john, i wish you would have purchased the weekly $20 put with me for 0.14/share friday. i would not sell just yet john, just because i believe the stock price could move lower doesnt mean agnc is a bad investment. the book is only down about 3 percent more than q3 by my calculations or about $24.50ish book value right now. i don't recommend selling, only hedging large market data driven events like this week.. that way you get to reduce your cost average further and invest in more shares with the hedge profits. i dont know what the data will be this week, but it could continue to show a stronger economy and rates could move up a good clip which would result in more mreit panic selling perhaps.. thats why i am hedged up.
not bitter, just dont want to see anyone lose money on bdcs. they are too dangerous. you would be better off buying IO bonds and making money on slower prepays while pocketing over 5 pct a year on the income side. i think mortgage reits long term will bring much better results... particularly AGNC, MTGE, MITT, HTS.
what you paid means little to me, you are underperforming my portfolio today im sure, and if you dont exit your bdcs you will continue to underperform. bdcs are death traps long term. just see 2008 crash and how their navs dropped large across the board and never recovered.
$7 was a rough estimate. i gave an exact price target for you now. 7.50 to $8 range. yeah, i must not know what im talking about.. thats why im hedged with a $20 agnc floor and you are still losing money on your mreits and bdcs.
7.50 to 8 on FSC. just wait. and AGNC headed lower is week, wed,thurs, friday should slam the stock especially hard on stronger econ data. if i am wrong at least there is my $20 floor in place via puts.
yeah i wasn't kidding about $7. It goes to $7 soon enough.
Watch as it develops.
excuse me, you are trading well above book value. Rates are much higher than Q3 end.
ok... You are trading about book value when AGNC which protects book better than WMC and is positioned for taper better than WMC is under 0.80 p/b. So 20% minimum drop + book losses will be higher at WMC due to the long TBA position and 9x leverage. There is just too much to say about all that and it was a directional bet gone wrong. SELL WMC, rotate into AGNC if you are too scared to short. Or at least just sell your WMC... THAT IS CRAZY to keep it at this premium with rates going up.
Hedge it up for at least this week. Go long weekly or monthly puts (monthly would cover FOMC, as well as this weeks data impact on AGNC.) Please don't naked long this. Puts can make amazing hedges and lower your cost average or protect you from larger losses.
"The stock" = "AGNC"
And my prediction of a sub $20 AGNC was not that far off. I was off maybe by a few days.
i wish that were true. But sadly, I know i'm right today. My timing was just off from my last prediction. The stock will go back below $20 soon. perhaps today. It is all data dependent but it definitely looks like i am correct based on overnight 10 yr rate direction. Down about 10 ticks.
nice return to go short, pair off with AGNC if you like.
just my opinion.... mreits will drop. 10 yr rate will go up. obviously all noise until this week is over and the data is all in. but panic is likely to continue ahead of the data. gotta love the fear trade.
inflation is low so rates will stay low. guaranteed returns will stay super low because inflation is low. inflation wont be picking up anytime soon unless growth is excessive which can not happen as the consumer is already maxed out again like.2006-07. There will be another consumer deleveraging cycle.
dr klumps, it is actually more likely that the 10 yr rate's low gets taken out and drops below 1.3% within the next 2 yrs. Dividends get cut due to spread constriction and higher prepays. whipsaw might be coming as the economy goes to #$%$. margin debt at all time highs and consumers leveraged up worse than 2007. its binge spending 2.0. New recession coming soon. but i am ready for higher rates and so is AGNC. watch the data next week for clues. bubble economy.. that is the USA.
just let them think whatever they want. its not like they can influence the stock price. let them short and lose all their money. who cares. maybe they make $ short term before they lose it all. let em try. its not like they can cause a run on AGNC like lehman. ( high liquidity of agnc's assets)