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  • Armour Residential: A Ticking Time Bomb With Too Much Leverage [View article]
    Sorry, above reply was to Speculative (Spec)
    Nov 24, 2015. 05:13 PM | 2 Likes Like |Link to Comment
  • Armour Residential: A Ticking Time Bomb With Too Much Leverage [View article]
    Hi Spic, not sure what your comment is implying. The article you referenced was titled with a question that went unanswered. My point of that article is that if you're going to invest in Annaly, you have to trust management. In fact, I made a comment on that article that that rule applies to ALL companies. We can sit here and analyze til we're blue in the face but the bottom line is unless you're going to take a big enough position to influence management decisions, you have to trust management. I think your comment may have been deleted before because it doesn't make sense and is incoherent. The truth and nothing but the truth? I have no idea what you're talking about. I highlighted that NLY's swaps work and the stock declines - what does that have to do with this article. This one is based on my opinion that ARR is too leveraged. If you invest in ARR therefore, my principle from the NLY article is still valid - you have to trust management to be able to manage the high leverage levels. Good luck to you and thank you for commenting.
    Nov 24, 2015. 05:13 PM | 1 Like Like |Link to Comment
  • Help Us Find The Best Retail Stock: SA Stock Pitch Contest [View article]
    Are these articles due by midnight on the 30th? Just asking because it is the Monday after the Thanksgiving weekend and if it needs to be in on Sunday the 29th, that would be good to know. Thanks.
    Nov 19, 2015. 11:20 PM | Likes Like |Link to Comment
  • You Would Be Smart To Add This Storage REIT To Your Portfolio [View article]
    Millennials have lived in their parent's basements because there weren't any jobs available and when they were, they didn't pay much. We are starting to see that change and new household creations is being driven partly by millennials, and partly by baby boomers. But storage plays right into that trend with millennials, because they have certainly been more frugal than the previous generation and have opted for more efficient cars and smaller apartments, for example. But with smaller apartments, they need a place to store their stuff. You are right however, I read the same contradicting research...time will tell. In the meantime, you could invest using sound judgment and a well thought out rationale. This is my rationale. If it doesn't play out, so be it, it wouldn't be the first time. But there is some thought process behind it. As an investor, that's all you can really do.
    Nov 18, 2015. 09:23 PM | Likes Like |Link to Comment
  • Looks Like Investors May Be Jumping Back Into REITs [View article]
    Whoa, can everyone please play nice?
    Nov 16, 2015. 02:24 PM | Likes Like |Link to Comment
  • Looks Like Investors May Be Jumping Back Into REITs [View article]
    Investors can walk, run, jump, slide, or shimmy. A trader will run faster than an investor just like Usain Bolt probably runs faster than you and me. In fact, if you want to get into the definition of 'investor' - look it is one example - An investor is someone who provides (or invests) money or resources for an enterprise, such as a corporation, with the expectation of financial or other gain. A trader is gambling on a stock's rise or fall - An investor is looking for 'financial' gain - whether they jump into an investment or ease into it is irrelevant. I could JUMP into an investment that I want to hold for 20 years or I can build my position over time. And if you know anything about behavioral finance, you'd know that most 'investors' give in to emotion at some point and do JUMP in and JUMP out of stocks. I chose to use the word JUMP - it has nothing to do with traders, but thank you so much for commenting. Good luck.
    Nov 16, 2015. 12:19 PM | Likes Like |Link to Comment
  • Why Do Investors Punish Annaly When Interest Rate Swaps Work? [View article]
    Thanks JimBobToo, that's all I was trying to do here...provide some food for thought.
    Nov 11, 2015. 09:29 AM | 1 Like Like |Link to Comment
  • Why Do Investors Punish Annaly When Interest Rate Swaps Work? [View article]
    hi Goldenbear, great questions. The 'best in the business' comment is MY opinion and my opinion only, based on how the company has performed relative to peers and how management has navigated certain environments and adjusted its strategy.

    Yes to your second question too. When I perform an analysis on a company, I am essentially evaluating how management has been able to implement it's strategy over time. Based on my conclusion that NLY is one of the most well run mREITs, at the end of the day I have to trust management, not some an abstract concept. The same goes for AGNC, TWO, or any other company for that matter. I'm not investing in Apple, per se, I'm investing in management's ability to leverage its assets to continue to put out new products that consumers thirst for. Otherwise, what am I investing in?

    I'm not saying we or you should trust all management, but look at management's performance as a way to determine if you SHOULD trust them. Too many articles on SA and other medium, including articles I've written, sound like they are written by people that think they can run some of these companies better than current management. Perhaps in a few cases, that may be so, but certainly not the majority.

