Seeking Alpha

William Packer  

View William Packer's Comments BY TICKER:
  • American Capital's Large Q2 Book Value Loss May More Than Double By June 30 [View article]
    David, I would also like to refer you to slide 12 of AGNC's Q1 2015 earnings presentation. Please view that slide and see the 2/28/2015 section of the chart on the left. Notice the 0.82% increase to book value during a time when interest rates were actually rising. The 10 year bond rose yet AGNC book value increased. This has to do with the hedging dynamics and the basis. OK. So you it's much more complicated than simple saying.. oh look, interest rates have gone up and mbs prices are down, so AGNCs book value is down. No, it's not that simple. You need to look at the basis and understand if that is tightening or widening out... also you need to take active portfolio re-balancing into consideration. So please learn more about basis risk and the mechanics of mREITs as well as the mechanics of the treasury and swaps market before writing an another article on AGNC. Thank you and hope you enjoyed your weekend.
    Jun 21, 2015. 02:01 PM | 2 Likes Like |Link to Comment
  • American Capital's Large Q2 Book Value Loss May More Than Double By June 30 [View article]
    David, 10 year treasury yields are falling because of Greek fears, not rising. OK. 10-yr may rise because of better than expected data, technical tradings, etc... but the Greek fear itself is a driving force to lower yields in U.S 10-yr bonds. OK. plain and simple. Bid-to-safety in 10s. Ask any bond trader how Greece is impacting treasury yields and they will tell you the same as I'm telling it to you.

    Also, QE for the U.S was a joke.. you would think that it would compress yields, right? but it didn't... because only the threat of QE did that.. but after enacted... yields pretty much rose over the next 6-9 months... because as soon as the program was authorized people started speculating on the taper... which the fed started talking about just 3 months later... so the hawkish fed jaw boning screwed up their master plan to cause a flatter yield curve. Opposite effect. The fed is full of children who don't really understand what the heck they are doing... and they won't be able to raise rates in 2015 and maybe not for another 6 months or more into 2016.
    Jun 21, 2015. 01:36 PM | Likes Like |Link to Comment
  • American Capital's Large Q2 Book Value Loss May More Than Double By June 30 [View article]
    Book value was around $33, up $13 from IPO back then. Book got slammed in 2013 and Gary has been scared since then.. running ultra conservative positions.. thus dividends much lower, book failed to snap back to prior levels despite a complete 180 in yields. Ok. So Gary lost confidence in himself, obviously, and is like Maverick in the movie Top Gun. He's good but he is not back into the fight yet.
    Jun 21, 2015. 01:28 PM | 1 Like Like |Link to Comment
  • American Capital's Large Q2 Book Value Loss May More Than Double By June 30 [View article]
    Wrong. Book value is more important than distribution sustainability. Book value is the key support for the stock. Yes, they are pricing a discount currently but if book drops/goes up the stock give credit to that. Distribution is variable in mREITs due to spread, leverage, hedging, among other factors... Most of the return comes from dividends, yes, but book value returns are important too... and also... book value is the capital you have to leverage these things... less capital to leverage = less dividend income. OK. So you need to realize keeping book value high is the most important factor.... and is the determining factor driving eventual earnings power. dividends are important because that is your current spread income but book value is much more important. If you think that AGNCs stock would be at $20 if book was near $30 instead of the current $25 book you are just being naive.
    Jun 21, 2015. 01:22 PM | 3 Likes Like |Link to Comment
  • American Capital's Large Q2 Book Value Loss May More Than Double By June 30 [View article]
    To help you understand what I am saying, David, look at the "basis risk" chart that AGNC displays. Then call IR @ AGNC and ask them about how agency mbs tighten to hedges as rates rise and widen to hedges as rates fall. Ask them. I will let them explain it to you because I don't want to write an article about it. It's just not worth my time. Perhaps you should write an article about it after you learn more about basis risk. Seems like a good project for you. :)

    Ps: basis did opposite reaction in 2013 which resulted in losses.... Because market dislocated.... Very unlikely to happen again... You can watch basis in real time if you have access to live mbs quotes vs that of treasuries and swaps
    Jun 20, 2015. 09:55 AM | 5 Likes Like |Link to Comment
  • American Capital's Large Q2 Book Value Loss May More Than Double By June 30 [View article]
    Frog, I trade /ZN

    Which is 10 year treasury futures. Stock trading is lame in comparsion. I have a dedicated amount of money to futures trading and i make more money there than anywhere else. Things like AGNC don't trade right... Because people don't understand them. But the market understands treasury futures because it's so liquid.... So when the news hits.... It makes sense... And you know the direction easily.... So you just get on the right side of the trade after the news... Use a stop-loss, and then move the stop up to break even after the trade becomes profitable.... Let your winners run.... Make a fortune. Trade with the trend, not against it.

