ISM/OSM yet again

[Darryl]

My order tripped at $19.90 and the volume is so small I can still afford to buy groceries.

Peter Lynch said a lot of different investment tactics have worked for him over the years, there is only one technique that consistently lost him money and that was bottom fishing. Personally I have taken several beatings over the years bottom fishing and here I sit with you guys bottom fishing

 

[cute fuzzy bunny]

 

[youbet]

My order tripped at $19.90 and the volume is so small I can still afford to buy groceries.

Peter Lynch said a lot of different investment tactics have worked for him over the years, there is only one technique that consistently lost him money and that was bottom fishing. Personally I have taken several beatings over the years bottom fishing and here I sit with you guys bottom fishing

Sooooo...... you Vegas Night investors enjoying harvesting the nice run-up in SLM since it dropped below $20 the other day? Looks like a quick 10%. You owe me. I didn't buy, even with back-of-the-sock-drawer funds. If I had, then it would have continued to drop!

 

[haha]

Sooooo...... you Vegas Night investors enjoying harvesting the nice run-up in SLM since it dropped below $20 the other day? Looks like a quick 10%. You owe me. I didn't buy, even with back-of-the-sock-drawer funds. If I had, then it would have continued to drop!

This was Vegas Night. I have purchased a few knocked down things this fall, and later thought what the heck am I doing? I'm retired for heaven's sake!

So far the markets have cooperated and allowed me out with small gains. But it is actually stupid behavior for someone in my position I think.

SLM could get another offer at $40 I suppose, or could get some financing. But no one is going to give Lord much (or anything!) without getting very good terms, and at least some control or an easy exit.

OTOH, it is not impossible to imagine this going very sour. It is probably still a good business, but I have no way of knowing. Although their balance sheet looks fine, they sold puts that I believe come due in February and they need financing to retire these, and they need financing to keep their barely investment grade credit rating. So I think at best, my risk reward is about 50:50, and I can’t see any reason to place a markedly higher probability on the winning case.

One of my rules is to avoid this situation. Another is to only buy a “fallen angel” when management is also buying in meaningful amounts. While there may be technical or compliance reasons why that has not happened in SLM’s case, do I know that?

Hence, when Mr. Market gave me an out today with a small profit I took it. I feel like wimp, as usually I let a bet ride, as I feel if you take the risk, you need to hang around for the reward. But IMO I was shooting from the hip on this one.

Good luck to those Bravehearts who remain long!

 

[Darryl]

Ha, Thank you for the shout on the way out (No cat feet).

I'm staring at the 10% for a days work and considering it. I'll call it when I go, not trying to be a hero here either and I did keep the bet small.

 

[cute fuzzy bunny]

Speaking of schmucks...

Sallie Mae shares tumble on disclosure - Yahoo! News

"We expect to see many participants exit the student-loan industry in response to the (new law) as well as current market conditions," the company said. As a result, it said, it expects to partly compensate for its reduced loan volumes "with increased market share taken from participants exiting the industry."

So they'll write fewer loans, but make up the volume by taking market share from other companies? WTF?

"In a stormy conference call with analysts, Sallie Mae chief executive Albert L. Lord brushed aside several questions and ended the session with an expletive."

Stupid, ineffective AND offensive! A triple play in effect!

 

[JohnEyles]

Speaking of schmucks...

Sallie Mae shares tumble on disclosure - Yahoo! News

"We expect to see many participants exit the student-loan industry in response to the (new law) as well as current market conditions," the company said. As a result, it said, it expects to partly compensate for its reduced loan volumes "with increased market share taken from participants exiting the industry."

So they'll write fewer loans, but make up the volume by taking market share from other companies? WTF?

"In a stormy conference call with analysts, Sallie Mae chief executive Albert L. Lord brushed aside several questions and ended the session with an expletive."

Stupid, ineffective AND offensive! A triple play in effect!

Remind me, again, what this means, and why, for the ISM/OSM bonds ?

 

[haha]

Remind me, again, what this means, and why, for the ISM/OSM bonds ?

schmuck119 up, 50 downit is a yidish word and it means prick
my boss yelled at me for something i didnt do.what a schmuck



Ha

 

[youbet]

The anticipation and excitement of wondering whether SLM will deposit an interest/divident payment to my account for my holding of ISM keeps my arteries clear....... The same kind of feeling I used to get from penny stocks, Vegas Night over at the parish and driving Chicago expressways.

Funny though, I bought it to be a boring, inflation indexed interest payer.......

 

[cute fuzzy bunny]

Remind me, again, what this means, and why, for the ISM/OSM bonds ?

It means theres a good chance you wont get your principal back on this investment. The company is being run by morons, they screwed up a buyout - twice - that would have paid off handsomely, they're profit margins are about to get squeezed, and their big idea is to cut back on their loan volume.

I've heard "we lose money on every sale, but make it up in volume", but I think the latter part of that meant increased volume, not reduced. And i'm pretty sure it doesnt work that way either.

 

[clifp]

It means theres a good chance you wont get your principal back on this investment. The company is being run by morons, they screwed up a buyout - twice - that would have paid off handsomely, they're profit margins are about to get squeezed, and their big idea is to cut back on their loan volume.

