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Oh My God I Own Shares of ETrade (ETFC)
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Some of you know that I’m a very happy ETrade customer and some know that I have bought ETrade’s stock (ETFC) during the last month. Here’s my buying history and the extended hour price after it reported a net loss of $56 million.
09/06/2007 @ $15.1675
09/25/2007 @ $12.1999
10/12/2007 @ $13.30
After hour price on 10/17: $11.75
After adjusting for different quantities bought at different times, I’m down 12% as of this point. Who knows what tomorrow will bring for the stock price but no matter how you look at it, this has been a bad investment for me so far. I can do three things at this point: buy more shares, sell my shares, or do nothing.
1) Buy more ETFC – The stock is beaten down so bad that it cannot go much further because most people already expected the company to report a pretty bad quarter. The fact that it is only down 5.85% in after hours trading after such a bad quarter confirms that most people who will sell the stock has already sold (the stock was in the high 20s a few months ago). The risk is of course that the mortgage unit keeps getting worst and worst to a point that the company is in trouble and/or their retail clients start moving assets away from ETrade.
2) Sell ETFC – I am already down 12% and being stubborn usually equals more losses. What you don’t know never hurt the most but what you know that turns out to be wrong is usually the most devastating.
3) Do Nothing – and hope that the stock price goes back up. This option is really for the undecided, not a good idea.
Before I tell you what I plan to do, maybe I should tell you why I bought ETrade in the first place. I see a great company that’s been so badly beaten down because of the mortgage unit. I see so many good things with one bad thing. In time, things will turn around because I believe the valuation of this company is very good. If the stock price keeps going down, it will be very attractive to other competitors to trying to gobble it up, putting a floor in the stock price.
Has this picture changed since the earnings call? No, since I was expecting the bad quarter. I see the same great company that just got cheaper. It might take a while for the stock price to come back up, but I know it will.
So what have I decided? Well, can’t you figure that out already? 
PS: Buying ETrade or any other company that everyone thinks is in trouble is a dangerous thing to do, so only buy them with money you can lose. There is a chance that I’m just dead wrong. If I lose it all, I may scream, I will probably swear and I could even cry. One thing I know for sure though, I know I can afford it.
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105 Responses to “Oh My God I Own Shares of ETrade (ETFC)”
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Festival of Stocks - October 22, 2007 | My Adventures into The Street on October 21st, 2007 at 7:58 pm Says:
[...] presents Oh My God I Own Shares of ETrade (ETFC) posted at Money Ning, saying, “A story about my ETFC investment.” *Editor’s note: Hey [...]
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Why My Nintendo Wii is My Best Investment of The Year | Personal Finance Blog by Money Ning on November 5th, 2007 at 8:31 am Says:
[...] purchase. It is $250 that can be put into a savings account, or into investments (like at least 25 shares of ETFC with some $$ to spare) I keep [...]
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ETrade Took Me to School and I Still Own and Love That Stock! | Personal Finance Blog by Money Ning on November 13th, 2007 at 8:31 am Says:
[...] Oh My God I Own Shares of ETrade (ETFC) (39) [...]
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Canadia Money Advisor on December 7th, 2007 at 7:38 pm Says:
Free Annual Credit Reports - Everybody needs one!…
I am forever saying “If you’ve got good credit or bad credit, you need to see your credit report at least once per year.” To see your credit report, you want the most convenient and least expensive way possible….
If I am understanding you correctly, you are investing in Etrade for the long term right?
If that is the case, then no worries, share prices fluctuate every day, Money Ning. Even every hour. That’s why we pay the traders on the floor to pull their hair out.
It sounds like you have done your due diligence on this stock. I will have to check to see if I own any of this through my funds. It would be interesting to watch this stock grow over the years.
Mark: Yes this is for the long term. I knew before buying that I shouldn’t expect there to be much short term up side.
I think this is a good company though so I think it will be a good investment over the long term. I bought more today
That is another great way to lower the average cost of shares, buying more when the share price is lower.
Do you have a formula or something you use to help figure out how many shares you want to purchase if the price fall?
Mark: No I really don’t have an exact method for this. Most of the time, I would buy half of the shares I want to own, then if it dips lower, I will buy more. If it goes up, I just make less money which is okay with me
If it goes even lower after I’m done with buying, I treat it as if it’s a new investment so I will re-assess how much I want to buy then.
