Damn Gina!

Yeah, I had to steal my favorite line from my Urb flashback sitcom "Martin", featuring Martin Lawrence. What does Martin have to do with investing, yeah you guessed it Damn Gina! That's what I say when I get something right but I am too weak to pull the trigger. I have to give some credit to a stock star (not rockstar) friend of mine that goes by "The Great". We were all over the fact that the mortgage world is imploding as we speak. Need proof read a few of my columns that date back to last year when we called the top of the market...need more proof check out American Home Mortgage!!! But I will get back to that story in a minute.

We are here to say DAMN GINA! to the fact that I wanted to:

MAKE MONEY off of the real estate market. Specifically I wanted to SHORT MORTGAGE companies. So I had this convo with "The Great" only 2 days ago and we plotted a master plan to make so dough off of this scenario. The scenario is simple but the buzz from my friends at Fast Money on CNBC is that shorting this sector was old news. But "The Great" mentioned a few great points. The bloodshed has only begun on the books of these real estate companies. They have assets that are deteriorating in value and they can't pay back their damn loans. So our strategy was to pick a few sectors in real estate and get to work SHORTING those stocks, or betting that the value would go down for these stocks. So J. Gotti wanted to take the least risk adverse road possible and I will not guess what stocks will tank I want some certainty.

Urb "Living Legend" lesson of the day: My main man, Warren Buffett says make big bets on highly probably events.

Guessing which real estate stock will tank is like shooting darts. So I want to pick a fund that has exposure to: Mortgages and Homebuilders and short the whole damn sector. Now this is highly likely that the sector will fall over time. So what did I come up with:


(REM) an Exchange Traded Fund that specializes in Mortgage companies

The Damn Gina part -> http://finance.yahoo.com/q?s=rem
REM was down over 9% today

So what have we learned today...go with your gut. And my gut is telling me that the main reason REM tanked today was because of American Home Mortgage fears. This stock is done, finished...beat it, scram. And the kicker is they issued over 50 billion in loans last year and non of them were sub prime. That means, none of their loans were really janky!!!! Janky is a lovely word for horrible. But guess what, most of their loans were Alt -A or almost Janky. And if companies are going bankrupt on loan portfolios that are not even sub prime then we are in big trouble folks. Alt -A loans are going to a lot more almost "normal" home buyers.

So to wrap things up folks I am going out a limb and say if the market hasn't punished the finance companies that specialize in Alt - A loans then its time for us to do it, before the market realizes the obvious. Here is a quick list of companies that I found that specialize in Alt A loans:

Alliance Bancorp - already bankrupt
M+T Bank

Hey if you know any public companies that specialize in these loans, let me know!