American Capital Agency Corp. Message Board
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I think there is simply unfounded panic. Pure and simple
Typical herd mentality. If you're in it for the divvy then just sit or buy more. But if you sell simply because everyone else is selling and you don't know why, I would just sit and stop looking at it.
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Unfortunately your wrong. The Feds are spending 45 billion a month to buy Mortgage backed Securities. This is lowering the spread. Mreits will be worth less because they will be making less and paying less dividends. I wish I was wrong but I'm not.
- 3 Replies to ahotride
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Which means they can sell their assets at a great profit over current valuation. They should all be selling holdings and buying back stock right now. This is a gift like no other and if done correctly will greatly increase shareholder value.
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So the Fed is in buying MBS. Take AGNC for example. On 9/30 I believe their BV was around $32.60. With the Fed continuing to buy, their BV should be roughly the same. So right now it's trading at almost a 12% discount to BV. Explain to me (I sincerely ask becaise I don't get it) why, in an effectively zero rate environment with the 10yr yielding 1.59, why should any of these REITs trade at a discount to BV. Sure they will buy back stock which is what they should be doing. But any of these REITs could sell into a very deep and strong Fed bid, delever and reap that discount to BV for us remaining shareholders. I am missing something but have no idea what.
Sentiment: Strong Buy
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Believe me, I've read all the Seeking Alpha articles too.
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agree, throwing the baby out with the bathwater. senseless selling is caused by panic. people are indeed fickle creatures. Fear causes them to do stupid, senseless things. when you are in the heat of the moment, you freak out. and I have yet to have a situation where I panicked be a good thing for me. not buying much, buy I surely am not selling.
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thats it in a nutshell. I can rather comfortably say I am down nearly $7000 on my basket of stocks in the last 4 weeks. The consolation to that: they are all healthy companies with modest to high div yields.
- 1 Reply to simpleawright
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I am down 45000USD in 1 week. You are a lucky man. I will fly in economy class next time.shxx !
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