You can never go wrong with taking a risk if you can afford it
Wow, what a risky buy! Did you let you fiance know about your investment plans? I am just wondering how a couple to invest their money together.
thewild1: Thanks for the support!
Emily: Hmm you sure look out for my fiancee quite a bit
Every couple takes care of their money in different ways but I wouldn’t put my fiancee’s money at too much risk so those are all in safe investments.
Averaging is a good basic concept. But, I can’t understand why more investors don’t apply it to something safe, like a government no-interest bond fund. With profits restricted to cap gains only, the potential is usually double-digit. Then with a known direction–up, toward eventual maturity–you can play all the zigs and zags on the way up, by going in and out of an accompanying money market fund. (I’ve done this by collecting 11.5% annually on cap gains, and another 20% by playing the zigs and zags, over the past 5 years.)
Jack: Hmm. Care to explain this in more detail for us (with an example fund name and how you did it)?
We are always willing to learn new things!
MoneyNing, the stock ace! Keep up the good work, buddy.
the only stocks that go down that I like are the ones that pay a dividend.
I reinvest all the dividends, so if they go down, i get more of a return.
however, I’d never buy E-trade. when the CEO quit, he gave himself a $100 million parachute. not exactly the sort of thing that inspires confidence.
All of my stocks currently pay a dividend. I’ve been thinking of buying BRK-B, but I’m on the fence since they don’t pay any dividends.
Modern Worker: I’m by no means the stock ace and so far it doesn’t look like I made a good choice by buying
Oh well, we will see how this recession fear goes.
living off dividends: Berkshire is great but remember that value stocks have gone up a lot in the last few years and growth stocks will probably outperform for a while.
Good luck!
E-Trade is one of the best long-term investments I’ve seen in a long time. As we all know, the stock has been beaten down by the Mortgage Mess and investor fear. The truth is they took a “Provisission” write-off of bad loans. If those loans do not go bad, and there’s a chance they may not, they could take a Write-Up. Their Coar business of Trading Commissions is achieving 30% plus growth. If it was not for the Mortgage problem, this would be a $30 stock. Over the next three years, it probably will be up to that level or higher. My two-cents: Buy, hold, turn off your computer and be patient. You’ll tripple your money in three years or less. (Just don’t look at it for awhile)
Patience: Thanks! It’s always great to hear someone who agrees with you when you are trying to go against the tide
I want to know if your thesis has changed any since 10/22 as the market cap of ETFC shrank dramatically. I have started buying ETFC last week and my average price is $10.49. I might buy some more if the market allows sub 10 dollar price. However, I must confess I have some trouble figuring out the intrinsic value of this stock - especially because of the mortgage portfolio. In any event, I cannot pass on this golden opportunity to buy at book value.
Glodoc: If you are talking about sub 10 dollar, we are already there. The price is $9.47 at closing.
Right now, everyone is super afraid of financial stocks. Just look at the big giants like citigroup and bank of america falling 20% - 40%. Basically, everyone is saying that they cannot put a value on the mortgage portfolio anymore because of the defaults. Buying ETFC now is basically a bet that
a) there will be no further unexpected write downs
b) the unexpected write downs are already reflected in the price.
I believe ETFC will come out ahead of local banks in the mortgage departments because people who get ETrade loans have a higher income on average than people who get loans from banks. It was bad at the beginning for ETFC because speculators of the real estate market got burned as they are usually the people who take the loans that reset after one year.
However, I am buying ETFC with money I own since I have no idea how long it will take this mess will drag out. The last thing I want to happen to me is if I get a margin call and I sell all my ETrade shares to cover only to see the price rise and rise 3 months after.
MoneyNing,
Thanks for your reply. I am aware of the $9.47 closing price. My last buy was at $9.55. I guess, I was hoping it would not open higher than $10 tomorrow, so I could buy more! Of course, I will be thrilled if ETFC does open higher.
I have invested about 7% of my portfolio (no margin, of course) in this stock.
ETFC to me sounds like American Express experience for Warren Buffett (as you probably know, he put 40% his assetts in American Express after their (Amex’s) disastrous investment in one Salad oil business that was bogus and American Express lost about half of their stock value).
