Wednesday, 30 January 2008

Selling FirstFed (FED)

Just sold around $8,000 worth of FirstFed Financial (FED) at $38.94.

I actually don't know much about this "bank", but any mortgage lender with a focus on California can't be doing well. It was in the high-60's early last year, so doesn't actually seem to have fallen all that much given the huge change in the market. I think we need to see a number of small lenders go bust, and I want to be in on some of them. I plan to short more if it starts to go down, and maybe use a stop-loss around my average short price to limit risk.

I also have my eye on Downey Financial (DSL), with a view to shorting it. It seems to be a regular over at Calculated Risk, as it's delinquent loans are going through the roof! This is from a post on Jan 16th...delinquent loans up from 1.5% in June to 7.8% in December! And I'm not sure, but maybe I see a trend...?

Gonna watch the stock for a little bit before pulling the trigger. I better be careful on getting too bearish...maybe I should find some longs...

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