$300 million market cap. A very stable mezzanine financed building. They lend money for short-term real estate loans and are tight lending the money. If there is no loan to be done, there is no yield. If they do a loan, they just flow the income back to you. A very consistent business. Putting this into a TFS account is a wonderful vehicle. Yield of about 9%.

(A Top Pick May 5/14. Down 3.53%.) The trouble was repayment issues last year. They lend short-term to developers. They are underinvested, which hurts their bottom line. They have kind of solved that problem and it is cheap, trading at a 10% discount to its NAV. The mortgage market is still earning a very good rate of return on a risk adjusted basis. He thinks this does recover and does well over the next year.

(A Top Pick Feb11/14. Down 1.52%.) You are just basically getting a 7% rate of return, but he’d like to see the NAV stabilize, which it kind of has. The biggest concern is that rates are so low and there is more competition in the space. It’s like they are on a treadmill. Once the mortgage gets paid down they have to go out and re-distribute the money. It is challenging, because they are always trying to get ahead of themselves. Cheap at these levels.

A mortgage REIT.  They are smart people.  The return is safe.  You should be income focused.  It should react well in a rising rate environment.  It is not exciting, however.

Has underperformed and got hit by the interest-rate movement. Focuses on mortgage lending to multi-dwelling apartments or hospitals, short-term lending that banks don’t want to get into. Used to be a closed end mutual fund but is now a corporate entity so the trailer they had to pay to advisors has been eliminated. Trades at a big discount to its NAV which probably trails back up in 6-12 months.

(Top Pick Apr 25/12, Up 1.43% Total Return) It earns a 6% yield so you don’t get much price action out of it.  It is secured mortgages that are well diversified. [Mr. Gardner said on the show that he thought distributions were on top of the return listed, but the BNN news letter lists this figure under total return.]

Owns this in his bond portfolio. Well diversified. Their loan to values are generally 60% leveraged so you need a drop of more than 40% to take a hit. A great investment in your tax-free account.