Gldoc: It’s great that you got in later than me (hence a better avg price). I have been buying since $15 and my avg price is around $11 - $12 (Actually I went to check mid-way in my comment and my cost basis is $11.96) so I’ve been buying
Right now for me it’s about 10% and I plan to keep buying as/if it goes down.
I sure hope that you are right with your association with American Express
It would be the day for you and I if Warren Buffett comes out and says he owns stakes in ETFC 
I bet it will double within one week if that happens even though I doubt he will buy something so small.
As it goes down though, I’m not sure they can hang on much longer. I know they didn’t entertain acquisition talks when it was $15 but it is now $9.50. What if it goes down to $7 and people just buy shares in the open market and they close with $12? That wouldn’t be the investment I’m looking for since I think it should go back up to $20ish.
So far I am losing 18% on this stock (not counting the afterhours drop Friday). Very disheartening. I am going to buy couple of thousand more here. We need some relief from this relentless selling.
Gldoc: It sure is!! I felt okay until the SEC and more writedown announcements since all the down push before that was from the industry and not ETrade specific. Now there is a real reason for the decline.
Let’s see what next week will bring!
Uh oh, looks like there’s danger in Etrade
3:20pm… do you know where your etfc shares are going? Down the crapper.
Maybe cutting your losses after 5% declines instead of averaging down would have been smarter. Then it would only take a 10% gain to recover instead of the 300% or so you will have to come up with now to get back to breakeven.
talez: There definitely is!!!
Sabbas: Yup it definitely would have been but hindsight is 20/20.
I’m not sure why the hostility in your comments but I’m glad you are helping watch out for the etrade stock price.
ouch! since i dont have stock certificates, anything over 100,000 is not covered at etrade? I have almost everything in stocks there.
kate: Actually it’s the bank side that is insured up to $100,000 just like any other bank.
The stock side is covered. I wonder what will happen if you bought those ETrade index funds though.
If you are someone who screams, cries and otherwise gets all emotional when a stock drops, or if you get excited and delighted when a stock rises, you should NOT be trading. Give your money to a money manager. You will ALWAYS lose with an emotional attitude like yours.
Elliot: You are right
If I put too much emotions into it, I will definitely always lose.
If you have a margin account at Etrade you might want to read this:
http://www.pinnaclevaluefund.com/reports/StockStrat(26).indd.pdf.
my accountant reminded me that i do not have the stock paper certificates….etrade would be holding them…does that make a difference? I have not read the above pdf, i’ll look now, though.
Pretty hard to find a money manager that would watch over funds like his own.
can someone steer me to really see if the stock side is “covered?” I guess I could call etrade!
Thank you John! your URL didn’t completely highlight so I went back and copied and was able to see your article, and I called etrade and yes, they said they have sipc! worth 500,000 coverage and then London insurers, he mentioned 600 million..so I think I’m covered! I love Etrade vs ameritrade (ease of website, portfolio view mostly is what i really really like)…so I had almost all people i know use etrade instead, so I’m hoping I did not steer everyone wrong!
John: Great article! I have definitely learned something new! Thank you!!!!
kate: the article from John was very helpful and I’m glad that you called ETrade to give you some confirmation. As long as you aren’t shorting a stock or buying with money you don’t own (on margin), I wouldn’t worry about it.
If you have over $500,000 in assets though, i would caution you to move some away from it however since you just don’t need the hassle.
I think the fact that ETrade cannot handle the write down is bogus but the fact that the worry will cause people to pull their money away from the brokerage is a valid one.
It would be interesting to see what happens from here because the stock is pretty dead at this point. I actually believe it will go back up a bit once they announce the actual write down amount (which I don’t foresee them being able to do until the quarterly report).
I was so happy to have only one statement, I had gotten rid of amtd’s portfolio. I guess I could go back to them with some stocks, it’s probably free to transfer stocks, isn’t it? I should have asked the etrade guy… I watched Mad Money Cramer and he mentioned “toxic” about the reports from Etrade? and later he said citigroup mentioned bankruptcy and he said that they would not use that word “idly”. That’s scary!!!!!!!
kate: I don’t think you should worry too much. If you do however, you should get out right now. There is no point to worry and not do anything about it.
Even though we are insured, I’m sure there would be some hassle in getting our money back.
