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Author: stefaith Two stars, 250 posts Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3859  
Subject: First Marblehead Corporation Date: 5/24/2008 4:38 PM
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This was my dumbest investment because I never understood the company. I knew they facilitated student loans, but never understood why banks needed FMD to securitize their loans. I still don't.

In spite of my vagueness about the business I accepted TMF's recomendation.

When the sub-prime mortgage crisis developed, FMD started to drop, but I convinced myself that student loans had nothing to do with mortgages, so I compounded my errors by buying more...and more.

It turned out that people peddling student loans were pushing them on students who were not such good risks, just as the people peddling mortgages were recklessly lending to anyone who could still breath.

I am now sitting on far too many shares bought at an average cost of 32, now trading at under 4. I haven't got he guts to sell, even though I think they will probably be worth nothing soon. I am holding, praying for some miracle that will let me get my investment back, which proves that I'm still pretty dumb.
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