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American Capital Agency Corp. Message Board

  • therightstuffer therightstuffer Dec 14, 2012 11:50 PM Flag


    When cys announced its div last week the market was giddy and pushed the price up. Ever since then the price has been declining. Don't be shocked if the same thing happens to agnc.

    but i love the gloom and doomers who predicted a div cut. They were sooooo confident that it would happen and wow were they wrong.

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    • IMO CYS has been getting hit because it cut the 'regular' dividend by $.05. I believe the mkt would have reacted better if they'd kept the dividend @.$45 and dropped the $.52 'special' dividend by $.05. I think there's also some confusion about where that special dividend is coming from; I don't believe they previously reported having a pile of excess cash or undistributed taxable income (like AGNC reports every qtr - so the thinking is that they sold a bunch of appreciated MBS and that they are paying it out now - thereby diminishing spread and/or cap gain income in the future.

      AGNC is playin the 'predictable' earnings and dividend card and they are very transparent in their reporting and disclosures.

    • yourbestfriendintheworld yourbestfriendintheworld Dec 15, 2012 1:30 PM Flag

      the AH action in AGNC has moved it back to a dime above my overall net BE, and I'm going to set a trigger there. I'll close out for $0 if it happens, then go hard into a straddle and dare it to move up or down.

      come to think of it i may wrap the straddle in a short strangle to make a short iron butterfly. that would cut my entry debit and my risk, bring my BE points in closer, and limit my max at a level we probably won't reach so having a limit there won't hurt at all...

      that'd be some fun, but i really hope we don't dip back to my BE. i need to get a dollar more out of everything from here.

      • 1 Reply to yourbestfriendintheworld
      • YBF,

        "" I'll close out for $0 if it happens, then go hard into a straddle and dare it to move up or down."""

        You must be weary from the journey. This is the fourth quarter, last four downs(not literally), and you are bailing as the fans are rising to their feet. From your post, I assume this is a short straddle you are planning, yes?( Short Iron Butterfly). If you are lucky you will get a dollar credit, no?

        If the stock moves more than a dollar in five days you lose more money. The line backer has the ball. We just have to get around that 400 lb full back(FC...he's slow...;-)).

        Good luck in any event...


        Strong, strong, strong BUY!!

        Sentiment: Strong Buy

    • I think you may be right Stuffer. Although CYS might not be AGNC, the entire sector is in the hands of the shorts right now. AGNC just got pummeled the last three days and I certainly see this #$%$ happening again in Q1. However it may start Monday afternoon. We shall see.

      The real question is how low will the market take these things. It has been interesting watching NLY and ARR as they are trading around the 85% of BV level. It is very difficult for me to accept that BV does not mean anything anymore. Unfortunately, the market is trying very hard to convince me that I am wrong.

      Sentiment: Hold

    • Hey TRS,

      For CYS...that's the fourth(4) regular dividend cut(to .40) from June 2011(.60). AGNC has had one. I know it can still get nasty for a number of reasons, but AGNC is not even close to a CYS.



      Sentiment: Strong Buy

    • I hope that the same does not happen to AGNC, that would be so messed up. If they announced the dividend and the stock begins plunging back down to $30pps next week...SMH : ( May the Lord Almighty forbid such an scenario.

      Sentiment: Strong Buy

      • 2 Replies to xionrevolutions
      • Even though cys cut their div to .40 they also declared a special of .52. I'd say that made up for the cuts. The market loved it for a few days and then the gloom and doomers started selling.

        the fact is that the market still doesn't believe in these mreit's. Every time the tresuries sell off the naysayers get on the "rising interest rate" bandwagon and down go the mreit's. Now the bears are attacking arr and warning everyone that arr will cut their div too. I hope arr does the same thing as agnc and maintains their div. The bears might finally shut up.

      • Pray for the nerds in dc to get their act together on the fiscal cliff. We're trading them right now.

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