Thornburg Mortgage (TMA) an interesting stock

While eventually these mortgage lenders (whomever survives) will be great stocks to own, in general its far to early to own these. However, I am watching with great interest TMA. I saw on CNBC last night where out of 30,000 some mortgages they have 50 some defaults. While that number will probably rise significantly in the upcoming months/year its still a very low default rate. This company serves the jumbo loan market (which I believe is $417K+) - a market that will slow but generally caters to pretty wealthy individuals. Now I don't know there entire story but if they are not doing no doc loans to people making $45,000 who are trying to buy $600K homes, than it could be an interesting story.

The stock fell nearly 50% yesterday and gained back much of it today on the CEO's press blitz. The problem right now is no one wants to even buy high quality loans of AA grade borrowers - so these lenders cannot sell the loans they originate.

The stock was mid $20s a few weeks ago, fell to $7's yesterday and rebounded to $10's today. While it probably will need to write down some of its loans, and its dividend has been suspended, if its catering mostly to AA, A type of borrowers, as long as the country does not go into recession with job losses prevalent - they might be ok in the long run. For those with healthy risk appetite its probably a decent buy here, but for now I will just watch it.

My position on almost all other financials save the Mastercards (MA) of the world is too early to buy except for dead cat bounces; that includes firms like Goldman Sachs - certainly they are overdue for a bounce, but until earnings estimates get slashed they are not true buys yet.

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