Wednesday, August 01, 2007

AHM Underwater

Boy, I'm glad I didn't buy that AHM ( sub req'd) when I was thinking about it! I mean, I believe in my stop-loss orders and all, but the best way to prevent a loss is to avoid it outright.

Now, it will be interesting, purely as an observer, to watch what happens to AHM going forward. My partners and I have used AHM for the majority of our loans in Baltimore. While we're still performing, we'll definitely be looking for a new source of funding. That will be easier said than done.

90% haircut in one session. Its crazy to think that I was leery of them with a yield of 17%, ain't it? I liked the numbers, but given the expected (now realized) turmoil in real estate, I foresaw problems with their stock price even before this blowup. Now there aren't even earnings to calculate a P/E. Dot com, anyone?

The lesson to be taken away from this, if it wasn't already clear, is listen to your instincts.

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