Agreed. This stick does suck. I've been laughed at. Scoffed at. Basically dismissed as a know nothing. Yet I've nailed this stick to the tee. It's a loser. Get the hell out of NLY.
Not a good strategy to wait for the div. Sounds like you have about 4,000 shares. Sell now and split the baby. At best, in my opinion, waiting here for the dividend will be a break even proposition, maybe, how this holding is being distributed right now. If you do hold, then what do you do - sit there again to go through this next quarter, maybe even worse if they start with the monkey business then.
Common div cut is in the cards and baked in. If nothing else because, if the chatter is correct, their hedges are blowing up right now so cash will be short while the portfolio cash flows build back. Normally, this would be all noise, but I'm guessing that, like a lot of others, these guys have been doing some heavy duty directional hedging lately - and that costs money or, at least, exposes a lot of cash to close out if wrong. We'll find out when they report - but my sense is the worse they do on the hedges the better that portends for future earnings - but that is just my hip shot opinion and, as everyone knows, I have been wrong before.
So you know the future? No indication that the dividend must be cut yet. Suppose the FED raises .25 and then is finished, margins can be maintained in 2016.
No doubt they will pull some stunt like that ego... The most realistic fear for me is that they go with more preferred and make it senior to existing preferred. Things will get very ugly then.
Just so they keep payin that preferred IN FULL and I think that will be the last thing to go (before creditors) since they can't pay diddly to any common holder before they pay us in full. That said, I have pulled off the drip order on my preferred - This is going to get a lot more ugly before it even starts to get better, so I'll just take the cash for now, thank you. If the preferred breaks down much more I will have to kill this holding.
Not so sure but willing to watch from the sidelines for now. LIBOR is on the move and has been all year so if these names were going to benefit from that it seems like they would have started to by now. Looks like you've got strike one on your NLY bottom call. This thing is being thrown out like yesterday's dog food. It's more than tax selling - that got done a while ago. This is the kind of growing fear you don't want to bite into.
Zero chance of that. Dividend cut is coming, 25c. And now that we've been in the 8's all the old dividend chasers will be back here saying I don't care what the price is as long as they keep paying me a dividend, "pretty good in my opinion!" Think of all the reinvested shares you are buying on the way down! One other thing, they aren't doing buybacks. Authorized but just window dressing. Why? Because it reduces the capital base to play with and collect management fees on. Buybacks are bad. A reverse split followed by new issue of equity, now that's what's needed!
Well, the good news as far as I've been able to ascertain, is that the worse their hedges do can translate into the better it portends down the road for the regular operating performance - but that may be wishful thinking. We have seen this kind of price activity in the preferred in the relatively recent past (few years) so until it breaks down through the prior lows I'll keep it and keep it dripping. I do feel sorry for the common holders right now - they must be bracing for a div haircut.
I think I read where the CEO said this was the most confusing credit market he's ever seen and I'd have to say that's an understatement. If these guys don't have a decent handle in it then I have to think no one does.
Have to think its all about their hedges and the repo market. Nothing risky in their portfolio but 1/4 pt FED increase would help them, IMO
There are some serious issues in that actual junk market that need to be sorted out. If this preferred is considered junk its okay with me - for now!
I may have been wrong on that kurt - but I could have sworn I saw a gap in the div history for the D preferred on STAR - I did just check one site and it does show the payouts all the way through with no gap - so I must have that wrong. Those did turn out to be great investments - kudos to you for picking them up. Socking away 10,000 shares of that at the bottom and dripping them in a Roth would be a very nice income machine right now. I have to assume that could be worth close to a half mill now and generating 40 grand a year in income
Those were dark times. If there weren't so many folks saying we're in for worse starting next week I'd be worried. There are so many megaphones out there screaming to jump ship on everything that it seems like the classic contra-indicator. Nevertheless, I am mostly cash or cash equivalent now in the form of short term I-Grades. These preferred shares and some written put options on T and CVX are about my riskiest holdings right now. I did buy some LEAP put options ITM so I can sell the QQQ at $130 for the next year + that I'm glad I was able to pick up pretty cheap.
Pretty soon should be a good time to start averaging in to the metals and materials and then maybe even some EM's. The bloodbath has been going on for a while now and there should be some signs of life appearing in the next year or so.
Ah...yes...a well conceived and thought provoking post from "the six foot roach's friend",... none other than..(drum roll please)... "fish fart ." One can only begin to imagine the time you must have spent underwater in mommy's bathtub to coin your screen name....not to mention how underwater your portfolio must be. i hope you have purchased a good set of nose plugs.
Typical NLY cheerleader. Misery loves company. 8's are imminent. I was scoffed and laughed at when I forecasted single digits here. Now the 8s beckon.