Consider Selling Capstead Mortgage (CMO) Before Earnings

July 20, 2010

I have had occasion to suggest Capstead Mortgage as an attractive purchase partially based on attractive economics created by historically low interest rates, and partially based on the number of difficulties in evaluating most other investment firms that are not encountered with this one. Capstead Mortgage purchases adjustable rate mortgages on a leveraged basis and […]


Definitely time to be in Capstead Mortgage (CMO)

May 5, 2010

I have gone over the details of Capstead Mortgage previously: that their exclusive concentration on adjustable rate mortgages insulates them almost completely from interest rate movements, and the blank check that Fannie and Freddie got from the government makes their loans absolutely safe, so the only thing to worry about is what premium to book […]


I may have to be back in Capstead Mortgage

October 29, 2009

As some of you may recall, I suggested getting out of Capstead Mortgage (CMO) on the grounds that its fat dividend (currently 17%) couldn’t last forever and that, at a price of $14.60 and a book value per share of $11.50,  the price represented well over a year of excess dividends, and the Federal Reserve […]


I’m out of Capstead Mortgage

September 17, 2009

I suppose the ideal solution for me would be to align this blog with a subscription newsletter. Telling you what to buy would be free, but telling you when to sell would cost you. Since that strikes me as a little mercenary, I’m telling you all that I’m out of CMO. If you’ll recall, I […]


A good beginner stock? (Capstead Mortgage).

June 19, 2009

On a forum I visit regularly there was a post when a novice investor asked if there was a good beginner stock that he could learn the ropes with. The general consensus was that there is no such thing as a beginner stock; all stocks were viewed as extremely complex generators of investment returns, full […]