Play with WM, Play with Fire

Hi Lou,

Keep up the great work! Lou could you please give me your thoughts on Washington Mutual WM. Since it looks like they may get bought out.

Thank-you
Steve

Hi Steve,

Thanks for the encouragement! Washington Mutual Inc., WM NYSE is in a rough place. Today they had their debt rating cut again sending their debt to the lower levels of junk.

If you play with WM you play with fire so be prepared. The risk in the stock is that it gets sold off in pieces and not as whole and frankly it’s only the branch network that is worth anything. With everyone who could be a bidder waiting to see what will happen with the $700B Paulson Plan it could get dicey.

I have always held that the best time to hold a stock is when it’s going up and WM has been going down for the last 12 months with barely a pause. You need a healthy appetite for risk to consider buying WM at this time given the state of the financial system and the events of today.

Happy Capitalism!