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Annaly Capital Management, Inc. Message Board

  • frontsept frontsept Dec 3, 2004 12:26 AM Flag

    When the shoe drops, it will be ugly

    For those of you who know bond math 101. When rates go up, bond prices go down. However, NLY's stock price goes up when rates go up. If you agree that the only asset NLY owns are mortgages, then does this make sense?

    To be fair, if investors keep buying NLY stock as rates go up, so it goes. However, I wouldnt want to be long when the music stops.

    If you are a student of the markets, you will know that at some point the music will stop.

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    • It's not rates, it is the spread my friend and not the absolute rate of mortgages. Furthermore about 80% of Annaly is in ARMS and managment understnads how to maneuver in the market pretty much regardless. These guys ar good. theonly one comprable are over at NFI and they have weathered the worse short attacks imaginable last April.

      The music wont stop until it pases 21 and then it will be fine anway, it will only stall--and of course if the dividend goes up it can climb higher than 21.

      Every short attack on NLY fails.

    • Sounds like we have another negative new poster--uses many fancy sounding thoughts--BUT if he is so down n nly why is he a owner? or why is he wasting his time here on his sure loser?? sounds like another poster that looks at nly thru his own special negative viewpoint or he is a SHORT trying to bring down price so he can get out cheaply!!
      like a lithenatural in disguise??

    • How can we stop your negative music .

      • 2 Replies to mickeyy20
      • micky,

        the writer is only stating the facts. The only thing that has kept NLY trading up these last few weeks was the high oil price. Some believed as long as oil is high then the fed may not raise rates (bullshit). This argument is now falling apart and NLY is now starting to move inversely the treasury yields.

        If a weak employment report is out today then treasury yields should turn south but it will not be long lived. The market has a bullish tone at present and after a few days the employment figures will be considered not as bad as orginally thought, and guess what yields will start rising again. I believe the next FOMC decision is 12th dec and this will increase pressure on yeilds.

        I believe the us economy will continue to grow in 2005 and rates will end up eventually 4.5 - 5%. Where does that put the 30 year bond yeilds and NLY price. NLY should be played from a leaps long put and possibly short the 20 call. This thing could easily end up at about 12 within the year. The good thing is due to the nature of ecomomic cycles it will eventually return to 20.

        Just before the economic cycle has gone full circle and rates start falling will be the best time to own NLY.

      • I held NLY for a couple of years and agree that this is a great company. However, the spread compression between the 2 and 10 yr concerns me. I sold NLY a couple of days ago but still like MREITS, owning FBR, NFI, IMH and AHM. After following the FBR conference on MREITS, I'm basically staying with originators.

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