"There is some reason for concern here," says American Capital (AGNC) CEO Gary Kain, telling...

"There is some reason for concern here," says American Capital (AGNC) CEO Gary Kain, telling conference-goers mREIT investors have good cause for hitting the sell button. However, he says, a portfolio of Agency MBS can be constructed that both limits prepayment risk and provides an adequate yield. He urges close study of page 14 of his presentation - a slow prepaying, 30-year, 3.5% MBS purchased with 7X leverage can yield double-digits, and that's where he feels AGNC's portfolio is positioned.

Comments (9)
  • hoofan2
    , contributor
    Comments (4) | Send Message
    The author seems to be attempting to change Kain's meaning during his presentation in order to editorialize.


    He should not have italicized "can be constructed" because it provides an emphasis that did not exist in the presentation and IMO changes the meaning of what Kain said. Read the paragraph without the emphasis to get the correct meaning.


    Also, the author's ending comment of where Kain "feels AGNC's portfolio is positioned" seems odd. Kain KNOWS where the portfolio is positioned. He doesn't have to "feel" it.
    14 Nov 2012, 09:26 PM Reply Like
  • Ron Myers
    , contributor
    Comments (255) | Send Message
    I didn't listen to the talk but combined with 12-13 slide 15 seems pretty much designed to show that they are positioned in the types of securities that they feel have low prepayment risk.
    14 Nov 2012, 10:49 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2860) | Send Message
    Its a really good listen for anyone whose invested in this space.
    14 Nov 2012, 09:38 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2860) | Send Message
    Also said they won't look at the buyback til the stock is trading at about 5% below book, but its a function of the market condition. With the last reported book value being $32.49, and shares closing at 28.69 today, thats an 11% discount to book.
    14 Nov 2012, 09:59 PM Reply Like
  • Regarded Solutions
    , contributor
    Comments (20530) | Send Message
    the Fed is playing their game. It spells CRAP for these stocks until the Fed stops.
    14 Nov 2012, 11:09 PM Reply Like
  • AlbyVA
    , contributor
    Comments (839) | Send Message
    AGNC's share buy back will only remove betwen 15 - 20 million shares from the market.
    14 Nov 2012, 11:20 PM Reply Like
  • tuning50
    , contributor
    Comments (12) | Send Message
    I did Ok on some NLY shares some months ago, but heres a question: When mortgage interest rates start climbing which I suspect may happen in the next 12 to 36 months, (just due to creeping inflation) will mReits not be the place to be? If we buy in now and rates trickle up to 4,5,7% is this not a wise move for those of us in IRA's) ? I realize forclosures will glut the market soon but most of those properties are junk and will stay at the bottom. Better 1st time mortgages should start to rise is my guess. indicated by TOL (Toll Brothers) stock prices.
    14 Nov 2012, 11:22 PM Reply Like
  • theyuha
    , contributor
    Comments (95) | Send Message
    I sold the REITs and BDCs and bought silver (PSLV). ARR went down like 7% the next day. I do think they will spring back when the Fiscal cliff is solved. I am not able to take the stress of all of this. Silver can be volatile but this is getting scary with the REITs. Gary Kain is a very talented man but it is very hard to figure in the fear factor of those who buy and sell his stock. Some of these stocks could go up 10% in one day when they fix the fiscal cliff. For those who have enough money buying in soon could net a large gain plus the dividends but in the mean time there could be further losses. I do expect silver to go up in the next few months and silver seems to be of limited quantity. I am not sure when I will get back into REIT stocks. When interest rates begin to go up the Dollar could be in serious trouble( perhaps a few years from now). Already many nations no longer plan to use the dollar to buy and sell with. Lower oil and lower interest rates mask the real problems and give us some time before the dollar comes down significantly. The US simply cannot afford to pay the monthly interest if rates go up even a little. I recommend everyone who owns stocks to sit on some silver or gold. Silver will outperform gold.theyuha-silver.bl...
    14 Nov 2012, 11:31 PM Reply Like
  • Jack Rice
    , contributor
    Comments (1485) | Send Message
    The dollar in serious trouble in a few years....total hogwash!


    "Already many nations no longer plan to use the dollar to buy and sell with." "Many nations"??? Like, Iran? Foreigners are PAYING to hold US Treasuries (recent TIPS auctions). The sovereign credit-default swap premium currently for the US is far below Switzerland and about the same as Germany.


    So enough of this touting silver/gold. It's for geezers who have no future and don't think the world has one either.
    15 Nov 2012, 10:29 PM Reply Like
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