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Strategies & Market Trends : Anyone following Capstead (CMO)?? -- Ignore unavailable to you. Want to Upgrade?

To: MCsweet who wrote (163)	12/13/1998 10:53:00 AM
From: jmt	Read Replies (1) \| Respond to of 216

CMO states "by year-end the companies mortgage investments will consist almost exclusively of 2.2 billion of Fannie Mae, Freddie Mac, and Ginnie Mae securities financed by approximately 2.1 billion of short-term borrowings." I am by no means an expert on this subject, but this does not sound too high risk to me. I cannot argue with your reasoning. And given the mortgages are financed with short term borrowing suggests prepayments can be used to immediatly retire debt, preventing an asset / liability mismatch. This is likely what caused the losses in the last quarter. I do not know enough about this company to comment on its attractiveness. But I do know if the company has net cash (Cash & Mkt securities) less liabilities at $9 per share as stated, it would not be trading at $4. jmt