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  • Western Asset Mortgage Capital Nails The Quarter - Cautious On 18% [View article]
    Hey Rubicon, great article. I am long on WMC and have been since November, 2012. Since then they have generated an overall return of 15%, even after I pay my foreign investor tax. All in all, I'm very pleased with their performance. I completely agree with you that it is possible to see a dividend cut in the future. In my opinion, they have done a great job of maintaining their dividend over the past year, especially compared to other mReits like ARR or JMI. I really can't figure out why the "haters" have jumped down your throat on this article. Obviously, as you've tactfully pointed out, they clearly didn't read or fully understand what you said. And, given the number of grammatical errors in JHHAlpha's comments, the empirical evidence speaks for itself!

    Maintaining a long position knowing that a dividend cut is highly probable shows a lot of faith in the company and management team, so it astounds me that people would accuse you of being critical. Thanks again for the valuable insight and best wishes for continued investing success.
    Aug 13 11:09 AM | 2 Likes Like |Link to Comment
  • Mortgage REITs slide as Treasury yields take off [View news story]
    Thanks c21, I also hold ARR and JMI for the monthly dividend payments. I agree that diversification within the mREIT sector is important.
    Jul 4 02:22 PM | Likes Like |Link to Comment
  • Mortgage REITs slide as Treasury yields take off [View news story]
    This article is a bit misleading when talking about the drop in MREIT prices. When the author talks about NLY and AGNC being down nearly 5% since last week, what they fail to mention is that these stocks went ex-div last week, so 2-3% of the drop is directly attributed to the typical sell-off right after ex-div. There is definitely nothing to panic about here.
    Jul 3 10:55 AM | 7 Likes Like |Link to Comment
  • It's a nice bounce for the mortgage REITs (MORT +1.3%) today as a string of weak economic data leads to a big drop in Treasury yields, the 10-year off 6 bps to 1.88%. Leading gains is Western Asset Mortgage (WMC +3.3%) following yesterday's 8% post-earnings drubbing. CEO Jim Gavin took advantage, adding 12.8% to his stake by buying about $42K worth of stock at $19.96 each. Other movers include: (CMO +2.1%), (NLY +1.9%), (ARR +2.6%), (IVR +1.8%). [View news story]
    Is WMX another fat finger feaux-pas? Didn't he buy WMC shares??
    May 16 02:50 PM | Likes Like |Link to Comment
  • It's worth noting that Macquarie, in sounding the alarm over biofuels costs that could hurt earnings for refiners, thinks the problem won't hurt all refiners equally. It says the well positioned companies are those that are better integrated between refining and midstream product terminal assets that support self-blending of ethanol, such as MPC, NTI, TSO and WNR[View news story]
    Long since $25 :)
    Mar 13 02:49 PM | Likes Like |Link to Comment
  • A Portfolio For A Young, Aggressive Investor [View article]
    Chowder:

    You make some good points, as usual. Like yourself I had to "eat that hat" and 3 years later, I'm still digesting it! Fortunately, I'm still young and have time on my side. I'm certainly glad that I took the big hit early in life, because the lessons learned are invaluable.

    One of the sectors that I really like and think almost everyone should have in their portfolio is mREITs. They trade at very low ratios to book value and pay very nice dividends. I know there are inherent risks with every investment, but the principal being guaranteed by Freddie and Fannie certainly helps mitigate that risk. I have done very well with ARR because of the added compounding benefit from the monthly dividend. I also hold a couple Canadian REITs that own fee simple interest in various forms of real estate. Again, security of principal, low price to book ratios and monthly dividends make these companies a solid long-term investment.
    Mar 11 02:33 PM | Likes Like |Link to Comment
  • 12 Things To Dislike About Dividend Investing [View article]
    That's kind of like being a member of the DNA - National Dyslexia Association ;)
    Feb 6 10:44 AM | 6 Likes Like |Link to Comment
  • My Mad Method: What Next To Buy, And Why? - January 2013 [View article]
    Firchards and Rnsmth:

    Both very valid points. It is important that every investor develops a strategy that works for them. Depending on your portfolio goals, there may be a number of reasons to buy or sell a stock and it could be something as simple as re-balancing among market sectors or sub-sectors. Thanks for the input!

    JD: How are your numbers looking now on the AAPL/RSO swap?
    Jan 29 02:33 PM | Likes Like |Link to Comment
  • All In: Texas Buy And Hold'em [View article]
    My most painful poker memory: I was playing a game with a group of friends. We were playing for real money, but with relatively low limits. The biggest a single pot could get was about $75.00 with the average pot being about $15-20. One of the guys playing had a few too many drinks and was playing fast and loose betting up pots to the max just for fun. I started with a low pocket pair and landed 3 of a kind on the flop. Everyone else had folded by the turn so it was me and him heads up. The first time he even looked at his pocket cards was after the flop, so he was betting to our table limit pre-flop without even knowing what he had. After the turn, he still had nothing and bet to the max. The river card gave him a straight flush 2-6 or something crazy like that.

