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Chimera Investment Corporation Message Board

  • as23434 as23434 Aug 1, 2011 10:53 PM Flag

    Why should I buy CIM and not NLY


    Yes i know about the price difference, but can anyone give me 5 solid reasons to buy CIM and sell NLY?

    CIM seems to have a precarious position and its dividend is at risk.....NLY has the best mgmt of any REIT I have been involved with and they know how to navigate the waters.

    I want CIM to have a larger income stream, but i am nervous......intelligent replys only :)

    No position as of yet.

    This topic is deleted.
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    • you are ignoring a couple of facts

      1-CIM still has non-agency paper.. a LOT OF IT.

      2-non-agency paper is hard to price.. as i've said in other posts.. FIDAC has bet the house MANY times that they were getting a great deal by buying "discounted" non-agency paper that became WORTHLESS. Result? Stock price from $19 to $3.

      3-As i have explained a zillion times here, Book value changes daily.. because the non-agency paper is very volatile.. so the "book value" rhetoric is non-sense. Nobody knows for sure what CIM's book value is.

      I think the reason why CIM was sold off today was the conference call.. most institutional investors figured out the idiots in FIDAC still want to bet the house in non-agency paper again and will probably lose more money.

      CIM is a very risky stock to hold, unless you don't mind losing all your money.

    • The loss was not so big, book price did not fall much the last 12 months. And management did a great thing selling stock at 3.70+ prices. Would be much worse if they would be selling stock now. So the reason so much was sold at much higher prices is a good thing.

      The small loss they made selling non agency will pay off... Thery will by non agency again for less the price they sold and book value will increase once prices starts to move up again... Its just a matter of time and book value of CIM will increase to $4++ per stock, but you need patience and long term view.

    • Great move?
      If the move to agency paper was so great, how come they had a huge loss write-down last quarter??

      FIDAC "great move" to agency paper was made out of desperation, because they have been getting wiped out by bad paper losses for the last couple of years.. this is how CIM has gone from $19 to $3.

      Look at the plunge in CIM's stock price in the last year and compare the chart to NLY.

      CIM has lost over 30% in stock price last year..
      wow.. management is sure doing a great job

    • They made a great move last quarter to sell non agency paper and buying agency, now they can do the oposite and make a nice profit, and you are saying management is not doing a great job!?
      I am rating management based on what they have been doing the last 12 months, I dont care about the stuff they did before when they plumetted from 19. I gues a lot of people learned from the finnacial criseis, including CIM management, and since then they have been doing a great job. Read the conferece transcript. CIM is very well positioned, and lots of analistics are also agreeing on that!

    • CIM = down today to multi-year lows with the rest of the market tanks

      NLY = UP TODAY while the rest of the market tanks

      do you need more reasons?

    • I would buy KMM or GABUX instead unless you are dead set on buying a REIT.. and if you are I would look at ARR and NLY. CIM's NAV seems to really take a beating, I would think that a dividend cut isn't too far away.

      Good luck

    • I own CIM, ARR, and CYS. CIM has the flexibility to sell agency paper when it is overpriced to invest in non-agency paper when it is attractive...

    • Split your funds and both them both.

    • 1. NLY maintain ownership of all of CIM's share offerings, each time some 5%.
      2. NLY management oversees CIM's operations. Unknown what is going on there, but long term I believe NLY may be positioned for a huge opportunity in its market expansion---not to know.
      3. I own both CIM and NLY 4:1 ratio, holding losses, except recently in NLY.
      4. I am to guess that both NLY and CIM should report higher expectations for earnings this last reporting quarter.
      5. Any stocks support over a 10% yield as strong as NLY and CIM pay back losses over time to pay 14%!
      I think that both do well, but I really do not know. If I like NLY, I have to like CIM for the above reasons; knowingly, to be at risk if CIM does not have a reverse split and both do not change payment to monthly dividends.
      Economy in new recession needs for the housing to turn around, in which lower priced value of houses hurt the household, therefore 15 million owe more than the house is worth. I could not find supporting data to back up other postings comments that a lot of the kind of paper held by CIM or NLY can be determined to view the kinds of paper they hold. 14% of GPD vs. 19% standard, needs a prop up to go after spending in the tax code, should help.
      I think that however, these quarter reports today should meet or beat expectations.

      • 1 Reply to tommustric
      • FACT....You always owe more than the House is worth , always Have. It is a falsehood that buying is Prosperous. When you add the interest & taxes, etc over 15 to 30 years Amortization,you have PAID DOUBLE or TRIPLE your initial Investment. The IRS subsidizes it w/ Tax write off's but you only Re-Cap by your Tax rate, ie.. 25 cents on the dollar Tax reduction. It's the new way of Financing Mortgages and Valueing the EQUITY in the Home that Puts the Book Value up front & at risk for NLY & CIM.

    • Right now, I have CIM, but I wish I had some CIM and some NLY. The difference, as I guess you know, is that CIM has very little leverage, but has credit risk because it has largely non-agency mortgages, while NLY has leverage, but less credit risk, since it has agency backed mortgages. CIM's non-agency mortgages are on the books at much less than face value.

      If and when the economy gets better and house prices pick up, the (currently heavily discounted) paper held by CIM will go up in value. So, at some point, maybe, CIM would be better than NLY because of this potential increase in the value of the underlying assets. At the moment, however, the assets may be dropping in value, so it is working against CIM.

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