Invesco Mortgage (IVR)

June 30, 2010

Invesco Mortgage is just a baby (tomorrow makes 1 year as a public company), but it has over $500 million in market cap at its current price near $20 a share.  The parent company, Invesco Management, holds 10% of the equity in this company, and externally provides the management of the REIT and its portfolio.

The recent announcement of a 74 cent dividend was a 4 cent cut from the 78 cent dividend paid in Q1, 2010.  That makes current yield just under 15%.

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Baker’s Dozen at a Milestone

June 30, 2010

I just noticed that I have reached the milestone of 200 posts on this blog.

I have to thank the readers, who make it worth doing.  If I have one request, it’s that we have more comments, so this can become a more interactive exercise.

I thought it might be fun to give you links to to all-time top posts.  The winner is still one of the earliest — Three Card Monte.

After the break, I’ll post links to the thirteen posts that have garnered the most readers.

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Trading Note

June 30, 2010

At the open, I blew out the shares of Elan I bought yesterday on margin.  I don’t think being on margin is a good idea right now, no matter how cheap individual stocks might be.  I still own many more shares than I want to hold long term.  Those may have to wait until the second quarter profits are announced before they fly away.  I’ll hold out for enough profit to cover my property tax bill before the next bunch goes.

hh


Showing My Age

June 30, 2010

I’m having another of those “you know you’re old when … ” experiences.

AARP has been trying to make me feel this way for years by sending my “membership” packets all too frequently.  Here’s a hint, guys:

I know who you are and how to get ahold of you.  When I see how much money you waste sending me these junk mail packages (like yesterday), it lowers the probability that you will get any of my money.

Another big sign was when my little sister retired.  Then they started putting people younger than me on the Supreme Court.  Then I noticed that I had never heard of the musical guests on Saturday Night Live. But today the impetus is the financial regulation bill.

I can remember when “used car salesman” was the way you described sleaze.  Not banker, not even politician.  But in an amazing loophole just guaranteed to screw people who can ill afford to be screwed, car dealers are not subject to predatory lending oversight with the new Consumer Financial Protection Bureau under the Fed.

What’s up with that?  Can young people and the working poor be treated unfairly by a fast-talking used car salesman that doubles or triples their profit in an abusive loan? I would say so.

What’s wrong with this picture?

hh


Elan Musings

June 29, 2010

Yesterday was the most painful day yet in the ongoing slaughter of this stock.  After establishing a grinding pattern of steady small losses for nearly three months, yesterday’s 6% loss was disheartening.

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Not My Specialty – MLP’s

June 28, 2010

I don’t own any MLP’s and haven’t since paying over $1,000 extra for tax preparation one year.  Still, a lot of income investors do.

I browse some unusual places to learn all I can about investment topics. This column from a popular tax specialists’ blog site raised some interesting issues about MLP’s. It seems like the kind of thing that could be reversed, since it’s reimbursing the MLP’s for tax they don’t pay, and may never be paid by anyone.

Exxon has already challenged it in court, but was turned back. The FERC was very corporate-friendly when they made it policy in 2005. Somehow I don’t think any new Commissioners are going to be quite so “flexible” about giving taxpayer and/or rate payer money away.


American Capital Agency (AGNC)

June 28, 2010

AGNC is the last of the publicly traded  mREITs (actually, an amREIT) I’ve chosen to describe in this series, with about $800 million in market capitalization.

It hasn’t been around long, and has already had one complete change of management (other than the Chairman, CEO of parent company ACAS).  I worked with the former head of investment, Russell Jeffrey, a lifetime ago, but do not know the new team personally.

Given that the management change came only eight months after the AGNC IPO, and that IPO was only two yearss ago, there really isn’t much history to judge.

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About Freaking Time!

June 27, 2010

It warms the cockles of my heart to read what Fannie Mae intends to do to “strategic defaulters”…..

I remember hearing Jim Cramer actually tell people to do it on TV, and thought “You Scum.”

I’ve been deep underwater on a mortgage on a residence I had to move away from.  I rented it at a substantial carrying loss for five years until I had saved enough money from working to pay off the mortgage when I sold the apartment.  It’s just the right thing to do.

I showed up at the closing, and gave up the keys, locking in a solid six-figure loss, but walked away with my integrity and credit rating intact.

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amREIT Basics

June 24, 2010

Cy Berlowitz asked a great question in comment form on the Blowback page, and as I finished my reply to the comment, I realized it would be good to copy it here on the main page.

Here’s Cy’s question:

Howard, I’m trying to figure out when MBS have the wind at their backs. Am I correct in thinking that the wider the spread between the 10-year bond and the 90-day T-Bill the better it is for MBS?

Best,

Cy

My response after the break…..

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Anworth Mortgage (ANH)

June 23, 2010

Next in order of capitalization is Anworth mortgage, my largest holding in the residential mortgage REIT peer group.

I don’t hold more of it because I think Lloyd and his team are the best traders or hedgers, but because their stock is cheapest when compared to its capital and earnings risk.  Having said that, THIS IS NOT FINANCIAL ADVICE.  I can virtually guarantee that my financial situation is substantially different from yours, and that what is worth doing for me is potentially much too risky for you.

For that reason, I’ll share how I decided to do what I’m doing, but it’s up to you to decide how you need to invest for yourself in your situation.

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