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Author: hondodog Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8880  
Subject: Re: TMA -Very high risk / reward dividend play Date: 3/8/2008 3:46 PM
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It's extremely risky but the payoff is huges. Could be a 50% dividend on this price which roughly grows with inflation for the rest of my life. I took the chance.

common shares (TMA) have the least standing in bankruptcy, behind preferred shares, and bonds. bond holders have junior and senior standing, depending on the type of bond TMA was offering...all of these stand in line behind the lenders who are currently calling in margins...

it does not matter if the paper is good....the company does not have cash, even though is holds lots of good paper (mortgages) that others will profit from enormously...it seems likely they will not survive in this environment, the sharks are feeding.

Pimco, who has bonds will likely profit...preferred shareholders may get pennies on the dollar, the common will likely get zilch. it seems that bankruptcy may not be avoidable, unless a sugar daddy rides in to buy them out...

best wishes.
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