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Author: yodaorange Big red star, 1000 posts Feste Award Nominee! Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 77698  
Subject: Famous FAILED REIT short Date: 5/9/2013 10:09 PM
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You have to be cautious on anyone pushing or pulling(shorting) any stock. There are certainly a lot of investors that "talk their book" and attempt to influence stock prices. Heck, this is in large part what Warren Buffet and Charlie Munger did last week in Omaha.

If an analyst comes out with a short recommendation, it should not be viewed any more suspiciously than a long recommendation. The only difference is that statistically stocks go up more than they go down, so the broad odds are against shorting.

Bill Ackman runs the Pershing Square Capital Management hedge fund. He has been very successful. But he does NOT bat 1,000. Back in 2009, he decided to take aim at Realty Income, aka "O". He did a 32 page presentation on why he was shorting it. [1]

His conclusion:


At $25 and a 7.3% cap rate, we believe there is very little downside to the short.


With dividends reinvested, O has increased by 154%. . .

For some reason I do NOT recall seeing Bill's 32 page presentation on why he was 100% wrong on O. Must have missed it somehow.


Thanks,

Yodaorange

[1] Bill Ackman presentation on shorting Realty Income
http://www.marketfolly.com/2009/10/ackman-pershing-squares-r...
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