- NLY and NRZ rallied and reached the neutral ranges. If shares dipped without a decline in fundamentals, they could be appealing again.
- The emphasis in analysis of mortgage REITs should rely on book value more than the shape of the yield curve.
- Investors cannot reasonably forecast the future changes in interest rates and in management's changes to the portfolio to predict performance several months in the future.
- It is entirely possible to predict where values stand today. A wise analyst can make predictions about book value today because they already know how MBS and hedge valuations moved.
- Preferred shares give us some nice opportunities to camp out. We really need to emphasize valuation though. Plenty of investors are getting very optimistic.
For further details see:
Investors Hate Caution