My friends at ML and BAC 2 weeks ago told me that they were going to start downgrading sector... I would also rather get in when going down, just continue to add at multiple levels since I'm not great a picking the exact bottom. But this feels a little out of balance compared to relative rate rise over the last few days.
basically, the rising rates....people running off the cliff, like lemmings...All the merit sector getting killed...I actually got some NYMT just now - I tend to ignore the 'principle' and go for 'cash flow'...just so long as none go BK.... I don't tend to overthink it...I do expect rates on 10-yr to go to 3%...If traders in bonds think that's where they'll go, then perception becomes reality...So, at 3%, it may be a time to look at things that got killed...The downward swings should slow at some point... I just ignore the fear right now....and I 'buy'....but I ain't gonna become some cheering section in here - we can drop more.
(nrf-c&d and rso-b...over 9% yields on these preferreds...."commercial" vs. residential)
This one shows a book value of $6.29 per share in Yahoo financials.....the market reaction to equities with giant dividends is absurd compared to the fundamentals, most are selling well below book? usual irrational overkill.... I think the low historical volumes in today's markets causes small and mid caps to be easily manipulated by big players.....do we even stand a chance ? When they drive down share prices beyond all fundamental reasoning ... this is turning into a big load of #$%$ trying to invest ....
People have different goals...mine is strictly "cash flow". So, while some would not "stomach" the drops, I just buy some more positions in various things that are getting killed, and just ignore the "paper losses" as I cost avg , and get higher yields on new money....Now, there are things I'll not buy, but NYMT is a spec of mine.... & I did get 500 shares of RSO-B ...paid 22.36... (preferred paying 9.28% now). Actually, 92.5% of money is in the preferreds... 'commercial'...not the 'residential' side.
Anyway...it's all about 'cash flows' for me...while ignoring the price movements, on "lemming day"...The risk would be "BK", but I think that's a small risk with the ones I own...risk/reward...Everyone's gotta make their own decisions !...place your bets, folks....