Friday, December 21, 2007 0 comments ++[ CLICK TO COMMENT ]++

Sold DFC for a Total Loss

Delta Financial filed for bankruptcy protection a while ago (read my post here). A total loss for me. I should have sold it off a few weeks ago to save a few hundread dollars (clearly a newbie mistake since I had no intention of holding on to it). DFC was small portion of my portfolio so it didn't hurt me as much as it could have (a loss is a loss though).

Speaking in hindsight is generally useless given that anything that works out looks good even if it is a bad investment, and anything that doesn't work out always seems bad. In my case, this was probably a bad decision from the beginning. It was somewhat of a rash decision (impatience strikes again) given that I never really understood the mortgage lending business very well. I started looking into it after reading that Mohnish Pabri viewed it favourably but this is one of his mistakes I guess. I thought Delta's low exposure to risky housing markets like California, as well as Delta's higher fixed-interest loans (typically results in lower defaults), would enable it to survive and do well but, alas, I was wrong. When the credit markets locked up, it was game over for Delta Financial since they couldn't secrutize anything.

Sale Price: $0.08
Purchase Price: $5.48

Total Return (CDN$): -99%

Tags: ,

No Response to "Sold DFC for a Total Loss"

Post a Comment