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Annaly Capital Management, Inc. Message Board

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  • tremulousbull tremulousbull Jan 29, 2013 3:13 PM Flag

    Predicting book value

    I didn't see any increases in the price of Fannie paper in Q4, they were lower at the end of the quarter compared to the beginning. But I wasn't very clear on what time period I was talking about, so maybe we are actually saying the same thing but looking at different time periods. My analysis looked at the increase in the price for Fannie paper from beginning of Q3 to the end of Q3. This correlated to a book value increase reported in Q3 (compared to Q2). I then looked at the price of Fannie paper from the beginning of Q4 to the end of Q4 and found that on average it decreased by about half of what it had increased in Q3. Therefore my thesis is that book value in Q4 ( yet to be reported) will decrease by about half of what it had increased by in Q3 so it will drop to $16.41. I am really hoping that they bought back a ton of stock in Q4, this should elevate book (from what I calculated) considerably.


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    • ------------------
      I didn't see any increases in the price of Fannie paper in Q4, they were lower at the end of the quarter compared to the beginning.

      Bingo. Your right on. It peaked at the end of Q3.

      You have to watch out for the pumpers around here.

      • 1 Reply to xxavatarxx
      • -----------
        Bingo. Your right on. It peaked at the end of Q3.

        watching for anything avatarcl says will include him showing complete lack of any resembling understanding of Mreits or for that matter common sense...

        the chart presented in my post before this shows the effect that is really going on, which is of course opposite to what avatarcl has to say... as usual...

        the average prices paid in the Q4 quarter is HIGHER than those in the Q3 quarter peaking in Oct as i said... and meaning the agency paper book value and sales value is higher overall through out Q4... (and as noted before, this is only an exercise in determining prices, because Mreit book value prices are tied to many other factors, including selling that paper, and buying the right kind of paper, rather than issuing secondaries to boost book value)

        one will also notice that this phenomenon is no longer carrying forward, and in Q1 that price increase is no longer something that will increase book prices...

        this is bad news for MReits for this Q1 quarter who rely on trading and selling off their portfolio as AGNC does... and is a huge boon to MReits that do what MReits are supposed to do, make money from the spread, rather than make money from issuing secondaries at far higher prices than what they should have been, all those investors that invested in AGNC's secondary during the sept quarter are losing money badly, because they overpaid... but the important thing here is that AGNC can never again issue shares at absurd prices... and this is the main real thing that increased AGNC's book value over the last few years....

        that fat lady has sung on AGNC starting this Q1 quarter.... and as you can see from their sEC filings, aGNC is losing money on the spread over the last 6 months.... it is only a matter of when they report for Q1 and the market figuring out what is inevitable

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