Afternoon Observations

  • I nibbled on some NLY. They are a mortgage REIT and were trading below book value. They basically hold Fannie and Freddie bonds. If I could buy a dollar for less than a dollar I'll take it. These guys are very conservative so if they go under there are not many stocks that can be owned. They yield well over 15%. JP Morgan estimates that in the next year they will yield 20% at the current price.
  • The vast majority of my money is still in cash. Yes there is blood in the streets but during the last Bear Market the VIX got over 40 before every major rally. We got to 35.58.
  • If the VIX goes over 40 I am planning on holding my nose and buying.
  • eBay acts like a champ.
  • America is still a great country. We work harder than any other people in the World. However, there are too many imbalances in our economy that need to be repaired. The transition will be tough but the sun will come out again.
  • It's always darkest before dawn.

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