    Anyway, poker story aside, there are a couple other important points to make about the comparison between investing and poker:

    1. As an individual investor, you're always the small blind. The big institutional traders always have a superior position of power because they have more money. Just like a big stack at the table, they can be bullies.

    2. The institutional investors get to see the table cards before everyone else. They get to trade after hours when the rest of us can't even see what the markets are doing. It's like going for a bathroom break, but getting dealt in the hand and having someone automatically post your bet.

    3. You can't bluff the market - no matter how good your poker face is!

    So, with all that being said, how do we win. Well, the best strategy I can think of is to play like the "house". In casino poker, the house takes 5% of each pot. I would call this a 5% dividend yield. If you're getting 5% of each pot for long enough, eventually your playing with all "house" money, thus significantly reducing your risk.

    And my final thought: Don't forget to watch for the bubble! ;)

    Happy investing.
    Jan 25 02:50 PM | 1 Like Like |Link to Comment
  • My Mad Method: What Next To Buy, And Why? - January 2013 [View article]
    I'm not sure where u01 comes up with the idea that you did the opposite of a good investor. I believe there were a number of "good" investors that employed u01's strategy on Nortel, dollar cost averaged it right out of business! It's always easy to second guess on timing, but at the end of the day a 30% return is pretty respectable. As Kenny Rogers put it "you gotta know when to hold 'em, know when to fold 'em, know when to walk away, know when to run..." Now that you've left the Apple table, I guess you can count your winnings.

    Best wishes with RSO. It may not be exactly what you thought it was, but with a 13% yield, if the price continues to be stable even if the dividend gets cut in half and you're still doing well.

    Happy investing!
    Jan 22 04:45 PM | Likes Like |Link to Comment
  • A Real Dividend Growth Machine: 2012 Review [View article]
    Hi Pound:

    I realize this is a stock investing site, but if you really want to retire early, the best thing you could ever do is to take a good course on buying and managing investing real estate. There are a number of strategies where you can use other people's money (OPM) for your down payment. You do the management and split the profits. This is something that can easily be done in your spare time and you can still continue to invest in your trading accounts. Worst case scenario, if you buy a couple of small investment properties now and all you do is take the rent to the bank every month, in 25 years you own them free and clear. I would suspect that a couple of rental properties with no mortgage would cover your insurance costs. Even if you haven't bought out your partner along the way and you have to split the income, you still have a steady stream of residual income bought with someone else's money and your management.

    I hope this gives you some buttery food for thought ;)
    Jan 15 04:00 PM | 1 Like Like |Link to Comment
  • Will Armour Residential's Repurchase Program Offset Its Dividend Reduction? [View article]
    A discount to book value can be looked at in two ways:

    The Benefit: if the company liquidated all it's assets, the proceeds would be considerably more than it's current stock price. Meaning if they paid all the money from liquidating assets to shareholders and closed the company, all the shareholders would make a significant profit.

    The Downside: when a stock trades at a large discount to book value, it is a strong sign that institutional investors don't have a great deal of confidence in the company's management.

    Currently the risk with ARR is that the declining dividend rate is scaring away investors. While the company is very solvent and has ample assets to pay its long term obligations, their liquidity (ability to pay short term obligations) is somewhat questionable compared to other mREITs.

    I am not scared by the discount to book price or declining dividend rate because I plan to hold this stock for many years. With such a strong asset base, management should be able to adjust their cash flow to build their dividend rate back up and increase share value. I remain long on ARR and have used this dip in share price to purchase more.

    I hope this helps you.
    Dec 19 01:00 PM | 2 Likes Like |Link to Comment
  • The Unbridled Truth About Dividend Contribution To Shareholder Profitability [View article]
    Robert:

    I can arrange that purchase for you. I will email you an account number to wire funds to... don't worry about it being in the Cayman Islands ;)
    Dec 6 11:00 AM | 4 Likes Like |Link to Comment
  • Is Armour Residential's 15.4% Dividend Yield Sustainable? [View article]
    It doesn't surprise me that the purchases by the insiders were not larger. Looking back at insider activity for the last few years, there were no sales (only 2 "gifts" of shares). This tells me that the insiders are long on the stock and aren't just buying at depressed prices to sell when the stock recovers. Given this scenario, purchases ranging in value from 30-60K are pretty reasonable. I remain long on this stock and fully intend to increase my position in the near future.
    Dec 5 10:32 AM | 2 Likes Like |Link to Comment
  • The Unbridled Truth About Dividend Contribution To Shareholder Profitability [View article]
    This is one of the best discussions I have read in a long, long time. Chuck, JWG, and David, you all post insightful comments and support your positions well. Thanks for your input, it has been very informative.
    Nov 30 01:48 PM | 3 Likes Like |Link to Comment
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