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Strategies & Market Trends : Dave Gore's Trades That Make Sense -- Ignore unavailable to you. Want to Upgrade?

To: sandiegobear who wrote (16515)	7/27/2003 10:57:01 AM
From: mishedlo	Read Replies (2) \| Respond to of 16631

I believe this to be a flawed business model. That said, shorting something that is 75% short is risky business. Subprime loans killed MXT and ACF. Poor loan portfolios nearly killed S and it would have had they not been able to dump them. C well overpaid for S bad debt IMO but C is better able to handle it that S was. Subprime one-market ponies are very very risky. COF was getting hammered as well but decided to go into other markets. I would not be surprise to see this head to zero but I offer no timeframe or guarantee. If housing prices start to drop, or defaults pick up more than they have, (with more and more jobs being lost every month - I believe one or both of these to be extremely likely)you would not want to be anywhere near this stock. ======================================= NovaStar Financial Inc. invests in mortgage assets, with a focus on non-conforming mortgage loans. The Company also originates single-family non-conforming loans under the name of NovaStar Mortgage, Inc. and manages retail brokers operating under the name NovaStar Home Mortgage, Inc. Loan servicing is also a critical part of its business operation. By servicing loans, the Company strives to identify problems with borrowers early and take quick action to address problems. As of December 31, 2002, NovaStar had 216 active branches in 35 states.