I really want exposure to commercial real estate so I am willing to buy Apollo Commercial Real Estate Finance (ARI) at 90% of net asset value. Commercial real estate has not recovered as quickly as the residential markets but there are signs of improvement. There is $1.6 trillion of CRE loans that will need to be refinanced over the next five years as we reach the outer limits of extend and pretend, and that is going to create significant opportunities for Apollo.
We have done very well with alternative-income vehicles associated with Apollo Global Management in the past, and I expect to do so with its CRE Finance offering. The hedge fund and asset manager has extensive real estate and finance assets under management, and its expertise should help the finance REIT turn in stellar long-term returns.
That wraps up my view on the world and what I think is cheap enough to buy right now. It is interesting that outside of small banks and long shots, which are separate businesses and portfolios in my mind, I can only find 25 stocks to buy now at current prices.
Even if I jumped into a full 2% starting position, new portfolios would only be 50% invested. Since I am a scale buyer, the vast majority of the time the actual percentage would be less than that initially. There is no excess of cheap stocks now. While that is not a market call, it does serve as something of a caution flag for me.At the time of publication, Melvin was long NLY, ARR and ARI.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV