The new crop of Mortgage REIT's generally had one of three investment strategies, with some overlap amongst the three: those modeled primarily after Annaly Capital Management (Cypress Sharpridge & Invesco), those that primarily acquire, originate and manage mortgages (e.g. Colony Financial, Apollo) and those that primarily target distressed debt with the intent to workout (e.g. PennyMac). But I believe over the past 5 years a new mortgage REIT category has emerged on a rather Extreme Strategy those that tried to corned the market in 30 year Fixed rate Agency at record low interest rates of 3% and 3.5% and finance it with variable rate very short maturity debt and leverage this strategy 8 and 10 to one. This is a rare breed of M-REIT and indeed a very EXTREME STRATEGY. I base my proposition that they loaded up and borrowed to the hilt to maximize buying a much as they could at the highest prices and lowest yields.
THIS IS THE EASIEST SHORT ON THE NYSE TODAY at $22.75 to $23.00, how can you loose with a portfolio and strategy like that. THIS IS A NO BRAINER.