
Let’s say you lose a portion of the money, what will will you do?
The economic down turn of late-2008 showed us all that anything can happen. One day your prospering with the student loan money you’ve invested and then the next day you’re stressing about how you’ll pay back your student loans.
I’ll be the first to admit that you can make some really solid returns from investing your student loan money into the stock market. But I don’t like that kind of risk. I’d rather put the money down on the Maple Leafs winning (that probably flew over your head if you don’t watch hockey).
My take on investing student loans
I can’t tell you what to do. I choose to invest money that I have. Not money that I’ve borrowed. If you’ve got your shit figured out 100% then chances are nothing will stop you from doing it. I wish you all the best and hopefully everything works out.
Second of all- if your parents pay for all of your education-related costs, you’re better off than most college students that are struggling to pay for college. The small gains from interest/stock appreciation are alright, but is this the best utilization of your time? Could you possibly benefit more from focusing your energy on internships, starting a side business, or making the most out of your college experience?
Foreclosures come to High End Zip Codes
Jan 8th
The S.F. Chronicle had a feature article on Sunday describing how notice of defaults are spiking in the affluent neighborhoods in the North Bay.
Here is a key quote:
“A lot of people in California who own $1 million to $3 million homes bought larger and more expensive homes than they really needed,” said Peter Schiff, president of Euro Pacific Capital in Darien, Conn. “Part of their purchase was for investment purposes, because they assumed values would go up. Now that people have a more realistic outlook on real estate prices, it changes the dynamic. There is very little reason for someone with a million-dollar mortgage on a $700,000 house to struggle to make that payment. More and more people are going to walk away from these homes.”
And here is a key graph:
