Pete shrugged, 'This show is called Fast Money for a reason,' even though it's actually called the 'Halftime Report,' for a reason. 'Would I rather get 12% or 50%? I'd rather get 12% with less risk,' Terranova said. Pete Najarian revealed, 'I have owned Apple forever,' but said 'I'm not so sure about generational buy' as Terranova keeps saying, specifically because it's not delivering the beta and asking Terranova if he'd rather pursue 12% or 50%.

Joe Terranova asked himself 3 questions about AAPL on Friday's Halftime Report, then concluded by saying China is the next catalyst. But what I later realized was that this profit would pale in comparison to the loss that would occur once the short term cost of borrowing exceeds the yield on the companies portfolio of mortgage backed securities which has a mostly fixed rate of interest.Pete notes that Research in Motion in October was the real generational buy The interesting thing about this stock was that there was an interest rate swap position that would begin yielding a sizable profit if interest rates were to go up. I had previously thought about buying this stock because I didn't quite understand why rising interest rates were a bad thing for a mortgage reit. This alleviates some of the prepayement risk.ДЈ) Agency Callable Debentures- non-collateralized loans made to a government backed agency (low risk of default)ДЄgency Mortgage Backed Securities, Debentures and Corporate Debt ($118.3B in principle w/ $8.4B variable and $109.9B fixed with average yield of 2.59% and 2.76% respectively) Either way, money is returned at the time when it is least wanted.Дў) Collateralized Mortgage Obligations (CMO)-This is similar to (1) except they use a tranche system to allocate prepayments which gives the buyer more control over the maturity of the investment.

These have prepayment risk meaning that people can choose to prepay loans if interest rates fall or not do so because interest rates are climbing. The following are the primary sources of profit generation:ДЎ) Mortgage Pass Through Certificates- they purchase a share of a pool of mortgages (usually 30 year fixed) and receive the monthly payments of interest and principle. They use short term debt to finance the purchase of long term debt i.e. Growth seems to come by acquisition and being up more than 60% so far this year, I'm not sure if I'd be getting a good deal on this but maybe worth a look.ДЄnnaly Capital Management (NLY) is a Mortgage REIT. The article alleges that this is a fairly recession proof business which is a plus, but profit margins are narrow. If this is an accurate valuation of the real estate assets, it raises the question of whether it makes sense to invest in a company just because it is sitting on significant assets even if those assets aren't really making money.Дescribed as being in the supermarket business in this article, it appears to be steadily growing. I suppose a better comparison would be to compare to enterprise value.

They value SEARS real estate at $8.6B which is more than the market cap of $6.26B. I've adjusted EPS for these write downs and the resulting table is shown below.Д«aker Street Capital says SEARS real estate holdings is worth more than the entire company. Two years later the goodwill associated with the acquisition was written down in the amount of $87M or $1.36 per share. In the same year they acquired Universal Safety Response, Inc. This had a per share impact to the tune of approx $1.63. In 2009 for example, Smith & Wesson had an unusual operating expense as they wrote down $98M for long-lived intangible assets. It may be slightly misleading to rely solely on this result to decide that one company is more predictably profitable than the other. 2014 EPS is the consensus analyst estimate. The record below shows the EPS history for RGR compared to SWHC. I find inconclusive evidence to suggest that the gun industry will experience a fall in demand this year. Ruger represents a better investment than Smith & Wesson due to conservative management which has kept expenses low and has made less bad overall decisions.This is recognizable in the earnings record.Дў. SWHC comparison and the other having to do with the firearms industry in general. One having to do specifically with the RGR vs. They are both smallcap firearm manufacturing companies. I recently compared Smith & Wesson (SWHC Mktcap 856M) and Sturm Ruger (RGR $1.17B).

Swhc writedown