This started because a student felt uncomfortable with the portfolio of REITs selected by one of my better REIT screeners. He examined the list of REITs proposed by the stock screener and said that my portfolio contained REITs with “weak” sponsors. Separately I’ve been told on other occasions that investors should simply invest in REITs with good sponsors. Of course, these conversations seldom delve into how to actually determine what a good REIT sponsor is.

I’ve always felt uneasy about investment strategies like this – an intellectually dishonest investor can simply define a REIT sponsor as a good one if the REIT has performed well historically, otherwise the REIT sponsor cannot possibly be a good one. This is tautological reasoning and useless to serious investors.

So yesterday, I went back to the library during my break to get this out of my chest once and for all.

For the purposes …