seems like the recent news--
"American Capital Invests $81 Million in Commercial Mortgage Backed Security Trust"
has not been well received.
call me stupid, but buying B rated stuff at a 41% discount, sounded like a plan.
>"On the merits of the CMBS strategy, we must accept the wisdom of Malon and his boys or sell. "< yep!
have to confess to being a (keep it simple) TA guy and have little to say about fundamentals. how could I possibly second guess ACAS management? I can't, I don't. researching and finding out a little about the mortgage biz, didn't hurt my brain to much--at my age, have to be cautious about info overload. will continue to watch the chart and go from there. 50dma=37.01, 200dma=35.09
"What will happen next time they issue additional shares? It usually tkes a hit on those occasions. Will the next one be a major slam?"
I would have to disagree. The employment of Forward Sales agreements has all but eliminated "secondary price drops".
On the merits of the CMBS strategy, we must accept the wisdom of Malon and his boys or sell. It's about that simple. Me, I trust the guy.
cruiser(or cruiser's buddy, oldnazi) is that you? don't worry about reading ACG or even posting there, everybody has your crazy ass on ignore. you never brought any stock trading ideas to the table, just that psycho right wing
here's a little warning to those folks that read the ACAS board----if your offended by charts, trading talk, comments on the market, etc., then put me on ignore. it's just that easy, huh?
I went over to the ACG board and posted the news article about ACAS for "captinlate"(a VF member and someone more than familiar with the mortgage industry). here's the reply--
Re: Capt. Mortgage
by: captainlate2001 01/03/06 02:52 pm
Msg: 26418 of 26419
Can't argue with a 41% discount to face value! A great investment by them IMO.
(ACG board is a very polite place, with some very knowledgeable folks answering/asking questions.
occasional OT about music or computers, mostly stock, CEF talk.)
Here's an OVER simplified example.
We are owed 10 bucks. We paid $5.90 for it.
It returns 8-10%.
Half of it defaults. Half of it pays avg rate (9%) and the principal.
So we get back 5 buck in principal....and $.45 in interest a year. If the traunches had a one year maturity we'd have $5.45 and we'd excercise our first lien rights on the other half of the mortgages.
I don't find this as risky as some. I realize this illustration is dramatically over simplified. But when you break things down to nuts and bolts it's easier to see the true picture.
I'm thinking in light of the steep discount, this is a pretty decent deal.
ACG might be a nice board, but the stock is terrible. Declining dividend over the last few years. Stock price chart for the last 15 years is terrible to behold as well.
Yahoo dividend history in the attached url.
I don't see the fit. It seems like a whole new thing for ACAS and in a rizing interest rate environment too.
But what do I know?
ACAS has been one of my core holdings for years but I am getting a little nervous about this business new direction.
If any of you wiser folks can sooth my anxiety I would love to hear from you.
I have quite a few holdings down this morning. I'll just wait and see how it goes.
It would not surprise me to see ACAS hit $34 or so on folks taking profit in Jan 2006 and not having to pay taxes 'til April 2007.
The changes internal to ACAS in 2005 were significant (CMBS and Europe). I view them as long term positive, but the market seems to be disagreeing with me in the short term. It happens a lot.