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  • 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 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 07:14 PM | 2 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 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 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 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 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 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 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 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 02:01 PM | Likes Like |Link to Comment
  • Panicky selling grips the mortgage REITs (REM -3.5%) as Treasury yields soar following the payroll report. American Capital (AGNC -6.9%), (MTGE -5%), Annaly (NLY -6.9%) Chimera (CIM -4.9%), Armour (ARR -3.9%), Invesco (IVR -2.7%), CYS Investments (CYS -3%). CYS' Kevin Grant was public a month ago about being a happy buyer as yields rose - a bit early on that call. [View news story]
    jpmist;
    Scary is right! But tempting nonetheless. I got that number from the SA quote today for MORL based on their current declared div, but this needs to be confirmed via other sources (which as of yet I have not been able to do). This would be an interesting play at this stage of the mReit "readjustment" given the 2x div yeild....if one can figure out the arcane language of the MORL etf method of calculating share value and dividend.
    Jul 5 05:41 PM | Likes Like |Link to Comment
  • Panicky selling grips the mortgage REITs (REM -3.5%) as Treasury yields soar following the payroll report. American Capital (AGNC -6.9%), (MTGE -5%), Annaly (NLY -6.9%) Chimera (CIM -4.9%), Armour (ARR -3.9%), Invesco (IVR -2.7%), CYS Investments (CYS -3%). CYS' Kevin Grant was public a month ago about being a happy buyer as yields rose - a bit early on that call. [View news story]
    I woke up this morning with that Kenny Rogers song in my head..".know when to hold 'em, know when to fold 'em, know when to walk away...". Might be time for some lateral moves, like into MORL for some high stakes gambling to offset the portfolio book loss in the mReit bloodbath (round 2). MORL showing a 63% yeild and is probably at the bottom, fill yer hats!
    Jul 5 01:05 PM | 1 Like Like |Link to Comment
  • Annaly Capital Joins The Club, Armour Is The Odd One Out [View article]
    I seem to recall back in October/November when QE ad nauseum was announced, the SA pundits were predicting the demise of mReits. Contracting spreads, massive dividend cuts, etc etc. Better bail out now before it's too late!!! Now the theory is massively contracting book values, combined with dividend cuts, etc etc...the sky is falling! As has been proven over and over, about 99.99% of what market "experts" and "analysts" predict is wrong. It certainly was during the last mReit slaughterfest.
    Still long NLY, ARR, NYMT, NCT, TWO, etc and plan to stay in the game and collect the dividends.
    Jun 20 12:43 PM | 7 Likes Like |Link to Comment
  • American Capital Agency Among The Worst mREITs [View article]
    It's very tempting to jump in and buy AGNC et al at these fire sale prices....however, the Q2 dividends and BV are soon to be announced and there may be some surprises to the downside (not necessarily AGNC, but other big names like NLY and ARR (uggh!). This may add more fuel to the fire that is causing the stampede to the exits of the weak hands and scared money. Keep the powder dry and wait it out. This could prove to be the sweet spot for mReits at the moment if you look beyond this period of valuation adjustment. The asset mispricing may be at the peak now in relation to SP values looking out 12-24months.
    Then again, hope springs eternal!
    Jun 11 04:57 PM | Likes Like |Link to Comment
  • Growing thoughts of a tapering and then ending of QE∞ triggers panicky selling in the mREIT sector (MORT -2.3%) as Treasury yields hit their highest level in more than a year (the 10-year at 2.12%), and mortgage prices slide as well (MBB -0.4%). Leading the way is a 5.3% decline in American Capital Agency. Annaly (NLY -2.7%), Two Harbors (TWO -3%), Anworth (ANH -2.2%), Western Asset (WMC -4.7%), Apollo Residential (AMTG -3.7%), Javelin (JMI -4.3%), Invesco (IVR -1.8%), MFA Financial (MFA -1.5%). [View news story]
    I think Mr. Santos has an agenda (short!) Certainly very little understanding or appreciation of the history of the mReit sector nor of the ability of management to hedge and trade their MBS portfolios. He says "...at some point the industry will go kaput." Yeah right.
    May 28 05:32 PM | 1 Like Like |Link to Comment
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