Monday, February 26, 2007

Downgrade on a down day :-(

It may be best to stay away from "the financial sector"all together....anything related to credit, loans, mortgage, banking, etc.....its a tough market out there, with residential foreclosures and the sub-prime default rate going full throttle....get out while you can....and then BUY THE DIP....we are still confident in MCO, but the DIP FOLIO strategy is one of quick "swing trades" and somewhat predictable 5 to 10% gains....not a buy and hold type model. So although MCO is a "best of breed" long term winner, we are looking to exit (this stock and sector) on the next up day.

S&P Marketscope - February 26, 2007 1:55 PM ET

MCO 65.49-1.94

Analyst Brandon Dobell tells salesforce downgrades given his concerns about potential impact from slowdown in CDO (collateralized debt obligation) issuance on growth expectations for '07, '08... Given MCO's high capital efficiency, thinks concerns about growth will likely have big impact on valuation in near term... Would be seller in near-term given potential for slowdown in growth in Q2, beyond (thinks Q1 in good shape), particularly if these issues have spillover effect into other segments, especially intl CDOs... Cuts $2.62 '07 EPS est. to $2.57, $79 target to $64.

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