Jonathan Christopher

Why I'm Long Mortgage REIT Chimera

Financial Hippie is correct that CIM is presently a relatively low risk purchase with a current dividend of about 8% and potential for increase in stock price and dividend as the investment environment improves and they can expand their leverage.

Additionally, since their P/B is 1.31, they can continue to increase earnings, and earnings per share by issuing more stock without dilution of equity.

I purchased CIM right after the initial offering and had a big loss in the stock as the error in timing became apparent. I had thought they would wait to invest (considering the uncertainties at that time) and was very disappointed in their performance. I am willing to give them one more chance, especially since I have been a long tern investor in NLY and think that Mike Ferrell does a good job.

Currently long on NLY and CIM