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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: sjemmeri who wrote (8183)	9/9/1999 6:14:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78666

Steven E., Wallace R. et. al.: Looks like there's some interest here now in mortgage REITs, and we've all got our favorites. To me, seems like there's some industry consolidation going on: CMM - Steven's choice, and I'm looking at (don't own) ICH which AXX would like now to acquire, but ICH already has an offer from AMCT. Holders of ICH at current $6 price will get a good div. yield if the AXX offer goes. I notice the buyouts are for less than book value which initially surprised me, but on reflection, I guess might be reasonable, given that the acquirer is also taking on the responsibility for relatively large amounts of debt. These mortgage REITs pay great dividends (right now anyway). I've found one I'm watching that yields 17%. As Wallace says though, "assuming the dividend holds (a big assumption)". Very tough for me to figure. Collaterization, securitization, interest rate risk, treasury bond fluctuations, spread risk---. Actually, it seems impossible for me to understand let alone figure out next steps. Maybe a way around it might be to follow the insiders if there's insider buying and/or no insider selling. I had thought if the selling price were below book value that would provide some protection, but now I'm not so sure that is enough. Paul