Yesterday, in the after market, AGNC sunk some 8.2% and earlier today when I checked it was down only about 5%, not low enough for me even considering buying some considering its recent NAV had dropped below $29. Then I just checked and it closed at 30.66, down 7.37% and its range today was 30.35 - 31.90. That means if you would just buy 1,000 shares of it at its daily low at around 30.35 or at yesterday's after market, you could have made about $ 1,550 profit in one trade. That is better than working. Today's trading volume on AGNC was 28.5M comparing with its daily average of 4.0M, that was seven times more trading activity on it today. Don't tell me all these people were all buyers. However, I would not touch AGNC at above $30.
MTGE dropped some 5.3% in yesterday's after market, closed at 25.19, down only 3.49%. Its daily range today was 25.04 and 25.80. You would probably make some money if you bought some yesterday after market was closed. Today's trading volume on it was 3.35M, comparing with its daily average of 733K, about 4.5 times normal. However, I do not believe MTGE's drop had finished yet, its recent NAV was 24.25 (at the end of March) and it suffered a 56 cents per share loss. I do not know right now will be the best time to buy it yet.
The problem with stock market going up is not because all these companies perform well or all these stocks are really undervalued but rather they are too much cash around (including those foreign central banks who can buy stocks) and all these margin debts that artificially push up the stock market. The Fed has no way to exit their QE safely, in short, the asset bubble will burst, just when.
In a way, you are right; but in a way, you are not. How long is a long period? 20 years or longer? Actually in a long period of time, like 20 years or longer, only 25% of all of the stocks will trend up, while 75% of them trend down. You would be much better off just buy and hold index funds such as SPY or IWM if you intend to hold them for a long long period. No kidding, that is true.
In a casino you either win or lose, and if you lose, you lose everything you bet on each hand, each roll of the dice, each spin of the wheel. With stocks, if you guess wrong, you can sell long before you lose all. Not a valid comparison at all.
I am not talking small investors like you, but big gamblers who use margins in buying tons of stocks, they can actually lose more than what they have. Right now, out of the 379B margin debts at the end of March, 2013, about 92B dollars are money that these people did not have, that means they can indeed lose more than they have. You are the one who has no clue.
Look at the rest of the REITs in my watch list, the one who dropped today were:
TWO -3.27%; REM - 2.63%; NYMT 1.97% (it only dropped to 7.05 when its SPO was announced on 4/30, but it closed at 6.96 today); NLY -2.45%; MTGE -3.49%; MORT - 2.23%; MITT -2.05%; IVR - 1.40%; HTS - 1.51%; CYS - 1.48%; CWH - 3.35%; ARR -1.70%
This happened while the market shot up today. It may appear the shakeup (or shakedown) on REITs (mREITs) may have just started?
Thoughts? Time to sell or buy? Thanks in advance. J