Breaking the Shackles of the 9 to 5 | by The Time & Money Group

One of the problems with Financial TV is that they have 24 hours to fill with programming.  How can you fill that much time without including some “not so bright” people?  Every morning I wake up around 5 am or so and turn on Bloomberg.  I lay in bed and catch up on what has happened in the stock markets around the world until around 6:30am.  On yesterday, they had a ”not so bright” on who said that it may be time to buy certain subprime lenders.  All I could do is shake my head and turn off the TV.

Apparently there are two kinds of subprime lenders.  Ones who hold on to the loans and the other that sells their loans.  I don’t remember which one he said that it was time to buy, but it doesn’t matter.  Obviously this guy was an analyst for the subprime lenders and his job is to push those stocks.  Whenever you watch these shows you must determine what is the person trying to sell and then determine if you want to believe anything that comes out of their mouth.

Two weeks ago (2/12/07), I half-heartily joked in a weekly email to my subscribers that I should short the subprime lenders.  This was after HSBC and New Century had imploded.  Since they had already taken a pounding, I really didn’t think they would continue in free-fall mode.  Best case it would be “dead money” for awhile.  However,  I was quite certain that they were not going up anytime soon. 

Here are the results since that email:

• Accredited Home Lenders (LEND)  -8.5%
• Countrywide Financial (CFC)  -4.9%
• H & R Block (HRB)  -5.8%
• New Century Financial (NEW)  -9.2%

The bottom line is that stocks hunt in packs.  In other words, the group has a strong influence over the direction of individual stocks.  After the shellacking this group has taken, there won’t be any subprime lenders swimming against the tide for a long time.  Throwing money at them now is just not smart.  

I am sure that analyst has a family to feed, but I wouldn’t want to be his customer.  This is why it is so important that WE (Main Street Investors) take charge of our finances.  No one cares more about your money than you. 

BTW, less than an hour after the analyst’s great advice - Toll Brothers announced their pathetic results and housing related stocks took another thumping upside their heads.