Western Asset Mortgage Capital Message Board

lenloc

Sage counsel. Dividend paying stocks are rapidly becoming a surrogate for " Bond Investors " seeking yield and safety. Fed. monetary policy assures them neither.

jtrader64

The information originally was sourced from a article was published in the Wall Street Journal this April 19 or 20. Later, I obtained additional information followed from various public sources, over the last 30 days.. Highlights as follows; MREITS purchased $ 450 billion of agency backed mortgage securities in 2012. This was less than 5% of the total $ 7.5 Trillion. US Banks @ $ 1.7 Trillion were number one purchaser, followed by foreign sovereigns @ $ 1.1 Trillion. In 2013 the Federal Reserve is projected to purchase $ 500M of MBS’s. Particular concern is the Financial Stability Oversight Council, comprising the top US financial regulators, may “cite MREIT's as a source of market vulnerability in it's annual report ” or in subsequent meetings.........setting the stage for stricter oversight of the industry. "

eyesandears - What is your source for the report from the Financial Stability Oversight Council that is due in two weeks?

From what I'm reading, this information was in their annual report that came out in early May. mReits were mentioned in the report but nothing major came from it other than to say that they could be risky if they are forced to sell in a declining market because of their leverage.

Did they say they were going to issue recommendations related to mReits?

Over the last week I've added to WMC, AGNC & TWO.

What's funny is that TWO has no interest rate risk (i.e. vulnerability to BV declines) to speak of and has been trading like those who do.

Every investor has different goals, tactics and risk tolerances - and I don't think mReits are the end all and be all, but I have a good slug of them in my portfolio.

Quad

that must be very stressful. feel for u buddy.
suggest something which worked for me.
buy a diversified portfolio of rising div paying stocks and focus on the rising divs and not the pps. Once the divs reach critical mass u r home free. the pps becomes irrelevant. (mreits don't fit this strategy hence they r just 5% of my portfolio but they add spice).
ur holdings r too price (not RISING div) focused hence the stres.

Lenloc

You are right...I am obsessive about making money and conpulsive about losing money

so, quad...are you holding, buying or selling ?

Sentiment: Strong Buy

hey eye, tho not a psychiatrist its obvious u have an obsessive compulsive disorder. otherwise u would not address ray with all those digits.

stockmeister3

In two weeks the Financial Stability Oversight Council will decide if REIT's should join large money center banks and be designated as systematically important. If that designation is made then additional regulations, restrictions, and reporting structures will be mandated.

The only certainty is that if additional regulation is mandated, costs go up, and management flexibility is diminished.

ray, i might upset some/many but i have been an atheist since aged 17. People often ask me why an atheist should be a decent or "moral" person? My reply is always the same i.e "enlightened self interest" I practice honesty and fairness coz it is in my own long term MATERIAL self interest and not for so called "moral" reasons i.e its a SURVIVAL mechanism. How long would have I thrived/survived in my profession if i did not honestly study in order to know my subject and give good value added service? Proof of the pudding was that i was pretty successful financially in my profession exactly becoz of that.
Now I don't mean integrity is SUFFICIENT to guarantee material success but is certainly NECESSARY for long term success.
I hardly come across anyone who deep down believes this, certainly not our political classes, at least not over the past dozen or so years.
I know its kinda unconventional thinking for many/most who point out successful crooks, but for every one such there are thousands of failures. One has to think probabilistically/statistically.
Bottom line, it gives me confidence the economy is not coming back to good health and hence the continued case for mreits.

Len ...

That is an interesting hypothesis. I agree with your premises, but connecting them to conclude that honesty/integrity are the foundations for a good economy is novel .... and something I agree with. This comment - "honesty is enlightened self interest" - is something I have been focusing on for some time. I have a little different take on the major benefit: I think that if you're honest [which means in what you say, and saying that which should be shared], you are forced to live a better life in all ways because you can't lie and make excuses for the krap that most of us try to get away with. I think if parents instill that lesson in their kids, they have done just about the best thing possible.

Ray

Agree completely! I've run the numbers on NLY in the past and looked at reinvesting the dividends in new shares over a 10 year period. Through the ups and downs of loose and tight spreads, high and low book value, and rising and declining dividends, NLY returned an average of 10+% annually. The key is to have a long term approach with these high dividend stocks. I am not a trader and am thinking long term to increase my cash flow for retirement someday. This is a way to accomplish that goal, as long as you don't get scared out when short term traders puke out shares at the first sign of the threat of a small dividend cut.

Sentiment: Strong Buy

as the ole buy n' holder says,
a cut in divvy will hurt my bones
but fall in price never harms me.
(unless i'm fool enuff to sell)

Yeah - the fsoc story is the only possibly negative news that I saw today. I didn't see a reference to new regs coming out in 2 wks ; just a reference to lew commenting on reits in general as possibly being an issue.

lenloc

Your eloquence rivals your brevity...You obviously distill information quickly. I expect the product of many years of reading riveting medical text books and journals

I am not expecting WMC to break below the $ 19.36 support, but if it does.....a likely express elevator down.

Ray858945

I have several dozen active investments in diversified sectors, a partial list includes:
MREIT's- WMC, AGNC, MTGE,
Biotech/Pharma- EXAS, GILD, REGN, BIIB, CELG, VRTX,Q
MLP's- NPL, EOG, EROC,NFX
Housing Related- RDN, RLGY, AMTG, TOL, PHM
Financials- STI, AIG, KEY, ING, APO,VNTV
Tech- AAPL, PCLN, EXPE, AMZN,SNDK
Cons Disc- KORS
Entertainment- SEAS

What do you like and why?