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To: Spekulatius who wrote (19365)	6/29/2004 12:16:51 PM
From: - with a K	Respond to of 78507

I had sold the last of my WM shares near the end of Feb. at just under $45. I'm not surprised by the announcement but at the size of the warning. Washington Mutual slashed its 2004 earnings outlook on Monday, citing rising interest rates that are eroding its mortgage lending business. It said it expects 2004 profit of between $3.00 and $3.60 per share, down from $4.21 last year, and said its mortgage business may lose money. It previously expected to make a profit of about $4.35 per share, spokesman Alan Gulick said. Analysts polled by Reuters Estimates, on average, had forecast $4.05. The lowered profit forecast was the second from Washington Mutual in seven months. On a related note, Dale's Baker's new pick FMT looks interesting at first blush. Any comments here? FMT's PE has been under 10 since 2002, having lost money for a while prior to that. So I used very conservative estimates: Company: FMT Date: 6/29/04 Next year's expected earnings: $4.00 EPS growth rate used for estimate: 8 P/E maximum used for estimate: 7 Graham Fair Value: $64.77 Current Price: $17.29 $ difference: $47.48 Percent Growth to Fair Value: 274.60% finance.yahoo.com

To: Spekulatius who wrote (19365)	6/29/2004 12:43:36 PM
From: - with a K	Read Replies (2) \| Respond to of 78507

SI post on WM: Monday, Jun 28, 2004 10:31 PM View Replies (1) \| Respond to of 15981 This press release was a huge surprise to me. No, not that WM is going to warn, or miss earnings big time when they report July 22, but rather the way that they sounded like it was a surprise to them, and how little they have done to prepare for it. Now I wonder about their portfolio. They were swamped by the big refi mania that peaked July 2003, as well as the mini refi mania that ended around Jan 2004. As a result, they funded an unknown amount of loans that has to be at a loss since rates had moved up since then. If they sold these loans, what is the loss? If they decided to portfolio these loans, they are sitting on a paper loss. Regarding staffing, biz.yahoo.com the story was supposed to be that they had cut staff, decided not to add staff during the mini refi mania so they should have already downsized enough. That is clearly not the case. Having heard the last few conf calls, Killinger impressed me as a hard selling shoot from the hip CEO, with more noise than substance. Now the guidance is $3 to $3.60 for the year? I am willing to bet that they will miss $3. Unfortunately, WM has an out. They would probably put themselves up for sale if it gets really tough. It is tough to short, without having a good understanding what the takeover value may be. Message 20262767