FIG trader_

First Marblehead: Hostage to the Credit Market

Please do tell. Analyze this for us at least one way, for Xmas sake. On the other hand, for those who viewed this as a short in the 30's 40's or 50's, you may want to try a flier at tis in the next few months well below yesterday's close. But if course if you are operating on even a fraction of the same assumptions as many did over the last three years, fuggedaboutit. You need Paulson like hedgefund returns to recoup you initial investment. Personally, it may be worth revisiting the whole scheme, i can think of long-term scenarios of value building

Tom Brown’s School Days

It was a cheap shot, and yes out of context. From my recollection, he was one of the first to call for a shakeup at C, before doing so was an easy "sell".

First Marblehead's Demise Effectively Closes the Bear Case

One would have thought the posse would have been called home by now; Its been weakened, but reinforcements seem everywhere these days. Perhaps you didn't see the stop loss on SLM. You embarrass yourself less often when you take this approach. But of course you have so much conviction about your "idea", you don;t feel the need to. As a result, you are left....

Two Reasons To Buy Sallie Mae Before Everybody Else Does

Fortunately, I had stop loss at $40.00 (for long only); No case needs to be made. Bad call, I admit it. Trying to get greedy with the same names I have been right with. However, if you take the long short SLM/FMD..........

FBR's Latest First Marblehead Downgrade Makes No Sense

Well certainly, Street has come down to a loss of $.15, from almost a buck last year. Coincidently that was when the risk was the highest, and the bearish case the strongest. But, if they (and you) were so far off last year, why would anyone rely on forward estimates including March and June quarters of around $1.00? Having been a bottoms up analyst, I'm aware of the blinders analysts put on, marrying a name, and not divorcing it early enough. My advice is to stay on the sidelines, re-evaluating new "business model". I don;t have a case, bullish or bearish, for that matter at this time. The old business model imploded, as I predicted. There are plenty of "ideas", especially among financials, with less volatility in the earnings stream, the real issue here

First Marblehead's Demise Effectively Closes the Bear Case

Another bag-holder sleeps through this thing. Mine is one of many bear cases. My own original piece, written December 2006 on figtraderintelligence.... (at $50+) includes repeated responses to Bankstocks.com bullish "case" (all the way down to high teens (price target reduced in late November). right here on seekingalpha. Are you still in the bull camp? If you are still "holding" the bag, perhaps you would like to share your "thoughts" for all here to hear.

FBR's Latest First Marblehead Downgrade Makes No Sense

Needless to say, if you liked at $35 in November as you did, you have to think it is a bargain at $16 (or $18). But there is no bear case at $16. It was made by myself and others at $50, $45, $35. No bears left at this price, just sellers, and lots of them. After yesterday, seems like even BV price target is not out of question. That is a price target that not even the loudest of the growling bears could have hoped for six months ago. The funny thing (or not so funny if you are bleeding money every day and on margin), is that the guys that loved this thing at $50 are selling, and the guys that shorted it and thought it was worth half of $50 are buying (i.e. covering). Twisted world.

FBR's Latest First Marblehead Downgrade Makes No Sense

After slogging through several hundred words about bear markets in financials, I finally got to the part where Tom Brown provides a thorough exegesis of Snowling's "too late to be useful" analysis and stock downgrade. (For those so inclined, the stock was in a position to break right at that technically important $30 level when the report came out. A coincidence I suspect.) It's another one of those "shoot" the messenger explanations that Tom Brown never gave (while others did) in his days as the best bank analyst on the Street. He is giving Snowling too much credit for the stock's drop. While there is some tangential relationship (keeps potential buyers out of market for few days), analyst ratings are not the ultimate determinants of a stock's price. Proof is the subsequent 30% up move off the intraday lows ($25.+ change). I take no major issue with Brown's analysis of Snowling's assumptions; only the relevance to the stock price. He is just shooting the messenger. The difference between TB's, and MS's assumptions (tens of millions in cash flow/earnings) doesn't explain the variation in the stock's market capitalization on that day, or for the prior 365 days. (Again, please reread FMD short sell recommendation from 12/2006;The Bear Case on First Marblehead on figtraderintelligence..... No hindsight here, if I may humbly say so.) I am 100% in agreement with TB that the financials (broadly speaking) have bottomed (see capitulation piece in November) and that buying on weakness is great idea. I have just lowered my low-end target for more suspect names, in which I include FMD. Many people refuse to believe that this is a financial and price/book a relevant data point for this company. They are at liberty to do so. They can ignore my posts if they wish. But I have yet to read adequate explanation for the stock's 50%-plus decline since 2006. (I am also at liberty to not debate issues not always the most relevant to a stock's direction or ultimate value, such as Tom Brown's assessment of Snowlings' mis-assessment). For the record the stock is probably much closer to a bottom than a top, though I would have to do more homework before recommending it. Dissing it has just been too easy to pass up.

