Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of mortgage REIT Capstead Mortgage (NYSE: CMO) temporarily dropped as much as 13.6% this morning on a tremendous volume spike, only to retrace back to a much lesser drop in a matter of minutes.

So what: It wasn't a bad earnings report -- that happened two days ago and didn't cause much of a stir. No, Capstead's plunge-and-climb was mirrored exactly by other REITs such as Annaly Capital Management (NYSE: NLY), Chimera Investment (NYSE: CIM), and American Capital Agency (Nasdaq: AGNC) because mortgage-bond repo rates spiked overnight and threatened to damage the entire industry.

Now what: The instant recovery came as opportunistic investors pounced on what looked like a panic-fueled opportunity. Whatever floats your boat, I suppose -- these stocks all come with tremendous dividend yields that are further amplified by every price drop. Just remember that the REITs are basically paying a reward for accepting their huge risks, and that not every enormous dividend story ends well. (Spoiler: NovaStar Financial went supernova in 2007 and now sports a pink-sheet market cap of about $3 million.) In other words, jump in on these drops only if you know exactly what you're getting into, because the panic-sellers might be right.

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