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Redwood Trust, Inc. Message Board

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  • brebrbt09 brebrbt09 Apr 5, 2004 11:02 PM Flag

    Insider Sales

    pehaps the party is indeed over. I am less concerned about heldover dividends than I am about losing 20% stock value in a few days.

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    • every mreit in the sector got trashed on the prospect of higher interest rates related to both increases in employment and it's potential effect on inflation....real inflation is what will cause the fed to raise rates, we own interest rate sensitive stocks and they will get sold by many on this kind of news....yes RWT sold off, arm's held by AAA jumbo borrowers have less spread than other kinds of borrowing, so if rates rise, the question is whether or not RWT can reset it's adjustable rate mortgages fast enough to keep up with fed increases, this is the risk we take related to RWT earnings, along with credit risk, real estate value risk and all the competitive risks related to other companies in the market place....question is whether they can continue to pay dividends (especially the specials) at the rate we expect based on earnings....I'd say it's a lock for this year, but some dd on the effect of 100-300 basis point rise in rates ought to be something this board gets busy on....NFI investor built website has an earnings calculator which allows one to make certain assumptions and try to predict earnings....wish I had one of those here right now...but I'll see what I can come up with...

    • >>I am less concerned about heldover dividends than I am about losing 20% stock value in a few days.

      if that is really the case, then this is probably not the stock for you.

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