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Annaly Capital Management, Inc. Message Board

  • fwb54 fwb54 Jun 25, 2008 8:24 AM Flag


    If I buy today, will I still get dividend?

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    • This stock trades millions of shares every day. Despite the intraday ups and downs, it is not a high beta stock, i.e., not extremely volatile. It is highly unlikely that it is a candidate for some conspiratorial bear attack just because it is NLY. It is, however, in an industry that is in disfavor and because it trades in a fairly narrow band, it is a favorite of traders (like me).

      We buy when the selling runs out of gas and we sell when the buying runs out of gas. There are ways to analyze how that unfolds. I bought it this morning at 15.58 and sold out into the ensuing rally. That can account for a lot of the volume since there are frequently several opportunities each day to take advantage of the momentum swings (although I only engaged in one round trip today, I could easily have done more if I was focused exclusively on NLY).

      If you truly are a long term investor, you shouldn't be paying attention to these minor fluctuations. You will give yourself an ulcer if don't already have one.

      If you are seeking the kind of instant gratification that is characteristic of high beta stocks in a parabolic uptrend, I fear that NLY will disappoint. Instead of capital appreciation, you are being compensated for your risk with a high yield. If you wish to undertake a different kind of risk, then you shouldn't be in a stock like NLY.

      On the other hand, if you are happy with the dividend while the market sorts out what the future of these financial companies really is, then stay with the stock, but keep a mental stop in at a level commensurate with what you can afford to lose if you are wrong. Stick to that discipline and if it turns out that NLY can't maintain its footing in these treacherous times then you won't put yourself out of business with a monster percentage loss that you might never recoup.

      As, if and when the stock does move out of its trading range, correspondingly enter a trailing stop that keeps you from foregoing your gains if you are not nimble enough to spot the end of an uptrend. If you maintain that kind of discipline it won't matter much to you what the big money is doing in these kinds of stocks.

    • Yesterday.

9.35+0.04(+0.43%)Jul 2 4:04 PMEDT