Friday File: ANOTHER Huge Dividend Jump Inspires Buying, plus Gold and Bio Nibbles

Real Money Portfolio Transaction Updates, plus thoughts on IIPR, GH, OR, SAND and others

By Travis Johnson, Stock Gumshoe, September 13, 2019

Here’s what I’m trying to avoid: Predicting the direction of the markets because of my deep understanding of US-China trade dynamics. Every time I read an article that asserts “China trade deal more likely because of Bolton firing” or something like that, I throw up in my mouth a little bit.

The market is way too much like my kids, here’s a common Gumshoe family scenario from years past: One of the little Gumshoes asks me what we’re doing on a Saturday and whether I’ll take him bowling. I respond that we don’t have any plans yet, but we’ll talk about it. He then runs downstairs, yelling, “Dad said we would go bowling today!” and starts a fight among the other children, one of whom loves to bowl and one who would rather dig a ditch in the hot sun. The bowling-prediction market goes bonkers, with fighting on both sides, but none of the three of them actually has any idea about whether or not we’ll go bowling.

If you think you can predict what’s going to happen because you’re analyzing President Trump’s tweets or the wording of Chinese announcements or the rise or fall of different people in the White House, you’re going to turn out to be either wrong or lucky… and the former seems much more likely to me, given the great variety of possible outcomes.

Still, the market, like the three little Gumshoes, persists in trying to predict the future from the tea leaves… and, perhaps more importantly, overreacting wildly to every indication that one side or another is right. It often ended in tears here on Gumshoe Mountain, hopefully the stock market outcome will be happier.

What’s happening with my Real Money Portfolio this week? We’ll start with the biggest portfolio shift, hot off the press…

Innovative Industrial Properties (IIPR) completed another relatively small sale/leaseback deal in California (with Vertical) and boosted their commitment to one of their Illinois tenants (Ascend Wellness), meaning that they have now built a portfolio that should generate rent of about $56 million a year. If you take away the corporate overhead costs and other cash expenses (preferred dividends, interest on the small amount of convertible debt they have), then that means this portfolio should generate something in the neighborhood of $44 million in FFO per year, or $3.89 per share (there are 11.3 million shares outstanding at ...

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