Orchid Island Capital Inc. (ORC)

[bar1080]

Several years ago on a Friday I came VERY close to buying another mREIT which had an active board on IHUB. Mainly I was looking for a yield stock that would offer performance Non-Correlation with my portfolio. Put simply, I was seeking a solid investment that might rise when most stocks fall.

I had been vaguely familiar with mREITs since they were created around 1970. But they're complex investments to analyze. mREITs, I knew, were basically highly leveraged bond funds (ORC is about 7X leveraged). To make them even more inscrutable, they engage in complex hedging.

On that Friday I planned to enter a buy early Monday. But after researching the history of mREITs on Saturday and Sunday, I discovered that the group had a long history of failure.

What happened, I wondered, to all those mREITs from the 1970s, 1980s and even the 1990s? It was very difficult to learn about them. That was a very bad sign. If I would invest in a Mortgage REIT I preferred one with a pedigree. Many of my investments date back 100 years (UPS, Walgreens, MMM and Boeing for example). Where the hell were the pedigreed mREITS??? Where were the mREITs that survived market meltdowns?

By that Monday I had decided two things: 1) Few mREIT buyers understood much about them; 2) The group was far too risky for my taste (or for most retiree accounts, IMO).

As for ORC, I've read every post of this board. I've examined ORC's lifetime performance (it only dates back to 2013). I've seen its terrible performance lately. I'm not impressed with ORC.