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Annaly Capital Management, Inc. Message Board

  • varia_nada varia_nada Apr 25, 2012 5:37 PM Flag

    Seeking Advice

    I think (correct me if I am wrong) it all started with the Operation Twist tha NLY prudently reduced it's leverage months ago hence decreased in income and dividend pay out and the share price kept dropping.
    I had to sell some shares to protect my retirement $$ and lost quite a bit of money.

    Is Operation Twist over or nearly over? Is NLY increasing its leverage again to booth earning? or....? Is it kind of safe to get back in for the next divy?
    Ask too many qustions, sorry.

    Any comments would be appreciated.

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    • Thats fine and dandy and I am the same way. MLP's however are also not a good example of steady growth because they are highly tied to spot prices unless youre looking at pipeline MLPs which are basically like utilities. I like MLPs too but I hate doing the taxes... and I also dont want to touch anything until oil prices calm down and NG comes head and center. The future can be NG if we want and if that happens then the place to be is NG MLPs.

      All I am saying is that you nitpicked my post incorrectly assuming I was applying the mREIT logic to all sectors. Read it again. I was very specific in that I was talking about mREITs only. The idea that yield determines price on an mREIT is incorrect. It is very loosely tied (+/-10%-15% swings in price) but the real beef is in the BV which ultimately determines the limits of PPS.

      This is not true of div growth stocks like MO, PG or KO. Those are a different story because they have a steady growth model. Normal REITs are that way too albeit slower but mREITs are not. In fact they are the antithesis of steady despite what that beta tells you which is not a good measure.

    • <<I think (correct me if I am wrong) it all started with the Operation Twist tha NLY prudently reduced it's leverage months ago hence decreased in income and dividend pay out and the share price kept dropping.>>

      I'll be pedantic here to point out you have learned a valuable lesson: lower distribution drives stock price lower. There has been a recent premium placed on stocks that have growing distributions/dividends. You got caught in the other side of this trade, the cashing out of stocks with declining dividends.

      <<When will NLY be a safe buy?>> First off, stocks are never safe. But, when it looks like the distribution will start increasing and it is below book value would be a good strategy.

      <<I had to sell some shares to protect my retirement $$ and lost quite a bit of money.>>

      1) The market charges tuition to learn a lesson. Just try to not take the same class again and pay the tuition again :).

      2) You took a loss. GREAT. Take a look at the message boards for FTR and NRGY and all the comments from investors that still have not taken their losses. "I haven't lost any money because I haven't sold any stock." Rookie investor mindset which you do not have.

      3) I felt that NLY was a pretty risky investment and have only bought and sold it in my taxable account. If I have a big loss there, I can (1) sell and use the tax loss and (2) buy it in a tax deferred account at a good price (don't tell the IRS about this).

      4) It sounds like you need to do some homework on what a good buy price is. Ask and I'll try to help.

      5) Your position sounds like it was too big.

      <<Is Operation Twist over or nearly over?>>

      The Fed is nearly out of short term paper to sell, so they will have to come up with something different if they want to continue buying longer dated paper.

      <<Is NLY increasing its leverage again to booth earning? or....?>>

      Read their website and press releases.

      <<Is it kind of safe to get back in for the next divy?>>

      Buying the dividend is a great way to lose money. Pull up a 1-year chart of NLY on Google Finance and watch what happens ex-dividend day and the days and weeks following. You are about to take another market class and pay tuition.

    • Like isxfun said, June. That said you made a classic mistake. 1st you should never buy when things are high and if you do you should not expect it to stay high thus you should be investing for dividends not cap gains. If you are investing in dividends then you wouldnt need to sell. Thus you bought for cap gains when it was high and sold when it was low. Classic mistake. Note that even with price drop you still made money on NLY last year from divs.

      Before asking for advice you need to be a little clearer about your goals. Do you plan to hold long? If you hold long then NLY will be fine over a 10 year period. If you dont like volatility then go bonds.

    • Operation twist is scheduled to end in June. There has been some talk of extension at the next Fed Board meeting in late June. It's anybody's guess as to what the outcome will be however if the economy still is improving there will be some pressure to let it lapse. However we are in an election year....

      If Operation Twist ends (Treasury selling short, buying long bonds) should put upper pressure on the longterm interest rates and with the Fed promice to keep short them rates low to 2014, spreads could improve for all Mreits. (in theory).

      Right now I am buying NLY on pull backs at a SP less than BV, then look at upcoming earnings and increasing my position on ex dividend

    • nada
      should not have sold. this stock is good until 2014 at current news. it will fluctuate, probably between 14-18.
      the book value is 16.18 or so . if you can stand the high's and lows sit back and collect the div.
      if not you need to look for a lower beta in a stock

      Thrash Man

 
NLY
11.875+0.015(+0.13%)3:31 PMEDT

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