August 15, 2019. Whew. Yesterday was tough. But the Core Portfolio did not drop nearly as much as SPY, which is what we would have expected. The good news is that we received a ‘bunch’ of dividend payments overnight which is what this blog is all about. Income.
Yes we DO expect a recession next year, based on what we are seeing. But we will worry about that in the coming months.
Here is a video you should watch.
We started watching CIM Chimera a few weeks ago at $19.47. It spiked up to $19.88 at which point we lost interest.
So today we see CIM back down at $19.43 paying a huge 10.3% yield. We saw one article on SeekingAlpha.com which is linked here which will give you a detailed discussion about the Company. Essentially, CIM is in the residential and commercial mortgage markets.
We are placing a BUY LIMIT ORDER GOOD TILL CANCEL at $19.43 for a small starter position.
Chimera is not immune to volatile rates. The net interest rate spread, core income, and book values continue to hold up very well over the year. What is more, the company is significantly covering its dividend. However, a near $3 premium-to-book is just too expensive. As such, investors and traders should wait for the name to dip further, and we believe that dip has begun. To be clear, we love Chimera. It is in our income portfolio and is one our traders love to swing. It is a shining example of a strong mREIT, even though it is not immune to volatility in rates. For those who do buy here, even if shares are stagnant for years on average, it only takes a few years to make your entire investment back in dividends.