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Walter Investment Management Corp. Message Board

abccoll123 128 posts  |  Last Activity: Jan 2, 2016 7:17 PM Member since: Sep 18, 2008
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  • abccoll123 abccoll123 Jan 2, 2016 7:17 PM Flag

    And Especially since Fed Rate hike seems to have FLATTENED the YIELD CURVE.

  • In 2014, my MReit ETF characterized 4c out of 10c distribution ( for each dollar of investment or NAV ) as Return OF Capital ( ROC) - different from Return ON Capital. My understanding is that - it means, in 2015 the Mreits had 4c less capital to invest - and with an avg leverage of 5:1, that means 20c less to invest out of each dollar of NAV - is that true ? Which means, interest income by the MReit will be 20/100 = 1/5 lower - all things being equal. If MReits want to maintain same distribution, they will have to distribute even MORE as ROC - which means even less capital next year. Looks like a SLIPPERY SLOPE to me. DR Klumps or any MReit expert - is my math wrong ?

  • Reply to

    .30 cents announced

    by hillsdale89 Dec 17, 2015 4:14 PM
    abccoll123 abccoll123 Dec 21, 2015 8:02 PM Flag

    Only in Feb 2016, when the 1099's are sent, will people know how much of it is just RETURN of CAPITAL ( different from Return ON Capital ). In 2014 - ROC was 20% - what will 2015 bring ? Feb 2016 we will know.

  • Couldn't find that info on their website. Does your 1099 state any Return of Capital for AGNC.

  • In March, the 2014 1099 said 20% of "so-called" dividend is actually Return of Capital ( ROC ). In August, they revised that to 40%. Wonder what 2015 will bring ! Since REM is just a pass-through entity - which means underlying MReits are eating into their PRINCIPAL to pay us. Anybody has any comments ?

  • Last year, almost 20% of my MREIT ETF's distribution was actually worthless Return OF Capital ( ROC ) - and NOT dividend or capital gains. Which I found out only in Feb this year once I received the 1099. That's TOO late a disclosure for me.

    REITs were notorious for giving ROC, looks like MREITs too have picked up the habit.

    SEC needs to do something to force these dividend payers ( the MREITS and REITS ) to disclose this at the time of paying dividend ( or a quarter later ) - not thru 1099 a year later. It hurts the SMALL INVESTORs badly who are NOT SAVVY enough to GUESS that their current dividend probably has a lot of worthless ROC.

  • Reply to

    Book value is $13.10.

    by serpentine290 Apr 23, 2015 6:51 PM
    abccoll123 abccoll123 Apr 25, 2015 11:28 AM Flag

    Another reason could be that investors have - after opening their 1099's - found out that 20% of the distribution was actually NOT DIVIDEND - but just Return OF Capital ( not return ON capital ).

    My MREIT ETF gave same ROC last year - which means almost all MREITs are in the same boat.

  • Reply to

    VERY BAD STOCK

    by gqgerb Apr 21, 2015 3:21 PM
    abccoll123 abccoll123 Apr 25, 2015 11:21 AM Flag

    I think once the 1099's arrived and people opened it ( FINALLY ) and realized that out of that $1.20, ONLY 96 cents was actual dividend and rest was Return OF Capital (ROC), people did not like it.
    With 96 cents being the REAL dividend ( NOT $1.20 ), it means current REAL YIELD is 9.3%. With NLY - what I have seen over the last 4-5 years is that investors like a yield of 11%. For that, NLY needs to come down to $8.75. For a 10% yield, it needs to come down to $9.60.

    S&P looking more attractive on a after-tax basis. NOT chasing NLY at current price.

    I own a MREIT ETF - that too showed a ROC of almost 20%. So it is NOT just NLY - almost all MREITs are afflicted by this. Nowhere to hide in MREIT world.

    REITs were notorious for giving ROC, looks like MREITs too have picked up the habit. SEC needs to do something to force these dividend payers to disclose this at the time of paying dividend - not thru 1099 a year later. It hurts the SMALL INVESTORs badly who are NOT SAVVY enough to GUESS that their current dividend probably has lot of ROC.

  • abccoll123 abccoll123 Apr 25, 2015 11:05 AM Flag

    With 96 cents being the REAL dividend ( NOT $1.20 ), it means current REAL YIELD is 9.3%. With NLY - what I have seen over the last 4-5 years is that investors like a yield of 11%. For that, NLY needs to come down to $8.75. For a 10% yield, it needs to come down to $9.60.

    S&P looking more attractive on a after-tax basis. NOT chasing NLY at current price.

