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# Annaly Capital Management, Inc. Message Board

• mropdahl mropdahl Mar 28, 2012 11:43 AM Flag

## 3.03%? Or do I need a math teacher?

If I'd invested \$10,000 in NLY on March 28, 2011, when the share-price closed at \$17.49, I would have received 571.75 shares. During the course of the following year - that is, to date - I would have earned four dividends worth \$2.37 But during that same time, the share-price has fallen to \$15.65 (as of 11:30 a.m. today). By my calculations, I would have netted 3.03% on my investment - which is hardly impressive. That said, I would freely admit that am not a gifted mathematician, so if my calculation is incorrect, feel free to Roll On The Floor Or Whatever (ROTFOW) - but let me know where I went wrong.

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• ---- calculated 3.03% based on that date of purchase -------

He calculated the wrong dividend amount, he also didn't calculate the auto reinvestment of those 5 dividends at what he appears to think are lower prices (which is a good thing)... (something an actual investor would do if he was actually an investor wanting to see what his money can actually do... instead of a CD or what ever) you have to actual real comparisons...

but the real problem is, he for some "unknown" reason wants to use ex-dividend days? for a calc that is meant to show an "average"....

who does that??? to take an upheaval day... to show an "average type day" calc? an average of what the stock does during a year???? as if even a year is long enough for these type of investments....

that is the point i was trying to make with those "what ifs"... who chooses a day when there are 5 dividends?.. instead of 4? who chooses a day that the stock drops the dividend amount to show an "average" of what the stock does over the year????

what he.... and apparently you haven't figured out yet, is that you can fool yourself into either a case of selling a stock or buying a stock... no matter what the stock... but that does not make it a rational decision, it just makes it an excuse for what ever motive he want's it to be....

I never said it was a 14% return on any particular year... here is what it has done... it has returned over 600% ( even USING TODAY'S apparently low price to you and him) over it's existence if you do show that auto reinvestment...

what does that "average" out in yield over the last 15 years? that is how you look at these things... over multiple years.... even your two year investment starts to show this effect... show us what that return actually is, since you want to see the power of your money, show us what that is with dividend auto reinvested over those two years... even buying it at what ever it was back then at the end of march, \$17.80?

again, as i said in another thread... you have to work mighty hard to show a short time period where you lost money on this stock.... and those time periods evaporate just given a slight bit more time..... that is actually hard to say for many many stocks.... most of those complainers on other stocks are talking about losses... here we get people complaining about a 3% return, while the rest of the world deals with under 1% retirement accounts.... wooh is us...

• The simple math was performed by the original poster when a simple calculation was performed and a return on that investment was calculated 3.03% based on that date of purchase. You then took that simple approach and loaded this board with more what if's when all the poster was trying to say was how much the return would be if his approach had been followed. You never answered that question and based on your long detailed analysis most likely confused people on this board more than helped them. I am sorry that you cannot believe that NLY has not been a 14% return over the past two years.

• ------- Your response to my question is still out there --------

do you want to read your sentence slowly and tell me how that makes any sense?

as far as i know, the only thing you asked me was how many years i've been in NLY, i answered... so is "your question (or my answer?) still out there"? what ever that means??

what question do you have? if you have a question? I asked you to show me what numbers you are disputing.... and again, you don't show any numbers to dispute? so what are you disputing exactly????

what simply math are you disputing?

• You are a piece of work. I know my situation and now that you say you have been in NLY for 10 years you have done very well. I do not know why you take simple words with simple math and make it so complex. Take a rest and gather your thoughts. Your response to my question is still out there.

• Based on all these varied responses...Yes, we do need a math teacher!

• NLY pays four dividends per year. If you put a fifth dividend into the mix, you will of course skew the result to exaggerate the company's performance. If you add "the fifth dividend" - .62 paid on March 29, 2011 - you would necessarily have bought the shares before the dividend was paid. So you would not have paid \$17.49 a share. You'd have paid \$18.10 a share, which is what the shares were trading at on March 28. I'm sure you know this, so your argument can only be an exercise in sophistry.

• pretty weak overall.

Most longs here don;t care what the share price is (odd) - they just want the div ...

• 2 Replies to realistic_sob
• I can't believe this isn't obvious: if a company pays a 14% annual dividend, and the share-price declines by 11%, the net gain is 3%. In other words, it's minimal. And if you hold those shares for 20 or 100 years, if the dividend remains the same and the shares continue to lose 11% of their value each year, you will still be earning a minimal return not much in excess of what you would earn by holding a Certificate of Deposit for 20 or 100 years.

• You are right about that as far as nly pays high dividends,longs invest on nly for income;within 6 years they will get back their original investment in the form of dividends so why worry about the daily fluctuation of the stock price?

• your math is correct. a response to your posting suggested that this was still better than the bank.the small difference between your nly net and a cd interest doesnt warrant taking the risk of a significant stock decline.

• Look it it this way for those holding share since 1997 the average annualized return is 20%. This is a long hold investment not a swing trade.

• <<Look it it this way for those holding share since 1997>>

TOTALLY irrelevant, you would have been better off in AAPL if you could go back that far. Pull up a 10-year chart of NLY on Google Finance and then add AAPL. You'll see. Can you time travel backwards?

What matters is where is NLY going forward from today. It looks to me like down more.

I view my investments as pieces of electronic paper that will make me money from dividends/distributions, price appreciation or both. To treat a piece of paper like a loved one, a favorite sports team or good friend to hang on to through good and bad -- really you need more loved ones, sports teams or friends.

Don't fall in love with an investment and don't ever think that an investment you own will never go down a lot. Think GM, Inc., MCI Worldcom, Enron, FTR, NRGY, ...

• So, pull up the one year price data on NLY from Yahoo Finance.

1) Now, sell on ex-dividend EVE and wait a little to buy back. You should be able to generate a double digit return.

2) Wait to buy back when NLY is down by double the dividend. Would double the dividend improve your numbers?

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