Lewis Enterprises

Lewis Enterprises focuses on deep analysis and insights into REITs, real asset investing, and investment management, covering topics from historical investment trends to emerging financial models. It challenges conventional financial wisdom by exploring alternative investment strategies, the impact of global financial changes, and innovative financial tools for risk and asset management.

REITs and Real Assets Investment Strategies Financial Models and Theories Market Trends and Analysis Risk Management Global Financial Systems Investment Management Economic Policy and Impacts

The hottest Substack posts of Lewis Enterprises

And their main takeaways

Hidden Forces

196 implied HN points • 07 Jan 24
💰 Finance Market Dynamics
  1. Investors should focus on different dimensions of risk for expected returns in investment decisions, rather than trying to pick individual stocks
  2. Academic challenges exist in finding factors that perform well in out-of-sample tests for factor-based investing
  3. Traditional factor investing methods may face challenges when applied to asset-heavy passthrough entities like REITs

Just one word: Dividends

353 implied HN points • 19 Nov 23
💰 Finance Investing Stock Market Dividends Valuation
  1. Dividends are a natural outcome of business ownership and distinct from share repurchases.
  2. The shift towards buybacks over dividends may have a significant impact in the real economy.
  3. A new paradigm of higher interest rates will prioritize cash returns and challenge the reliance on buybacks for funding consumption.

Lights, Camera, Action!

235 implied HN points • 12 Dec 23
💰 Finance Real Estate Private Equity
  1. Hudson Pacific's studio assets present an opportunity for unlocking value through deleveraging.
  2. REIT management often resists selling assets despite high valuations, impacting investment returns.
  3. Combining portfolios of West Coast-focused office REITs can benefit public markets investors, despite being unlikely to happen.

Harvard's Water

589 implied HN points • 06 Aug 23
💼 Business Investing Real Estate
  1. Long-term institutional investing can provide a unique edge in the financial market.
  2. Establishing unconventional investment profiles can lead to great returns but might challenge conventional wisdom.
  3. Harvard's approach to investing in water resources and farmland involves complex strategies and global acquisitions.
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Unknown and Unknowable

334 implied HN points • 08 Oct 23
💰 Finance Investing Artificial Intelligence Risk management
  1. Richard Zeckhauser's essay emphasizes recognizing a lack of edge rather than just analytical skill in investing.
  2. Asset prices can heavily discount ambiguity in situations where future states are unknown.
  3. Artificial Intelligence could be applied in investing UU situations based on Zeckhauser's maxims for investing in the unknown and unknowable.

The Zero-Coupon Convertible

255 implied HN points • 07 Nov 23
💰 Finance Investment Bonds Equity Options
  1. Investment returns boil down to coupon, credit, duration, and convexity.
  2. Zero-coupon convertibles combine features of debt and equity, offering companies a hybrid form of financing.
  3. Zero-coupon bonds and zero-coupon convertibles serve different investor needs and preferences.

The REIT Pain Trade

216 implied HN points • 10 Nov 23
💰 Finance Investing Real Estate
  1. Shorting REITs vulnerable to higher rates has been a popular but unsuccessful trade this year.
  2. The post does not offer investment advice and comes from the author's interest in quantitative investing and REITs.
  3. Readers can access the full post by subscribing to Lewis Enterprises for a 7-day free trial.

MREIT Stocking Stuffers

98 implied HN points • 22 Dec 23
💰 Finance Stocks Investing Real Estate
  1. A few Mortgage REIT Fixed-to-Float preferreds offer short-term yields
  2. Mortgage REITs mitigate credit risks through hedging but face other risks like funding costs and market volatility
  3. Preferred series of three mortgage REITs will start floating in the first half of 2024

The Invention

334 implied HN points • 12 Mar 23
💰 Finance Financialization Housing Market
  1. The evolution of mortgage-backed securities has significantly impacted the US housing market and the global financial system.
  2. The government guarantee on mortgages and the rise of MBS have reshaped the financial landscape, creating new layers of transactions and financial products.
  3. The financialization of the housing market has implications for social capital and civic engagement, affecting how Americans interact with each other and their communities.

