Roadkill

A few weeks back we decided it was game over in the battle for First Marblehead (FMD-NYSE).

We did not think it could get much worse for the bears...but it has. Although they covered about $80 million worth of their short position around Halloween, the bloodletting continues.  Tom Brown recently chimed in again…

Tempers surrounding First Marblehead sure have cooled down over the past year. And for good reason: a lot of uncertainty surrounding the company, both real and imagined, has been resolved--almost always to the company’s favor. On the sell-side, bearish analysts have begun to raise their ratings. Even Portales’s Bill Ryan, perma-bear on all things financial, has quieted down. (Does anyone take him seriously anymore?) Short interest has fallen by nearly half. Bankstocks.com

True, short interest has fallen by half.  But the bears have been fighting the ramp all year long. Tom has singled out several sell-side analysts for scorn. But if memory serves us right he left this guy off his hit list.

An ill timed downgrade by Friedman Billings at the September 2005 low was followed by another series of missteps:

15-Sep-06 Friedman Billings Upgraded Underperform Mkt Perform old target $24 new $37

27-Sep-06 Friedman Billings Reiterated Mkt Perform old target $37 new $41

26-Oct-06 Friedman Billings Reiterated Mkt Perform old target $41 new $43

06-Dec-06 Friedman Billings Downgraded Mkt Perform Underperform reit target $43

There is an old quip..."A stopped clock is right twice a day”. 

Perhaps this analyst will finally get it right. Unfortunately for the bears few of them will be left standing.

On Wall Street being wrong is OK...staying wrong is not.

Roadkill indeed.

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