For those interested in trading AGNC (as opposed to buy & hold) and worship at the BATESAT shrine, you don't necessarily have to bite your nails waiting for the price to hit 28.50 or 29.00. There are some interesting alternatives out there with a huge money making potential. I've been watching Energy (XLF LINE), Healthcare (HCP), Telcom (WIN), Banking (BAC), Metals (GLD SLV), Food (BGS), and a few others.
Bottom fishers might want to take a close look at Bank of America (BAC) beaten down 60% YTD. In sharp contrast to BAC, B&G Foods has had a terrific run, up a whopping 50% YTD. I think B&G Foods (BGS) would be great for the long term provided the price settles back down to Earth and a good entry point materializes. I think I would buy B&G before even thinking about P&G as a defensive stock.
But something that can be bought right now that is boldly flashing on the RADAR screen is BlackRock Energy & Resources (BGR). Over the past two quarters, BGR is down nearly 20% and is selling at 8.98% discount to NAV. And as we know, energy, metals, and some other commodities have a tendency to trade within ranges.
I just bought a tad of 2big2fail bonds today, I bought some ISF and IND for ~9.8% yield. 2big2fail worked out great for Dexia bondholders last month and if push comes to shove I'm sure ING would get bailed out (again).
Today's swap line increase is exporting Fed QE to the world, I expect 2big2fail European bank bonds to rally on the news. In crisis I like to climb the capital structure into bonds. The most likely outcome IMO is a 25% total return within 6 months. I haven't traded ING baby bonds for years and if the five central banks hadn't stepped in to take QE global today I would have let these fall to $14 before buying.
Back on the AGNC topic, the swap line increase is an increase in the size of the Fed's balance sheet. The Fed must someday decrease the size of it's bloated balance sheet b4 raising the federal funds rate, so the swap line increase indicates that the Fed will be on hold even longer. Perhaps 2015 until a Federal Fends Rate increase. That's bullish for mREIT earnings.
I am not sure I would risk it with BAC. When Buffet invests nowadays, he buys preferred stock with div higher than anything common stock will ever pay. Look at how GS been doing since they took Buffet's money (not that they didn't have other problems going for them). But the point stands. He puts money in, but subsequently takes out more than the common share holders can. This has quite an effect on BAC's future earnings.
Actually the main fear for BAC is that the lawsuits with put the company into bankruptcy.
That won't happen. Buffet doesn't put his money into companies near bankruptcy. Keep in mind, in an bankruptcy, preferred shares may be ahead of common shares, but they are behind bonds and would get wiped out.
BAC is a big gamble. If we have a republican president we may very well see a big rise in BAC ala 2009. (3 to 19)
And yes I am a BAC bagholder. I bought BAC before that idiot Lewis bought Countrywide and Merrill...
But as we all know, they march their own path. We trade this because we know it will be around 29.50-30.00 by ex div. You think you know what X will trade at by the end of December? If you do, go trade there and stop whining. But if you don't trade there but here (smart if you want to have a relaxed way of life), then stop complaining and enjoy the fact that, barring any crazy stuff happening, we know we will either get 1 big trade, or 3 trades (selling at 28.90 and then will go down to 28.50's and sell at 29.25 and then buy at 29.00 until 29.80's). Good Luck
Hi porkus, Thanks for sharing your picks. Knowing what you know now would you buy any of those in Dec 2007? Unlike housing, energy prices have completely recovered from the Great Recession. Energy stocks aren't what I will ride into the incipient Euro zone breakup/bank failure crisis. I will certainly tune back in to your picks on the far side of that crisis though so your sharing them is still appreciated. In particular I may trade some of BGR's holdings like NOV when it gets down below $40 again in the next crisis.
i agree on WIN and BAC , had them both but sold out already , going to more cash besides AGNC , T , PPL and a new one i like alot QCOR , just started on this one, maintaining what i already have but cutting way back on new purchases , trying to stay mostly cash right now , market is so messed up
also sold out of TEF , and SPY , see what happens after holidays are over
even dumped my GLD !! cash is king , at least 80-20 king