Looks like shorts are leaning hard on today's rise. 18.15 to 17.75 as I type. This is where a buyback authorization would make them look over their shoulder to see if the hammer is coming at their heads.
I could be taking flip gains today in both nrf and nsam, but I'm not taking in either.
With respect to nrf, we'll be ex dividend in about 3 weeks. First, I want the dividend. Second, the ex dividend drop will be quickly forgotten. Third, maybe a little pop because Hamo has every incentive to do what he can to get the price up.....yield (cost of common capital) much too high PLUS number of shares to be issued in the griffin merger...the higher the price (until the cap), the fewer the shares.
With respect to nsam, I suspect Hamo is grinding his teeth over the multiple, BUT, part of it is his fault for not increasing estimated annualized cad in the August presentation slides. I have the feeling the next one will include higher fees from nontraded reits, estimated fees from griffin equity and estimated fees from closing the forward sales contract.....and maybe some estimated fees from the rxr deal. Plus, the market will finally be able to see in black and white that nsam has real (not pro forma) cad earning capacity. Plus, they have no downside in announcing authorization to do a buyback. Authorized to buy is not the same as buying, but with the authorization, the shorts never know when actual buying will begin or end.
In short, we are only 3 weeks or so from quarterly reports and ex dividend, with nrf getting the bigger dividend boost and nsam getting the bigger multiple boost.
Thus, ain't selling the flippers because I think I will do substantially better by holding for another month or so.
If I change my mind I will post that here after I sell the flip lots.
Can we be married to the same woman and not know it?
More than 40 years ago I put wife in charge of household checking account and household bills. She resisted electronic payment until I made her do it. Now she pays everything she can electronically and loves it.
First I showed her how to transfer money from Fidelity to the checking account. I sat next to her and walked her through each step. Then one day I asked her to transfer 3,000 from the taxable account at Fidelity to the checking account. Then I walked away from her . She protested my walkaway and I told her to make believe I was dead. She did it. Soon, she must take her first MRD from her IRA. I intend to walk her through how to do it and I'll tell her she must do the next one by herself. I know she will take notes.
It took me a few years to get wife to understand market fluctuations are not profits or losses. They are just changes in value. The profit or loss is not real until the position is closed. She also understands that we will be in the stock market for the rest of our lives, so we hope our time horizon will be very long. She no longer freaks out with fear on bad market days like last week.
I sit with her to go over a monthly report of portfolio performance, income and expenses so she understands just how much excess income we have. She is involved with the estate plan---especially to understand it.
Even though I run the investment show, I might die first, so I constantly try to keep her abreast of our finances which I have greatly simplified during my gradual retirement. Ya just have to keep at it, a little at a time, but frequently.
There are two ways of doing that....pro forma (before you borrow) and after the fact (the debt is there). I suggest you NOT approach her on a pro forma basis.
I am as positive as positive can be.....99.999999% probability that if I proposed a plan to borrow to buy dividend stocks (and flip), wife would be against it. A pro forma profit is not real in the debt-timid mind, no matter how probable it is, but the proposed debt is real and scary. The downside dominates the brain cavity, so much so the upside cannot enter the thought process.
After the fact, it's real. She wasn't thrilled about a much bigger tax bill to pay off the debt, but that would not have dissuaded her from paying it off. It was the dividend list that did it. OK, honey, we sell these stocks to pay off the debt and we give up 100,000 of dividends so we can save 30,000 of interest. We give up 70,000 per year of dividend profit so you can feel safe and secure. THAT's what bought reluctant consent.
When you really know your company and its industry, it's easy to be confident that a given selloff on no company or industry specific bad news is an irrational selloff. THAT'S when buying on the volatility is the easiest.
Collect 9% while paying 4.5% = 4.5% profit on the broker's money. Pay 40% in income taxes = 2.7% profit after tax. Do this on 100,000 = 2,700 annually to blow on dinners out. At 100 per pop, that's 27 dinners out, more than 2 per month. Tell your spouse NRF is paying for dinner. It changes their attitude about using debt.
Once upon a time my risk-timid wife noticed the margin debt and went into a tizzy of fear over being in debt.
