Gotta suspect wmc will take a hit to book of 2 to 5% also
I NEED TO TRADE NEXT TO YOU - A REAL MANIAC
ALL OVER THE PLANET.
GET ON IT
SO SMALL SPREAD OUT PORTFOLIO
TO CONCENTRATED MTGE POSITIONS
TO NOW HES A BIG BELIEVER IN HEDGED UP TRADING
HMMMMMMMM - SOUNDS A BIT ODD.
THOUGH I DO AGREE WITH YOUR - WELL SOMEONE ELSES COMMENTS THERE.
SO THAT EXTRA 500 MADE YOU PAUSE
FUNNY YOU MENTIONED YOU GOT 10K AND GOT OUT
AND HATED THIS STOCK AND SAW 23 COMING NOW YOU CANT WAIT TO LOAD 21K
OH SORRY 21,500
WELL IF ITS WORKING KEEP AT IT
One of the reasons is they continue to buy in shorts on the open
someone controlling the trading floats and the buy in pushes it up
just a joke
i also look to short mitt book down makes offerring risk even higher now
its about 2 bucks over book
and wmc raliles well we saw mitt take a book hit but i suspect wmc has much more 30 3's and 20 2.5's then mitt
find a spot that is good short regardless and then add that new potential risk.
wmc and mitt both offerring risk so worth a sell anyways.
Cant see how agnc data was better
can say both are good or bad and its a mark but mtge seemed better
nim up 20 basis - thats gotta be good heading forward
and undis and taxable easily covers the divi agnc seems more questionable
i put on 100k each side and ill keep adding to this
Of course offer risk too so wouldnt jump into it big until it offers.
book down 2% okay some impact 23.1 v 23.47 offerr risk still
spread up to 2.25 v 2.15
UNDISTRIBUTED CASH IS 2.12 V 2.15 - HOARDS OF CASH TO MAKE YOU FEEL AND BELIEVE THEY WILL MAINTAIN THE DIVI SOMETHIGN CLOSE
WENT INTO MORE NON AGENCY WITH AGENCY DOWN TO 73.5 V 78% LINKED
SPREAD 5.38 V 5.20 BEEFED UP EVEN AS MORE PUSH TO NON AGENCY.
CPR 8.8 V 7.8
SO SPREAD UP BUT CPR UP TOO
.49 TAXABLE - BUT WITH THEIR UNDISTRIBUTABLE ITS NOT EVEN A QUESTION.
YOU HAVE A HYBRID HERE THAT KEPT GOING TO HYBRID AND KEPT CASH ON HAND
MTGE YOU HAVE A HYBRID THAT WENT LESS HYBRID AND TBA DESTROYED THEIR UNDISTRBUTED CASH.
its not just tba is the problem - tba made the problem bigger - and can and will spike things up on a positive way if prices rally and hold up when they report again.
good thing with mitt and bad about mtge is that mitt has the non agency while mtge went too much agency with new monies
mtge book drop was much less but would have been even less if more went to non agency.
mitt and wmc have the offering risk to - so what exactly is the upside in either that you would want to stick your neck out.
versus even say mtge or agnc which might have a problem but paid the price - maybe go down more but already took big lump
just not worth owning one that mightttttttttttttttt or does have the other assets.
I think if wmc has assets similar you could see 2 to 5% drop #$%$ of agnc problem was in the specifieds and then 45% was the tba that monthly booked it to cause more pain at least on paper.
good thing is after hits if you can see these specifieds have popped then agnc and mtge will roar back the most as the tba will augment the pop but wont see that for a little bit of time.
that's why to me the uusing tba is stupid - sure can add value on the spread but at what cost - can eat up your cash flow quickly and mtge was doing well so why both tba instead of going with little more non agency which was serving them well.
find out how much they are exposed in 30 3's and 20 2.5's as agnc mentioned and that might help you better decide.
don't forget both agnc and mtge - neither raised the divi but the markets liked the earnings for bth I remember mtge spiked up from 25.75 to 26.50 then they did an offering shortly after.
and how much 30 3's and 20 2.5's do they have - it wasn't just the TBA that caused the problem
there is no problem with tba except when prices go up quickly or down quickly (irrelevant to the hedges though the hedges can protect) but its the asset mix they had that got the hit
and the rolling augmented the negatives just like it can to the upside when prices go and or get marked up.
WELL A FEW THINGS
if the goal of wmc is to grow like agnc has then good strategy can certainly achieve this.
first produce decent and pay and raise - always raise - to get the price up and get people interested and then do offerrings - raise your capitalization and thus your management pay.
I believe agnc hinted that while they didn't want to say it was all quarter long it seemed to be late in the quarter is when they saw the decline and poor performance.
here is the main point - say wmc has absolutely no similar assets to agnc and issues a solid report - not saying 90 or 1.00 but just solid and in line and book holds up - what is your upside - and wont any upside simply run into the s-11 offering they issued recently - as they go up and above book that risk comes into play.
so even before agnc and mtge gave this sector a whiff of fear - wmc on rallies was a sell
remember it was up at 22.50 to 23 then rolled over to 21.80 and now its 21.50 to 22 or so but also with fear big block after hours Thursday was 20.50
so what is you upside right now - im not telling you to get short - but I will on rallies because then p/b is a premium building and ready to run into an offering same goes with mitt
instead get on the sidelines and let wmc show you their numbers and if they go up well okay the upside is limited and then when they offer jump on board same with mitt
look for dx and anh on pullbacks anh for agency safety and dx cause they delivered a number you don't have to guess about - remember you may think wmc has a yield of x percent but are they paying you daily to own it - no
so for me anh and dx on dips and ill counter with hts ralies as they missed and ill sell wmc and mitt ralies but nibble on dips too
and then whats the rush - amtg Monday mitt, two on Tuesday - and wmc soon enough
but if you think wmc will beat by all means you should be long but thast your call
but if they drop enough probably worth the long because they aren't agnc.
and where did agnc put their monies???? same place?
my guess is probably close to exactly the same
why - because its easier to make one bet and just spread to both
mtge in many ways is simply that - agnc plus non agency but less non agency now?
if the specifieds move up and they hinted they have a little - then the roll will heighten those gains as well and you will have book up
probably buying on dips is a decent place to be but so is selling any decent rally and shorting it too.
last quarter loss is not next quarters
if losses continue and right now they are stating marks are up - recovering - but if losses continue - they wont have enough cash on hand - in other words their use of tba has also leveraged their cash flow greatly (their undistibuted cash) which we many wouldl want them to have to keep at the worst a .90 divi for predictabilty
and i have to think that there will be some mention as to why mtge shifted to more tba and less non agency.
as wayne mentioned tba added to good results as well
so while you want to focus on internals which are improving - their tba use which helps juice their spreads in a way - comes at a cost and as an investor do you want this variability?
well whatever im going to eat breakfast.