I don't find REITs that attractive right now, what is your basis for getting in? I think commercial real estate is terrible to get into, way too many vacancies and still some overhang projects left from recent good times. I think the rents being charged will progress down over some time because even though the economy is improving, businesses are being very careful about expansion and with all the cheap space out there they can demand very favorable terms in every major market. Only good side I could see in them is that dividend rates are much better than being a bondholder right now so if you wanted a fixed income type investment and were willing to take on some moderate risk, this might not be that bad a sector to be in.


Your other comments I like. Consumer cyclicals are always overpriced IMO. They are steady and survive down periods very well, but their value is always questionable because paying for a big brand name is not very value conscious. Think about it, if you have 40% of the market, you can't do a whole lot to get more of the market (barring monopolistic practices). The pricing of premium names though means you have to get bigger or cut costs. I have never been a big fan of betting on stock to do well through cost cutting. Cost cuts rarely work out half as well as companies envision and even worse they kill productivity as morale sags and people start seeing it as a "cheap" company. However if your stock requires growth and you are a consumer company that really can't grow faster than the economy, how can you justify the price? I think your suggestion on this is right on.


Dollar had a weak day, but tomorrow is sure to be stronger. The impressive late market rally will bring back money, everyone wants to catch a potential market bottom the world over so that will draw some cash. Besides the fall in the dollar was mostly psychological, the whole parity with the Euro issue. The Yen will weaken soon, I think the BOJ is letting some people get set up for a fall when they come in with a big intervention soon.