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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (40703)12/19/2010 6:56:12 AM
From: Madharry   of 79003
 
interesting that you say that, many value investors continue to believe that their shares are pretty cheap. Barrons has an article about savings banks being unusually cheap and sallie mae as well, but when i researched sallie mae it seems to be full of risk and questionable management decisions. one of the most interesting comments i read was from someone who pointed out that sallie mae really cleans up when a student defaults on a govt guraranteed loan because then sallie mae collects 100% on the guaranty and then turns into a collection agent getting as much as 1/3 of the funds eventually collected from the defaulting student. if this is true i would certainly be leery of sallie mae servicing my student loan. as an investor the 50-1 leverage is pretty alarming. On top of that I read that over 9% of their private student loans are in default now. if there were secured bonds though that would be another matter.

The macro events continue to be interesting, I wish i understood the mechanism for expanding euro money supply better. its funny to see all those heads of state posing for pictures, smiling , when they are facing such serious problems
between debt crisis, austerity programs, and civil unrest. I predict that monetary expansion will continue in 2011 and that should be good overall for the stock market and commodities as stores of value. I also wonder what the ramifications will be of china being upset with the united states and bernanke for their monetary policy which is contributing to the increase in commodity prices which china abhors. When you say cash> what exactly do you mean?
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