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Chimera Investment Corporation Message Board

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  • revenant_08 revenant_08 Oct 3, 2011 12:36 PM Flag

    CIM headed for bankruptcy?

    Bankruptcy is NOT defined as: "the share price reaches zero".

    Bankruptcy will usually (not always) cause the price to go to zero, but not the other way around.
    Separate cause and effect here.

    If you really do mean: "Panic selling by a horde of morons has ruined this mREIT."

    Then, the thing to do right now is one of:
    a) Hold, and get the dividends every quarter. They are NOT influenced by the share price at all. (only the yield percentage is influenced by this)
    b) Wait till it hits an eventual bottom and then buy as much as you can comfortably handle.
    c) Buy a little more (with the dividend money every quarter?) so as to average down your cost.
    d) maybe buy some call options instead - you need to have some idea of the recovery time-line in this case.

    What NOT to do - if you believe that statement above - is:
    a) Sell now, lock in your losses, and run away.

    If, on the other hand, you think that there may be some other reasons to the share price drop, and that they just might continue, then selling now might be the right thing to do.

    Either way, decide for yourself, based on available evidence what you think is going to happen to the stock.

    Be brave, not a sheep, and follow through on the appropriate course of action.

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    • You have posted a very good message. Not too many are of this quality.

    • There aren't going to BE future dividends, haven't you been paying attention?!?!Bottom= delisting and pink sheets, virtually impossible to trade at that point, and there aren't going to be any future dividends because they aren't going to ever make any money again. Operation Twist and the deleverage due to SEC scrutiny will make these companies brokE! No hope no future!

      • 1 Reply to a0002604
      • I was not aware that the all-knowing GOD posted on this message board.
        If I had been, I would have been putting more weight on HIS posts.

        Your opinion, and you are welcome to it, does not automatically make you right.
        (Unless, of course, you are GOD)
        And even if you are right - about a future event - it does not automatically mean that anybody who disagrees is not paying attention.
        (Even if you are GOD)
        The fact that you feel that way, though, shows me pretty clearly that you are not GOD, so we can dispense with that theoretical hypothesis.

        If you are so very sure that there will not be future dividends, would you be willing to wager on it?
        Set a time-frame - say 5 years?
        Since you are absolutely convinced you are right - why else would you make such an emphatic response - you should be willing to accept any odds.
        I will not take undue advantage of that, I would settle for 1,000,000 to 1.

        I will take that action for $100.00 of my money. That means you put up $100M
        There, you have a certain gain of $100.00 - if you take the wager.
        Are we on?

        P.S. I did not state that there would be dividends. I said that "if the poster believed his statement" (implied is that he would expect dividends) and "the dividends are NOT dependent on the share price".
        If the company is profitable, and yet is delisted, even goes to zero price, they would still be obligated (and likely would) pay out the dividends if they wished to remain in the same tax category.
        Therefore - were you paying attention? - the dividend is not dependent on the share price, but rather the profitability of the company.

        Again - separate cause and effect.

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