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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (30664)	7/25/2008 2:01:33 PM
From: Jurgis Bekepuris	of 78748

TRAD - again. I looked at their Q2 numbers. There's good and then there's bad. The bad is large decrease of interest income. I am not an expert here, but it seems that it was caused by interest rate decrease and not tightening of the spreads. Now, assuming the rates will go up, the income could go up again. On the other hand, this is still a negative, since it is something that the company does not control or controls very little and which wags the rest of its income. Roughly speaking they lost >30% of income due to interest income drop. On the good side, brokerage commissions and fees have increased over 20% although expenses have increased about 20% too, which is not so good. Overall, one has to make two calls here: 1. macro call that interest rates will stay flat or go up for interest income to increase. 2. market call that TRAD will continue to gain/keep customers and fees/commissions will not experience a decline due to price war, etc. I am not certain of either of these things, so I will sell my tiny position here. IMHO TRAD is not very cheap and not very expensive here. It could still be an OK holding for diversified portfolio. :)

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