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Newcastle Investment Corp. Message Board

  • megansdad246 megansdad246 Oct 2, 2009 11:04 AM Flag

    selloff is irrational, but what's new

    The worst secret in america was that NCT was going to retain capital, and the preferreds and common get mauled? Preferreds back to enticing levels when factoring accumulated divvies, fwiw, I can see a 20% move in short term, higher.

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    • "very few of them are paying dividends"
      I've been holding RSO for just over a year. I'm not a big investor. Only 800 shares, but their conference callls are continuely encouraging and they announced another .30 divy about a month ago. Of course the staock ran up from 2-3 up to 5-6. Still a nice return. Been reinvesting the divys back into it. In the mean time I rode NCT from 18 from when I was just starting out. Holding on for the long term future 28 yrs till I retire. Well see.

    • I forgot to list LVS, this one should come good quicker than most.

    • SFI, CT, ABR, GKK, NCT, most of the other mortgage reits. They are all priced for plenty of distress, have had big quarterly impairments and loss reserves, very few of them are paying dividends. Highly speculative stocks, priced accordingly.

    • Can I ask what stocks you are following?

    • Thank you and good luck with the shares.

    • Here is what I am keeping an eye on right now:

      AMFI -- Should make it, but had to sell some banks to get the cash on the balance sheet
      PMI -- They have enough cash on hand to make it through mid-way next year, then they ned to generate some cash flow, but they will write 10 billion in new loans this year, so most people are betting they will come good
      AHD -- Energy transmission, just started looking at this
      CHB -- This one is really speculative, they may not make it, but if they do, you will make a mint. Problem is, they are modular builders and they busy time just passed, so they have a long hard winter ahead of them

      If you want blue chips, AA. There is a glut of aluminum on the market, but when the market picks up, so will the prices and they will get back to 45 a share. Also, BAC, they should get back to 55 a share and more with the mortgage acquisition.

    • What else do you own currently? Anything interesting to check out?

    • A selloff based solely on the 'retaining capital' release would indeed be irrational, in and of itself, considering any informed investor should have known this to be the fate, however, consider:

      1) The common, and preferreds, have rallied strongly - preferred up 100%+, common up 300%+, in the past couple months.

      2) Much of the buying in the commons was short-term day traders, who jumped onboard a high volume, high percentage moving stock, exacerbating the rise.

      3) There were actually some investors, judging by posts on this board, who thought there was a serious chance of dividend reinstatement this quarter.

      • 1 Reply to cubemeister2001
      • Without question many folks in NCT are both day traders and long terms traders. I know I am since the price swings are just to wild and predictable not to day trade it.

        I sold out last week in two batches capturing most of the highs, and came very close to buying back in today as I watched it hit $2.10, but my gut is saying the market has to test the July lows before heading higher, and NCT could be back to the $1.20 - $1.60 range soon enough.

        Fortunately earnings season is around the corner which will quickly set some direction, but I believe the correction downward will continue until Alcoa sets the stage.

        In the meantime I am sitting on 70% cash, just in case earnings season is a huge disappointment and we revisit the march lows.

        Personally I actually hope it does happen so I can enjoy the ride back up again.

        Side note: Peter you should do like to play in the riskiest stocks out there. I hope they don't represent the majority of your portfolio.


    • We had to skae out some poor investors, but that is easy for me to say as I am in at .88 cents, so the drop never got close to me. I think we can now build on this and get into the $3-4 area by cc.

      • 3 Replies to peter_scott10
      • I don't think it is a shake out of the poor investor. I sold most of mine (only 12,000 - nothing like yours) but was glad I got out at $3.64/share. Just wanted to take some profit from the nice 130% gain in two weeks! Glad to see it dropping so I can get back in. Certainly a volatile stock that you will need to take profit when you can. Good luck - you know you will do well in the long run as long as you are patient.

      • <<Well, my luck stikes again. I margined 30,000 shares this morning, so it is my fault that the stock went down.>>

        The quote above is from you the morning of September 23 when you margined 30,000 shares probably at $3.50 a share or higher. The stock price moved pretty much straight down from that time. You keep indicating that you are in at $0.88/sh., does that include the 30,000 shares margined at over a $1/sh. higher? Or did you take the hit and now are boasting about your low entry point for whatever remaining shares you hold?

      • I'll bet that the idiot who sold 52,875 shares @2.12 three minutes after the open is not too happy. Since that sale seemed to start the bloodbath, I hope he has many more stupid moves that cost money in the future.
        Nobody in their right mind expected the div to be reinstated in this economy. If they're using the funds for something that is accretive in the near term, we'll see the price bounce as we get closer to earnings.

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