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Sunday, May 19, 2013

Opportunity is coming again for NLY and AGNC

Unfortunately I will be extremely busy moving forward in the rest of the year and I'm not sure if I can continue to write as regularly and often as in the past. I will try my best but likely will be more sporadic and less detailed. Hope I can still give your some thoughts on opportunities as far as I can in a timely fashion.

Not sure if you have noticed these days that AGNC and NLY were both hit very hard. Well, this could be another good opportunity for buying them, if you not yet having them at all, or adding more shares to your existing positions. The idea is to buy them when they are trading substantially below their book value. Right now, here is the what they stand:

AGNC book value $28.94, current price $29.65
NLY book value $15.19, current price $15.01

AGNC is still a bit above its book value but NLY is slightly below its book value. While my gut feeling is to expect both of them may go further down before stabilizing, there is no sure thing on this. Buying some at this price is not a bad idea although not a supper great deal. Dollar-averaging is always a better idea in such an uncertain period, i.e. buy a bit now and buy more if it declines more.

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