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  • garbonzo_123 garbonzo_123 Dec 9, 2012 1:13 PM Flag

    Getting back to making money with AGNC

    Doc –
    Do you really want to be making bets 6 months out with all that’s going on? I can see the possibility of BATSSATE (buy at $26 – sell at $28). Right now I’m just sitting on my Jan shotgun approach ($29s, $30s, $31s, $32s & $33s ((yuck))). Good luck to the longs.
    Best –

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    • Hey Garbonzo_123,

      It is a bet and I am in favor of it(giving long odds) for the following reasons. This is one of the longest, if not "the" longest time frames that AGNC has been trading 1.00+ dollars under book. What are the odds that will continue for 6 months. That is number one.

      Number two, look at the dividend tax horizon. Regular qualified dividends(15%) are going the way of the Dodo(extinct) which most likely will include a shift out of those stocks with qualified dividends, into stocks with whopping big dividends, whose dividends are already taxed as regular income, with consistent yield history(read AGNC).

      Three, if we do indeed go over the cliff(looking more likely as the cliff approaches, with the Dodos which should go extinct managing the same---topic for a different thread), look back at history(such as the debt ceiling crisis with the S&P downgrade of our debt, Aug 5th, 2011)

      PPS sunk, (same as recently with America's--but not Wall Street's-- hero getting re-elected). What happened a day later on Aug 8th, 2011, AGNC went from 29.82 high on Aug 5th to 26.35 low the next trading day(8th), only to rebound on the 9th to a 29.78 close. What a great opportunity. While the world was saying, "OH, NO!", the smart money made more money. That's because they knew they had a winner in AGNC.

      So, as most here know, I rely heavily on history. I have seen the chorus of nay-Sayers come out repeatedly on every pull back or crises we have been through for my over three years on this forum, and it is very predictable. Weeds come up in my lawn every Spring and I get out my hose(Long Calls) and weed killer(Short Puts) and hose the hell out of them(run to EX) and they disappear until the next Spring. My lawn is healthy(AGNC) and it always returns to a beautiful green(34+). Yes, history is no guarantee of future events, but it sure has worked so far for AGNC.

      And the weeds will poke out again(nay-Sayers), but I am right there with my spray bottle in hand...;-)


      Sentiment: Strong Buy

18.01+0.17(+0.95%)Nov 27 1:00 PMEST