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American Capital Mortgage Investment Corp. Message Board

  • instantwinbutton instantwinbutton Jul 5, 2013 11:11 AM Flag

    Writing to inform of position change

    i have completed a full swap of 21500 shares of mtge to WMC. I hold 21500 wmc now. It was a valuation call, wmc is down roughly 3% more and wmc holds over 940m of swaptions as of Q1, and i'm sure that number has grown in Q2. So when you look at future book value projections - where we are going from here... The market is saying book dropped by 10% today and I do not agree with that assessment. mbs and treasuries are down together and when you look at swaps today.. that volatility is very high.. so swaptions have been the best hedge. The swap was completed at a 1.05 spread.

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    • Thanks for sharing, but I think their prices to current BV are within a few percent of each other today. The difference is certainly nothing worth realizing a loss over.

      EFC is what really sold off unjustifiably today, although the move was much smaller. It was unjustified because EFC's short TBA position has been making serious coin lately. I bought AGNC, MTGE, and EFC today. WMC is perhaps a better value than EFC today, but EFC is a bit of a different animal than AGNC and WMC and I like the slight diversification that EFC adds to my income stream. EFC is a brand new position and I already own some WMC.

      Those are my moves today, again thanks for sharing yours.

    • So how much did you lose on MTGE? You would have been a lot better off staying in PSEC, rather than going into the mREITs (which you pumped significantly). There still is a lot of risk in the mREITs as rates continue up. Your analysis of the rate future has been wrong so far, and the market is saying that you are wrong as to the future. You should cut your losses and stay out of the market totally until the rates truly stabilize. JMO.

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