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American Capital Agency Corp. Message Board

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  • robert_jdelaney robert_jdelaney Nov 9, 2012 8:55 AM Flag


    Hi xx, same here- I hold April 5.00 calls. I should have stuck to my original thoughts about getting back in mid November but eh- such is life.
    I think the spread compression is making people bail and sell in droves- regardless of the results for the previous quarter- they are looking ahead and believing the divi will shrink

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    • I think the market will ultimately price in a 10% to 15% dividend reduction. Currently NLY is at 90% of book, CYS at 86% of book, and ARR is at 88% of book, WMC is at 92% of book. The agency reits will be hit harder. I think the reit sector as a whole will continue down another ~5%. I took my $8,000 loss and fled to PSEC where I am down $4,300 on 8,700 shares. I don't understand why PSEC would trade at a 5% discount to book as it is a BDC with good earnings. Any thoughts on PSEC? I would be careful with reits right now. I may buy some reits in December to get some of the ex date run up, but now seems to be a bad time to be holding on to this sector IMHO.

      • 1 Reply to iokuok007
      • iokuok007, part of me wants to think some of this is a knee jerk reaction to
        1) NLY's bad earnings hurt the sector
        2) Obama won which hurt the sector
        3) Market in general took a pounding so your gonna get some sell off in general

        Usually there is a lull / sell off sometime after ex.
        But the big question is weather we will get a run up again for the ex.

        I'm also not expecting things to go to like 10% OVER book.

        But I wouldn't be surprised if some of the stronger players in the market get back to book or close to book.

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