Even when you are wrong, can you be right? Sometimes an overabundance of caution can blow up in your face. Investors are wise to “sit on their hands” rather than jump at every concern. Conversely, we must act to avoid problems before they consume us.

Last week we wrote about Annaly Capital Management (NLY). NLY is a great company that is organized as a Real Estate Investment Trust (REIT). Because of this, they do not pay income taxes. They pay out 95% of taxable income to shareholders, who receive a 1099-Div. to report on their taxes.