Is This Security A Safe Haven? Absolutely Not [View article]
One more thing. "Safe Haven" is a relative term. This is an important note, because with it you can understand the systemic risk argument. The risk you are speaking of is operational risk, and not relevant, considering that it has been noted in the article and in other articles.
Is This Security A Safe Haven? Absolutely Not [View article]
RS, Thank you for your interest in the piece. You'll note that the article was titled as a question, and was intended to spur this sort of discussion. I appreciate your passion about this.
I have been interested in the mREITs because of their appeal to seniors, who I want to protect along with all investors first and foremost. The fact is, I also authored this article a while back, "Are Annaly Capital & mREITs Right for Seniors" in a 2 part series (part 1 is linked here). I also authored several other sale argument articles about these securities, and within this very article you're writing about, I talked about risk. http://seekingalpha.co...
I too was concerned about the risk in these shares, but the fact is that as long as the underlying dynamics of the securities these shares own is not affected during broader market downturn, these stocks will continue to draw capital... That draw of capital investment, is in and of itself a factor and an insulation against value destruction.
In previous articles I discussed the risk in the underlying operations. What I have noted though is that these shares have great support from the financial adviser community and investors, and as capital flows have flooded into equities, they have benefited further. Also, they have a beta coefficient that shows lack of sensitivity to market turns. Those are safe haven characteristics and should be discussed.
While all securities carry risk (and I stated this is not a risk-free asset), some will have less systemic risk than others. I think that's what you're missing and what this article was about. Down the road, where I see fiat currency coming under great pressure and inflation prevailing, these securities will not be safe havens. However, a lot has to happen between that point and today, and you can bet that when that happens (and up until it), I'll be letting the investment community know about it as always.
But yes, NLY is a safe haven security today against systemic risk, because it has capital support and has proven to be uncorrelated to market movements that reflect broader economic issues. And yes, as Cramer indicates, it has a better focus regarding credit risk, though is not risk free, obviously, because we would have a risk free rate here if so, not a double-digit yield. When this is no longer the case, you and all you reading seniors, can expect I'll be vocal about it and help you move capital. As we stand today, I continue to suggest gold as my favorite investment, along with real estate. And we sprinkle in stock ideas when we see them, like Best Buy when nobody liked it; like J.C. Penney when nobody loved it (and we hated it when everybody loved it and its new flashy CEO and his "brilliant" plans)... etc. etc. We've been an important voice about Apple and other issues as well, and we'll continue to present those special opportunities in this capital perverted current market. Best, MK
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
ALU misses by 4 cents... I need to point out that I was right or else you'll never remember it. Stock down 3% premarket. Also GDP missed, another data point I correctly predicted and pretty much climbed a mountain and broadcast against the market's protests. Maybe you should be following me instead of fighting me.
Wall Street Breakfast: Must-Know News [View article]
I hate to say it, but I told you (investors) so. Today's GDP miss was discussed in detail in my articles over the last several weeks and months. I recently noted that economist forecasts were likely built around the Fed's faulty math, in which it itself showed its ineptness in forecasting, talking about an impact from the Sequester and payroll tax break expiration and still not incorporating it in its forecasts. I was also shown to be right today on ALU, which missed badly, and a week ago on McDonald's. I hate to say it, but today the market will steer on a path that better reflects the recession developing. April's fractional growth after Q1's double digit return will turn into May losses. Are you following me yet?
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Don't forget "the pie" is going bad in the meantime, as economies slow, stall and sour. Have you accounted for this? Please feel free to talk more about this game changing product in more detail here. I'm open and will listen.
Is This Security A Safe Haven? Absolutely Not [View article]
Is This Security A Safe Haven? Absolutely Not [View article]
Thank you for your interest in the piece. You'll note that the article was titled as a question, and was intended to spur this sort of discussion. I appreciate your passion about this.
I have been interested in the mREITs because of their appeal to seniors, who I want to protect along with all investors first and foremost. The fact is, I also authored this article a while back, "Are Annaly Capital & mREITs Right for Seniors" in a 2 part series (part 1 is linked here). I also authored several other sale argument articles about these securities, and within this very article you're writing about, I talked about risk. http://seekingalpha.co...
I too was concerned about the risk in these shares, but the fact is that as long as the underlying dynamics of the securities these shares own is not affected during broader market downturn, these stocks will continue to draw capital... That draw of capital investment, is in and of itself a factor and an insulation against value destruction.
In previous articles I discussed the risk in the underlying operations. What I have noted though is that these shares have great support from the financial adviser community and investors, and as capital flows have flooded into equities, they have benefited further. Also, they have a beta coefficient that shows lack of sensitivity to market turns. Those are safe haven characteristics and should be discussed.
While all securities carry risk (and I stated this is not a risk-free asset), some will have less systemic risk than others. I think that's what you're missing and what this article was about. Down the road, where I see fiat currency coming under great pressure and inflation prevailing, these securities will not be safe havens. However, a lot has to happen between that point and today, and you can bet that when that happens (and up until it), I'll be letting the investment community know about it as always.
But yes, NLY is a safe haven security today against systemic risk, because it has capital support and has proven to be uncorrelated to market movements that reflect broader economic issues. And yes, as Cramer indicates, it has a better focus regarding credit risk, though is not risk free, obviously, because we would have a risk free rate here if so, not a double-digit yield. When this is no longer the case, you and all you reading seniors, can expect I'll be vocal about it and help you move capital. As we stand today, I continue to suggest gold as my favorite investment, along with real estate. And we sprinkle in stock ideas when we see them, like Best Buy when nobody liked it; like J.C. Penney when nobody loved it (and we hated it when everybody loved it and its new flashy CEO and his "brilliant" plans)... etc. etc. We've been an important voice about Apple and other issues as well, and we'll continue to present those special opportunities in this capital perverted current market.
Best,
MK
Recession Watch: Alarming Economic Data From Overseas [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Wall Street Breakfast: Must-Know News [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]
Deterioration In Europe Could Cost Alcatel-Lucent In Q1 [View article]