I Want Your Take Of The High Yielding NLY

By robtcohen, October 24, 2011

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

My fear is of dollar collapse or (an hopefully temporary) currency crisis in which NLY goes from teen price to a single digit price. Is ”the U.S. dollar risk” also your opinion?

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6 Comments on " I Want Your Take Of The High Yielding NLY"

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Travis Johnson, Stock Gumshoe
Admin
4432
October 24, 2011 10:06 am
That’s not my personal fear — the risk for Annaly, as for all the mortgage REITs, is that the yield curve flattens … as it has been showing some signs of (admittedly with limited success) with the fed trying to push down mortgage rates and 10-year bond rates. The secondary risk is regulatory and/or systemic change in the mortgage market (ie, if lots of refinancings get done quickly and easily because of govt. decree), worries about the currency collapsing are way down the list for me when it comes to mortgage REITs. Not to say that it wouldn’t be a… Read more »
Cool Soupy
Guest
0
Cool Soupy
October 24, 2011 6:53 pm

Oh Great Sage you are right on – first we bailout the banks and today we are going to bailout Fannie/Freddie mortgage holders with lower cost mortgages. Mike Farrell Chairman at NLY must have foresawn this as he has reduced his leverage and cut the dividend ahead of this announcement. Of course this is just more pressure on our fragile banking system.

hedy1234
Irregular
372
hedy1234
October 24, 2011 11:54 am

Nly and chimera are both fine so long as the government continues to follow its stated goal of surpressing interest rates. I believe they said they would do this through the end of 2012.

blufox
Member
12
November 4, 2011 6:10 pm

I have owned both NLY and CIM over the years and think they are quite safe. I currently have a fairly large position in CIM which I have held since Feb 2010. I am down a bit but the dividends received more than compensate for the current slight capital loss.
Back in the 90’s I called Annaly and spoke with Farrell and was quite impressed with him. For my money he’s one of the best and he’s assembled an expert team.
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