#$%$. they lost money on the hedge bets. that is management, and nothing else.
this outfit got started and weaned on the QE punchbowl. wilkus is the brain, and kain the puppet. dead money, but I'll hold. useta like watching the blood drip from my knuckles when i'd punch walls out of frustration, too...
Call me a pigeon.
Sentiment: Strong Sell
The environment for mREITs has been less than optimal the past couple of years, but Kain has done a far less than optimal job of navigating the environment. What I mean is, he's clueless.
Sentiment: Strong Sell
It is not Kain's fault. This was all clearly known up front. Just look at the history of Mortgage REIT's, or look up my older posts from 2-3 years ago. Never stay in a M-REIT more than 5 years, 3 years is the optimum. M-REIT's only raise capital when rates are low and amateur Yield Investor are aplenty. Classic pattern from the 1970's, 1980's, 1990's, 2000's, the people who make big bucks from M-REIT's are the underwriters and the management companies earnings the 1-2% commish on invested assets, who cares about the leverage or the debt, as long as assets are growing or high, the commish will be high.
They are in a deadly embrace, the odds are 99.9999% against buy and hold investors. I would short here on any rallies, but this looks like distribution is going on and slow decline. I see no positives anywhere for 2 years.
My own call, if the markets go into correction mode of 10-15%, I think the agency M-REIT's with get hurt more than general market. I think more divvy cuts have to be factored in. I think this is very risky, double digit yields will subject you to double digit losses real quickly if a "Black Swan" event takes place in the markets
Was the $3 before federal and state income taxes. You got half that amigo and you are exposed big time to a $10 loss. You are analyzing past data, ignoring the trend and ignoring the future probable outcomes. You should state you cost was $19.95 it rose to $24 and I took in $3 in dividends, but now a descending triangle in share price has cost me $3.50 in principle, I still have $3 in dividends but the rate has decreases 10%, and we are not earning enough to cover the new reduced dividend, hence with future rate increases come and the Yield Spread being crushed and compressed, future dividends should be reduced and future principle loss should be expected for the next 2 years. Hence, From $19.95 to $10.00, plus I will get another $2 in dividends added to $3.00 for cumulative total of $5.00. Hence, you $19.95 investment will be worth $10.00 and you have $5.00 in cumulative dividends. How do you make money based on the facts and projected returns. AGNC did the same analysis and said they can buy the stock back at $10 in 2 years, why buy it now at $20.
TBT hit 45 today. Up nicely from my average price of $39.25, yes I bought at 43-44, but I loaded up the truck at starting at $39.00 - 41. I would still accumulate very aggressively under $42. Very little downside risk, just accumulate ladder wise, 39, 40, 41, that is what I am doing. I wouldn't buy AGNC until it hits 10 or lower. I believe two years from now they will be at $5 and have a 4 for 1 reverse split to get back to $20, like Chimera just had. When you narrow strategy and focus on one specific area and then lever 10 to 1, you end up like Chimera which was at $20 and you get saddled with 10 times more assets at ridiculously low rates, you can only fake the financials to show you hedged the losses, but eventually the loss avoidance was only a small %, massive losses will be absorbed over the next decade. Sad, but look a Chimera's history, if the Agency REIT's survive this half cycle, they will look like CIM. If they don't, the REIT asset mgrs. will buy this insolvent shells for the capital loss carryovers after converting from REIT status to Corporate status. That is where the big money is at, look at Bimini Capital Mgmt & Orchid Mgmt,
Its $10 dollars, this isn't rocket science. the will have another ipo at $10 to get assets under management up to maintain their commish.
The worst time to raise that much cash was when interest rates are low, you are buying extreme duration at very low almost zero rates. That is exactly when you don't want to load up with low yielding assets. If these guys were really investors, they would have raised capital when rates were high and levered to the hilt. But they just built up assets as fast as they could at low rates taking all the easy money for yield seeking pigeons. They didn't have to worry about asset values, they just levered up more to increase amount managed to earn their commish, the 1.25% commish is what drives them and the total value of investments, I don't think they really care about book value or risk, as long as they maintain assests under management and their percentage comes off of that, a quarterly loss does not phase them or even hurt them financially, as long as they don't own many share, just enough to look good to the pigeons.
1) No, but he does own the Safeway.
2)Yahoo quashed my spring website reply, so lets try seis siete siete-cinco siete cinco siete
barrio code cinco uno dos
You can still make money.......follow this simple and very brilliant advice.
Use Annaly or any of the other Agency Reits as a crystal ball for AGNC performance. AGNC has more leverage but they also have more cash horde than the other Agency Reits, hence they don't have to cut their dividend as much as the use up the cash accumulation. So here are my tips:
1. These guys have more leverage and more hedging risk so negative effects from rise in rates is bigger.
2. But they have more accumulate undistributed cash.
3. The other Agency REIT's will cut their divvy sooner and by larger amount. But AGNC is in same boat just will be strung out, making it a no brainer in trading this. THIS IS A CLASSIC SLOW DESCENDING TRIANGLE PATTERN.
New Dividend should be $2.00, future cuts will take this down as the run off their cash horde. Insider selling has picked up for two quarters should continue.
Here's their answer, "As an externally managed mortgage REIT, AGNC pays the Manager a management fee payable monthly in arrears in an amount equal to one-twelfth of 1.25% of month end stockholders' equity, adjusted to exclude the effect of any unrealized gains or losses. So, as the Company has grown stockholders' equity since its inception in 2008, so have the management fees. Please let me know if you have further questions on this matter." So there you have it, looks like mgmt makes tons of cash whilst we lose ours. So tell me why Gary Kain should care about us when he rakes it in no matter what. You have to remember with these companies, the operative words are Economic return and Unrealized gains and losses. When the operative words should be Real Returns and Real gains and losses. Pretty soon this pig will be in the teens and the div will be 12 cents, and they'll tell us what a huge return were getting. It seems to me if you didn't buy this stock in the first 2-3 years in existence, you'll be taking a beating. JMHO
Lost money on seven trades in a row. But made it all back on my next trade thanks to Ultimate Stock Alerts (find them in Google)
I been watching........................don't own any reits right now.When you say 'perhaps" it indicates the problem...................nothing is transparent here or within reasonable predictability. I don't like holding anything with those characteristics.