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Alias Born 02/27/2008

Thursday, March 15, 2012 12:15:12 PM

Re: McBuyInTime post# 270

Post# of 2537
Perhaps not at all a coincidence that the trading patterns appear they're explained well enough by the yield... which is closer, again, to where it was recently, at the now current prices. Suggests to me that the yield is a more important indicator of the market's view of proper share price, while indicating the market has a more stable view of the proper price of the risks inherent in the issue and its management based on yield, than is apparent as a function of tracking other metrics ?

The series of placements done recently also appears to have introduced an new element in terms of market dynamics... making it likely, as a routine market function, that newly minted holders resolve would be tested. Not much rocket science going on there... rather than the same old market story, showing there is always a good reason to think about buying used shares on sale, buying them from those who overpay when buying the new ones... ? Unlike the case with things like new cars... used shares bought on sale at a discount from the new ones, are actually much the better ones to own.

Otherwise, we're back to considering why it is that management has "missed" on their interest rate guesses, and have lost money on their hedging bets...

Ultimately, that's what the trade here is focused on... the performance of the issue as that is dependent on management's adjustments for changes occurring in the rate environment... with the share price being composed of traders interest in arbitrage between what the managed position is, and what the market environment suggests that will be worth in the future, as the view of the market changes...

So, will rates go up... or down ?

The Fed's been "jawboning" rates lower... while also talking about weaknesses in the economy they expected to be becoming more of an issue about now...

But, recently, the discussion has shifted back to whether or not the Fed will have to alter its longer range views... if the short term performance we're seeing now continues, making it more likely that rates will have to rise, rather than decline...

It's basically the same issue as investment in interest rate based issues always is... can you trust the Fed's direction on interest rate policy... and, how much can you trust them... and, even if you determine "how much" properly... what should you do in managing the timing of investments relative to the timing that will prove to matter in the market ?

ARR appears to have done well, for management, by growing the pile of resources under management fairly significantly, recently.

I'd say the timing in their trades with the new share issuance shows they've got a decent enough handle on the timing issues in the market...

The price performance more recently ? Well, has the "promotion" effort driven by sales directed through the large brokerages who were putting new shares to market... now come to an end ?

There's really about zero difference between pink sheets and NYSE in terms of "how the market works"... but, on the NYSE they do manage to make the same crap more palatable to the masses... by posturing it as "investment grade" crap that is thus declared suitable for sale to larger flocks of sheep. Buy low... sell high... still works on the same basic set of market expectations ?

For now, the questions appear to me to be mostly about the market psychology... of bagholders... in the newly minted shares.

And then... are rates going higher... or lower... from here ?


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