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  • It's Beginning To Look A Lot Like 1998 [View article]
    This was clearly orchestrated by certain "foreign governments" to hit Putin where it
    hurts the most. BUT he is being paid in US$ for his oil, so getting huge amounts of rubels at a deep discount. US wont let default happen, but the liquidity problem in
    Russia could bring the whole house of cards down.
    Dec 18, 2014. 12:01 AM | Likes Like |Link to Comment
  • New York Mortgage Trust -5% after announcing secondary [View news story]
    I would put my faith in the competence of the management of NYMT to do what will ultimately be in the best interests of the shareholders who are expecting high returns for the risks taken.
    These are very sophisticated and talented players when it comes to high yield debt instruments and have established an impressive track record of performance.
    Nov 24, 2014. 02:28 AM | 1 Like Like |Link to Comment
  • New York Mortgage Trust -5% after announcing secondary [View news story]
    Don:

    This is not an issue, with respect to mReits, that adheres to a very precise, Investopedia definition. At least in my opinion, for what it's worth. (I think the third glass of merlot certainly had a dilutive effect on my powers of reason when I wrote that comment!)
    Yes, secondary issues of common stock are technically going to dilute the ownership, but if the proceeds are being used to increase the capital base of the mReit, and in this case with the purchase of a block of mortgage debt yielding over 6%, , the end result is that the new capital is going to be accretive to the EPS and ultimately to the dividend payout.
    The issue of the dilution/accretion effect of secondaries for mReits has been discussed here by people with far superior technical knowledge and analytical skills than I currently possess. I will do some further research and perhaps this can become a topic for more discussion.

    Cheers!
    Nov 23, 2014. 07:14 PM | Likes Like |Link to Comment
  • New York Mortgage Trust -5% after announcing secondary [View news story]
    The secondary is not dilutive, it's accretive since the funds are used to purchase debt securities which are income producing and can then be used to increase leverage. As long as I have been investing in NYMT, the stock price always, ALWAYS drops like a stone because of this fundamental misunderstanding of mReit secondary offerings.
    And that's okay because I just buy cheap shares from the folks who don't get it and benefit from the 15% yield plus another 12% in currency exchange to $C in a tax free account. Thanks!
    Nov 20, 2014. 07:02 PM | 4 Likes Like |Link to Comment
  • Mortgage REITs slip amid investor presentations [View news story]
    It's Round 4 of the mREIT selloff (going back to Oct/12) but I am not so sure about the immediate impact of the FHLB "proposal" to restrict private insurers owned by REITS. My research suggests that the hearings on this are ongoing, nothing has been absolutely decided.
    Furthermore, the management of the mREIT's don't seem too concerned...it will most likely result in higher mortgage costs to the consumer but not a restriction of the liquidity for the individual mREITS. Maybe I'm wrong on this, have to wait and see. Buying opportunity!
    Sep 30, 2014. 04:35 PM | 2 Likes Like |Link to Comment
  • This Is What Best-In-Breed Looks Like [View article]
    On the subject of leveraging debt in this market, Bill Gross of Pimco (220B$ under management) was interviewed on Bloomberg today. He was touting just that, the leveraging debt, since, in his opinion, the conditions that create a bankable spread between borrowing short and lending long are going to stick around for awhile yet.
    So load up, fill yer hat and enjoy the dividends, just like the bankers.
    Sep 11, 2014. 10:48 PM | Likes Like |Link to Comment
  • This Is What Best-In-Breed Looks Like [View article]
    Thanks for the interesting synopsis of NYMT. Been long this mReit for almost 3 years and have achieved a total return of over 40% inclusive of dividends, capital gains and currency (CDN$ to US$). The management have a huge depth of expertise in hybrid, high yield debt and know how to capitalize on the current economic situation.
    To hell with the naysayers who keep bringing up (throwing up?) the distant past or wallowing in the constant fear of near term interest rate hikes...they have done extremely well, and consistently, for the past several years outperforming all others in this sector despite some difficult economic circumstances.
    Sep 11, 2014. 07:14 PM | 3 Likes Like |Link to Comment
  • A Quick Formula To Estimate Annaly Capital Stock Value And Understand The True Drivers Beyond Its Price [View article]
    Having amassed a large and diverse portfolio of mReits over the past 2.5 years, I have found that approximately 99% of the micro analysis and recommendations from writers here re mReits is not really worth the time expenditure to read nor take action on (said with all due respect to the time and effort taken to write the articles).
    I thank the author for his interesting new twist and will most certainly look further into his thesis...BUT.. I have reduced the whole process of investing in mReits to the following simple formula (I need simple and easy to grasp): buy shares of the top 5 or 6 companies at as much of a discount to NAV as possible and reinvest the dividends for as many years as possible. Rinse and repeat.
    They are essentially little "dividend factories" and it really doesn't matter what happens to the share price over time (time and compounding are the critical factors in this) unless conditions dramatically change resulting in drastic cuts to the dividends ( a scenario that is NOT going to happen in the short term at the moment...at least that is my macro analysis per Jeff Grundlach). Spending hours and hours dissecting the innards of an mReit and attempting to predict the outcome of each and every micro/macro economic scenario, along with parsing the vague pronouncements from the Fed chairperson, is a waste of time.
