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Chimera Investment Corporation Message Board

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  • colorado_dude4u colorado_dude4u Apr 7, 2011 12:45 PM Flag

    CIM - risky stock?

    Actually risk here isn't that great but there's no growth. The pay out is significant but not enough to get institutions to invest. Income funds might nibble at this but it's pretty late in the cycle. They want hybrid (growth/income) in their portfolios and the high yield here doesn't offset the fact there's no growth.

    They will pick an AT&T or MO over this because they know those will pay out forever and have decades of steady payout history. Income funds aren't very nimble and take very long positions in a large part of their portfolio. A review of top income funds doesn't show any of them have this. A few have NLY and AGNC which outrank this in many aspects.

    But in this market it doesn't make sense to start a position in this.

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