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To: Brendan W who wrote (21871)	8/9/2005 1:20:48 AM
From: Paul Senior	Respond to of 78523

FMD, uh oh. Not a good sign for others who might consider our acumen with FMD Brendan W that we both have bought this stock and we also were both buyers of Worldcom, Enron, and HealthSouth too. -g-

To: Brendan W who wrote (21871)	8/9/2005 9:59:23 AM
From: Spekulatius	Respond to of 78523

Brendan - re FMD, thanks for your very detailed response. I see some of the points you are making. I know i tried to play "devils" advocate. I am confident that FMD is not an "Enron case" case, however it could become a "Doral" case if you substitute "Residuals" with "IO stubs". Non cash earnings need to be heavily discounted, this in the end is my biggest gripe with FMD right now. if one believes that FMD's balance sheet and cash flow statement are Ok, it's a buy. I owned some WCOM because I thought at that point that WCOM's balance sheet and cash flow didn't look that bad. My lesson from that investing episode was that not all cash flows and balance sheets are created equal.

To: Brendan W who wrote (21871)	8/11/2005 6:35:45 PM
From: Brendan W	Read Replies (1) \| Respond to of 78523

FMD update. FMD released earnings this afternoon. I bought some more in the afterhours, because of what I perceive to be a lack of negative surprises in the report. In the conference call, they said the client concentration risk did decrease in fiscal 2005 (ending 6/30/2005): JPMorgan/Bankone dropped to 30% from 59% in FY 2003. Earnings came in 5c ahead of the company's projections for the year and fourth quarter. They mentioned a backlog that will get securitized in the fall but I don't remember the exact number, nor do I know how to judge it. They confirmed growth expectations of 30 plus percent for fiscal 2006. The one potential negative I heard was that client spend on advertising student loans (though growing rapidly) was being deferred to later in the fiscal year. They cast this in terms of the clients trying to match ad spending with when the loan activity was actually occurring. It was somewhat comforting that FMD views federal authorization of student loan funds as a positive. The rationale was (a) it would grow the overall market for secondary eduction and (b) greater private student loans would be required to supplement the always inadequate federal loans. Also, interesting was the CEO poopooing the idea of selling their servicing assets at par because they would then not be able to recapture the value of their truly "conservative" assumptions on the servicing assets. We'll see.