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American Capital Mortgage Investment Corp. Message Board

  • linelong77 linelong77 Feb 26, 2013 7:38 AM Flag

    Ot Jack

     

    btw Sir why have you soured on line is an investment? Tia.

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    • jackhiller@ymail.com jackhiller Feb 26, 2013 11:41 AM Flag

      All of the good news about the richness of oil and gas resources in the US coupled with the increasingly successful tech (horizontal drilling and fracking) made it clear to me that the O&G sector was going to structural oversupply, and with the economies worldwide facing years of deleveraging and decreasing demand from aging populations (Japan, Europe, and the USA), supply would be exceeding demand for years.
      linn was continuing to buy NG properties as if they were buying at a cyclical low, and I thought that was a strategic mistake-- that forced my hand to sell. The sucess of Kain and the creation of MTGE as a hybrid version of AGNC with a yield double Linn's provided a terrific use of funds from selling Linn.

      After over a year of switching out of Linn into MTGE, I'm convinced that was a good decision.

      This latest oil purchase by Linn is a step in the right direction, but they still have too much NG.

      MTGE's SPO could not have come at a better time, as mortgage interest rates in Feb were showing the largest interest rate profit spread for many, many months. The same also applies to ARR's SPO, and I think ARR is now way over sold, as it provides for monthly compounding of its divi which I expect to hold, because of their well timed SPO.

 
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