    My theory on why Annaly gets punished when swaps work is based on the reason why swaps are entered into to begin with: I believe investor assumptions are that if the interest rate swaps had gains, the underlying business dynamics have deteriorated. (i.e. short term rates rose or yield curve flattened). As some of the data shows, that is not the case. So I don't think people that dump the stock when interest rate swaps work understand what's going on in the underlying business. Of course, I have no idea of knowing why you or any other investor buys/sells any stock nor the timing of those transactions.

    But apparently the article created some interest and debate, which by the way, is my only objective here. I hope that most readers don't act on articles they read or even analyst reports without challenging some of the assumptions presented in such publications.

    Thanks for reading and commenting, and happy investing.
    Nov 11, 2015. 09:28 AM | 3 Likes Like |Link to Comment
  • This Boring REIT Belongs In Your Retirement Portfolio [View article]
    I think all REITs may be at risk of a pullback because investors tend to dump their dividend paying stocks when rates rise. However, interest rate increases are typically associated with economic growth, which is good for real estate, and eventually, these stocks perform very well. Some might argue that the prices have already come down because of the number of occasions that the Fed was expected to increase rates - going back to 2013. In any case, UBP/UBA is driven by consumers and the consumer seems to be doing pretty well.
    Nov 9, 2015. 09:29 PM | Likes Like |Link to Comment
  • Apple Has A Tell [View instapost]
    Hi Cory, thanks for the compliment. I tried to get this published as a regular article but it seems SA doesn't like simple when it comes to Apple. Frankly, I read some of the Apple articles and when I get to the end, I'm really not sure what I just read or whether I can actually use any of it for making a decision. Glad you liked it. I try to publish shorter, more pointed articles so if you like this one, follow me and you will be alerted whenever I post a new article. Cheers.
    Nov 5, 2015. 10:58 PM | Likes Like |Link to Comment
  • Apple Has A Tell [View instapost]
    steyoun, I'll check my data for errors. And yes, it's hard to do this type of analysis going back and gathering all the data if you haven't followed the company all along. I've done some Apple analysis before but its been more recent. I'll see what I could find.
    Nov 5, 2015. 10:56 PM | Likes Like |Link to Comment
  • Realty Income: Watch For The Boogeyman And Don't Be Afraid To Buy The Stock [View article]
    Hi Jolly, the formula for calculating cost of equity is dividend/share price + dividend growth rate. The one piece missing was the estimated FFO and the payout ratio. If EFFO is $2.92 (consensus) and the payout ratio is approximately 81.5%, the dividend would be $2.38. $2.38/49.46=4.8%. Add the expected dividend growth rate, which is estimated to be 4% annually, you get to a cost of equity of 8.8%. Thanks for asking. It seemed clear to me at first but now that I go back and re-read it, I can see the confusion. In your example, if the dividend is expected to grow 100% per year, then yes, that would be the cost of equity using this formula. Of course, that wouldn't be realistic. In this case, you may want to calculate the future dividend as the numerator and use a more conservative, long-term growth rate for the dividend growth piece. The other alternative is to use the CAPM formula, which is: risk-free rate + Beta*(Expected return on market - risk free rate) - this formula is driven by the beta on the stock and the equity risk premium, which is contained in the parentheses. The challenge with CAPM sometimes is what beta do you use? Beta is a relative risk metric usually based on the S&P500. Would that be the relevant risk metric? Hope that helps.
    Nov 4, 2015. 09:56 PM | 2 Likes Like |Link to Comment
  • Realty Income: Watch For The Boogeyman And Don't Be Afraid To Buy The Stock [View article]
    Bogeyman (also spelled bogieman, boogeyman, or boogie man, and pronounced /bʊɡimæn/ or /boʊɡimæn/; see spelling differences)[1] is a common allusion to a mythical creature in many cultures used by adults or older children to frighten bad children into good behavior.
    Nov 4, 2015. 09:44 PM | 1 Like Like |Link to Comment
  • Why Investing In Real Assets Is A Sound Portfolio Strategy: Using REITs To Gain Exposure [View article]
    Absolutely. The tax treatment won't change. The reason it is being separated out of the financial sector is because REITs are fundamentally different than banks, insurance companies, etc. BTW, I believe mREITs are staying in financials.
    Nov 1, 2015. 09:54 PM | Likes Like |Link to Comment
  • Ventas A Bit Vague On Its Earnings Call: Something Up Its Sleeve? [View article]
    Oct 27, 2015. 10:35 AM | 2 Likes Like |Link to Comment