Better late than never on this post, I suppose.
I started out this blog writing about all of my lessons learned from past investments, which is all well and good, but it's really more important to be focusing on present and future investments.
So I'll be sharing what I'm buying each month and why.
Then we can all see whether the trade belongs in this list, or this one.
The stock I purchased for July 2007 is Annaly Capital Management, Inc. (NLY).
Annaly is a real estate investment trust (REIT) that makes money from the spread between mortgages it sells and bank loans it buys. Therefore, with bank loan rates now near historical highs, and due to fall just as soon as the Fed decides to cut rates, I think now is a great entry point into NLY.
The stock was punished in 2005 due to rising interest rates and a cut in its dividend, but it has been slowly recovering and has been raising its dividend for the 6th consecutive quarter.
So in the long term, the stock price should appreciate; but in the meantime, there is a 6.5% yield to reward investors while they wait for the Fed to make its move.
Another thing to like about NLY is the CEO, Mike Farrell. He saw the sub-prime mortgage crisis coming and avoided it, and unlike most, he has insisted that we are in the early innings of the crisis (which is my gut feeling as well).
This demonstrates his ability to manage the company's assets, and that he has the best interests of the company and its shareholders in mind.
