Reding the interview with Bill Miller in Smart Money--famed for beating the S&P 14 years in a row I am reminded that he said the time to buy is wnhen people are selling and the time to sell is when people are buying. That in genral people make the move about 2 years too late.
Right now is a good time to buy NLY at a discount. It has been extremely conservatively and well managed and the flattening of the curve lowered the return for the time being. Waiting for the curve to become steeper is waiting to buy it at a higher price. Eventually this abnormally flat curve will almost surely evaporate
Stock will be under pressure for more 5-10 days . At current price and dividend the yield is too low to reward the risk. Don't forget that managemnet said short term will be tough, suggesting one or two more weak quarters. Why buy now if there are big chances of further decline in the next few days? Buy at 16 and hold. At current levels there will be a lot of sellers this week.
I agree with your assessment that the stock will be under pressure in the near-term. I also would snap up more shares at 16 should we drop to those levels. However, I wouldn't be selling at these prices either. The long-term outlook is still fantastic and the dividend albeit smaller is still exceptional considering the stable stock price.
NLY management is doing the right thing--they're adjusting to a changing market. With any adjustment comes growing pains but IMHO, they're one-step ahead of the game and I trust them with my money.