Two Plus Two Newer Archives  

Go Back   Two Plus Two Newer Archives > Other Topics > Business, Finance, and Investing

Reply
 
Thread Tools Display Modes
  #1  
Old 08-02-2007, 05:01 PM
Reef Reef is offline
Senior Member
 
Join Date: Jul 2004
Location: PCPforums
Posts: 13,198
Default Walk Away From Your House by Jim Cramer

Video Link

[ QUOTE ]
is now telling people who "made a bet and lost" to not compound the error, and to simply walk away from the mortgage and default.

[/ QUOTE ]
Reply With Quote
  #2  
Old 08-02-2007, 05:53 PM
DesertCat DesertCat is offline
Senior Member
 
Join Date: Aug 2004
Location: Pwned by A-Rod
Posts: 4,236
Default Re: Walk Away From Your House by Jim Cramer

Is this why my favorite subprime mortgage company was down 35% today? And down 50% over the last 3 weeks? I don't listen to Cramer so I bought more today and buying more tomorrow....
Reply With Quote
  #3  
Old 08-02-2007, 06:12 PM
prohornblower prohornblower is offline
Senior Member
 
Join Date: Dec 2005
Location: learning the hockey-stop.
Posts: 8,016
Default Re: Walk Away From Your House by Jim Cramer

Do you not listen to him, or do you listen and do opposite? [img]/images/graemlins/grin.gif[/img]
Reply With Quote
  #4  
Old 08-02-2007, 06:21 PM
r3vbr r3vbr is offline
Senior Member
 
Join Date: Sep 2004
Location: Porto Alegre - Brasil
Posts: 1,288
Default Re: Walk Away From Your House by Jim Cramer

DesertCat, do you invest in subprime lenders and/or homebuilders? I think this is def. a good time to be buying with all the people predicting the apocalipse and all, everything is on 52week lows etc.

Where do you see the most value on these markets? I really trust your analysis
Reply With Quote
  #5  
Old 08-02-2007, 06:26 PM
DesertCat DesertCat is offline
Senior Member
 
Join Date: Aug 2004
Location: Pwned by A-Rod
Posts: 4,236
Default Re: Walk Away From Your House by Jim Cramer

[ QUOTE ]
Do you not listen to him, or do you listen and do opposite? [img]/images/graemlins/grin.gif[/img]

[/ QUOTE ]

I totally ignore him.
Reply With Quote
  #6  
Old 08-02-2007, 06:34 PM
DesertCat DesertCat is offline
Senior Member
 
Join Date: Aug 2004
Location: Pwned by A-Rod
Posts: 4,236
Default Re: Walk Away From Your House by Jim Cramer

[ QUOTE ]
DesertCat, do you invest in subprime lenders and/or homebuilders? I think this is def. a good time to be buying with all the people predicting the apocalipse and all, everything is on 52week lows etc.

Where do you see the most value on these markets? I really trust your analysis

[/ QUOTE ]

I think there is some value in subprime, the problem is it's a lot of work to figure out where. I bought some DFC and made some nice profits and sold most of it before it replunged. I'm not going to buy it back until I do my homework on it in more detail now that I better understand these businesses.

The company I'm referring to in my first post is out of business and the market apparently thinks it's bloated corpse is worthless. It's been a great learning experience, I bought early before I really understood it and as it declined I've been constantly reresearching it and learning more.

Effectively what you need to understand is that most mortage/lending companies carry huge assets (securitizations) on their balance sheets that they don't own and huge liabilities are are totally non-recourse to them.

So you have to carve out a "pro forma" balance sheet of what they really own/owe. Then you look at the "stub value" of what cash they can reasonably get out of their securitizations. The securitizations are separate companies and you need to get their prospectuses and monthly reports to tease out how much cash flow they can generate and what collateral will be left over when it's closed. In some cases it's clearly nil, in some cases it's murky, and sometimes it's obvious that the parent company is going to get some cash.

Lots of work. But I think it's rewarding. I'm down $70,000 so far, but if I'm right I'll end up with a substantial profit by next year.
Reply With Quote
  #7  
Old 08-03-2007, 01:41 AM
pig4bill pig4bill is offline
Senior Member
 
Join Date: Dec 2005
Posts: 2,658
Default Re: Walk Away From Your House by Jim Cramer

BTW, Wall Street has coined a term for this type of "value" investing.

Catching a falling knife.
Reply With Quote
  #8  
Old 08-03-2007, 02:48 AM
kimchi kimchi is offline
Senior Member
 
Join Date: May 2006
Location: FU minbet
Posts: 1,246
Default Re: Walk Away From Your House by Jim Cramer

[ QUOTE ]
[ QUOTE ]
Do you not listen to him, or do you listen and do opposite? [img]/images/graemlins/grin.gif[/img]

[/ QUOTE ]

I totally ignore him.

[/ QUOTE ]

I totally ignore him too, but wading into a sector in a clear downtrend isn't prudent IMO.

Why would you be buying into a falling market? If valuations look good by your analysis then wouldn't it be more sensible to wait for some confirmation from price action that an upward move is more likely?

Bottom fishing can prove profitable if you make the right calls at the right time, but I doubt it provides a good risk:reward
Reply With Quote
  #9  
Old 08-03-2007, 02:54 AM
kimchi kimchi is offline
Senior Member
 
Join Date: May 2006
Location: FU minbet
Posts: 1,246
Default Re: Walk Away From Your House by Jim Cramer

[ QUOTE ]
Video Link

[ QUOTE ]
is now telling people who "made a bet and lost" to not compound the error, and to simply walk away from the mortgage and default.

[/ QUOTE ]

[/ QUOTE ]

Sensational reporting by this guy is good for his ratings but I doubt many people will be able to walk away from their houses even if the valuations continue to fall.

People still need a roof over their heads and need to weight up the costs and benefits of defaulting and paying rent as opposed to remaining with their home and mortgage.

Walking away will cause people to 'lose their deposits'. Even though the market has already taken many people's deposits, it a near psychologically impossible thing to do - albeit prudent for certiain individuals in specific situations....a point Cramer fails to expand upon.
Reply With Quote
  #10  
Old 08-03-2007, 09:18 AM
jaydub jaydub is offline
Senior Member
 
Join Date: Dec 2004
Posts: 2,055
Default Re: Walk Away From Your House by Jim Cramer

[ QUOTE ]
[ QUOTE ]
Video Link

[ QUOTE ]
is now telling people who "made a bet and lost" to not compound the error, and to simply walk away from the mortgage and default.

[/ QUOTE ]

[/ QUOTE ]

Sensational reporting by this guy is good for his ratings but I doubt many people will be able to walk away from their houses even if the valuations continue to fall.

People still need a roof over their heads and need to weight up the costs and benefits of defaulting and paying rent as opposed to remaining with their home and mortgage.

Walking away will cause people to 'lose their deposits'. Even though the market has already taken many people's deposits, it a near psychologically impossible thing to do - albeit prudent for certiain individuals in specific situations....a point Cramer fails to expand upon.

[/ QUOTE ]

What deposit? His advice is aimed at the 100% LTV and neg am borrowers.

J
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -4. The time now is 05:22 AM.


Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2021, vBulletin Solutions Inc.