I can’t believe there are no merger or buy talks yet though. We will see during the coming days since there isn’t much room for the price to go down.
so what are u gonna do now–buy more shares or just sit on it?
nick: a post is scheduled to go out in 10 minutes which will address the question that you have
I bought a couple of thousand more shares at 3.90 yesterday. That brought my total shares to 10,000 and cost basis to 8.39. I gained $14,500 today, but, I am still down 33,959.70. It goes to show that if you lose 50% of the stock value, it takes a 100% move up in order to just get back even! I will buy more on pullbacks (though I must admit now ETFC is becoming a fairly large holding in my portfolio).
interesting! Cramer was so negative about ET that after i bought $2000 worth Monday, i sold for 986 profit today, Tuesday. I had bought AMTD and still have that lagging in my portfolio, that’s the only reason I did not have any ET stocks anymore (the $6 dividend January 06? for AMTD). I sold some AMTD to break even with that dividend I was investing for a couple years. Good luck!
Gldoc: Hmm. Good for you that you are able to buy more yesterday when everyone is selling
Timing turned out great!! I’m not sure how much you have in your overall portfolio but $50k on one stock is not a small chunk. I would scale it back to a level that you are used to since anytime you aren’t treating with demoninations that you are comfortable with, emotions tend to run higher and mistakes are usually made.
I’m not sure if you are an experienced trader or not but be careful when you keep buying on pull backs with a stock that is drifting lower. It is a dangerous road even though you must feel pretty good about today’s pop after yesterday’s purchase.
kate: Good to also hear that you made money today
I definitely had more money today and I did yesterday but I’m still much in the red! 
I’m sorry if my comments came off sounding negative. I wasn’t trying to sound that way. It was problably due to the fact that I was watching my other stocks get hammered the same day, just not as badly.
I previously owened shares of ETFC when the price orginally hit 12/share and then sold when it jumped back up to 14. I was lucky in hind sight but I honestly believe that ETFC is currently a “broken stock” and not a “broken company”. If I had the money and time to spare, I would happily watch this stock run back up 100’s of percentage points. However, I do not believe in the practice of “averaging down” and find it’s practice dangerous to responsible portfolio management.
I will continue to monitor this stock and will keep your positions in mind. I hope that the bad news clears out soon but I do fear that it will hover under $5/share until investors can get passed the whole mortgage mess. When they do, anyone still holding on will be sitting pretty. ETFC made a bad mistake, but they have the right idea in their business model. Hold on for the long run if you are still holding on now.
No worries Sabbas. I understand that yesterday was not a fun day for people who are long stocks (today should feel good though I hope).
Good for you that you sold when it hit $14
I think most people who bought stocks while it was going down was in it for the long term. It doesn’t take a genius to figure out that the mortgage mess is not over. I think most people (myself included) just didn’t foresee that it can go THIS low 
I plan to hold it for a while. If you want to follow it, I actually bought more after this article was written so my basis is $11.96.
MoneyNing: Thanks for your comments. Yes, I consider myself experienced enough trading and investing. BTW, my investment in ETFC is ~84k - it became 50k! I wanted to invest 10% of my portfolio in ETFC. I also feel (like Sabbas said) the stock is broken, not the company. I have no rigid rules on averaging down, as long as I am convinced my pick is right. I like what Mohnish Pabrai, author of Dhandho Investor says: The market often confuses uncertainty with risk. There is great uncertainty with this stock, but, the risk - the risk the company will go out of business is low (even at 15% as Prashant Bhatia calculated). In other words, there is an 85% chance you will come out way ahead.As Pabrai says: large bets, infrequent bets and when the odds are in your favor, bet the farm. On the surface, it sounds like a risky bet, but it really isn’t IMO, especially if the stock is selling at a tremendous discount to its book/intrinsic value.
GIdoc: I agree with you that it is a broken stock only (as evident of me holding it). Actually, I wonder how many people held the stock from high 20s until yesterday and sold. That would really suck
I just hope that not TOO many people transferred their money out of ETrade since that would put a big cap on its value.