    Rates are going lower.......
    Jun 20, 2015. 09:32 AM | 2 Likes Like |Link to Comment
  • American Capital's Large Q2 Book Value Loss May More Than Double By June 30 [View article]
    I'd have to write an article and detail everything. I don't want to. I will just let you believe what you want.... However, I trade agency bonds, swaps, treasury futures, and swaptions for a living besides my stock trading..... So just looking at swaps today and how they performed(the ones agnc owns) vs that of the mbs... I can see that the spread losses have reversed in June, but then got a little wider yesterday as rates went down on the long end. (Yes agnc actually can lose money as rates on the long end drop because agency spreads to swaps and other hedges widen out...)
    Jun 20, 2015. 09:22 AM | 3 Likes Like |Link to Comment
  • American Capital's Large Q2 Book Value Loss May More Than Double By June 30 [View article]
    Agnc book value today is about $25.00. Didn't read the commentary but the book value is higher now than when reported on the dividend PR. It's not as simple as rates up or down on the 10 year... It has to do with the the spread between hedges and agency mbs too.... This is not black and white.... Book can go up as long rates rise...

    Also, the PR includes the dividend declared. Dividends declared directly reduce book value upon declaration. If you don't believe me.. Call IR.. I have confirmed already long ago.
    Jun 19, 2015. 08:26 PM | 2 Likes Like |Link to Comment
  • American Capital Agency's (AGNC) CEO Malon Wilkus on Q1 2015 Results - Earnings Call Transcript [View article]
    If you look at book value volatility... AGNC has held firm throughout a lot of market volatility for interest rates in general.. If they can continue to keep book value up and interest rate spreads widen out.... They can earn a good spread even if fed funds moves up. Total economic returns should still be positive. MTGE has more room to operate, and can buy floating rate non-agency paper to diversify away from agencies if the ROE is not attractive enough. My biggest fear for mREITs is not the fed or interest rates on the long end going up.... But rather interest rates crashing lower which would widen out the spread between MBS and their hedges.
    May 12, 2015. 05:50 PM | 1 Like Like |Link to Comment
  • American Capital Agency's (AGNC) CEO Malon Wilkus on Q1 2015 Results - Earnings Call Transcript [View article]
    AGNC and MTGE will never go out of business. I am 100% confident about that.
    May 12, 2015. 05:29 PM | 1 Like Like |Link to Comment
  • American Capital Agency's Upcoming Q4 2014 Earnings Projection - Part 2 [View article]
    AGNC is actively managed... therefore.. it really doesn't matter what computations you do... because the numbers can be way off... due to it's actively managed portfolio... But scott does a good job estimating the potential impacts if the portfolio remained stagnant.
    Jan 19, 2015. 03:54 PM | 1 Like Like |Link to Comment
  • I Have Concerns Regarding American Capital Agency After The Dividend Announcement [View article]
    Jraskib, the stock won't stay here. It will go up in a big way. The market just has not seen the report yet.. so the report will cause the confirmation. One way to play this.. is to buy the next months CALL options... so if you wanted to own say.. 2000 shares.. you just buy 20 contracts of the $22 strike... that will limit your downside and give you plenty of upside. Just an idea. I have all my money tied up in the BDC sector.. so I can't participate in this... but i wish you all the best.
    Jan 16, 2015. 02:49 PM | 3 Likes Like |Link to Comment
  • I Have Concerns Regarding American Capital Agency After The Dividend Announcement [View article]
    Hey, Rob. It's been a while. Good to hear from you again. It won't be $30.00. I know I said $30.00 but that is in reference to book values today... And in reality... it's probably $28 to $30. (and $26.50 to $27.20 reported) Ok. On the prepayments... AGNC probably moved the portfolio into prepayment protected paper... and in a hurry.. so i think the presentation will be all about prepayment protection changes and more 30 year paper. I may be wrong.. but I get the feeling Gary saw rates dropping fast and moved into even more prepayment protected stuff which sense has probably rallied a lot in terms of payups.

    I think $AGNC is a buy at today's prices.. because I see much higher book values and stable earnings for now. I see fed rate hikes as largely hedged away for now... and thus $AGNC is a strong buy to me. But I am not long $AGNC and I am completely tied down in $MCC right now. I don't plan on going back to mREITs until the BDC sector completely recovers and trades above book again.
    Jan 16, 2015. 02:29 PM | 4 Likes Like |Link to Comment
  • I Have Concerns Regarding American Capital Agency After The Dividend Announcement [View article]
    They don't report the book value this month because they report in only a couple weeks. This will be normal. That said, book value probably went up significantly... maybe $30.00 per share. I bet they are maintaining the earnings power pretty well too.. So I would not expect a dividend cut.. especially as they already declared 0.22.
    Jan 16, 2015. 02:05 PM | 7 Likes Like |Link to Comment
  • American Capital Solidifies Attractive Credentials With Double-Digit Dividend Yield And Price Appreciation Potential [View article]
    otto, that is just the name. They are not solar related. Everyone seems to think they are a solar company just because of their name.
    Nov 25, 2014. 10:51 AM | Likes Like |Link to Comment
More on AGNC by William Packer
COMMENTS STATS
697 Comments
764 Likes