On ANH, I have in my notes that on the call for Q3 they said that net spread will contract again in Q4 so dividend will likely decrease again.
JMI released their monthly update yesterday.
They reduced leverage in November from 7.1 to 5.0. They bought back about 221K shares of stock.
They sold more 30 year agency MBS. Agency portfolio went from 1.144 billion down to 814 million. The left the hedges in place so they are now at 140% hedged (vs. 108% at end of Q3).
I started some at 16.01 and 16.00. 1.1mm shares traded by approx. 10 am EST.
Jack - he posted yesterday that he closed the short and was long.
One thing you may be failing to realize is that these are not all in at once longs or shorts. These positions are fluid, adding and subtracting as the stocks move up and down. Does he win on every trade? Absolutely not and he'll tell you that.
I know some like to bash shorts but if you are a long term long, why do you even care? If WMC gets sold off to $14 next week are you selling? No. If it goes to $17 next week are you selling? No. These short term moves are meaningless to you.
Think about what shorts were doing yesterday. They were covering as the price spiked down. Yes, what stopped the move were shorts buying and longs adding.
Jack - perhaps you forgot that CYS paid a special dividend of 52 cents in December last year while WMC paid 22 cents.
Overly relying on history? A rather ironic comment given your content, don't you think?
Keep the useful comments coming, Reik.
Even if you are not pair trading, these comments are useful. Maybe someone is looking to get long more shares of WMC or looking to exit some WMC. If so, where it is trading relative to others in the sector can be useful information. Or if you like the sector, you can enhance your returns by shedding the ones that run up and switching to others that have not held up relative to others.
Maybe someone can't see right off how pair trading works, but certainly you can't deny that pair trading this sector has outperformed a long only strategy this year.
But, sure, if your strategy is to just buy and hold forever, why even bother worrying about what Reik posts? You've already made up your mind.
MFA has some modest insider buys that got released today. Good timing.
What's lenloc going to say? He is desperately clinging to his long from the $22-$23 levels.
The guy never could understand pairing up trades and using others in the sector to find value. He could only pick out half a trade and yell, "see, I told you" when he found something that didn't go in your direction right away.
The guy is disingenuous.
Keep in mind that they reduced the size of the portfolio. The portfolio is about 15% smaller at the end 3Q vs. 2Q so expect core to go down again in the fourth quarter.
Jack - you can get long the bond futures today or grab some levered bond ETF shares and capitalize on your beliefs if you are correct.
Alkkov wrote: "Jtrader - that didn't work out so well huh? Stop trying to game that #$%$, sell otm puts on both."
Alklov - Uh, no. I am not going to be selling OTM puts on a sector that is a clear downtrend. I'll stick with what has been working for me not some risky approach that could have me long two stocks that are dropping with the rest of the sector.
Give the trade some time. Stay sector neutral and rotate to value and out of the over-valued stuff (relative to the rest of its subsector). And, yes, I understand about the big round number on CYS on Friday. I was adding near the lows and shorting more WMC on its push up.
Sure, you can dismiss this jobs report but look at what the 10 year did. Look at MBS. Look at REM, look at NLY. Look at your beloved WMC. It reported earnings and book was not up like many thought - it was down 3% and WMC is also in a downtrend. This is not a healthy market for the mReits so I'll pass on the short puts.
Someone needs to tell the investors dumping CYS that, too. They are big into the 15 year paper.
It is okay though, good opportunity to grab some CYS and short WMC.