Thanks, Jim

Jim Cramer has been telegraphing for a few days that he was going to hype his neighbor’s company on his TV show.

As you may recall, Cramer even had to give himself a bad timer award for his $20 a share buy recommendation for Annaly a couple years ago, so Mike Farrell’s amREIT has been in the Cramer penalty box for a while.

That changed earlier this week when Jim, playing his role of trading guru on his pay site, set up some of the other contributors a bit by asking them why they still considered NLY a short.  The payoff came last night on CNBC.

Cramer gave a shout-out on Annaly last night (duh, steep yield curve, government guarantee, group stocks trading at or below book value) and the stock accelerated the bungee bounce it’s been experiencing since trading down to $15 earlier this week.

So, as any reader for the past six months knows, agency mortgage REITs are what works in this environment.  Past that, every bit of news seems to support the idea that the optimal conditions for these financial companies will go on much longer than the Street or most investors thought.

That said, my personal fortunes were helped quite a bit as I kept putting more cash into the sector every time it hit a new, lower plateau.  Today (and a bit yesterday) has let me lower my exposure from grossly overweight to just overweight.  Sells in recently bought NLY, CMO, CIM, ANH locked in some profits, and got me back up to a higher cash position.  I’m not quite ready to send the cash back to the bank (a way I keep myself from having too much available for stock trading), but I do feel better in this treacherous market with more cash.

The One that Got Away

One of my stable of core favorites (that isn’t an amREIT) almost got its third large buy earlier this week.  That was Elan, which flirted with $5 a share again.  I tried buying another slug the day it hit $5.10, but missed.  Today it’s at $5.70.

Disappointed?  A little.  Happy I have another slug bought as it broke down through $6 a share?  Certainly.  I’m even writing $6 calls against those shares.  Worried about the shares I own for north of $7?  Not really.

Singles and doubles, folks.  Swinging for the fence is not what a market like this is made for.



2 Responses to Thanks, Jim

  1. LB says:

    Nice job.

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