Thanks for the interesting reading…I always wanted to talk stocks, but never found a place yet…$986 probably sounds silly, my rule, since I started after 911 finally….is to wait for 1000 gain, no matter what my investment…it’s done pretty well for me…a very few times I waited and made a little more. smile…
When I first got hooked I noticed my symantec was up $8k. Been hooked ever since. I was forced to learn for work, read about 25 investment books, 90 percent of which told me to buy and hold. So i really love Cramer cause I agree, i like the theory sell when make 30-40%….although my strategy is different, I use that when I am not sure or have invested quite a bit more than usual. Thanks again!
kate: Your rule might not be scientific or anything but it does help you get out of a stock if it goes up quickly which is always good. If everyone can gain $1000 from their purchases, they would be very happy by now
Cramer is definitely a character! He seems to know what he’s doing but he’s probably not as good as everyone wants him to be
What he does is very hard though since he has to project that ALL his tips are correct when the industry isn’t setup that way!
I figured it’s not worth the book work unless you profit at least 1000 minus taxes…also, it was less math, although I’ve finally gotten around to making an excel sheet to figure the 35% gain, I sound like a real math dimwit, I guess I am.
kate: No worries because that’s what Excel is for! I’m glad you’ve found something that works for you though. I guess as long as you are making good money, who cares how!
What’s the prevailing thinking among some of you ETFC stockholders now? I can’t see this going any lower (I say that now), and can’t get the company’s strong intrinsic value out of my thinking.
Buy more or hold nervously?
ETFC: I say buy and hold… The intrinsic value of this brandname company can’t be understressed. And the obvious conflict of interest of a bank (Citi) - which has its own subprime problems - putting out an analyst note encouraging a run on Etrade is crazy. When the dust settles there’s gonna be some serious legal battles. Bottom line: Etrade is NOT going out of business & it’s been mispriced as if the “End of Days” are upon it.
A classic Warren Buffett opportunity here… Control your emotions… Buy it and forget about it. Wake up in 2-3 years with +300% gain. Same thing happened after 9/11 with SCOR re.
I cant help thinking Cramer on Mad Money said two different nights…using the word “toxic” about Etrade’s balance sheets…as much as I love Etrade’s portfolio website software!
stevearno: It can always go down lower but I think everyone holding it believes that the company is worth a lot more money even on its books. It will be interesting to see how much write downs they announce in Q4 because that will determine what the stock will do in the weeks after the announcement.
paulinator: I hope that in 3 years, we will be celebrating our purchase
kate: I think they have a ton of mortgage exposure and everyone seems to think that it could get really bad but we will just have to see!
MOST banks have a ton of mortgage exposure.. so what? The deposits backing the mortgages are insured by the Fed printing press. All banks are technically insolvant from time to time - Hell, the Bank of Japan was insolvant for 10 years. The Feds going to inject new cash by lowering rates. I think if Etrade was a “pure play” on mortgages I’d be more worried, but they’re diversified & their core business is trading. The resurgence of volatility in the market is likely to be good for them.
paulinator: It’s great to hear bullish comments when you own the stock
I’m definitely in this for the long haul. Let’s see how long it will take them to recover 
MoneyNing: I think how long it will take depends on 2 things.
1) Growth in deposits & trading accounts will help the balance sheet. Which we all have some control over.
2) Growth in short interest. ~7% right now. These guys are going to get squeezed at some point - with ~47% insider ownership its going to happen sooner or later… Can you say “share buyback”! At these prices any free cash flow is going to be used to give the shorts a really bad haircut.
Your point #1 is actually VERY worrysome. The fact that the market is so bad these days does not help people being nevous of their money being in ETrade. It provides them that much more incentive to take money out of there to minimize risk. In the coming days, we will find out how much pain this has caused ETrade.
7% is nothing big though. I think 20% would be considered big. I don’t think ETrade is going to do any share buybacks right now because they are probably taking pre-cautions that there “might” be bigger write downs. The last thing they want to do is buy shares back and then not have enough cash to pay off their bad loans.
Long term…
They do have to get this mortgage junk behind them. Which means, there maybe even better value to come.
We’ll see I guess. I’ve got $50k in at $4.80. I’ll double up if it hits $2.00.
paulinator: You have much more into this stock as I do so I wish you luck!
It might take another 6-18 months for this whole thing to play out so we’re in for a fun ride
Two class actions filed against Etrade today claiming errors in filings and disclosures.
Saw a bit of life yesterday, but I fear the rally may be short-lived given investor red flags that go up when reporting suspicions are raised.
