Florida Home Insurance Reform Is Working — And It Could Reshape the Entire Market

**SPEAKER_1** (0:01)
This is Invest Talk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Justin Klein.

**Justin Klein** (0:16)
Good afternoon, fellow investors, and welcome back to Invest Talk. This is our, what are we, Thursday? It's Thursday, June 11th, 2026 edition of Invest Talk. Excited for this hour to be with you and answer whatever is on your mind. So don't hesitate to reach out and give us a call. That's the main way we touch base with you, is really trying to gather your thoughts, your worries, your considerations for investments, all of that.
I always say when you bring those forward, you're helping the rest of the Invest Talk community as well, because I guarantee someone else out there is thinking to ask the same question or something similar.
I try to broaden out all my questions or the answers, excuse me, to apply to the most amount of Invest Talk listeners as well. So even if it's one particular stock, I try to talk about the sector as a whole, analyze companies in general, all of that, and you can take something away. So that's why when you make a phone call, you're helping yourself and everybody else. So that's what this hour is about. Whatever is on your mind, don't hesitate to reach out. Once again, 888-99 chart is the number. Now we're in interesting times, very interesting times with what's going on in the Middle East, obviously politically in America and abroad, and then AI. AI certainly is a driving force of what's going on in the markets as well as the economy. So how is that evolving? We're always keeping you abreast of that as well. We had some news today which we'll get to in a little bit and how much I really buy it that caused the market to rally. So we'll unpack that and much, much more. So once again, this show is about you and whatever is on your mind. So don't hesitate to give us a call. Now heads up, our next wealth webinar is set for Tuesday, June 30th, 12 to 1 p.m. Pacific Time title is Beyond the Yield, How to Invest for Your Income Needs. And you can register over at investtalk.com. Now just to be able to talk about today's Mark Performance and run down the show topics, but as usual, we'll tackle this first caller question now.

**Ralph** (2:34)
Hi, Invest Talk. This is Ralph from Chicago. I was calling about Alexandria Real Estate Equities, ticker ARE.
I bought it a while back. I've been losing on it. I was just wondering what you guys had thought about it. Should I cut my losses or hang on? I'll be listening on the show.

**Justin Klein** (2:56)
Thank you. Looking at Alexandria Real Estate Equities, they rent to life science companies, ag tech companies and technology tenants.
But it's a it's a REIT that's been struggling. Funds for operation peaked at $9.47 in 2024, fell 5% last year to $9 in a penny.
This year, funds for operation supposed to be down to $6.38, then $5.72 next year.
Clearly, the trend is not positive. The profitability, return on equity and turning on invested capital, turn on assets, they're all negative.
And the dividend has already been cut from $1.32 down to 72 cents.
That happened late last year. This is a perfect example of a value trap. Or more importantly, something we'll talk about later on this month in our wealth webinar, it's an income trap. There are a lot of those out there at any given time. A lot of people might look at this and still say, well, it's dividend yield is 5.5%.
It was much higher. It was closer to 8% turning 12 months. But you don't want to just focus on the yield. You want to focus on the quality of the assets, quality of the business, the cash flows, all of that. And clearly everything in that department has been headed in the wrong direction. And they have a lot of debt, about $16 billion in net debt. Now it's a real estate company. It's a REIT, so it's going to have some leverage there. But one of the biggest issues with REITs is that because they're required to pay out 80 plus percent of their cash flow to shareholders, because it's a pass through entity, they have little left over to repair their balance sheet when maybe they make a mistake. And that's what you're seeing here. So you might be down, but you could be down a lot more. Now we'll say near-term, it is relatively bullish. I think it has more upside in the short-term, but I would be looking for an exit. I would be looking for an exit for this name because of the leverage, because of the trajectory of the funds from our operation. I'm not quick to do it, but like I said, I'd be looking for an exit. This is not a long-term hold for me. No way to grow a show yesterday. We looked into this story. Is the Fed's next move a rate hike? What a strong job report means for your portfolio. We also answer questions on PayPal holdings, as well as, yeah, PayPal. And if you happen to miss it, go check it out. The best way to get every show is to follow InvestTalk wherever you get your podcasts. Now we have a lot of ground to cover the next 45 minutes or so in time permitting. We'll get to all of it. Our main focus point is about the Florida home insurance market reform. It could reshape the entire insurance market. It's pretty dramatic. It's called tort reform. And it's having a large impact and that could spread across the industry. So we'll take a look at that. We also have other topics on the docket. One is in regards to SpaceX and the IPO tomorrow, what companies are set to lose the most with this listing. Also, the Treasury is issuing about a half a trillion dollars a week in T-bills. But what problems could that be building within the system when they're doing that? Then lastly, if we have time, factory gate prices in China are at their fastest, are growing at their fastest rate in almost four years. What will that ultimately mean for our inflation picture? We also have voice bank calls. One is on VBR, the Vanguard Small-Cap Value Index, and the other is Berkshire Hathaway, Berkshire B. We have some questions that came in via the comment section over on the Invest Talk YouTube channel, of course, so we'll be answering some of those. But we're going to a quick break. So please remember, you can call anytime and leave your question on the Invest Talk voice bank or if you're listening via our live stream or possibly in AM1220 in the Bay Area, you can call right now at 888-99-CHART. Up next, I'll comment on today's market activity.