While the markets were mixed, it appears that my actual portfolio, small as it is, gained 2.5% today. XTO made some big gains today. TMA-PF did not do so well.

Can anyone explain this to me? Thornburg reported "good" news in the debt offering, so they are going to survive. This caused a jump in the price of the common stock. However, the common stock is more diluted. The preferred stock dropped 4.21%. What I don't understand is that this preferred stock gets paid dividends before any common stock. The debt offering obviously gets paid first unless they convert to common stock. The preferred stock gets 12% before the common stock dividend gets paid, plus since it is cumulative, they have to pay all the arrears as well. This actually is good news for preferred stock holders, but they had a sell off, while people bought the common stock. Am I just stupid, or is the crowd? The guaranteed dividend (at least as long as Thornburg survives) is way bettter because as a REIT, they must pay out at least 90% of the profits. Since the 12% is based on $25.00 per share , the guaranteed dividend is $3.00 per year per share. These shares are trading at $4.10 per share. 75% dividend payout ratio. WOW! I just wish that I would have waited until it fell to this level to buy in instead of at $8.53, but I thought it was a good deal  at that price. Maybe I will buy more because debt gets paid first, but preferred comes second. Common stock is last if anything is left. So why buy the common. On top of that, the preferred is convertible into common stock as well, but who would want to do that at this point.

On another note, My practice portfolio gained 1.82%. The big winner was Hurco (HURC) with a 6.01% gain. The biggest loser was Valero, which is the biggest loser overall, but remains on my list. While they have missed Q1 forecasts, they have an incredibly cheap valuation. They either have good financial stability or have had consistent EPS growth as well to stay on my list.

About TMA following may explain - note the bold section  (bold added by me) as for the common many have not done good research.

Mar 25 02:14 PM
Credit Suisse report
25 March 2008
Americas/United States
Equity Research
Mortgage Finance

New Financing More Costly to Common;
Alternative is Bankruptcy
With the March 27 capital raising deadline approaching Thornburg
Mortgage is attempting to change course in the type of capital raised. We
view the new financing as more dilutive to the existing common
shareholder than the initial convertible plan; the alternative to not
completing the financing is bankruptcy.
?
Capital Raise: Thornburg is changing course and attempting to raise up to
$1.35 billion of senior secured notes instead of raising $1.0 billion of
convertible debt. The senior notes will bear an 18% interest rate and carry
warrants to buy about 1.6 billion shares at $0.01/share. The new debt is
contingent on at least 90% of the preferred stock being tendered at $5 per
$25 of liquidation value; the preferred shares are currently trading at $4.45. If
the tender is unsuccessful the new debt holders would have a priority claim
on the principal repayments on the underlying mortgage collateral.
?
Pro-forma Book: We estimate that TMA's common book value (using
principal outstanding) is about $0.60 (assuming 100% of the preferred is
tendered), compared to our estimate of $0.80 under the convertible capital
raising scenario. Common book value would be negative using current
market values of the assets.
?
Earnings available to the common shareholder will remain depressed
as $325+ million of revenues are needed to support interest (on
corporate debt) and operating expenses. We are maintaining our
Underperform rating and $1 target price, which approximates book