The Position Makers

well, we finally got something from etfc as way of guidance.

i’m not digging the nose dive in price and zero recovery on the release.  is it the subtle signal of “buying time” the company conveys by picking the latest reporting date possible, Jan 24th, that’s driving FUD in the stock?

there’s also mucho talk of HELCO on the books weighing down the company in 2008 as the loans begin to reset.

honestly, i could be stupid but i don’t understand how a company that owns an asset with intrinsic value can be a death-blow liability.  even if 90% of the assets default (which would mean that 90% of homeowners stopped paying for their homes**), that leaves 10%.  it’s a loss but not a bankruptcy defining loss.

so far as the assets are concerned, i need to figure out how much of the $33 billion is assets etrade owns and how much is in the brokerage business itself.  it would be a fairly simple formula for calculating a range of value in the brokerage business once that number is in hand:

est’ # of trades * average lot size * frequency of trading * commission schedule = operating cash flows.

as far as my position goes, i’m still straddling because there really doesn’t seem to be a firm footing for the stock.  if it keeps dropping, i’ll probably reinforce my position but i won’t buy in again until the $2.xx range.

**if 90% of homeowners on ANY company’s books stop paying for their homes, i think we’ll all be in such a mess of misery that the great depression will look like a party from ‘99, so a 90% default is the least of my concerns at this point.

again, i may be missing something…