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Author: foolynaround Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 70  
Subject: Re: when issued trading commences Date: 4/14/2011 11:39 AM
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in re: "Now my question becomes how did you ever find ggp?"

i think i posted sometime way long ago that i used to work for one of the subsidiaries purchased by general growth and was extremely familiar with a significant number of properties in the portfolio. i also had experience in corporate real estate finance and felt that the argument that ggp had a refinancing problem and not a solvency problem was correct.

when i decided to purchase this stock (during the first week and a half of march 2009) i was buying hoping that ggp would in fact file for bankruptcy and that they could force refinancing and save the company without wiping out common stock holders.

that hope, analysis, confirmation bias, or whatever you want to call it proved to be correct. i also had a devastated number of accounts and figured this was one of those opportunities which would right a lot of wrongs if i stayed with it. from a sale in may 2009 (in which i recovered my total investment) to sales as recently as the beginning of this month, i have disposed of about 1/3 of my ggp position while still holding my hhc spinoff shares.

as you might have noticed from yesterday's news, ggp has refinanced another 7 properties stretching out the maturities from 3 years to 10 years and freeing up about $400 million in cash flow while at the same time increasing their revolving credit line. this is part of their plan to improve their balance sheet and eventually get their stock price back up to a level which is in line with the quality of the properties they have in their portfolio.

a little over half of my position is in ira's which i intend to leave their until i reach 70 1/2. the positon i have in my taxable account will gradually be reduced on an annual basis to supplement soc. sec which i took early and a very small retirement benefit which i will start getting in about a year from now.

i just believe the world would have to go to hell in a handbasket and stay there for this stock not to double in the next 7 years and if that happens then we all have much bigger problems to address. additionally i am taking my ggp dividends in drips which will hopefully enhance my returns.

from looking at a beans and rice retirement when the market crashed, i now have the distinct possibility of having a ribeye steak and potato type of retirement. the key was buying enough ggp originally to make a difference and then holding on to realize it. when you see things like $1 in walmart at the beginning is now worth over $100 you understand that you have to hold on to ever realize 100x returns. i'm currently up over 50x on my ggp stock (including the hhc spinoff) and feel that i have the distinct possibility of reaching that 100x level (at least in my ira's)

with that said, if this reaches what i think is a fair value i will be quick to cash out my ira investment and play it safe for the future. any way it goes, i have been and will continue to decrease my level of exposure in ggp over time in my taxable account just because i can little afford to take another hit like i took in '09.

regards, dave
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