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Hatteras Financial Corp Message Board

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  • okiedivot okiedivot Apr 18, 2011 9:07 AM Flag

    Annual Report

    Enjoyable thread. IRR analysis (PW(irr) = F0 / (1 + irr)0 + F1 / (1 + irr)1 + F2 /(1 + irr)2 + .... + Fn /(1 + irr)n) has been a solid tool in 2009 and 2010 for discerning between MReit investments. It may continue to be one of many analytical applications, if cash flows do not swing wildly in the coming years. As has been pointed out in this thread, markets tend to factor in interest hikes and other news well in advance, and even if they are not 100% efficient, some factoring will have occurred.

    There are many accurate calculators for IRR (or ERR if you are a graybeard). The small amount of time that it takes to project cash flows using various scenarios is well worth one's time. One or two hours would be sufficient to enter 6 MReits, using 20 future dividend periods.

    I used to be able to remember the rankings by MReit, but admit that now I have to print them out and rank order them later. NLY, AGNC, HTS investors may find it enlightening to put various Ben-scenarios into play and share their findings on a future thread.

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