Tom Brown at bankstocks.com is smart.
Last week, already buried in SubPrime stock hell, he wrote a post entitled:
“It’s Time to Get Greedy”.
The headline is coming back to haunt him today. His stocks are all down another 30-60 percent – TODAY. Here is the Bloomberg update on New Century (NEW) and the rest of the group . Amazing reading.
When you make focused bets like he is, YOU ONLY HAVE TO BE WRONG ONCE! He is very wrong. He may not even be in the game to see how it really plays out and have the chance to get proven right!
The market is a cruel animal. It finds your weakness. This story is one that I will follow for a while, especially since I read his blog and site daily.
Understand, that his pain can lead to further liquidations and further drops in the stock – UNRELATED TO THE FUNDAMENTALS. Also know that the hedge fund sharks smell blood and are circling these positions knowing who the doomed holders are.
For the Subprime lenders, Goldman and the rest of the banks are going to have to step up and extend some terms and credit to these lenders – OR IT’S OVER!
I believe the market is all about new opportunities and you never use the “greedy” word with stocks. Live to fight another day.
Man, why that guy put his neck on the line and suggest that readers try to catch these falling knives… These stocks got straight bitch slapped today, and I wouldn’t touch the sector with a 10 foot pole even at these levels. NEW and LEND are the 2 I have primarily watched, but I’ve stayed away from the sector overall. What about you, did you short any of the sub-prime lenders or are you a long only kinda guy?
Most of these stocks have been in bad trends for a long time (even years). The acceleration in the negative trend is what’s catching everyone’s attention, but it shouldn’t really be a surprise to anyone who has taken a look at a chart that goes back a few years.
But Howard.. the real point is… he has a much nicer picture than I do! nice smile there.