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I hate it when posters are repeatedly bullish on a stock, and then disappear when things go wrong.

So I am here to say that this week's selloff in NSAM was not in the plan. You can find discussion of it on the NRF board at IV. In a nutshell, it appears that the selloff is born of hysteria over proposed federal regulations that would impose higher fiduciary standards on brokers and investment advisors, and thus, it is speculated, might adversely affect the sale of non-traded REIT's. Most analysts think the reaction is way overdone, and they remain sanguine on NSAM. But justified or unjustified, there is now a cloud over the stock, at least temporarily.


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What was really hard to figure out is that NSAM rallied 5% on Monday, April 14, immediately after the regulation proposal was announced. Who can explain that?

Mark
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Who can explain that?

Sell the rumor and buy the news?
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I take note of day to day price movements but I'm don't pay too much attention to them. I'm more interested in CAD projections. That's just me.

The following points are from my failing memory, so take them with a pound of salt.

I seem to recall that both the SEC and the Labor Department (LB) were both working on (competing?) new rules that would affect how NTRs are sold. Recently the LB did issue something:

http://www.thestreet.com/story/13113413/1/northstar-asset-ma...


NSAM had a good run over the last 6 months

http://finance.yahoo.com/echarts?s=NSAM+Interactive#

so part of the volatility may have been do the a pull-back


And I think that WPC mentioned something about new FINRA rules affecting NTRs on a Citi 2015 CEO Conference. I seem to remember that WPC was asked about the forthcoming FINRA rules and management said it wouldn't be a big issue for WPC; what the new rule it might do is to disclose the commission for purchasing the NTR. The fear was that customers would run away when they saw that commission, usually 10%. WPC has already worked with dealer brokers on a plan to charge 6.5% up front commission and additional commissions in the following two years. The presentation was found at

http://ir.wpcarey.com/CorporateProfile.aspx?iid=4054624

but was not working when I checked.


Over at the IV board, Sophicles had post about NRF

http://www.investorvillage.com/smbd.asp?mb=1668&mn=1845&...

about NRF. He related 2 changes that might affect the price:

1. NRF will become a "Diversified REIT" instead of a "Mortgage REIT" on April 30. This I think is important since 8+% yields are usually associated with mREITs. I think that 6-7% yield is more appropriate for NRF. So the reclassification of NRF will put some wind to its back.

2.NRF might be added to the RMZ on May 29. If it does there will be a one time boost of buying by index funds and add wind to NRF's back

I think this was discussed in the NRF/NASM Citi 2015 presentation somewhere but the presentation seemed to have disappeared.

Comments, corrections, bricks welcome

klee12
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What was really hard to figure out is that NSAM rallied 5% on Monday, April 14, immediately after the regulation proposal was announced. Who can explain that?

Well, Mark, perhaps its because NSAM's income is mostly about publically traded REITS versus private....and the proposed rules my not survive intact...

Cheers!
Murph
Home Fool
( long NSAM and sold NSAM puts when the fear set in )
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Delayed reaction? I saw an article dated the 17th about an MLV upgrade. Maybe that temporarily held it up.

Was there a large seller dumped their shares sending in down? I thought I read an article on the Investor Village board about that, but I don't have time to check that at the moment...


I don't think there is any impact to MSAM due the the new rules, but that wasn't published right away. And I just saw an article on Yahoo Fin that there is a stock repurchase program. Even if they don't actually buy back the shares, the announcement will help fend off short attacks.

-srockaz
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