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Recession Proof Industry?
Old 12-04-2008, 09:03 AM   #1
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Recession Proof Industry?

I'm beginning to like the self storage REIT's as an industry reasonable resistant to the recession. There are four of them (SSS, PSA,YSI, and EXR) and all have been beaten down pretty badly. Thus the yields are in double digits, for the most part. I realize that REIT's adjust their divident frequently and I'm concerned that there is little analyst coverage out there.

Anybody got any thoughts?
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Old 12-04-2008, 09:06 AM   #2
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Keep in mind that REIT yields are probably overstated right now, and possibly considerably. The quoted yields are generally based on the payouts of the last 12 months, and most observers believe weaker performance in the coming year will result in those payouts being slashed.

I don't have a strong opinion about whether or not this is a good time to buy REITs (other than that it's better than it was a year ago). But I would, at minimum, caution against looking at the currently juicy yields and expecting them to last.
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Old 12-04-2008, 09:23 AM   #3
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The only recession-proof industry I know of is food. Look at how good MCD is doing in a terrible market.........
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Old 12-04-2008, 10:33 AM   #4
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The burial business should grow with our ageing population.

Cheers,

charlie
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Old 12-04-2008, 10:36 AM   #5
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The burial business should grow with our ageing population.

Cheers,

charlie
I'm trying to remember tha casket manufacturer that Peter Lynch made a "killing" on way back when........

Remember the Lynch stocks: The Gap, Bandag, some gorcery coupon stock, Red Oak or something??
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Old 12-04-2008, 10:50 AM   #6
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The burial business should grow with our ageing population.
Charlie's right. Buy stock in the burial industry - it will be the last one to let us down.
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Old 12-04-2008, 10:58 AM   #7
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I'm trying to remember tha casket manufacturer that Peter Lynch made a "killing" on way back when........

Remember the Lynch stocks: The Gap, Bandag, some gorcery coupon stock, Red Oak or something??
i remember SCI had a huge growth spurt around 15 years ago
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Old 12-04-2008, 12:09 PM   #8
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Quote:
Originally Posted by AJBR View Post
I'm beginning to like the self storage REIT's as an industry reasonable resistant to the recession.
Why do you think so?

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Originally Posted by al_bundy View Post
i remember SCI had a huge growth spurt around 15 years ago
I liked SCI back in the 90's, but my broker kept trying to warn me away from it. I figured as the boomers aged that SCI would be doing well as the inevitable happened, but I didn't have time to research it like I needed and followed my guy's advice. Good thing, they tanked in the late 90's - debt and over expansion I think - and haven't been very impressive at all since then.
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Old 12-04-2008, 12:30 PM   #9
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self storage probably does better when people store stuff to move around, not when they sell stuff to move around.

i watched a program on california foreclosure cleanups. you should see the piles of stuff people won't pay to store, including kids' toys and family pictures. not pretty.

http://biz.yahoo.com/ap/081128/forec..._cleanups.html
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From Bust to Broom: Foreclosure cleanups bustling
Friday November 28, 1:48 am ET
By Jessica M. Pasko, Associated Press Writer From Bust to Broom: Mortgage crisis a boon for foreclosure cleanup businesses

FORT EDWARD, N.Y. (AP) -- Several men wordlessly carry out furniture, broken computers and boxes of garbage from a large blue house on a quiet upstate street on a brisk autumn morning. Rusting bikes and an old grill lay discarded in the overgrown backyard which is spotted with empty beer cans and crushed milk cartons. The mood is oddly serene as the men unload the remnants of what was one someone's home.
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Old 12-04-2008, 12:51 PM   #10
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Originally Posted by lazygood4nothinbum View Post
self storage probably does better when people store stuff to move around, not when they sell stuff to move around.

i watched a program on california foreclosure cleanups. you should see the piles of stuff people won't pay to store, including kids' toys and family pictures. not pretty.
I worked with a guy who used to do that back in the mid-80's during and after the Oil Bust. He said when people got kicked out of their homes they would store stuff and the business would be good, but eventually many of them stopped making payments and then the storage places started kicking their stuff out in forced sales.

My impression is that self-storage lags behind other industries during a recession. Eventually as people stop paying and their stuff gets sold then the storage business goes down as well.
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Old 12-04-2008, 01:09 PM   #11
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What does a need for storage say about this society? This thread so far is all about storage, even caskets are temporary storage.

Years ago, forgotten which recession, I knew a guy who said his business was recession-proof. He had main frame computers that were running programs and storing data off-site, had the word "online" in the business name. Had to be the '80s, it started as a kitchen table business and quickly went to a financial district location with 108 employees. There is no reference to him and his business on google today. Umm.

[edit: found him on Google, seems he started another business in '93 which has been acquired by a larger company. He was the happiest person I've ever seen in his job/career].
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Old 12-04-2008, 03:08 PM   #12
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The only recession-proof industry I know of is food. Look at how good MCD is doing in a terrible market.........
Donuts are the way of the future...think binge eating and comfort food to unfurrow our collective brows.
ok, back to storage...i have never figured out why permanent homeowners use these things. easy to understand for those relocating, or holding valuable estate goods until probate is done, or home based business for unsold bulk product storage.
just give it away if you can't fit it in your house. sheesh!
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Old 12-04-2008, 03:15 PM   #13
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just give it away if you can't fit it in your house. sheesh!
When we moved away from our 4/2.5, 2200 sf house in Houston to the 2/1, 1150 sf house we have now, obviously all the "stuff" wasn't going to fit. But we were making a conscious decision to get some of the "stuff" out of our lives, so before we left Houston we held a big "housecooling" party -- the opposite of a housewarming, where guests had to TAKE stuff from us as gifts to them, because we weren't planning on moving it or needing it.

