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| Symbol | Sector | Return | Exposure | Trades | Last Trade | Status | |
|---|---|---|---|---|---|---|---|
| WAMUQ | Banks | -99.19% |
|
27 | 09-Sep-08 | Currently Holding |
07-Mar-08
The problem with Wall Street Research
Holding Rationale for WAMUQ.
Washington Mutual's (WM) stock price is down nearly 14% today as an analyst from Merrill Lynch released a research report that stated loan losses over the next two years could be as high as $11.2B. For a thinly capitalized bank with inadequate credit reserves, this report led to a dramatic decline as investors began questioning WM's viability. So what is wrong with this report? Simply, that it is 5 months to late and the stock is already 50% below where an astute investor could have sold shares during the fall. In mid-November, on this website, I posted investment rational to short WM with the belief that total lifetime credit losses would be $12B. Using publically available information, I crafted my analysis and developed the story of a stock that would fall with no take-over offer in sight. While I applaud Merrill Lynch for finally getting the number right, one must ask what took them so long.
Tagged Stocks: WAMUQ
Posted at 11:49 in Holding Rationales | Permalink | Comments () | Top
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