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American Capital Agency Corp. Message Board

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  • hatedahft hatedahft Nov 17, 2012 9:21 AM Flag

    This week was a test

    I'd hold off on the victory parade because I think the shorts learned how easy it is to take down the Mreits. It makes me think they will be back.

    Sentiment: Hold

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    • Hey Hatedahft,

      Don't get swept away in the thinking that shorts had anything to do with last week. Go to shortsqueeze and note the volume of short interest this past week(under 4 million) which is the mean.

      Even at the 52 week highs in July at 12+ million, that would not have moved the dial much last week when roughly 75 million shares traded hands, from the weak hands to the strong. This was pure and simple panic selling, across the entire mReit sector. Great opportunity, which we might see again before the end of the year.



    • So will the longs. Good for traders.

    • They may be back. But once again we are reminded that the sector will trade around book value. Plus/minus. But there will be a reversion to the mean. So when you get #$%$ who say that they will buy one of the better ones (AGNC for instance) down 40%-50% from book value, that creates panic. But always keep in mind that these REITs are giant customers of wall street firms. Those firms lend these guys many billions of dollars. These same firms may let the sector get too cheap, like this week. But they will also issue buy recommendations when that happens. Wall street has no interest in seeing this sector go away. The emotion this week was very interesting to watch. A lot of weak hands got shaken out.

    • Since you are telling others what to do, you should hold off on the short parade, its figs like you that think the shorts have unlimited resources. The idiots and amateurs are selling and shorting. they will get buried when AGNC is trading back above $34 this year.

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