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Saturday, March 16, 2013

Did you buy NLY or AGNC?

I alerted you about 5 months ago when NLY and AGNC were screaming buys when people were engaged in panic selling of both. Two months ago I updated you about the opportunity again when they were still good buys. I hope you took the opportunity and bought one or both when they were fire sales. If so, congratulations to yourself for a good move. You are not only seeing a nice capital gain (over 10%), you can continue to enjoy a very nice dividend yield which should be around 12-15% depending on your buy price. NLY is currently trading at $15.66 and AGNC at $33.12. At these prices, I won't buy them now as NLY is almost at its book value (98%) and AGNC is actually over its book value now (1.02%).

For myself, I'm having both positions outstanding but in an unconventional way. I sold their long-term puts and currently seeing quite good paper gain along with their share prices going up.


NLY Jan 17 '15
$15 Put                  $1,500.00 -100   $3.65   +$9,912.5     +27.09%   -$26,000.00


AGNC Jan 18 '14
$30  Put                 $50.00      -10     $5.05   +$2,482.22    +48.98%   -$2,550.00

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