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THORNBURG MTG INC Message Board

  • dgdupriest dgdupriest Apr 23, 2004 12:31 PM Flag

    Yield -vs- Fed

    TMA data from Yahoo tables:
    AVG> ..... Price ..... Div ...... Yield ...... Fed Rate
    2003___$23.55__$2.49__10.57%___1.10%
    2002___$19.60__$2.28__11.64%___1.62%
    2001___$14.42__$2.00__13.87%___3.77%
    2000____$8.36__$1.17__13.99%___6.27%
    1999____$8.08__$0.92__10.13%___5.04%
    >>>>>>5-Year Avg Yield = 12.04%

    Changes in the Fed Rate stabilize the underlying economy, where quality companies like TMA can expect continued slow growth. It�s why the Fed exists, and is reflected in TMA�s (and other stocks) consistent average Yield. Evidently, TMA targets a yield of about 11-12% for budget planning � does anyone know their �target� for sure?

    The Fed will likely raise the rate a little to slow the hot economy, but wait for several more months to confirm continued good jobs growth. The election date is probably NOT a factor in their decision when to make a rate change.

    Based on the data, might I suggest watching YIELD, not PRICE:
    Yield < 10% � HOLD
    Yield > 10% � BUY
    Yield > 11% � STRONG BUY
    Yield > 12% � NO BRAINER

    The best recent opportunity was on 13 Apr when the Price was $22.75 = Yield of 11.43%
    Today�s current Price is $26.61 = Yield of 9.88% still a great return, depending on goals.

    (Note that Political party is not a factor)
    Buy for YIELD and Hold for DIVIDENDS.
    Keep your eye on the prize.

    ===============================
    YAHOO would make life simpler if they had a chart for YIELD vs Fed Rate
    ===============================

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    • Wow! What a great table to share with us. Thank you! In fact, this is a fantastic board. I just read over 20 posts and noone bashed or cursed anybody and every post had a helpful opinion. Compared to the clutter and nonsense on the NFI board I am starting a new investment strategy: I am only buying/holding stocks where I can find boards that make a lot of sense from the majority of posters. If I kept to that rule, I wouldnt have bought back NFI at 65 with all the "noise" going on there. In fact I find that whenever a stock is moving with great momentum and nobody on the board can really explain why, its time to leave! Thanks guys for all the great advice.

      I always felt that the people buying stock were suckers and the ones selling it to them were always the smart ones but at least here there is some unity and intelligence amongst the buyers. Great board! I feel much more confident in holding onto my reit's after hearing from you guys. As well, i own a few canroys and the posts I read on the APA yahoo board is going to cause me to buy some of that great oil co tomorrow as well.

      be well everyone!

    • test

    • Insider purchases announced today, indicate a strong confidence by management in TMA's future.

 

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