FBR's Latest First Marblehead Downgrade Makes No Sense

website is figtraderintelligence....

FBR's Latest First Marblehead Downgrade Makes No Sense

First if all, why do people like you think you are the only ones with the right to speak, by bullying or attempting to silence opposing views. (See Dec 2006 posts for original short thesis on figtrader.blogspot.com.) If you had followed my arguments repeated here on seekingalpha numerous times since, you would not be a current disgruntled bagholder. Others have, and have thanked me for it. For the record Second Curve Capital has reduced its position as of 9/30 according to filings reported by Bloomberg. Rather than follow Tom Brown's advice so blindly, do a little thinking for yourself, listening to opposing views, regardless of whether they focus on what you think is relevant. Clearly you/he was wrong on this time. Admit it, and re-evaluate your assumptions

FBR's Latest First Marblehead Downgrade Makes No Sense

Focusing on FBR's downgrade in and of itself is just masking the real reasons for the stock's total collapse, well beyond the average financial stock in 2007. One can be forgiven for being early or late to a stock; But one shouldn't be forgiven for not accurately assessing the considerable downside risk to a stock (50% in this case). Bill Miller has repeatedly said so about his own call on homebuilder stocks. In the case of FMD, "all the potential good news" was priced in the stock in late 2006, and none of the bad: credit market contraction, valuation compression; potential change in default patterns. Granted, I'll be the first to admit that for bears its been a "perfect storm". And there may well be another round trip to $50 a share. The markets are really that fickle. But I doubt it given the frost in the credit markets. My sense is that there is one more leg down in this stock, given the break yesterday coincident with the downgrade. So for value 3 to 5 year buyers, wait for high teens. Mid to low twenties was my original price target under "good conditions".We don't have them now.

First Marblehead: Worth $10 or $60?

Why hasn't anyone uncovered this gem of a stock? considering how they are practically giving it away. Seems like even the "pom-pom" crowd is throwing in the towel.

Two Reasons To Buy Sallie Mae Before Everybody Else Does

There is big demands for BMW's and their price is going up as well, but not sure who will pay for them. That thesis about unstoppable demand for education is the weakest one (I've heard it before; ) Go to my blog as far back as December 2006, and follow the thread of arguments. Its a financial, like it or not (and regardless of what the "pom-pom" crowd says, it will trade at relative multiple of book, vis a vis its forward ROE, one which will approach its cost of capital. I said it was a short in the 50's; Downside from here? Well who knows; If they can knock C down to 2002 levels, they could take this well below the mid 20's target price, under certain market conditions. I now expect the financials to rally strongly rather soon, once all big names cbust completely, so I would be careful right here. yet, it could breakdown like the rest any day. Just stay away from it, and short it on rallies to previous highs

The Times’ Hit Job on First Marblehead - Unfair and Nonfactual

Normally Tom Brown is quite thorough in his analysis of business models, though misguided in the case of valuing them, such as FMD, in my opinion. But he himself highlighted for FMD, unfortunately, the basis of student loans pricing (LIBOR). I assume he didn't realize what was highlighted on page C2 of Wednesday's WSJ. "Why Libor defies gravity." To be fair, few pundits or analysts can be credited to have made issue with this point until the past week or so (but like sub-prime, the LIBOR experts will be sprouting every day). With LIBOR circa 5.75 and Fed funds future pointing to low 4's by 2008, the 150 basis points spread (as opposed to a near zero spread) is material to profitability or affordability. Perhaps it narrows back to normal. Then perhaps it won't or it will be too late.

Why First Marblehead Can Survive Without Bank of America, JPMorgan

The problem (though less of a problem than pre-price collapse) is that the stock isn't cheap, even though the financial sector remains rather buoyant. Again as Tom should know, never underestimate the relevance of using price/book and ROE valuation metrics. Its a powerful tool, and one that will prevent disasters. I suggested in January this stock represented a short of historic proportions. At this price, it is probably still overvalued based on its limited visibility and declining ROE expectations. That is best case scenraio, one that market is currently pricing in for all financials. Worst case scenario is a small multiple of book.