As any reader of the AMP site or book knows TMA was on our avoid list. We are all looking for a change in the market.
Then we will acquire a position over time - providing that the turn/trend continues and the stock performs as expected.
The bottom of a market is led by financials. Today, in the face of more weak data TMA reported improved fortunes and a positive outlook.
I see this as a change in the fortunes of the Company and have purchased a small position - 100 shares at $12.02 U.S.
I am looking to Thornburg having signalled that it will be one of the survivors in the mortgage business - and as such it will benefit from :
1) the loss of many of its competitors
2) the lower financing charges as a result of Fed rate cuts
3) the financial institutions it deals with will have the confidence to provide funds to TMA because it has a strong balance sheet and a business plan and management that has proven itself.
Jeffries analyst - interviewed on CNBC
Upgraded TMA to a buy
Company is focused on ultra high end borrowers
and will benefit from the steepening of the yield curve - with a dramatic drop in their borrowing costs - that is a higher profit on each mortgage.
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I added to my initial
I added to my initial position yesterday ( and yes , it is better to be lucky then smart but AMP Portfolio holders are both).
In today's Canadian financial papers are interviews with Warren Buffett - in Canada to promote a new business. As to our TMA investment - he was quoted as saying there is no credit crunch, money is available - around the world - but it has been repriced to reflect risk.
I believe investors are optimistic by nature and a lot of money has identified Thornburg as a survivor - and therefore a turnaround candidate .
I caution against trying to pick a winner out of the toxic pool of financials - but Thornburg recently reported its financials - an upturn and a dividend was announced.
Jack Bass is the editor of the market letter The Apprentice Millionaire Program available at www.amprogram.com His latest book is " Building Your AMP Portfolio ".