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| Symbol | Sector | Return | Exposure | Trades | Last Trade | Status | |
|---|---|---|---|---|---|---|---|
| WM | Banks | -16.50% |
|
26 | 28-Aug-08 | Currently Holding |
07-Mar-08
The problem with Wall Street Research
Holding Rationale for WM.
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: WM
Posted at 11:49 in Holding Rationales | Permalink | Comments (1) | Top
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1 Comments on "The problem with Wall Street R..."
They're the ones that were unconscionably bullish all the way down in my first experience in the markets years ago, not to mention during the 2000-2002 hiccup. And I really think it's fitting for you to point out what you had to say about this 5 months ago, as it underscores the value of what's going on here at Covestor vs what passes for value elsewhere. Furthermore, as has been widely noted in recent years, not only has Wall Street research insulted our intelligence, they have compounded the felony by going back and revising what they said, tossing out bad calls here and there, and inflating their otherwise lousy records. Thanks for reminding me as to why I pay them no attention whatsoever. And thanks for all your helpful information here! Don
Posted on 08-Mar-08 06:44 by Don_Bartell
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