August 6th, 2008, 2:25 pm "Don't pay off the condo. Your loan rate is too good to rush to do that in this market. Buy a mix of other financials with distressed prices. In a few years you'll be able to pay off your condo several times over. If you have a lot of AFN look at other strong plays (MF, LEH, C, RSO, RAS, CSE) and some of the property reits. The best insurance is a diversified portfolio, but financials are so beat up right now that diversity in financials will probably do the job."
but wait: didn't he also say this, a while before that?
"I voted no on the merger and sold all of my shares. I was a long-term shareholder who didn't really want to sell, but concluded that this risky merger is going to be approved. IMO, RAS shareholders are far too complacent about the new company's future prospects. The addition of the recently formed, highly leveraged Taberna and its large protfolio of residential mortgages, rachets up RAS's risk profile by several orders of magnitude. Unfortunately, it's going to take at least a couple of years for the company to prove that its new business model really works. If they are able to ride out the accellerating downtrend in residential real estate, without any major problems, I will probably buy back in. In the meantime, market forces alone could drive the stock price down sharply, for the same reason that many other housing related stocks have taken a beating."
Now that's funny. I didn't even know this board existing back when that was posted, and the guy who posted that was truly ahead of the market in his forecast (and probably better off for it), but that attribution is probably more accurate than most of what has been posted by K1.
Good job IMTRACK. I assume that even you can see the difference between "Don’t pay off your condo! Invest the money in RAS, then you’ll have enough money to buy FIVE condos." and what you have quoted.
The core statement is "Don't pay off the condo. Your loan rate is too good to rush to do that in this market." Note the context. He has a great loan rate.
I follow that with a generalized recommendation to "buy a mix of other financials with distressed prices" and suggest that doing so will allow the poster to "pay off your condo several times over." There are some bad recos in my list (notably LEH), but there are a number of others that continue to be recommended by deep and other critics here, including MF, RSO, and CSE. RAS makes my list too (why shouldn't it given that I believe in the stock), and C (which many are recommending these days.
The bottom line was that "the best insurance is a diversified portfolio" and "financials are so beat up right now that diversity in financials will probably do the job". At this point in the market cycle, that is almost certainly true. It was then too.
Why don't you focus on doing research rather than misinterpretation.