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Anthracite Capital, Inc. Message Board

  • a_hister a_hister Mar 12, 2000 9:53 AM Flag

    take advantage of the price movements

    I've been averaging down on the dips and selling
    off my higher priced shares on the upswings, with
    just enough profit to cover commissions. Not really
    making any money, just improving unrealized gain/loss,
    the part you don't pay taxes on. Right now I have the
    same number of shares I started with, but have lowered
    my average cost. Improves the yield on dividends
    too!

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    • Your strategy makes sense only if you expect the
      stock to trade in a narrow range and generally not to
      shoot up. This is, of course, what I expect. Almost
      nobody understands what AHR does and no one is going to
      find what they do sexy enough to run up the price.


      On the other hand, if you think of AHR as the
      equivlent of a fixed income security with a quality akin to
      that of a junk bond you'll realize that the
      risk/reward profile on the basis of income alone (ie,
      ignoring gain potential) this stock is a screaming buy. It
      seems to me that the dividend rate is at least 300 bps
      (3.00%) (maybe more) higher than anything with comparable
      risk.

      • 1 Reply to davidnirenberg
      • Actually my overall strategy is structured and
        has me systematically selling off shares as the price
        moves up, as well as averaging down on dips. Obviously
        you would make more money by buying all your shares
        at the bottom of dips and selling them at price
        peaks, but I've never been able to pick tops or bottoms
        with any degree of accuracy. I don't know of anyone
        else that can do this either. So I devised this
        strategy to automatically take advantage of the up and
        down movements of stock prices. I prefer it to
        guessing or just riding a stock up and down.

        BTW I
        disagree with your comparison of AHR to a junk
        bond.

        Good luck to AHR longs!