Gyroscopic Investing

Meb Faber's latest podcast had David Gladstone, owner of the Gladstone farmland REIT, symbol LAND.

https://player.fm/series/1058800/213581629

I have been looking for a way to invest in farmland as a passive investor. I think I found it. LAND pays a sizable dividend as well, 4.6%. The ratio of LAND to the S&P500 is 1/2 what it was back a few years ago, going along with Jesse Felder's thesis that real assets are on sale relative to equities.

I like it. I'm going to sell some S&P500 ETF and buy LAND with the proceeds.

It sounds like it doesn't have much competition. That is discussed in the podcast.

It was a stunning podcast. What I found really interesting, is that they had a really unfortunate situation where they bought a farm, which was subsequently to be rented out to a farm company managed by two men. Then within a year, both (!) of them died and the company was about to go under. So David Gladstone relates that he still knew how to farm, so they took it over for a couple of months until the farm company could attract new management.

Impressive.

Anyone have any idea what happened to this one in 2014 and 2015? Morningstar shows it as having a total return (price appreciation/depreciation plus reinvested distributions) of -31.73% in 2014 and -14.81% in 2015. The NCREIF Farmland Total Return Index didn't do that badly during those years (actually, it was positive for both those years)....what gives?

ochotona wrote: ↑Sun Jul 29, 2018 4:20 pm Meb Faber's latest podcast had David Gladstone, owner of the Gladstone farmland REIT, symbol LAND.

https://player.fm/series/1058800/213581629

I have been looking for a way to invest in farmland as a passive investor. I think I found it. LAND pays a sizable dividend as well, 4.6%. The ratio of LAND to the S&P500 is 1/2 what it was back a few years ago, going along with Jesse Felder's thesis that real assets are on sale relative to equities.

I like it. I'm going to sell some S&P500 ETF and buy LAND with the proceeds.

Me too, I have held this for a little while. It is small and trades lightly, but I like that they have a number of berry farms, yum! It has dropped recently, so I might buy some more.

Caveat Emptor...if you are going to buy a specialized REIT...make darn sure you read the prospectus in its entirety.

Kbg wrote: ↑Wed Aug 01, 2018 9:01 am Caveat Emptor...if you are going to buy a specialized REIT...make darn sure you read the prospectus in its entirety.

Not only that but you have to be OK with the fact that some of the profits reaped by farms are due to cheap (illegal) labor. In the podcast he talks about the strawberry acreage in Oxnard, CA being incredibly productive. That it is and I know from first-hand experience that the taste of the fresh berries is just out of this world. But every time I've been by those fields (many occasions since 1998), they are absolutely swarming with Mexican migrant pickers.

Also, he does briefly address water issues in the podcasts but one has to expect that water shortages are a likely longterm drag on farming profits... certainly seems likely to me, at least, in much of the incredibly fertile CA fields.

I got stopped-out of LAND recently, but made some money, so that's not so bad. I think I'll give it a rest, though. I also got stopped out of FXN, my oil & gas ETF, at breakeven. Being in Oil & Gas, I took this as a sign... too early to invest.