I really do appreciate all of the IRR you,Quad, Terr. dd and Jim do but the harsh reality is that I was and (IMO) continue to be correct.
If I am not mistaken every one of you were peddling the BV to PPS stuff about how we had to have at least 31.15+ B4 an spo. Does anyone remember? I mean that IRR stuff was tedious ;-).
Had me scratching my head and looking into it for a few moments, but the harsh reality ,as I outlined in earlier posts on this thread, is that management does something very simple. THEY KEEP US RANGE BOUND!!!!!!
H;;L Yes, I would agree and love to see the upward mobility of the PPS AND it would normally follow that progression. The reality is that management is going to continue this pattern and defeat the normal statistical progression.
Its what JackHiller said...you can't always use, with certain confidence, historical static data to predict non-static future events.
The flies in the normal linear progression machine are these spo's.
I contend that my Sept time frame is accurate. Since Sept 1 we've seen 7 days in the high 27's only. From Oct 1 one day only. All others have been 28.00 or higher and only 32 days have hit 30+ with most of those( 26 days out of that 32) being under 30.50.
I would say that follows BATESAT pretty well!!
Anyways...now the children are crying about the sustainability of AGNC going forward. Did you see Jerry Stanerwick(aka Orlinda_fell) going back to true form howling at the moon with all the others....makes one kind of sick, if it wasn't so darned funny.....they must have bought the EX.
"If I am not mistaken every one of you were peddling the BV to PPS stuff about how we had to have at least 31.15+ B4 an spo. Does anyone remember? I mean that IRR stuff was tedious ;-). "
Tedious it was, but as a minor point of correction, we were trying to correlate the quarterly high with the PPS to BV, not the SPO price. That's why I used BATESAT and sold my AGNC positions over a month ago when PPS reached the 29.80s. I left a lot on the table as the high later reached 30.76, but my conviction that an SPO was likely, due to the price proximity to 30, drove my decision.
Hi Doc, You are spot on right about BATESAT as an effective trading strategy over the last 9 months. BATESAT is the strategy one would arrive at from examining a price histogram of the last nine months and that surely better informs a trading strategy for the calls expiring soon that you trade. It's all about the relevant time frame, you and I are interested in different call expiration horizons. For guys like me that tend to trade LEAP options, linear regressions better inform our decisions because the underlying trend, if it continues, will have time to make a big difference in options expiring in January 2013. You have previously described that as “emergency brake creep” and I am all about that 2/3 of a penny a day AGNC price appreciation creep. That creep is what comprises my margin of safety, because although I usually sell my options each quarter on the divvy run up, I like to know that I can safely hold them like I did this time if the price I want isn't bid. If I didn't think we were on an uptrend price-wise and didn't think BV would continue to grow I wouldn't buy AGNC calls.
What the 9 month linear regression of closing prices does is take our eyeballs and a few example prices out of describing what happened and shows a trend if there is one. You are correct that the SPO's are the flies in the ointment but the dividends are the diamonds in the ointment. The nine month linear regression line passes directly through the trading ranges of three of the four xd days that have occurred during the past nine months, the most recent fizzled divvy run up being the exception. For the one year price history the linear regression passes through four of the five xd day trading ranges (the most recent fizzle being the exception again) and the SPO selloffs deviate from the regression line to the downside by no more than the divvy run ups deviate from the regression line to the upside.
I'll put it your terms, you care about whether or not AGNC gets a fork stuck in it's eye over the next few months whereas I am very interested in whether AGNC has glaucoma. May we both make bank.
I believe that the cumm div PPS was depressed by market dynamics and maybe some short selling, although I don't have the numbers to back up that feeling.
Today's open should be a strong opportunity.
PS Your "range bound" reference makes you wonder. But no, I think the market underperformed management's desire, but there was still enough wriggle room at the close yesterday to create an accretive SPO.