I've heard "we lose money on every sale, but make it up in volume", but I think the latter part of that meant increased volume, not reduced. And i'm pretty sure it doesnt work that way either.

As Warren said "invest in a company that an idiot can run because soon or later an idiot is going to run it"

Clearly SLM is now officially run by idiots and I if I was stockholder, I'd be livid.

The beauty of SLM business is part of their business is idiot proof. Loan money to students with Federal guarrantee, package these loans to investors. As long as the rate students pay is higher than amount investors demand viola a built in profit. Unfortunately the idiot proof portion of their business has gotten less profitable thanks to Congress. (Of all the wasteful stupid subsidies Congress decide to cut why pick on the one that effects me!!). Still roughly 80% of their business is idiot proof.

The good news is they still are depositing checks to my account and at rate of 6.7% on current value (5.7% on my cost) it beats most other investment especially with inflation heating up. Of course if I still held my TIPs bonds I'd be collecting an inflation adjusted 3.5% coupon until 2011, without any drama....

BTW does anybody know what the historical default rating for BBB companies and how much on average investors got back.

 

[cute fuzzy bunny]

You're presuming they stay at BBB.

But the default rate isnt that high at BBB.

Pretty amusing to watch this whole thing unfold. If I were going to lay out a blueprint for how to %$# up a company and make its investors want to take their money elsewhere, this is almost exactly how I'd go about it.

If this Lord character moons the analysts at the next meeting, its definitely some sort of plan.

 

[youbet]

SLM Shares Jump on Management Changes: Financial News - Yahoo! Finance

SLM up 13%. New management at the helm. Looks like happy days are here again!

 

[haha]

SLM up 13%. New management at the helm. Looks like happy days are here again! [/quote]

At least the equity holders might want to go easy on the bubbly-

Sallie Mae also said Albert L. Lord, who held the chairmanship for three weeks, has been appointed vice chairman and will remain chief executive.

Ha

 

[youbet]

SLM up 13%. New management at the helm. Looks like happy days are here again!

At least the equity holders might want to go easy on the bubbly-

Sallie Mae also said Albert L. Lord, who held the chairmanship for three weeks, has been appointed vice chairman and will remain chief executive.

Ha[/quote]

Yes, but the new chairman has accepted the assignment of making Lord keep his pants covering his butt during analyst calls!

 

[brewer12345]

Yes, but the new chairman has accepted the assignment of making Lord keep his pants covering his butt during analyst calls!

Well, if he does disrobe, maybe the analysts can play "flesh" with him, as described in the epic story of my avatar: the analysts get to take turns smacking his @ss and if he can guess which one of them it is, they have to take his place. Seems fitting, really.

 

[Darryl]

Ha, as promised I am announcing todays sale of half my purchase at $19.79 for a loss of 11 cents a share, of course I fully expect a handsome profit when I sell the other half

 

[haha]

Ha, as promised I am announcing todays sale of half my purchase at $19.79 for a loss of 11 cents a share, of course I fully expect a handsome profit when I sell the other half

Best of luck Darryl. Weirder things have happened.

Ha

 

[youbet]

I had some unexpected ISM activity in my account today. Normally I get an interest credit on the 15th and that happened normally this month. Unexpectedly today I also received a "credit interest" and a slightly larger negative posting.

Anyone have any clues as to what is going on?

 

[clifp]

I talked to Schwab. It seems that Sallie Mae in addition to all of their other crimes against share and bond holder is also an Indian Giver.

The promised us $.09xxx interest payment in Dec 15, and today they realized they screwed up and are only going to pay us $.08xxx/share for Dec. I am too lazy to go double check the CPI numbers to see if they screwed up. The good news is it may lower your taxes/ My ISM is in my IRA so I had to sell sell Money market shares to have positive cash balance argh.

 

[youbet]

Ahhhhh........ OK I see it now........

Today's negative number is the same as the Dec credit interest. So, they debited Dec's interest and then credited me the smaller, get it right this time, amount. How nice.

 

[FUEGO]

I think they screwed this up with ISM Jan-Feb 2007 as well. Seriously guys - I hope someone at SLM is reading the prospectus so they can figure out how to properly pay us our dividends.

 

[cute fuzzy bunny]

I'm just glad I sold the @#%$ and sorry I ever bought it. Isnt that the second time they screwed up the interest rate? Is it really that hard to figure out or is this company just a bigger bunch of idiots than I thought? Because that would be a big stretch...

 

[clifp]

Now they are taking money back from OSM payments also. God what idiots

 

[charlie]

I bailed on ISM at a loss some time ago. A similar exchange traded debt
security is PFK. It pays 2+% plus YOY CPI and has a better credit rating.
If you want to stay in an inflation linked security you might
consider selling ISM and buying PFK and harvest the tax loss if you
are underwater on ISM. You can check out PFK on Quantumonline.com
This is just a suggestion, of course. Follow my advise or any other
recommendation you find on this forum at your own risk.

Cheers,

Charlie