I began buying today with some of the cash I’ve had on the sidelines. Naturally, the gremlins informed me I was too soon.
Still, I continue to like the amREITs below book value, especially when the futures market is saying LIBOR won’t be going anywhere for a couple of years.
The Fannie/Freddie buyouts are more than half done at this point, and the outsized hit to Annaly (after their assurances that they owned the kind of paper that wouldn’t be called) has resulted in a really major hit to their stock price.
Needless to say, today’s NLY purchase just under $16 a share was cheap, but then the stock got cheaper. I’m going to try not to be fooled by the “head fake” close, where the stock recovers part of its loss.
I’m starting the process of moving money into the stock accounts to buy into the bargains that are cheap and getting cheaper. I’ll probably commit all but a year’s worth of living expenses by the time I’m done.
That should give you an idea of the risk profile I’m willing to take, and holding that year of cash out of the market is probably a good idea for most of us if the BIG ONE is coming.
It definitely feels like the market has further to fall, but I won’t be following Richard Russell’s advice to sell everything, at least not while I think the income from these stocks is solid for another year or more.
I’ve also let my short sale of May 60 calls on IOC just ride, so I’ll be owning more of that stock this Saturday.
If Richard and several other technical traders are I listen to a correct, we’ve got a major downward leg ahead in the market, and I want to have my cash ready.
The hedge holdings — QID, SRS, FAZ and SDS — did their thing today, but it wasn’t quite enough.
I lost about 1% of NAV today, and that was nearly all in IOC. I’m OK with that, because I keep hearing about the major players that have positioned themselves in this stock for a major move, including Soros, Druckenmiller, along with my personal favorite oil analyst from the message boards, whose Maria “interviews” are classics.