For what it is worth, the anticipated increase in the discount rate is already built into the market price of many stocks including CMO. I agree, the market is nervous triggered by everything related to petroleum beginning last September.
For me, based on the revenue, income and dividend history of CMO, I plan to stay the course, collect the dividends. CMO management know what they are doing and can cope with change as they have since year 2000..
Technically kip, one could pay out more than they make. The US government is a prime example. However, I agree with you that this stock is headed lower. I am guessing somewhere around 9. CMO typically has a 10% yield. Assuming a .88 annual dividend (.22 * 4), the stock should fall. Given the Fed is going to raise rates, too, I see now way the stock could be 12 in one month, barring the Fed saying they are going to lower rates (which is obviously a fantasy). Short term sell but long term buy - it's just a matter of timing your purchases.
Unfortunately, the only thing that will turn 12 in one month, is my 11 year old daughter. market real nervous about .25 % interest rate increase and the effect on resetting the loans outstanding to value. Even though good percent of portfolio has a 6 month turn, vast majority has a 40 month turn plus. Also, look at the .22 cent return with a cash out 31 cent dividend. Can't pay out more than you earn.
Have the same experience , earned more in divs than original price. Wonder how CMO has continued to pay the 10% since the REIT crash of 2008?
There was nothing to talk about, it was solid as a rock. But now that you've started talking it has tanked. CMO bounces back a lot better than most mREITs. Looks like the prepayments will go down helping margins. Just wish I had the divvy to reinvest today.