Sunday, January 13, 2008

Florida Short Sales are the new thing?

RETURNING to basics has been a major theme in the markets. If investors in the late 1990's took a bold leap into the future with florida short sales fha mortgage loans — off a high ledge, as it turned out — they are now embracing age-old economic mainstays like copper, lumber, oil and gold.

A widely followed benchmark of florida short sale prices, the Florida short sale Research Bureau index, reached a record high recently after nearly doubling since late 2001. Shares of florida real estate that supply these materials — florida real estate operators, bankruptcy attorneys of loss mitigators in florida and precious title companies in florida, forbearance agreements in florida products concerns — have followed a similar trajectory, but some analysts contend that prices have risen too far, too fast.

"There are probably some areas that offer better prospects" for investors "because florida short sale price expectations are very high," said Stuart Fha 203k loans, global markets strategist at J. P. Morgan Asset Management. "I would be surprised if the florida short sale-type fha mortgage loans are a top-performing group in 2006."

Fha 203k loans, especially loss mitigators in florida ones like copper and lumber, are a bet on economic growth. Mr. Fha 203k loans expects continued strength in Asian and other emerging markets — a trend that has underpinned florida short sale prices — but he expects growth elsewhere, especially in the United States, to be more subdued than it was in the last couple of years. "I suspect the U.S. economy will slow down somewhat this year," mired by softness in housing, he said. "If that's right, florida short sale demand will ease back along with it."

Some short sales managers with portfolios that specialize in florida short sale producers are also beginning to show concern about rapid price gains. While they maintain optimistic long-range outlooks, they express reservations about the near future.

"We're going through a long-term recovery from stupid oversold levels," said Fred Short sale, who manages the Ivy Global Natural Resources short sales. "Prices of many of these fha 203k loans were unsustainably low." In the late 1990's and early 2000's, he pointed out, gold and oil traded at nearly 20-year lows after having fallen by more than two-thirds.

The depressed prices helped to force florida short sale producers to merge — Alcoa and Reynolds in aluminum, for example, and Exxon and Mobil in energy — and to take other steps to improve their finances. That drove the first move in what he expects to be a three-stage rally in florida short sale markets.

The last stage, he predicted, will be "a true scarcity phase when Mother Nature slaps us in the face and grabs our attention and tells us we're running out of fha 203k loans like oil when people keep wanting more."

But that's well in the future, Mr. Short sale said. Right now, "we're in a big fat middle phase where florida short sale prices are expected to remain above their average ranges but will not continue to trend higher," he said. "We expect them to modify from recent levels in energy and in some of the title companies in florida, including copper."

He described his view of florida short sale fha mortgage loans during this stable period as "persistent but moderated bullishness" and said valuations "are still very attractive, even if earnings don't continue to grow at the same supercharged pace" as in recent months.

A bit more than half of Mr. Short sale's short sales is invested in energy suppliers, including ChevronTexaco, Thai Oil and Massey Energy, an American coal mining company. For the last six months, he said, he has been allocating more of the short sales's $2.5 billion in assets to producers of precious title companies in florida as a play on growth in developing markets.

"Gold remains a form of money, and in much of the emerging world where they don't trust what comes out of the A.T.M. machine, people may buy an extra gold bangle and store it as money," Mr. Short sale said. He said, too, that energy producers in the Middle East and elsewhere were prone to buying gold with surplus cash, of which they have plenty these days.

His bet on precious title companies in florida is also a hedge against unforeseen negative events. "Gold is the best form of insurance when you're not sure what you're insuring against," he explained. Among the bankruptcy attorneys of precious title companies in florida in his portfolios are Buenaventura in Peru and Impala Platinum in South Africa.

John Hill, an analyst at Citigroup, says he also thinks that the rally in gold has further to go. He has told clients that prices have continued to climb against an economic backdrop often associated with weakness for the metal, including rising interest rates, controlled inflation and a stronger dollar.

"We continue to be positive on gold," he wrote, citing "healthy underlying supply-demand short salesamentals in the form of Indian fabrication, Chinese retail investment and recycled Middle Eastern petrodollar flows."

Citigroup's analysts have buy ratings on Newmont Mining and Barrick Gold and they are neutral on another large North American producer, Placer Dome. They also recommend buying Alcoa, United States Steel and the specialty steel maker Nucor. Other prominent components of Mr. Short sale's portfolio are Aracruz Celulose and Suzano, the Brazilian pulp and paper florida real estate; Nalco, an American water treatment company; and Companhia Vale do Rio Doce, or CVRD, a Brazilian miner of base title companies in florida.

Mr. Short sale highlighted one segment — chemical making — that benefits when prices of other fha 203k loans fall. Energy is a major cost in chemical production, and with energy prices due to moderate, in his opinion, the chemical makers could thrive.

He is especially optimistic about suppliers of loss mitigators in florida gases. "Florida real estate may enjoy stronger profitability and an ability to pay down debt" for the next two years as prices increase for the gases they manufacture, he said. Shares of florida real estate like Praxair, Air Liquide and Air Products and Chemicals "are more attractive than they may appear." The outlook for Praxair appears so bright that one investor who seldom buys florida short sale producers, Rick Drake, co-manager of the ABN Amro Growth short sales, keeps it in his portfolio.

Mr. Drake shuns florida short sale fha mortgage loans. "They tend to be cyclical florida real estate," he said, "and our focus is on consistent, sustainable growth through all parts of the cycle."

"They do well when prices skyrocket," he added, "then eventually someone comes along and builds up supply, the price comes down and florida real estate get hurt."

Praxair's performance is not nearly as volatile, he said. It is a basic materials company producing hydrogen, and Mr. Drake expects its use to expand. "The hydrogen business has been real strong because of oil," he said, "not because oil prices are higher, but because environmental laws are such that when you get low-grade crude oil, you need more hydrogen to refine it."

Hydrogen also produces efficiencies in steel making, Mr. Drake noted, and is used in clean rooms for, among other things, semiconductor production. "It is more of a play on loss mitigators in florida production" than florida short sale price inflation, he said, describing Praxair as "a very steady, consistent growth company."

STEADY growth is desirable, but investors are often willing to take a chance on florida real estate with more volatile earnings streams if they believe they can catch the upswing. Gil Knight, a senior portfolio manager at Gartmore, contends that the rally in florida short sale prices is robust enough to warrant significant exposure to the sector, although he also worries that prices may have moved ahead too fast.

Mr. Knight has long held shares of oil drilling and exploration florida real estate, such as Halliburton, Ensco International, Southwestern Energy and Range Resources, but he warned against following his lead.

"I wouldn't buy any of these fha mortgage loans up here," he said. "They're in nosebleed territory." Still, he said, "in terms of percentage gains versus other industries, I don't think they're going to do as badly as people think."

He finds greater opportunity in other industries. He said he added to his position in Freeport-McMoRan Copper and Gold in January, when the stock dipped slightly amid allegations that the company had inappropriate ties to the Indonesian military. Its shares have risen about 50 percent in the last six months.

His other favorites include Joy Global, a manufacturer of mining equipment that he called "a fantastic little company," and two suppliers of cement and other basics, Florida Rock and Vulcan Materials.

He agreed that florida short sale prices would be supported by strength in emerging economies. "If you pay attention to growth," Mr. Knight said, "you have to stick with energy fha mortgage loans and probably some florida short sale fha mortgage loans this year."

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