Might it go down further?
stevearno: Now it is just anyone’s guess since you never know if someone will bet on it going long or short in the near term. Most people won’t touch this stock right now so it will have a tendency of having more down days than up. If you are in it for the long term though, then there is a good chance that it will be higher than it is now.
ETFC surged to 5.33 today, with reports stating its going to be sold off. Do you think this will go back to 20ish if its accquired by bigger company.
Vijay: I don’t think it will go back to 20ish if it is acquired. Actually, I doubt it will be 20ish
I think getting 10-15 is going to be extremely great for the company if it is sold now.
Plesantly surprised by Friday’s ETFC’s action. Up 25% on a volume of 93 million shares! Buy out of part or whole of the company appears likely. External cash infusion is another possibility (which I think is less likely). The stock appears relatively safe to buy under 6 dollars and possibly up to $7. My average price for ETFC is now down to $7.60 (with additional buys).
Sorry, it should read: Pleasantly….
GIdoc I”m happy for you getting basis down to 7.60! I”m still too scared to buy further, since I don’t know enough about reading their financials.
GIdoc: Good for you. I admire your conviction about this stock!
kate: Me too! My cost is still at like $12!!!
i don’t know if i can quote cramer here, but this was interesting, his mentions of etrade. good luck, again!!
http://www.thestreet.com/s/jim-cramers-best-blogs/newsanalysis/investing/10391492.html?puc=_txtbooyah
kate: Great find! Thank you for the link! It seems like Cramer really hates that portfolio. This makes me a little nervous but at least we have the takeover to look forward to. It will probably not be quick enough for our patience though
I am glad it was okay to send the link, I’m not real familiar with this website, seems like every time I try to explore i get interrupted…or go off on a tangent…
It is rather scary, he usually never talks that bad about someone’s balance sheets so I will steer away from buying more…I got bit by lvlt, sprx (i think?) and gtw in my short career.
I think sending links are generally okay if you are trying to add to the content instead of just spamming. It’s bad when people see that you are putting your own links up (for people who have their own websites) since that means they are trying to promote their own site.
These are pretty tough times to own ETrade. I wish all of us luck!
http://www.thestreet.com/s/report-etrade-in-sale-talks/newsanalysis/banking/10391431.html?puc=_txtttt
more on etrade
I’m not sure how to exactly calculate my cost basis, but since it is upwards of $20 I really don’t want to, for fear of becoming suicidal.
Our economy is not looking good right now, despite stimulation from war. It seems that it will only get worse, not to mention energy costs. My impression is that ETrade profits from consumers making investments. Which consumers? Well in general which people are attracted to a do-it-yourself discount brokerage? If these consumers have no money to invest, and they won’t for a couple of years, then how can ETrade make any money?
Please enlighten me if I have mistaken ETrade’s source of income. If I am wrong and ETrade’s customer base is on average wealthier, then those people are probably leaving right now because SIPC doesn’t cover their huge portfolios, and ETrade is rumored to be susceptible to bankruptcy. This scenario is also bad. Is there a good scenario?
kate: Hmm. Nothing but bad news!!! The only hope seems to be the takeover but it seems like it will never be as high as my cost. I guess I shouldn’t care how much I bought it at though since what happened has already passed.
stockton86: You should realize that what’s important is the future and not the past! Don’t worry about your cost basis!
As for ETrade, it will be bad if the economy goes into recession but much of what a brokerage makes is based on margin interest. ETrade also has (had) a very strong banking side since people put deposits in. I’m not sure how many people have taken money out of them but no one will ever know until the next quarter report.
Yes, the future is important. Convinced that ETFC will continue to drop, I sold today @ 4.78, which was less than 25% of my original purchase prices (avg) : (
As for the banking side, 5.05% APY was great, now it’s just a smidgen above Citibank, and I’ve seen others out there that are higher (think I saw some savings accounts in Kiplinger’s that were higher). I’m sure there are other aspects of banking too, besides savings accounts…
I’m new to the concept of anything margin, I first heard the word this summer. I think I get your drift though, and perhaps many customers will be paying that interest for awhile, because their stock (bought on margin) has depreciated and they must hang on and hope it comes back in the near future, rather than sell and, how do you say it, pay off the margin? I certainly didn’t realize margin interest was a major source of income! It’s such a low rate, and I’m the type who would almost never purchase anything with money I don’t own! (a house being one of the few exceptions)
I might buy back in at 2 something (I can’t imagine a takeover of ETrade!), as I now have a vendetta for ETFC. BTW, when is the next report due?
stockton86: It’s good that you are able to pull the trigger and sell even at a lost since that’s a skill all in inself.
