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American Capital Agency Corp. (AGNC)


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I looked at this company late last year and my notes have a byline: Moral Hazard, Inc.


It seems as though the managers are taking a nice fee for allowing investors to risk their money on a yield curve carry trade. I'm curious to know how they will adjust the business model in the event of rate increases.


Otherwise, it looks like a game of repo hot potato.

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Beware of these mortgage REITs... run when people 'value' them based on P/E.


Trades above book... understand how it is they make so much money, and what skill is involved.


I'm long ACAS (edit: which owns a stake in AGNC), but am generally highly skeptical of all mREITs that aren't trading well below book, or named Annaly.



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Mortgage REIT with a huge dividend (21%+).  Company and/or risk seems to be misunderstood.  Any opinions on AGNC?


I own a very small position in it. Short-term hold while yield curve is steep. I would recommend looking at ANH as well. This REIT is trading at less than book with a company buy back in place.


Overall small positions and clearly a bet on the yield curve. My personal opinion, derived from my job as a commercial lender, is that the economy remains weak and that the government is going to be slow in increasing rates. This should allow for another 12 months of solid dividends.




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