Small Investor Chronicles™

13 March 2007

Just A Beginning

One has to be completely disinterested in anything remotely related to finance not to know that the long-awaited meltdown of toxic loan schemes is beginning to unfold. How long it will take, how many billions will be written off balance sheets, how many bankruptcies, foreclosures, etc. will follow - we cannot tell yet. The only thing a prudent small investor can do is to minimize potential exposure to this junk. Make sure you don't own any mortgage-related bonds, bond funds, anything below A-grade should be viewed with utmost suspicion. With CD's paying over 5% annually, there's no need to take risks with one's cash just yet.
Here's an example:

TOP 10 HOLDINGS ( 16.50% OF TOTAL ASSETS):
Adjustable Rate Mtg 2006-3 CMO - suspect
Preferred Term Sec Xiv 2004-14 FRN
Preferred Term Secs 2003 FRN
FHLMC FRN - suspect
Comm 2002-Fl7 CMO - suspect
MASTR REPERFORMING LN - suspect
Banc Amer Fdg 2005-E CMO - suspect
Trapeza Cdo Vii 2004-7 FRN
Amer Gen Mtg Ln Tr 2003-1 CMO 4.69% - suspect
Structured Asset Secs 2003-15a CMO - suspect

My conclusion? Off with this fund!

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posted by Alex Khenkin at Tuesday, March 13, 2007

4 Comments:

  • I am new to blogging, so I am trying this window to see if it takes me to Small Investor Chronicles, enjoy the simplicity and layout of the site, or blog. What is the differance, looks like a web site set up for the pupose of editorial and or blogging????

    By Anonymous pico, at 3/15/2007 12:47 PM  

  • The definition of blogging, Just the Beginning I am a Certified Residential Appraiser, the beginning of the end came some time ago, while inspecting a home for purchase the under thirty year old buyers were very excited, no income declaration, so much down and you cant get through this sub prime lender and for the first two years you only pay!!!
    That was in 2005, have already been back to that one now selling short, and the young buyers tell me they did not know that property taxes were every year, they thought that 3600.00 was a one time payment. Just a Beginning is an understatement I cannot imagine how big this one is going to be.
    There are to many people in to many categories who had there hands in this one, We all got licenced and certified after they blamed the S&L debacle on us appraisers, who ya going to blame now baby.

    By Anonymous northwoods, at 3/15/2007 12:59 PM  

  • Alex, how does it work, can you or will you direct me. I enjoy the train of thought yet I just don't seem to get how the parameters of the blog work. I got your site from a comment you made on another.
    northwoods pico be me

    By Anonymous Anonymous, at 3/15/2007 10:37 PM  

  • Pico, go here: https://www.google.com/accounts/NewAccount?naui=8&service=blogger&continue=http%3A%2F%2Fwww2.blogger.com%2Floginz%3Fd%3D%252Fcreate-blog.g&sendvemail=true&followup=http%3A%2F%2Fwww2.blogger.com%2Floginz%3Fd%3D%252Fhome
    open an account (it's free), and write whatever you want whenever you feel like it. That's it!
    -Alex

    By Blogger Alex Khenkin, at 3/16/2007 7:29 AM  

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