My friend and reader Frank Derfler emails me”
All 13 previous Eurozone summits, prior to the latest one, have mostly enjoyed short-lived stock market rallies in their aftermath which lose steam. Why should this latest “solution” be any different?
What else is there to say?
Want more depressing Europe stuff? Read “Can Super Mario Save the Day for Europe?” Yup. You got it. Today they’re switching presidents of the European Central Bank. His name is Mario Draghi of Italy. They call him Super Mario. He used to work for Goldman Sachs where he made pots of money. Italy is basically in the same mess as Greece. Only there’s more money at stake.
The big TV revolution. With broadband Internet, more people are watching “TV” on their computers — often laptops connected to big monitors. Since computer monitors are cheaper than TV sets, this has hurt TV set sales. The new concept is best shown in the “Google TV.” It is a combination normal TV set / PC. It comes with WiFi and a full qwerty keyboard for finding “TV stations ” — ones on cable TV / DirecTV or the Internet, from “stations” like Hulu and Netflix.
New “TV” sets are likely to arrive with cameras, enabling you to make video calls (think friends, relatives and business acquaintances). The big anticipation is the Apple TV with all the above and Siri. That will the end of confusing TV remotes. You’ll simply tell your TV set, like you speak to your iPhone 4s.
The two public companies likely most to benefit are Google and Apple. For more on Google TV, click here.
Sony calls them Internet TVs.
For more, click here.
Why buy Annaly? The following article is from Seeking Alpha. The author describes himself:
Retired, living in South Florida. I have been investing for 40 years and lean towards a conservative approach with dividend paying blue chips, as well as a small amount of short term risk plays.
I hedge with option strategies, and watch trends.
I have always handled my own portfolio, and firmly believe that anyone can learn to navigate the market and its risks and rewards by doing ongoing research, watching the world around us, and keeping an eye on trends and politics.
My goal here is to simplify the world of investing by making it a bit more personal, entertaining, and down to earth.
I am not trying to sell anything, nor am I looking for “clients” since i am not a professional advisor, or stock broker.
I simply want folks to read my articles, give me feedback, follow me, and let me know how I am doing.
I look forward to any and all comments and hope that you enjoy my style.
This is his article:
Why Buy Annaly?
Wow, there has been loads of commotion on the mREIT front, and plenty of issues that have made even the most staunch investor in this section squeamish to say the least.
I am going to ATTEMPT to make a compelling argument as to why I feel that Annaly Capital Management, Inc. (NLY) is a very strong buy, right now, yep… NOW.
As usual I will keep my article brief, to the point, and direct, so that everyone can see where I am coming from, and be able to make a decision using my suggestions, opinions, and research combined with YOUR own research, due dilligence, and appetite for this type of investment.
Why NLY now?
BEST OF BREED
Since 1996 NLY has had the right recipe for success in the mREIT business. As many others have floundered, NLY has flourished. It is NOT an easy industry to navigate, especially through difficult times, yet no other mREIT comes to mind that has done a better job than NLY. Take a quick look at their vitals.
FUNDAMENTALS
I will just name a few fundamentals here, such as 2010 net income of $1.2m in 2010, with a rebound from $346k in 2008, but a drop from 2009 $1.9m, which can be accounted for from most of the re-fi’s and foreclosures … which the majority has already happened. see it here.
Net income applicable to common shares of a positive $116k for the qtr ending June 2011, from a NEGATIVE $18k quarter ending September 2010. Some bounces in between for the same reasons I mentioned above. See it here.
Finally, net tangible assets of $9.8m in 2010, vs $9.5m in 2009, vs $7.1m in 2008 … which is explained because as the mortgages are “paid off” (or re-fi’s) NLY gets the cash, and their book value increases — not a terrible trade off! See it here.
DIVIDEND YIELD
This is the BIGGIE, gang, 14.4% as of today (2.40/share annual). Even at 10%, where will you get that kind of yield from any solid blue chipper you can find?
