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Strategies & Market Trends : January Effect 2008 -- Ignore unavailable to you. Want to Upgrade?

To: TheLineMan who wrote (3)	12/2/2007 7:25:34 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 65

Hello again LineMan, uh, well perhaps I missed your rephrase, at least it took me awhile to figure out the missing "J", as in Jump. While I agree that the extremely oversold and most hated stuff is in mortgage and building, the bankruptcies (in the sommer rout) and the recent lack thereof make me wary. One could say, things are somewhat stabilising and selling may have been overdone but then I see real buyers nowhere, as most larger investors buy convertibles (as in CFC, C...) and shun common stock. I agree with you that mortgage cos are difficult to understand from an accounting perspective. All I see is that if they dont produce anything (and production is not there) they dont earn any money but rather suffer as their residual "Z" bond depreciate on a daily basis. Or worse, repurchases of unsaleable whole loans more than undo previously made profits. To make thinks worse they can file for bankruptcy on the spot, from one day to the next as if someone switches off the light. If AHM, NEWC, LUM, FCMC and many unlisted more were no warning shot what else does it take. Now add BZH, TOUS and disgraced homebuilding stuff and you have a shopping list. That said, Survivors may also be cheap and they do look oversold. Despite all problems there might be people who see value in CFC, IMB, perhaps even Thornburg and LUM just to name a few. NFI is definitely in the craps tables category... come out, dont pass (away). Then, do not overlook fallen angels in the biotech and semiconductor area. Those are cash rich, without danger of Ch.11 tomorrow and just sold off as the markets shied away from smallcaps. Having said that I will divide my purchasing efforts and tracking list into 2: Mortgage/builders, with high levels of debt, and others, with plenty of cash for the next Q and no debt. Thanks to Q for keeping up the January effect efforts.