Not doubting you - but could you please let us know the EXACT date when Yellen said/or backed up the commitment to "FED will concentrate on new strategy to return wealth to those whose wealth was decimated by the FED's policy the last 4 years".
He did time the SELLING of MREITs correctly at least - he should have used that money to buy the S&P - but if he did all the right moves - he would be billionaire by now. Wouldn't he ? That's why it will take him up to next decade to become a billionaire. Ha ha ha !.
Message Board postings SHOULD NOT be used to figure out whether and when a stock should be bought. It SHOULD be used for getting additional info/something being pointed out that you might have overlooked. Another point of view is always useful - after all NOBODY is super smart. Otherwise - we all would be very rich by now.
If I could say the bottom, I would be very very rich by now. But one thing to keep in mind ( in all this excitement about bounce back ) is that MANAGEMENT of all MReits ( especially AGNC ) is buying back their stock ( thus supporting the stock price ) when they are selling at a 10% or more discount to BV. The big question is - HOW LONG can they KEEP DOING it ? It takes a small matter of a thing called CASH to do that after all !
So I would try to NOT get TOO EXCITED about these bounce backs. I would rather keep a close eye on the earnings and interest rates and MBS prices - just my 2 cents.
Good point Mrs Bonehead, but if you use your bonehead, you will see that the dividend then dropped like a rock from 35 to 10 and in the next quarter stabilized at 10. So even before the market had time to FULLY adjust to the DIVIDEND DROP( NLY had already dropped from about 19 to 11 - how much more drop can one expect in 6 months anyway ? ), the dividend had stabilized. But this is like water torture - and will continue ? Who knows.
Anyway - my advice to you is grab all the NLY shares you can get hold of with your two hands on Monday.
Current divy being 30c, will HISTORY REPEAT ITSELF - or this is it.
When dividends came down at various points in the last 3 years, this is what people said -
75c to 65 - NOT as BAD as expected
65 to 60 - NOT as BAD as expected
60 to 55 - NOT as BAD as expected
55 to 50 - NOT as BAD as expected
50 to 45 - NOT as BAD as expected
45 to 40 - NOT as BAD as expected
40 to 35 - NOT as BAD as expected
and now 35 - 30 - you guessed it, ding, ding, ding - NOT as BAD as expected
Let's retire it and find some other cliché.
I think, the market is expecting things to be STABLE starting coming earnings season. So that bit of good news is already BAKED into the price. What if the good news does NOT happen. The way interest rates are being whip-sawed, it is difficult for any MREIT CEO. One thing is clear, whatever happens - further interest rate rise or a fall - will happen VERY QUICKLY. This environment is just causing MREITS to WASTE their resources on HEDGING. BAD BAD environment the FED has created for MREITS.
It bounced off the previous low set in 2012, but I think its new range is 3.5 to 4.00 for the next 12 months if interest rates stays here. Let' see.
Going by history - they change dividend only about once in 12 months. So we are stuck with this dividend for next 12 months.
Dividend has been cut. So don't get too excited about this price drop. It is probably now sitting very close to the high-end of its range for the next 12 months.
25 million shares short , avg daily vol = 12 mil. It will take 2 - 5 days to cover.
a) What really matters ( for MREITS ) is not the 10-year, but the price of the MBS. Then MBS prices DID NOT BUDGE.
b) Why MBS prices did not budge then ? Because the ECONOMY was doing bad, Europe was in turmoil - so no one really THOUGHT that that the ECONOMY could sustain a 3.6% 10yr - which turned out to be true.
c)This UPTREND in interest rates, the MARKET ( not you or I - we are inconsequential, I believe 2.75% is tops, doesn't matter.) BELIEVES in and IT thinks will continue till 3.25% - 3.5% and much MORE IMPORTANTLY - STAY THERE. MBS prices have also taken note AND have come down hurting MREITs.
You can ONLY hedge UNCERTAINTY. You CANNOT hedge CERTAINTY. If the market determines that rates are going to certain limit, you CANNOT hedge that - or the hedge will cost you a lot. In todays' age of Social Media, market has come to some kind of conclusion what the 10-yr will be for the next 2-3 years. Will a insurance company insure a DYING patient on deathbed.
I don't think in this environment the shorts will cover SO FAR ahead - I mean there are still 3 weeks to go.
Most important question to ask is - hedged against WHAT ? A 3% rate, 3.5%, 4% ? The devil is always in the details.
What consequence is it of for an Chairman/CEO making probably a million every months to buy $1 milIion worth of stock. All this 10K shares purchased etc. - those are useless. What % of co-CIO's salary did it take to buy them ? For the most part - ignore insider buying/selling.