Redwood Trust, RWT. It's a mortgage real estate investment trust. It invests in typically non-agency jumbo mortgages, that is to say mortgages on bigger properties not backed by Fannie and Freddie. It buys them mainly with equity. It steers clear of what they call leverage on Wall Street. It yields a little less than 7 percent. It's priced to move (ph) less than 1.3 times book value means it's pretty cheap. What is I think especially interesting about Redwood is that it's holding a lot of cash. It I think is opportunistic and it is waiting for new supply that is likely to be coming from downgrades by Moody's and others.
James Grant's recommendation December 24, 2009 (14.48):