Other stuff -- large furnishings and stuff -- we managed to sell most of our surplus on Craigslist.

We still wound up with more stuff than space in the house, and we're slowly selling it or giving it away as we can. Fortunately our garage is huge.
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Old 12-04-2008, 06:19 PM   #14
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My impression is that self-storage lags behind other industries during a recession. Eventually as people stop paying and their stuff gets sold then the storage business goes down as well.
hmmm, let me check my watch because all that should be happening right about now.

just got a haircut, my barber tells me her business is noticeably down from last year. and this is our bizzy season. this afternoon i took a drive down a1a. parked for a short beach walk and a slice. i'd have walked more but the $1 of change in my pocket bought me but a 1/2 hour's parking. the sidewalk cafes had just a sprinkling of customers. granted, this was not a weekend day, but it is season.

so as to recession proof industries, it is neither personal grooming services nor self storage. how about restaurants.

went out with two cousins last weekend to a strip center known for its many restaurants ranging from fast sit down to deli to medium/high end. it was shocking to see how many restaurants had closed. the parking lot was eery, mostly empty, with whatever cars there huddled like parked moths in the light of the few storefronts still opened in an otherwise darkened shopping center.

we picked japanese and what tremendously great service we received. seems they have more time for you when you are one of their few customers. as the world writhes, finally decent customer service comes back into fashion.
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Old 12-04-2008, 10:37 PM   #15
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just got a haircut, my barber tells me her business is noticeably down from last year. and this is our bizzy season.
Why? Does hair grow faster in the winter? I wouldn't know, personally.
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Old 12-05-2008, 12:21 AM   #16
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People go longer between haircuts? Cut (shave) their own hair? Return of the hippies?
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Old 12-05-2008, 03:21 AM   #17
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This thread so far is all about storage, even caskets are temporary storage.
Recycled caskets?

Is this a new business idea?
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Old 12-05-2008, 09:53 AM   #18
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Why? Does hair grow faster in the winter? I wouldn't know, personally.
i complained not too long ago to my barber that mine does seem to grow faster since it turned to snow on top. so i find myself getting cut more often. i tell myself it is because i prefer shorter hair since i almost always drive with the top down. but really, instead of faking everyone out with a dye job, i'm just kidding myself by reducing the snow bank.

back on topic, i was wondering if recession proof industries might be found in the services to the very rich. i recently learned from my dad that his maternal grandfather was a furrier and so was one of the few who continued to earn good money during the depression.

in a tv news story about the current ubs-sponsored art basel in miami (Art | Basel | Miami Beach - Sponsors and Partners) one lady interviewed said something like "inside here we have no recession."

with a normal likely two-year waiting list for a new mega-yacht, (i don't find news articles on the subject but) i'd imagine that industry might not fair too badly.

i did find this article on a millionaire fair in moscow The St. Petersburg Times - Business - Crisis No Problem for Millionaire Fair.

Quote:
Official ticket sales were not released for the fair, which was held here for the first time in 2005, but according to the event’s web site, 40,000 people visited in 2007. Organizers said they were expecting 50,000 this year.

All the same, guests inside the airy exhibition halls Saturday said the event seemed less crowded than in recent years.

“It is nice this year with fewer people around,” said Alexei Shavrin, a real estate investor.
Part of the feeling that there was more space to go around might have been generated by the difficult economic times, but those on hand were saying the segment at which the fair is targeted is unlikely to feel the bite of a recession.
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Old 12-05-2008, 12:09 PM   #19
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Quote:
Originally Posted by lazygood4nothinbum View Post
i complained not too long ago to my barber that mine does seem to grow faster since it turned to snow on top. so i find myself getting cut more often. i tell myself it is because i prefer shorter hair since i almost always drive with the top down. but really, instead of faking everyone out with a dye job, i'm just kidding myself by reducing the snow bank.

back on topic, i was wondering if recession proof industries might be found in the services to the very rich. i recently learned from my dad that his maternal grandfather was a furrier and so was one of the few who continued to earn good money during the depression.

in a tv news story about the current ubs-sponsored art basel in miami (Art | Basel | Miami Beach - Sponsors and Partners) one lady interviewed said something like "inside here we have no recession."

with a normal likely two-year waiting list for a new mega-yacht, (i don't find news articles on the subject but) i'd imagine that industry might not fair too badly.

i did find this article on a millionaire fair in moscow The St. Petersburg Times - Business - Crisis No Problem for Millionaire Fair.
On the other hand:

Quote:
America's Economic "Spread-ession" by Jim Hightower on Creators.com - A Syndicate Of Talent

Thousands of vessels have been turning up in harbors, on beaches and on other waterfronts around the country minus any owners. They've been ditched. These are not junkers. They are fully functioning pleasure boats that have become money-sucking burdens to would-be mariners who find themselves sinking in today's economic whirlpool.
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Old 12-05-2008, 12:53 PM   #20
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Recycled caskets?

Is this a new business idea?
That's a good laugh.

Dust to dust, even the wood and brass? Eternity, just a blip in the universe's timeline?
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