Yes, the dividend was cut from .65/share to .60/share this last qtr due to the lower income ( re-fi’s and foreclosures, folks, not a broken business model) and all mREITS have IRS guidelines as to the % (90%) of its income that MUST be returned to shareholders.
The dividends HAVE fluctuated over the years but you would be WAY ahead if you’d bought the shares in 1997!
MANAGEMENT
Management has not changed since its inception, and Mike Farrell is widely acclaimed to be the best in the business (even managing the back side for Chimera (CIM)). For quite some time this CEO seems to have had the Midas touch, and it will continue in my opinion. What will stop him?
PRICE PER SHARE TRACK RECORD
In an extremely volatile real estate market, NLY has had the discipline to grow, expand, and prosper since it went public back in 1997 — with some fluctuations, the price per share has gone from approximately 9.00/share, to 17.00/share as of today October 28th, 2011. View this chart:
Yahoo Finance chart
The share price remember is also reflective of all the dividends it has given back to the shareholders since NLY’s inception; you might even own the shares you bought for FREE at this point! (it can still be done folks).
OK, now this is what the negative nabobs point to:
1) Operation Twist
Well that announcement has gone over like a lead balloon and has had virtually NO impact on the yield curve, and its future impact will be minimal at best (perhaps 10 to 15 basis points on the 10 year Treasury)
2) The Yield Curve Will Flatten
OK, it has a tad, but not to where the entire industry will go POOF, and remember, the fed has already shown its hand by announcing to keep the short term rates at virtually ZERO….and NLY makes its money using the spread between the short term rates and the longer ones….and all they need to do is tweak it a bit from time to time to keep the profits flowing!
3) The New “National” Re-Finance Effort by Our President
Remember HAMP, HARP, MHAP? A total of about 850k mortgages were “aided” — during the TOP of the crisis! Even if that is duplicated (which I do not think it will be anyway) the impact will be minute compared to the amount of money that NLY can make regardless.
4) The SEC “Question”
Yes, the SEC is asking for for comments regarding the tax status of all REITS. It has the potential to change the business model to the point where many will exit the business. However, take a look at when the SEC opened its question period: right when Twist was being floated, as well as the National Re-Fi noise. Coincidence? In my opinion it was politically motivated, will go absolutely nowhere, and is nothing but a huge red herring.
My Opinion
NLY is a winner. I own it, I add more when the price drops, I have the dividends reinvested, and I see nothing but blue skies ahead for the foreseeable future given the opinions that I have presented for your consideration. It is a BUY from THIS corner in the world!
Disclosure: I am long NLY.
I am also long NLY.
Two seriously stupid jokes.
Joke 1:
Blonde flying in a two-seater airplane. The pilot has a heart attack and dies. She frantically calls a May Day: “May Day! May Day! Help me! Help me! My pilot had a heart attack and is dead And I don’t know how to fly. Help me! Please help me!”
All of a sudden she hears a voice over the radio saying: “This is the tower. I have received your message and I will talk you through it. I’ve had a lot of experience with this kind of problem. Now, just relax. Everything will be fine! Now give me your height and position.”
She says, “I’m 5’4″ and I’m in the front seat.”
“O.K.” says the voice from the tower. “Repeat after me: Our Father. . . Who art in Heaven. . . ..”
Joke 2.
A driver was stuck in a traffic jam on the highway outside Washington, DC. Nothing was moving. Suddenly, a man knocks on the window.
The driver rolls down the window and asks, “What’s going on?”
“Terrorists have kidnapped Congress, and they’re asking for a $100 million dollar ransom. Otherwise, they are going to douse them all in gasoline and set them on fire. We are going from car to car, collecting donations.”
“How much is everyone giving, on average?” the driver asks.
The man replies, “A gallon.”
Harry Newton.
a tasteless joke for tomorrow…
Why didn’t the U.S. Govt. think of this?
A friend of mine just started his own business in Afghanistan. He's making land mines that look like prayer mats. It's doing well. He says prophets are going through the roof.