So, I told her I could repay all the margin debt in 10 minutes at the keyboard by selling the following list of securities. I showed her the list with proceeds well exceeding the margin debt. She said, "You sold way too much to pay off the debt." Then I told her about the income taxes we would pay in order to repay the margin debt. "Oh, darn", she said. Then I showed her a list of dividends we would not receive minus the interest we would not pay. The net was a decrease in our pre-tax income of 70,000 per year.
"Want me to pay off the debt right now?", I asked her. "NO" was the answer.
If you were as perceptive as you pretend to be, you would not have asked the question that way. I still believe a combined price of between 40 and 50 by year end with nsam accounting for most of the range.
Ahhhhh, but there is a rub here.......Hamo now owns a significantly bigger percentage of nsam than he owns of nrf. Hamo's bread is getting more butter from the nsam jar than from nrf. Be sure to read the next proxy statement from both companies.
Nevertheless, as far as I know, Hamo is still the biggest individual shareholder in nrf. As with every nrf shareholder, the fewer shares issued in the griffin deal, the better.
Institutional ownership reports of 9/30 holdings are due by 11/15 (or thereabouts). The big guys always wait until the deadline to report because they don't want to show their hand until they have to. However some of the smaller ones have started to report. Only two tutes correctly reported 6/30 nsam positions, which is understandable because the spin happened at 11:59 pm on 6/30 and nobody saw their shares until early July.
So the 9/30 reports should provide some insight on what the tutes are doing post spin.
Tute ownership can be seen on the nasdaq website.
I just noticed a Meritage Group owns 4.1 million nsam at 9/30, the largest owner listed out of all of 13 reports.
So I looked for Meritage in the nrf file........sold out of nrf, 6.5 million shares they owned at 6/30. So, we know they prefer growth over yield.
Found this online:
Meritage Group LP is a privately owned hedge fund sponsor. The firm primarily provides its services to pooled investment vehicles. It invests in public equity and fixed income markets across the globe. The firm uses fundamental analysis to make its investments. It uses a combination of external and internal research to make its investments. Meritage Group LP was formed in November 2006 and is based in San Francisco, California.
Also, if Hamo doesn't get the price up, more shares have to be issued to pay 1.1 billion dollars worth to griffin shareholders.
17.75 = 61.972 million shares
18.75 = 58.667
19.75 = 55.696
The difference between 17.75 and 19.75 is 6.276 million shares. At 1.60 per share to be cad neutral, that difference means another 10 million of cad has to be squeezed out of post merger griffin properties to not be dilutive.
Lest you cheer all of .74% up today, compare to equity reit indexes and other mortgage reits:
VNQ..1.53%, RWR..1.49%..IYR..1.33%.......all equity reit indexes.
Other mortgage reits: MTGE...1.43% NYMT..1.47%..AI..1.31%.
Still not selling. Just frustrated. Remember, price to public in last offering was 18.40 and price paid by underwriters was 17.95. Maybe Hamo won't sell more than 10% of the company short again.
After that nice morning pop the shorts got to work. Short volume was 1.172 million out of 1.991 reported, a very large 58.9%. Not really sure in this nutso market, but maybe the momo in nrf has turned positive. Up 1.38% despite a strong short pushback shows some decent strength.
I measure the aggregate portfolio every Friday at the close and I adjust for ex dividend amounts and external cash in and out of the taxable account. As of the close today, my total portfolio equity is up 25.45% YTD. This includes flip gains, and dividends net of margin interest paid. The s&p 500, price only, is up 2.08% so add about 1.75% for dividends = somewhere around 3.83% including dividends. I'm doing OK.
Last Fri two round trips in ETP...buy sell buy sell. Did it Tuesday as well, but this time buy buy sell sell.
Incredible volatility in ETP. Not quite 8 grand out of four round trips. Since a same day round trip qualifies as a dinner trade, wife is agitating for more dinners out.
I know what you mean about flip lots morphing into core holdings. I have a bunch of those.
Yes, my usual trade in nrf or nsam is 5,000 shares except in the IRAs where I am sometimes limited by available cash or, in some cases, a partial fill breaks up a round lot.
Superior website, superior service, lower trading commissions, continuity, having fewer accounts and inertia.
The savings are not so great I want to do the work switching to a devil I don't know from a devil I know. A partial move just makes me a smaller frog in each of their ponds.