But, what did the market in general do in that time frame? Also, much of decline in stock price early in year likely result of anticipation of interest rate hike. Now that that is baked in price, I would doubt that a similar slide in PPS for 2016, unless interest rate hikes per fed more aggressive and for longer duration than anticipated.
The Market goes up and down. Today was down, and this might well be a down year for overall market. Sometimes we have years like this. Over the long run, the market trends higher. The only panic in the market, are the weak hands held by those who panic. They tend to jump out right before big market rally's and get back in when rally nearly over.
The strong hands use market selloffs to further strengthen their hands, and occasionally take profits when market is surging higher.
Listen to what W. Buffett says whenever market sells off. He gets his shopping bag out, and hunts for basement bargain deals. I am sure he still is well positioned in BOA, recall him getting in around $5/share.
Now, let's see. CIM had an ~ 5 cent miss on earnings. Interest rate hike is 90% likely to happen in Dec 2015. Yet CIM continues to hold $14 support level, like a fortress!
I remain long. Nothing left to fear at this point.
Ok, lets discuss this:
Chimera Investment Corporation (NYSE:CIM) was the seventh-largest equity holding of Omega Advisors on October 16, accounting for 2.3% of its assets. Leon Cooperman’s hedge fund increased its position in the company by 2.09 million shares during the second quarter. A little more than a month ago, the company announced a quarterly cash dividend of $0.48 per share, which generates a whopping current dividend yield of 13.59%. It is also worth pointing out that the stock is trading at a very attractive level at the moment, considering its forward P/E ratio of only 7.10. In fact, the mortgage REIT is one of the cheapest stock picks of Leon Cooperman in terms of forward P/E as of October 16 (read more details). In the meantime, the stock has lost slightly over 11% since the beginning of the year. Israel Englander’s Millennium Management acquired a 4.0 million-share stake in Chimera Investment Corporation (NYSE:CIM) during the second quarter.
So, despite 11% loss for the year, long holders still will have profit by year end with 13.59% yield from 4 quarters of $0.48 per share dividend payments.
I doubt that Chimera will cut dividend any time soon, as that high dividend payout is what attracts so many investors. They would not want billionaires to start dumping shares simply because dividend cut sharply.
I would expect similar dividend payouts for 2016.
My dividend payout remains in cash at this time, lurking for a good opportunity to get to work.
Looks like the market in general is back to rally mode. While we say goodbye to warm weather and fun at the beach, and dread the approaching cold winter nights and flu season. We take solace in knowing that this tends to be the season of stock market rally's as we run up our credit cards spending and shopping tirelessly at the retail outlets. Holiday rally's are the order of the day, and as holiday season approaches, I take comfort in my ownership of CIM. I think of the many ways that I may spend the big div payout at months end. Perhaps reinvest in the land of the biotechs, or a plunge into emerging markets. Maybe, just simply buy back more CIM.
I could always leave it in cash, and wait for unexpected pull back in market to reinvest.
I am just having a good day, knowing that my portfolio has quite outperformed the S&P 500 this year, and will continue to do so, and with a big divy payment headed my way.
I am not suggesting turnaround on the horizon, but if CIM is out of favor simply because of anticipated rate hikes, then that will be a limited negative for CIM, as the hikes will be gradual and limited. Regarding China and T-Bills, I doubt that China has concluded that crippling the US economy is the best way to support China's economy.
Like I said, short Pops, and cover drops. I did some major covering of market 2nd hour of trading today. I remain long CIM. Will continue to trade the overall market, and accumulate CIM.
Keep this in mind. Inflation is well below target rate. There will be gradual rate hikes just to give fed bullets. Rates are not going up to fix a problem, just zero rates no longer required.
So, CIM will fare alright as the rate hikes will mostly be priced in, well prior to completion of rate hike cycle. Lower prices after each ex div is good, for the long term buyer can reinvest the large div by buying back CIM at lower prices. And then, when CIM turns around, will be a windfall for the long investor who dollar cost averages in, and reinvest div.
I should start do.john post. A bit more accurate with my recommendation to stay long CIM (down .3% today) and short the overall market (down 1% today).
I am convinced that we are in a Bear Market. No safe havens in a daunting bear market. Those who exited early will be the winners. Now, the remaining strong hands will be food for the sharks as the bear market whacks away at our dwindling accounts. I remain long CIM. But, shorting the market, in general, by buying puts, whenever there is a major market rally!
I love the timing of this article. CIM has been trending $14 despite bear market for most stocks. Trended higher past week as ex div approaches, then some nut includes CIM in this list of 5 toxic stocks base on chart pattern.
The article will of course look accurate as CIM pays the whooping div and share price will dip back towards the $13.50 to $14 range. This will not be a concerning dip or test of support as this article suggest. CIM is doing just fine.
"Cash flows beat stocks for first time since 1990"
I would say this bodes well for a market rally. The weak hands have been flushed out!