failed DT on fmd 3 months ago is showing big profit today

current price: 2.09
cost: 1.51
return: 38% (2.09/1.51=1.38)

As I said before, I DT on margin, if it is good, I make money, if it failed, I keep the stock, the key is relative margin position and you know the thing you buy is worth much more than the price you paid. I have been averaging down on fmd aggressively. See the two previous posts listed below:

2009-01-16:

http://web.wenxuecity.com/BBSView.php?SubID=tzlc&MsgID=138659

got MBI at 3.93, FMD at 1.51. I am going to sell them pretty soon. I am feeling good.

2008-11-05:

http://web.wenxuecity.com/BBSView.php?SubID=tzlc&MsgID=125988

bought fmd 1.71, today ER after close

Let me relist FMD's story:

1. Cash on hand is about its market cap.
2. It has future cash flow from its interest on trust residual. In a bear market, every body assumes the residual is worth 0, and fmd has been keeping writing down its residual value on its balance sheet because of MTM accounting rule. Today's news shows that residual does worth something.
3. Student loan can't be written off even in bankruptcy filing.
4. FMD does not carry student loan on its balance sheet, it does not have BK risk at all. Its risk is it runs out cash and credit line before student loan market unfrozen.
5. FMD is a leader in private student loan industry, I believe it is the best at pricing risk of student loans. It owns a student loan data base which holds decades of history of student loans.

I believe my overall position on FMD is still underwater. but I can see the light at the end of tunnel now. If I can do some more trading, I will be out of water faster. I have been average down on FMD heavily, especially after its price broke down its cash level. I bought more shares in the order of 10. My only regret is that I could not buy more when its price broke down under 1. Every time, when the best opp shows up, instead of buying more, I got margin calls. I can only come here shouting for every body to buy. Other wise I will be out of water sooner. But I am proud to say that I have exhausted every option I could find to get debt to buy shares for the past darkest months, margin, credit card debt, borrowing from friends. Now my account is showing up some nice profit for 2009. I am going to reduce my position and pay off my debt gradually. Luckily, i do not have a mortgage to pay. I am ready to hold my positions for years like people holding their mortgage.

2009, please show me some money!