PALO ALTO, Calif. (CNN/Money) -
Opinion, opinions, opinions. I've got mine, you've got yours. Let's hear yours for a change.
Kathy C., for example, has got some thoughts on REITs, provoked in no small part by my generally positive musings on the popular real estate investment vehicle.
"I was surprised that you didn't emphasize the REIT-risk that can be associated with a housing bubble," she writes. "I live in a high-end apartment complex where the rate for my townhouse has dropped from $1,695 to under $1,295 within the past year. And there are several empty units in my cul-de-sac. I predict the earnings for REITs to be dropping along with the rest of the economy."
Good points, Kathy. Of course, that's partly why you're earning above-market returns on REITs. But there's no question that there are risks. Having said that, declining earnings are still earnings. Compare that with what happened in many technology companies, where illusory earnings transformed into non-earnings. It helps put things in perspective.
Taking a slightly different tack, a broker for a company that manages a rather successful mutual fund inquires why I have chosen to invest in the Vanguard REIT fund, which simply tracks the performance of the Morgan Stanley REIT Index of more than 100 large REITs.
"Why are you buying an index? Surely you must know that an index fund (regardless of asset class) holds good and bad companies. Why not own actively managed funds? You know as well as I that we are in a stock pickers market. Index funds will continue to lag."
I do believe we're in a picker's environment. I also know those picks can be bad. And I'm somewhat comfortable shooting for average here, rather than less than average.
If you missed last weekend's Wall $treet Week with FORTUNE, check out the transcript of an interview Karen Gibbs did that lays out the perils of active management.
| Recently by Adam Lashinsky
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My article on the so-called digital rights debate landed me some predictably heated missives. Like this measured response from a certain Mr. E: "Congress forcing big media to share their content or forcing Hollywood to deliver their product according to the mandates of government is, in principle, no different than Pol Pot ordering the cities evacuated. That our government now (sometimes) does such things is the reason why strictly speaking we must describe our society as a mixed economy, not a truly free one."
I respectfully disagree, of course. Thank goodness this country isn't run according to strict libertarian policies. Sometimes mixed is good.
The following e-mail from Mark R, writing from across the pond, is worth reprinting in full. The subject line, complete with incorrect spelling, reads, "Why don't Americans realise." And the body says:
"Their economy is in the mire...
Their expectations are far too high...
The system they implemented...capitalism...is now working against them.
They work ridiculous hours.
They drink weak beer...
They don't have passports and they don't travel...
They have no understanding of the rest of the world and no respect for it.
The U.S. is not the best country in the world.
Americans are generally not admired, not envied, and often disliked."
I have only one comment to that: We actually have a lot of damn good beer over here (in particular, I have developed a taste for some of the West Coast brews -- Sierra Nevada Pale Ale, Anchor Steam Beer, and Full Sail beers, are my faves.)
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.
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