Implications
This is another classic example of the blind, sheeplike behavior of both investors and analysts. By treating all REITs as generic commodities, the market has done what it does best,---acting without thinking based upon some computer software ringing a Pavlovian bell. Dumping all REIT stocks seems to me to make as much sense as dumping all retail stocks just because SHLD is going down the toilet and a few marginal retailers who have been dying for several years have finally decided to submit to doctor assisted suicide.
Analysis
REITs are a very simple type of investment to understand if you do not allow yourself to be influenced by their meaningless new formula of keeping score called FFO.
All you need to do is follow the NOI figures and watch the direction in which their NET PROFITS are moving. As with 99% of all other industry groups, some REITs are very well run, conservative companies. Some are aggressive, high risk, high leveraged players and some are some combination of the two.
By not taking the time or effort to try to figure out the good from the bad, the GLG client is doing their hedge fund a real disservice.
