How much does the Irvine Company hate this site?

NEW -> Contingent Buyer Assistance Program
If the Irvine Company believed in the market, <em>they </em>would be out buying up properties to support resale values. The have the resources to do it.
 
Maybe the thread hijack was orchestrated by TIC to distract us? Oh wait, are they going to packet sniff me now for questioning them? Where did I put that tinfoil hat...
 
right, IR. just like corporations that cry about their valuations being too low. but asked why they don't buy back their own shares... chirp chirp.
 
IMO, companies shouldn't buy back their shares as their equity should be spent on growing their business, not to curry favor with the wall street analysts. in fact, I often worry when a company repurchases shares as it leaves me thinking that they have lost the motivation at the top to invest in new products or explore new markets.
 
Share buybacks make sense as a dividend policy. If a company wants to reward its shareholders, it could pay dividends, but then those are taxed again, or they could take that money and buy stock and drive up the stock price. Both benefit shareholders, but one is a taxable event to the shareholder, and the other is not.
 
not necessary... if we apply this to both real estate and equities, we can look at what reits are doing. a yr ago reits were trading at roughly the value of their underlying assets but since them reit indices are down about 25%. of course, mgmts all claim fundamentals are still favorable (i.e. nav's shouldn't decline much.) if that's the case, all of them should be buying back all their stock.





instead many of them are still doing head-scratching deals, buying properties at cap rates still near historic lows (<5%). in other words, they could buy the real estate in their own portfolio at a 25% discount but instead they're chasing yields that are almost nothing after borrowing costs. there's almost no justifiable reason if they <em>really</em> believed what they are saying about their share price. few of them are willing to put their money where their mouth is. as an investor i really dont care whether company mgmt allocates capital buying more real estate or buying back their own. i simply want them to be good at allocating capital - period.





of course some of you here have the SRS so i'm quite sure this is actually encouraging news.
 
I'm not a tax guy by any means, but aren't tax rate on dividends significantly lower than capital gains tax realized on stock appreciation.



"there's almost no justifiable reason if they really believed what they are saying about their share price" well, since you are perusing this site, I find it very hard to believe that you think REIT's are trading at a 25% discount given that we just went through a housing/real estate bubble that inflated values on all sectors of the real estate industry. I've listened to some of the conference calls and i don't here any analysts complaining as to why these reit's aren't buying back stock like mad, seems obvious to me that mgmt realizes current prices are the realistic value of the stock, not the 25% inflated housing bubble price.



You said it yourself, reit's have been buying property with historically very low cap rates due to steadily increasing rent rates and low vacancies. With condo developers out of the game, REIT's are anticipating picking up some land for development deals, wouldn't that be a justifiable reason, if mgmt honestly believed this, to use equity for growth as opposed to re purchasing shares in a recession.



I don't think you honestly believe REIT's or any company should start repurchasing shares right now.



What's SRS stand for?
 
<em>"I'm not a tax guy by any means, but aren't tax rate on dividends significantly lower than capital gains tax realized on stock appreciation."</em>





The thing is you pay your taxes on dividends every year, and you don't pay taxes on capital gains until you sell the stock and have a capital gain. A tax deferred is a tax denied...
 
yeah i think we're saying the same thing. i'm not honestly saying that reits shoudl be buying back their shares. obviously asset values are about to come crashing down and the mkt has been pricing that in. i'm saying companies tend deny their stock is inflated at the peak, as well as brush off subsequent declines on the downswing -- basically arguing that public mkt valuations are completely off base. of course none of them would actually back up their claims, otherwise they would be buying back their shares in a decline, which they're obviously they're not doing. just like the irvine co example. they're not stupid -- they're just not exactly forthright in their claims about mkt conditions.








SRS is the proshares ultrashort reit etf. it's basically 2x the inverse of the dow jones reit index (IYR).
 
"A tax deferred is a tax denied..." well, my eloquent response is an asset appreciated is not money in the bank untill it's sold, the tax is paid and is in a checking account.......(your's sounds better)



acpme, I hear ya now, I guess sarcasm and humor don't translate well over forums, thnx for clarifi. Hmm, rhetorical question but if you were a stockholder in company a, would you want company "a" to be forthright or realistic (aka bearish) about market conditions? Don't we pay the CEO's the big bucks to be the eternal optimist.
 
But for the record, both taxes on dividends and taxes on capital gains are 15% right now.





Both Hillary and Obama want to increase them, so act accordingly in November.
 
So Bernake is trying his darndest to stop hording, and get people to spend and invest ... and the Dems want to up the taxes on people investing. Makes perfect political sense...
 
Anonymous, it gets even worse than that.





Not only do Democrats want to raise the taxes on capital gains, dividends, and regular income, Obama is talking about doing away with the cap on Social Security taxes.





For those who aren't versed on the subject, currently (2007 tax year), the first $97,500 you earn every year is subject to a Social Security tax of 12.4%. (If you are self employed, you pay the entire 12.4% out of your own pocket. If you work for someone, 6.2% is taken out of your paycheck and your employer contributes an equal amount. But there is no such thing as a free lunch. If you eliminated this 6.2% employer contribution, your employer could pay you 6.2% more at no extra cost. Therefore, even people who aren't self employed pay the same 12.4% of their income to Social Security)





Combine this extra 12.4% tax with the return of the 39% tax break that both Hillary and Obambi want, and the top Federal tax rate becomes 51.4%.





Of course you still have to pay Medicaid taxes on top of this.





And the State of California wants 9.2% of your income.





And sales taxes for the state range from 7.25% to 8.25% on everything you buy. (Of course the tax rates on gas, alcohol and tobacco are much higher)
 
Winex, were you half as pissed as I was when the President pushed the "tax reform" that caused either state income or state sales tax to be tax deductible (on federal taxes), but not both? If you live in WA, for example, where there is no state income tax, all your sales tax became a deduction. If you live in CA, you had to pick one or the other.
 
Why doesn't our gov't have any responsibility to spend (or not spend)our tax dollars wisely? What would the Sons of Liberty have to say about our current tax system?
 
My Department, hence I, do not contribute to Social Security... but I still accrue quarters with my side job. How will any increase affect me, if at all ? Curious.
 
Eva, I was probably about half as pissed as you were when it happened. But that's only because I lived in Arizona at the time and the state extracts half as much of a burden on my income as California does.
 
Trooper, you're trying to get me ranting tonight, aren't you? I could go on for hours about the hypocrisy of a government that establishes a Ponzi scheme like Social Security that is mandatory for the private sector, but then excludes itself from the crap that it imposes on the rest of society.





But that's off the (current) topic.





The answer to your question depends on the specifics of your side business.





In short, if you earn more than $97,500 in your side business, you are in for a minimum of a 12.4% tax increase on top of the other tax increases that Obama wants to impose on you. (But that's alright, you're rich! Remember?) Of course, if your side business employs people and those people earn more than $97,500, then your hit will be larger.





But even if you aren't directly hit, you will be hit indirectly.





There are a lot of people and a lot of businesses that will be hit hard by this. I don't know what your side business is, but it is bound to suffer when a tax increase that large is imposed on the people.
 
<em>>Why doesn't our gov't have any responsibility to spend (or not spend)our tax dollars wisely?</em>





Who determines "wisely?" There are a couple of Republican congress critters in Alaska who wanted you to pay for <a href="http://www.heritage.org/Research/Budget/wm889.cfm">a bridge</a>. I guess they thought it was wise to do so. Lessee, Duke Cunningham thought it was wise to line the pockets of the people bribing him. And yes, I know, there are plenty of Dems with questionable (objectionable?) earmarks, too. Everybody gotta bring home the pork, you know.
 
You must log in or register to reply here.
Back
Top