Risk/Reward of Owning REITs, Raymond James in this Boom Bust Cycle

We know the conventional method of security analysis is to try and predict the future course of earnings and then to estimate the price that investors may be willing to pay for those earnings. This method is inappropriate to the analysis of mortgage trusts because the price that investors are willing to pay for the shares is an important factor in determining the future course of earnings (the same can be said for a conglomerate boom, where companies make acquisition using shares rather then cash/debt).

There are three factors that reinforce each other and will help in determining the price of REITs.