Market Currents
A big player in the mortgage REIT sector catches an upgrade amidst the sell-off, American...
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Monday, October 15, 2012, 2:37 PM ETA big player in the mortgage REIT sector catches an upgrade amidst the sell-off, American Capital Agency (AGNC -3%) being moved to Buy from Hold at Sterne Agee. Shares were down about 8% at the session lows.
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This news story has 37 comments:
The drop of 8% is incredible....to me I don't know if any information presented on this site is credit worthy......
Take a stance on a stock - one way or the other instead of offering what if's.....
It takes two people to make a trade, a buyer and a seller, so of course you are going to have different opinions. Also, intelligent people change their opinions as the facts change. The effects of QE 3 are still murky at best, so it makes sense that there is some confusion. That 8% slide is a 2.5% slide now, and since volume has tapered off compared to what it was early, I'll attribute the drop to either funds dumping shares, panic selling, or a little bit of both. Either way I expect a decent bump to book value when they report the quarter, as well as a good deal of insight about the business. AGNC was planning for QE 3, so we'll see how their hedging has held up.
The best way to make money is to first not lose it.
When you think about it, MBS might be backed by the Government, but the Government has NO CASH to backup that paper. It would have it issue debt, which doesn't offer the Fed much security, because in the end, the Fed would have to save itself by purchasing Government Debt.
My theory is that very little of that $40/billion a month is going into MBS. The vast majority is going into Government backed paper. So the impact on MREITS is likely nil.
Call me crazy, but I just don't see the Central Bank of the United States loading up it's balance sheet with Mortgage Backed Securities which are Guaranteed by the Federal Government who would need a loan from the Fed if it actually had to exercise that guarantee.
"Looking instead at mortgage rates, the average 30-year fixed-rate mortgage, which stood at 3.55% immediately pre-QE3, has since fallen to an all-time low 3.36% before ratcheting up a bit to 3.39% last week, according to Freddie Mac's weekly survey numbers."
I agree that the scale of the numbers is hard to fathom but see this link below........Feds MBS purchase program fm jan '09 thru mar '10 (15 months) was $1.25 trillion or an average of $83bn per month..........as for the fed sourcing the dollars to pay for the purchases, yes, they either issue more treasury bonds (likely to foreign buyers) to raise that capital or they simply print more dollars; not clear which they're doing for this current purchase program.........
http://bit.ly/QJJYEp
DO ANY OF YOU PEOPLE AT S.A. KNOW WHAT YOU ARE DOING??
I subscribed to this service because I wanted some knowledgeable market advice, but it appears that Seeking Alpha doesn't seem to know any more about the market than I do.
I'd do as well be flipping a coin as reading your advice when it comes to making a decision on buy, hold or sell.
SA is the best site I have ever seen for teaching me about my stocks. That doesn't mean everyone KNOWS what they are doing, it means I have to figure out who does and learn from them and then do more homework and then ACT or DONT ACT. Glueman, try to ask questions to the authors and read the pros and cons and then make up your mind and don't look back.
There were 2 articles last week with opposite views, one said SELL one said HOLD.
I have owned AGNC for over a year. I read every comment about AGNC last week and made many comments myself. There were many people, including me who DECIDED NOT to SELL.
It is MY job to read as much as I can here at SA and determine who makes the most sense to me. I am not an mReit expert, but I trust my investing decisions, based on my track record.
All this news says is AGNC was upgraded, last week it was downgraded by a couple of analysts, I COULD CARE LESS ABOUT UPGRADES AND DOWNGRADES, they are meaningless in the long run.
If, you have not done well in the stock market, change what you are doing. Read the DGI on SA, they are sharp and make a lot of sense.
In my opinion, the only way to make money in the stock market is to buy great dividend stocks and reinvest the dividends. If, you TRADE you will LOSE, if you try to TIME the market you will LOSE. If you buy PM and MO tomorrow and have all the dividends reinvested, you have A MUCH HIGHER CHANCE OF MAKING MONEY IN THE NEXT 5 YEARS then FLIPPING A COIN!!!!!! I can guarantee you that.
AGNC is RISKY compared to the rest of my portfolio, but no one is going to scare me into selling. No one ever made a dime panicking.
LONG AND STRONG: MO,PM,RAI,AGNC,SDRL and KMR
I
If you have 5 or 10 million in the market, why are you nervous?
I have 15.6% of my portfolio in AGNC and I did not get nervous today.
If you are trading, I hope you realize the odds are against you. 95% of traders lose.
Obama reelection will actually help the market more then a republican win based on past history.
Have they proven that they can run any agency or department ?
the only thing they have been good at is winning a major war when the populace was behind them and have the troops had been drafted into the various services. they couldn't win in Korea nor in Vietnam, etc.
Vote to throw all the bums out - and I don't mean the Dodgers.
On the other hand, I may just get back in next week - anyone like any other company other than AGNC??
it took me 10 months to make 100k and it took less than 2 weeks to lose 60k. of it. this is NUTS!!!
i wish there was a way to protect gains. and I'm not talking placing stop losses. I have done that and it backed fired on me...
is there a way to hedge against mREITS??
I remember when I held Equinix at $70/sh and sold out of fear. Now look at the price.
In all honesty, a 20/basis point move in mortgage rates isn't going to kill any MREIT. Also this article says that consumers might not see lower refi rates, which is good news for MREITS.
http://wapo.st/V3J77M
SA is a great site that gives different opinions about various stocks. AGNC is one stock that has a lot of weekly articles giving opinions on its future based on different scenarios. I have owned AGNC for less than a year and bought it for its dividend and its fundamentals as learned from this site. Due to my unique habits , I sold my total position last week, when several articles I read here were slightly negative. Some were positive. they all reinforced my opinion, but didn't tell me what to do.
It was a good move as it turned out, and I will get back into this stock when it hits near my new lower target, which will take in this QE3 buy back scare.
If you need an investment advisor for your portfolio, you'll have to pay for one. SA is just a bunch of educated opinions to give you another viewpoint on the market.
Dividends#1 said it very well.
And good luck investing.
I am out. Sold all.
Why do I post? I feel that there is a bias from those who are positive in their commentary. My bias is to inform my fellow investors that hey - there is a problem here. The better informed investor makes better investment decisions and it adds to a better market for all.