The Distribution Layer

235 implied HN points • 06 Jul 23
💰 Finance Investments Asset management Market structure Financial Services Retail Investors
  1. The future of alternative investments is undergoing significant changes in the market structure with emphasis on investment managers, allocators, and capital owners.
  2. Traditional asset managers are seeking growth by entering alternative investments but are facing challenges due to massive capital deployment impacting returns.
  3. There's a trend towards greater intermediation of capital allocation in the alternative investment landscape, leading to a more specialized distribution approach.

Dividends, Where'd They Go!?

294 implied HN points • 27 Nov 22
  1. Historically, stock market value was linked to cash dividends, but this changed with SEC rule 10b-18 allowing buybacks.
  2. Companies today in less capital-intensive industries hoard cash instead of paying dividends.
  3. Interest rates, tax treatment, and academic modeling have all contributed to the decline of dividends in the equity market.

Noise!

157 implied HN points • 30 Apr 23
💰 Finance Economics Financial Markets Quantitative finance
  1. Economics is better appreciated as a history of thought rather than an explanatory science.
  2. Fischer Black simplified complex financial models to focus on crucial elements.
  3. The concept of 'noise' in the financial markets affects our ability to predict returns and understand economic variables.

How to Lose Money

314 implied HN points • 19 Aug 22
  1. Leverage and power tools can be useful, precise, but also dangerous, especially in the wrong hands.
  2. The Orange County bankruptcy in 1994 was influenced by Prop 13, Bob Citron's investment choices, and changing interest rates.
  3. D.E. Shaw & Co emphasized the importance of considering both the quantity and quality of leverage when making investment decisions.

L.E. Guest Post | The Great Taiwan Bubble

117 implied HN points • 11 Jun 23
💰 Finance Investor behavior Financial history
  1. Recognize the need for making many difficult decisions in a complex market environment.
  2. Less value in pinpointing specific turning points, focus on themes like subsidized trading and speculative disclosure.
  3. Study historical market structures and player behavior to learn from past financial bubbles and avoid repeating mistakes.

Like a Pro

216 implied HN points • 04 Aug 22
  1. Professional investors consistently outperform amateurs
  2. Passive investing is gaining dominance in the market
  3. To achieve above-average results, you need to think and act differently than the crowd

The Sand Pile

157 implied HN points • 23 Oct 22
  1. Models taught in academia fall short of explaining real-world markets.
  2. The predominant model's failure to work poses a risk for academics anchored to it.
  3. The evolution of theories is a process of stretching the old to fit new findings and eventually replace them.

Credere

176 implied HN points • 09 Sep 22
  1. Countries can't go bankrupt, creating challenges for creditors in sovereign debt situations
  2. Developing nations struggle with debt and face challenges in competing with developed countries
  3. China's increasing role in global lending presents complexity and uncertainty in sovereign debt markets

Devils Take the Hindmost

157 implied HN points • 20 Jun 22
  1. Frauds are identified
  2. Blame is assigned
  3. Innovation investment returns

The Coupon is Sticky

157 implied HN points • 09 Jun 22
  1. Inflation impacts investments differently, and understanding it is crucial for investors.
  2. Stocks and bonds are not as different as commonly believed in terms of impact by inflation.
  3. The stability of equity returns and the influence of factors like asset turnover, leverage, taxes, and margins during inflationary periods.

The Chicken Cycle

137 implied HN points • 22 Jul 22
  1. Understanding the commodity cycle and capital investment dynamics is essential for profitable investing.
  2. Investing in industries facing supply-demand imbalances can lead to substantial returns, as seen in the case of Leucadia National's investment in Fortescue Mining.
  3. Focusing on supply dynamics over trying to predict demand can be a successful strategy in navigating the commodity cycle.

Somebody Has to Pay For Lunch

117 implied HN points • 08 Jul 22
  1. In investing, someone always has to pay for any perceived 'free lunch.'
  2. Understanding a company's financial position, management integrity, and price relative to net asset value are key in Whitman's investing approach.
  3. Marty Whitman emphasized the importance of focusing on a company's balance sheet, the influence of inefficiencies in markets, and the significance of knowledge over diversification in investment.