Yesterday, American Capital Agency's (NASDAQ:AGNC) CIO, Gary Kain, spoke at a conference and revealed further details behind his company's odd strategy of buying common shares of its competitors, like Hatteras Financial. The move has turned out to be a great one for American Capital Agency as the sector has rallied and valuation multiples have increased. So far in 2014, Hatteras Financial has given investors a total return of nearly 30%.

In the following video, Motley Fool banking analyst David Hanson discusses Kain latest comments and tells investors why American Capital Agency won't always employ this unique strategy going forward.

David Hanson has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.