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THORNBURG MTG INC Message Board

  • doonboggle doonboggle Aug 10, 2007 4:23 PM Flag

    Preferred outlook ? ?

    TMA has 3 preferred stock issues that, as of today, are looking attractive relative to not only their dividend but also appreciation. All 3 have declined in value substantially over the last few days.

    Would be interested in hearing from those of you that are more astute than I regarding the happenings of today with the money infusion ... and TMA's future. Is BK a viable option ... or will they hold on ... in which case the pfd's will likely increase in value.

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    • Not good in this market. Unless the Fed pumps a few hundred billion into the system, TMA's leverage will make it ugly for common and preferred. I've held a very substantial number of TMA preferred shares (close to 10,000 - that's shares not value!) for the last several years but got out early today at a big loss before it got even bigger. For the record, I think TMA was a pretty good run company but when liquidity dries up as fast as has happened, even the best in the industry will take a beating. This problem is so large I don't think the Fed can even handle it. When the markets start to re-value mortgages with an appropriate risk premium, TMA's will likely be down at least 5-10% which could wipe out all common and preferred holders. This isn't because of credit risk (ie. TMA will likely have a very low default rate compared to other lenders) but rather the rates will be below the new market rates for such loans. We may have a few up days along the way but anyone buying the common or preferred today had better be prepared to lose all or most of their investment. The impact on housing prices and foreclosures hasn't even started so I see this market going nowhere but lower for the next three to four years or even longer.

    • I have our accounts at Schwab, and yes, we do it electronically. There must be, within Ameritrade, a way to search for a symbol. If is, then as before, do a search for TMA ... and it, along with related pfd's, will pop up.

      What I did with AHM and ENRON was, during the final days prior to bk, bought on down days with the various issues, stock and/or pfd's, and watched diligently for it to go up next day, and dumped it quickly. With AHM a couple of weeks ago, got almost a 60% kick.

      I've done a bunch more in the past. Recall Continental Airlines for one; few days after 9-11.

      Others also but can't recall them all now some years later.

      The pfd's site I referred to ... www.quantumonline.com
      Has a good reference listing of many many pfd's. I use it all the time since we are in fixed income bracket for our retirement.
      doon

    • don't touch. new century had preferreds too. they are nothing more than 25 dollar face value unsecured bonds.
      I have seen preferreds like that trade anywhere from 6 to 22 dollars face default and go BK.

    • the preferreds will be wiped out like the common. dont touch them.

 

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