First Marblehead (FMD, Wallstrip) has become a trainwreck. It did not take long. Take a look at the last few months .
A better symbol than FMD may just be WMD as this stock has been a weapon of mass wealth destruction of late.
I was stupid enough to pick this as a Wallstrip worthy stock back in February. I was smart enough (lucky) to stay away from it and blog the same at the time . In March I actually blogged about it as a short candidate . In April, after the FIRST 50 percent decline, I revisited it . Thank goodness I passed. Others have not been so lucky.
Few things here…If you buy broken, busted stocks like First Marblehead, you better know the freaking story because even if you THINK you know it, YOU DON’T. I have been poking at Starbucks thinking I understand the broken possibilities. It has poked me back with losses.
As I wrote back in March…
One third of all stocks do the BIG ROUND TRIP to ZERO and that is why I don’t buy falling knives anymore. The few that go to zero that you and your conviction are buying all the way down will leave you broken.
Trends end. Stocks that make all-time highs can be at all-time lows shortly thereafter. Remember that when you are feeling cocky and your stock looks invincible. They are not!
Except Apple of course :) .
The stock market is not a game and not easy.
Disclosure – Long Apple
Written like a guru on the sideline, not a sage on stage. Love that. Thank you.
fmd is now a mess and i dont follow brokern stocks. What the hell do any of us know.
Rick sales are smart My last pice has a stop at $16 and you have to sell a little on the way uip.
I believe it is 1/3 and I ill check again with cole and eric at blackstar
Great post and stat, and one worth remembering. For most, it takes a while to learn, a lesson that was taught in 1999-2000. This market will mind mush your psyche and force you into humility if one hasn’t acquired it yet.
boo your rick sales, but this was a good post howard. Is 1/3 a real stat, or an “I heard it somewhere” because that is pretty incredible!
is it profit talking or do you think they’re done? I think they close these acquisitions well and next year that stock sees +30