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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: - with a K who wrote (19368)	6/29/2004 9:02:22 PM
From: Spekulatius	Respond to of 78515

re WM - Pretty interesting post. I agree that the earnings miss is much higher than anticipated. I have been cautious with respect to stocks that are generating a substantial part of their income in th mortgage business for a while and this confirms my view. It is interesting that WM exepcts to just about break even in the mortgage business so pure players should be hurting much more.

To: - with a K who wrote (19368)	6/29/2004 9:42:11 PM
From: Madharry	Respond to of 78515

This pronouncement by WM just astonishes me. I don't follow the company but it's supposedly a blue chip performer with top quality management. The release is vague as to how they are suddenly losing gobs of money in the mortgage business. Does anywone know how they account for their servicing income? Perhaps they have been booking a portion of it up front. It is quite possible that the decline in revenue in new business booked as well as declining interest spreads is now eating up all profits from the mortgage side of the business but they should be experienced enough to know what their potential downside is.