As I stated earlier this week, I have portfolio creep - too many names, as I like to stay in the 50-55 range in long positions. So I am letting go of another small stake in MFA Mortgage Investments (MFA). This one has not been in the portfolio long and was my misguided attempt to play the "financial rebound" through mortgage REITs; and have some zig when the market zags against my commodity/global plays.
Well all it's done is zag zag zag down, to the tune of a loss of 1/3rd of the position - nearly $10K. It didn't take very long to make my top 10 list of losers [Top 10 Winners and Losers] That stinks, but it happens eventually when you hold this many positions. All my purchases were in the $10s in early to mid February, and I am exiting my last batch here at $6.77. We've had our now predictable"early cycle" rebound where financials/retailers/etc that fell for weeks on end rebounded 30-40% in a week, so low $7s appears as high as MFA is going to go for now. I am cutting the loss and will revisit at a later date.
I still like the thesis behind this group *BUT* if (when?) we go through another phase of financial turmoil I could see this name being sold down further - much like FCStone Group (FCX) - once the confidence is lost, no matter what the fundamentals - entire groups of stocks are sold off en masse. This stock lost 50% within days once the confidence was lost... so with some rebound here, I am going to exit stage right, and like FCX, revisit it down the road once the credit markets are more orderly and the risk of your stock going down 50% in a few hours based on a rumor is not an issue to wake up to every morning.
Disclosure: No position