    I own a MREIT ETF - that too showed a ROC of almost 20%. So it is NOT just NLY - all MREITs are afflicted by this. No where to hide in MREIT world.

  • abccoll123 abccoll123 Apr 3, 2015 9:26 PM Flag

    Is the breakup of last year's distribution on their website - and if so where. I would like to see it before I find out I have been fooled next April.

  • abccoll123 abccoll123 Apr 3, 2015 9:21 PM Flag

    Wanted a simple YES or NO answer - did NOT get that unfortunately.

    Anyway, just because a company distributes 90% of its earnings to shareholders DOES NOT mean 90% of its distributions are coming out of earnings. A company could earn $1 and distribute $1.50 - meaning only 67% of its distribution is coming from earnings.

    As I understand, Return OF capital is junk - it has no value. I could have kept the money in my mattress with same result. Forget about dividend - it is not even as good as capital gains distributions.

    For NLY I see on their website that 20% of their distribution last year was "Other distribution" - meaning probably Return OF Capital - which makes their dividend yield 8% and NOT 10% as the market thinks it is. I don't see any breakup of distribution on AGNC's website - wonder if it is same story as NLY.

  • abccoll123 abccoll123 Mar 23, 2015 9:16 PM Flag

    She earns 30 million a year - am I correct ? And she bought $1 Mil worth of stock. Not sure if that says anything. I always disregard these puny insider buy/sells. They mean nothing really.

  • Much to my dismay, I found out from my 1099-B that 20% of MY MReit's so-called handsome distribution was actually Return Of Capital ( ROC ) - and NOT true dividend. Has anybody looked at their 1099 yet and let us know if AGNC also distributed ROC last year. I hate ROC - better distribute less than to fool me with ROC.

    Sentiment: Hold

  • Much to my dismay, I found out from my 1099-B that 20% of MY MReit's so-called handsome distribution was actually Return Of Capital ( ROC ) - and NOT true dividend. Has anybody looked at their 1099 yet and let us know if NLY also distributed ROC last year.

  • 1) Assuming a marginal tax rate of 25% and long-term capital gains tax rate of 15%, with the S&P 500 after-tax dividend yield being 1.4%, current 10% dividend yield in MReits ( AFTER-TAX yield = 7.5% ) is equal to an annual return of 7.5% on S&P 500. One is high-risk investment, the other lowER-risk investment.

    2) S&P 500 is probably BACK-STOPPED by the Fed, PPT and banks. No such protection for the MReits.

    3) S&P 500 held by LARGE institutions and investors - who can WITHSTAND VOLATILITY much better than the SMALL individual investors who hold MReits ( large individual investors don't hold MReits because of the CRUSHING marginal TAX RATE ).

    4) Will investors flock to MReits if S&P goes down ? If past experience is anything - the answer is NO. So MReits go down when S&P holds steady - and then MReits GO DOWN again when S&P starts going down. NOT a safe haven at all.

    5) MReits are small/medium company stocks. Small cap stocks are underperforming a lot in this market - next underperformer being mid-caps.

    With all this said - is it time to RETHINK an APPROPRIATE YIELD for MReits. In other words - is 10% yield STILL ENOUGH ? Risk has increased in the overall stock market again.

  • Reply to

    will DHF ever go back to $4.50 ??

    by basil_leaf66 Sep 11, 2014 2:41 PM
    abccoll123 abccoll123 Sep 26, 2014 5:38 PM Flag

    Short answer - depends on the dividend. Last two years, they have cut dividend by about 10% each year due to this low interest environment.

    Fed is NOT going to raise rates until at least middle of next year - that too maybe more symbolic than substantial. So DHF will have to buy low yielding bonds ( I don't know if it has any callable bonds ) for one more year at least - meaning ANOTHER DIVIDEND CUT coming NEXT YEAR.

  • Reply to

    Billionaires are Dumping Stocks

    by dr_klumps Jan 7, 2014 2:52 PM
    abccoll123 abccoll123 Jan 25, 2014 10:23 AM Flag

    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".

  • Reply to

    Billionaires are Dumping Stocks

    by dr_klumps Jan 7, 2014 2:52 PM
    abccoll123 abccoll123 Jan 25, 2014 10:14 AM Flag

    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 !.

  • Reply to

    The cold, hard truth...

    by thom988 Jan 8, 2014 7:47 AM
    abccoll123 abccoll123 Jan 25, 2014 9:22 AM Flag

    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.

  • Reply to

    Bottomed?

    by unclemikeyt Jan 16, 2014 3:27 PM
    abccoll123 abccoll123 Jan 25, 2014 9:13 AM Flag

    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.

WAC
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