Found this on yahoo. Thought is was interesting read. Although for recent time I don't think this is true a least for the stock AGNC. I use a basic trading range to buy in and out of AGNC. I got all my shares under 30 with and average of 29. I don't like to buy if its over 30. The below post does make sense I could see people shorting it last year anytime it when 32 or higher. Lately it has broken out of that range and is trading at 34 and nearing 35. As of now I think the BV/PPS is over 1.00-1.12.
The two MReitTs I own (IVR and AGNC) have div yields around the 15%. My theory and maybe a better statement would be if the yield is too low, than people would flock to other REITs. (Stability and other factors mater too)
below post from yahoo forums: AGNC
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There has been this hushed deference(reverence) paid BV, that seems almost like the Holy Grail, that all must pay tribute.
That" tribute" is to not wander far from her shores. For , you see, the multitudes will only pay homage when the ship is close to shore. The lore has proven true, in most cases, as the faithful have received their Books of Common Trading and have abided by these general rules.
Hence when mReits have traded over 1.15 from book, the multitudes take their offerings and deposit them at another ship moored closer to shore( BV/PPS= 1.00-1.12).
This has coccured so often that folks like Reik, make their living off of it, by shorting the high BV/PPS mReit and going long the low, or basically divergence pair trading using this value as their marker.
Enter those of us caught on the sidelines waiting for this marker to abate. Alas, the ship is wandering further from the shore. In fact it left without many of us. Those of us who miss her, are swimming for our lives, trying to catch her. Others are building signal fires on shore(Shorting shares, buying Puts), in hopes she will head back to shore.
Time will tell. What we can glean for sure, is that these waters which the USS AGNC finds herself in , are uncharted. She has never been here(all time high) before. Engineering has hailed the Captain(GaryK) but he doesn't respond(SPO). When we see the Rats(Insiders) begin to jump ship(selling), this will be a good indicator that she's beginning to come about.
Until then it is all a bet. I'm going with the trend until I see the gray of their eyes...
DocReit
The two MReitTs I own (IVR and AGNC) have div yields around the 15%. My theory and maybe a better statement would be if the yield is too low, than people would flock to other REITs. (Stability and other factors mater too)
below post from yahoo forums: AGNC
>
>
>
>
>
There has been this hushed deference(reverence) paid BV, that seems almost like the Holy Grail, that all must pay tribute.
That" tribute" is to not wander far from her shores. For , you see, the multitudes will only pay homage when the ship is close to shore. The lore has proven true, in most cases, as the faithful have received their Books of Common Trading and have abided by these general rules.
Hence when mReits have traded over 1.15 from book, the multitudes take their offerings and deposit them at another ship moored closer to shore( BV/PPS= 1.00-1.12).
This has coccured so often that folks like Reik, make their living off of it, by shorting the high BV/PPS mReit and going long the low, or basically divergence pair trading using this value as their marker.
Enter those of us caught on the sidelines waiting for this marker to abate. Alas, the ship is wandering further from the shore. In fact it left without many of us. Those of us who miss her, are swimming for our lives, trying to catch her. Others are building signal fires on shore(Shorting shares, buying Puts), in hopes she will head back to shore.
Time will tell. What we can glean for sure, is that these waters which the USS AGNC finds herself in , are uncharted. She has never been here(all time high) before. Engineering has hailed the Captain(GaryK) but he doesn't respond(SPO). When we see the Rats(Insiders) begin to jump ship(selling), this will be a good indicator that she's beginning to come about.
Until then it is all a bet. I'm going with the trend until I see the gray of their eyes...
DocReit
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