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Industry Discussions / Real Estate Inv. Trusts: REITs


Subject:  Re: WSJ: Regulators Worry Mortgage REITs Pose Th Date:  4/21/2013  3:01 PM
Author:  stat5guy Number:  74152 of 83886

We owned both New Century and Thornburg Mortgage.

We bought New Century in 2006 and in Feb 2007 the price dropped from about $30 to $19 on one day. The share price had been on a steady decline but the dividend had kept our investment above water. As luck would have it, on the day of the big drop we had a limit oorder in to buy if the price dropped below 29. So we picked up another 100 shares at $20. The price trneded lower for the next few weeks and we sold all our shares at $15. This is and was our biggest loss ever. Three days after we sold, the price dropped to about $5. In less than a month the price dropped from $30 a share to $5, and never recovered.

On TMA we bought 1000 shares after it dropped a huge amount figuring it would go bankrupt or recover. As it turned out we lost about $1000. This was pure speculation and we deserved what ever happened--- either the large payback or the loss of our investment.

The only consolation is that we never had more than 1% of our portfolio in mREITs. So while our IRA balance suffered the New Century loss did not have a huge effect on our portfolio.

I posted mainly to say that even a prudent investor who watched their investments closely can lose a big deal. We no longer chase the high yields of mREITs.

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