- One of our strong buy ratings from 2020 needs an update. GPMT destroyed the bears.
- GPMT was priced for disaster. It never happened. Unless someone was shorting GPMT. That person would have a disaster.
- Spreads between assets and hedges in agency and non-agency mREITs (ignores commercial mortgage REITs) have tightened while price-to-book ratios increased.
- There is less opportunity in the space. Investors could always increase cash, but few investors want to think about that. It's been over a year since they got the excitement of plunging portfolio values.
- Inflation is running hot year-over-year, or just slightly above average if we estimate a 2-year rate instead of 1-year growth rates. See the chart.
For further details see:
7% Yield Wrecked Bears, 164% Upside So Far