    Had I followed the advice read here about mReits over the past year I would have missed out on a 20-30% (and climbing) return. I bought US$ via mReits at a 30% discount over the past year, without a wit of real insight into the complexities of the day to day management of the individual mReits. Maybe I was just lucky this time....time will tell.
    Aug 29, 2014. 06:33 PM | 2 Likes Like |Link to Comment
  • Mortgage REIT sector downgraded by Compass Point [View news story]
    Must be a "discount" securities firm... as in, you can discount much of their publicly available analysis.
    Mar 24, 2014. 01:57 PM | 3 Likes Like |Link to Comment
  • How Does An Intelligent Investor Navigate Mortgage REIT Risk? [View article]
    Brad;
    Thank you for providing this voice of reason and rational analysis in what has become an extremely polarized investment sector (and in spite of those accusing Mr. Shnure of being an industry shill).
    I know that you have taken a very cautious line in your SA articles with respect to mReits so it is good to see a more positive outlook emerging from a respected REIT analyst. As a contrarian, I have managed to accumulate a nice portfolio of mReits at much below book value over the past two years as it was obvious that the assets were grossly miss-priced as a result of perceived interest rate risk at the time. I think the worst is over for mReits and the future is indeed very bright for those who will ignore the headlines, Cramer-isms, and faulty "sky is falling" analysis.
    I look forward to reading your future articles!
    Mar 19, 2014. 07:24 PM | Likes Like |Link to Comment
  • Margins shoot higher at Annaly; +1.8% AH [View news story]
    NLY up $.25 in after hours trading (NASDAQ). This should spur buying in the entire sector since NLY and AGNC are proxy for the agency mReits. Clean out the shorts too.
    Feb 25, 2014. 08:33 PM | 2 Likes Like |Link to Comment
  • Is The Housing Market Stuck In The Muck? [View article]
    Am I missing something here...?? Would the author please clarify how his thesis re the housing market recovery will have a direct impact on the future value of mREITs? I am sure I am not the only one who follows this sector who is wondering the same thing. An mREIT is a hybrid and NOT the same animal as an equity REIT.
    Thanks
    Jan 30, 2014. 06:04 PM | Likes Like |Link to Comment
  • Gundlach: Time to buy interest rate risk [View news story]
    I'm with Grunlach all the way on this call....buy! Buy!....not bye bye! The contrarian view is supported by the low inflation numbers. he is absolutely right on about the market freaking out about interest rates. I remain long on a number of mReits including MORL, of which I intent to buy more next week.
    Dec 1, 2013. 02:20 AM | 1 Like Like |Link to Comment
  • Forced selling by mREITs leading to an ugly cycle in mortgage prices is just what had many concerned about systemic risks posed by the industry. MReits (REM) sold about $30B in MBS last week to keep leverage ratios steady in the face of diving book values, says JPMorgan, exacerbating already weak security prices (MBB). Annaly's (NLY) CEO has characterized systemic worry as equivalent to misguided frenzies about shark attacks, and Hatteras' (HTS) CFO and Dynex's (DX) CIO have seen no changes in the repo market (which the companies rely on for funding). [View news story]
    So we must create a new bubble to offset the carnage left by the last asset bubble, which was created to offset the previous one (tech wreck and prior to that, the Russian currency crisis precipitating the Long Term Capital bankruptcy and subsequent banking liquidity crisis), etc, etc. If that's called saving my ass...it's time to look for a new country to invest in.
    Jul 10, 2013. 11:18 PM | Likes Like |Link to Comment
  • Forced selling by mREITs leading to an ugly cycle in mortgage prices is just what had many concerned about systemic risks posed by the industry. MReits (REM) sold about $30B in MBS last week to keep leverage ratios steady in the face of diving book values, says JPMorgan, exacerbating already weak security prices (MBB). Annaly's (NLY) CEO has characterized systemic worry as equivalent to misguided frenzies about shark attacks, and Hatteras' (HTS) CFO and Dynex's (DX) CIO have seen no changes in the repo market (which the companies rely on for funding). [View news story]
    We've had the bursting of the Greenspan Bubble, which has had a lasting impact on housing and the economy.At the moment,we are in the first innings of the bursting of the Bernanke Bubble. The first victims are the mReit shareholders along with those holding bond fund shares. This process seems to be self-perpetuating, in that we are seeing the first signs of some of the mReits unloading MBS at fire sale prices to meet margin requirements.If book values continue to decrease, this is going to have a devastating impact on share values. Combine big decreases in book value with dividend cuts along with the possibility of at least one mReit getting into a serious liquidity problems and you will total panic in the streets in this sector.
    Furthermore, the added scrutiny of the press pumping out "white noise" will add fuel to the fire and prompt more talk from regulators trying to fend off any further danger to the "stability of the financial sector".
    I am still long a big list of mReits but now wish I had never heard of the sector in the first place. May be time to take the loss, which so far is about 30%. Now I have to go back to work!
    Jul 10, 2013. 02:01 PM | Likes Like |Link to Comment
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