Thursday, April 10, 2008

Bookkeeping: Closing Thornburg Mortgage (TMA)

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I am closing my very ill advised venture into Thornburg Mortgage (TMA), far and away by biggest loser in the fund. My goal here was to play the refinancing boom (and the "early cycle" rebound) but timing is everything and Thornburg was a victim of a run on the bank similar to Bear Stearns (BSC), far worse companies did not suffer what Thornburg did. At the time I wanted to find some alternative ways to benefit when the market went to its "early cycle" Kool Aid without buying homebuilders directly - but my choice of stock could not of been worse. Since then, I've decided to just play the homebuilders themselves which is ironic since I think they are in far worse shape than Thornburg was, but the market is the ultimate decider. I was hoping for some buyout offer maybe in the $3-$4 range but Thornburg just decided to dilute shareholders to the ultimate degree to survive - I don't blame them; they appear to have very good management and just a victim of circumstance and bad timing this time around so shareholders lose.

Since the fund is doing very well this is as good as time as any to get this $25K loss off the balance sheet and "book it Danno!" I've been cleaning out quite a few positions of late whose charts have been weak (not participating in this rebound) and I did not feel any conviction in adding to, and this one fits the bill. I am selling my remaining 0.4% stake in Thornburg Mortgage in the $1.20s.

No position


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