The bank interest definitely isn’t something to be happy about anymore but it’s comparable to everyone else I would say.
The margin interest actually is quite good for these companies since they are using our savings account money to lend to someone else at a higher rate
I sure hope that it doesn’t go down to 2ish! We will see how long it takes ETrade to get some additional funding.
Thanks MoneyNing, your comment really helps to fill this void inside of me where ~17k used to be! J/k but I guess I never thought of it as a skill to try to play the stock market and end up with a sore you-know-what hole : )
Anyway I’m glad to be out because I’m more comfortable knowing exactly what I’ve got, even if it is substantially less than what I started with. The problem is I’m young and I invested everything I had into one stock without any research whatsoever. Nearly ten years ago my father “liked” Etrade, and I foolishly thought that meant something this summer when I bought it up.
I’ve learned the value of research and diversity when it comes to the market, and it might be a while before I invest a large amount again.
I hope for your sake it never goes to two, but even if so I think you’ll do well in a couple of years. Additional funding? I don’t understand what you mean by that specifically (real newbie to how stuff works in the world).
stockton86: Not a problem. Just helping my reader and a fellow ETrade stock holder out
It’s good to get that relief sometimes but the important thing now is not to try to follow the stock’s every move after you sell it because there’s just no point. There are a ton of stocks out there that you can focus on so try not to look at ETrade for a while.
Research and diversify is really one of the most important things to do in investing so I’m glad that you learn this!
When I meant additional funding, I meant takeover, someone buying parts of the business etc etc. I doubt they can offer any bonds like Citigroup did but you never know
Thank you again for the advice MoneyNing, and good luck with your ventures.
stockton86
i feel so badly for you! I started with 2000 increments until i could get a feel for what stocks do…but i have bought big chunks of things and could have easily done what you have done…so i really feel for you!…do you read cramer? i have read about 25 books as aforementioned, and his is to the point, i havent finished the one that came out awhile ago, but i need to do that!!…one thing that seems to work is to buy something with a 6 dollar one time dividend and then get out the day after you have to own it, i’ve only done it twice, first time i had the cash to use for a year but ended up with a loss but the 2nd time i got out quick and feel i did okay…have to research and try it some more though! df, amtd and msft had a nice div. once….
ps i’m 49…til feb!
“A bottom is beginning to form in financial stock, Jim Cramer said on TheStreet.com TV’s Wall St. Confidential Web video Wednesday.”
http://www.thestreet.com/s/thestreetcom-tv-recap-seeing-the-bottom-in-financials/funds/tv-recap/10392049.html?puc=_txtbooyah
kate: Hmm… Did you read that special dividend trade somewhere? My take on this is that since the stock price will fall to reflect that special dividend as it is value lost by the company, instantly that would net a neutual gain. The only obvious upside is when it is actually announced, but you can’t really anticipate that just like you can’t really know who is going to be taken over next!
ETFC remains volatile, albeit now with a positive bias. I have bought some April 08 calls ($6 strike price). I increasingly feel the company will not go bankrupt. We will make money, but, patience (and an iron stomch) is needed. Hang in there friends!
WSJ NEWS ALERT: E*Trade Gets Cash Injection From Citadel
GIdoc: Good luck with that! Even though ETrade end up going down, I think it has potential!
kate: I think since the stock went down, most of the sellers would be gone unless they have MORE bad news.
I bought 1000 more shares today so my cost basis is less than $9 now.
MoneyNing: Thanks. I am glad your cost basis has come down. The market’s reaction to Citadel deal is interesting. It is like suing the doctor for hair loss after successful chemotherapy that saved the patient! Citadel is going to make out very well and IMO rightly so, because, they stepped up to the plate and risked a couple of billion bucks. Thanks to Citadel, ETFC’s subprime risk is substantially reduced and the risk of bankruptcy is virtually eliminated. Time to (continue to buy the dips if one can,) stay patient and reap rewards in a few months.
GIdoc: There’s definitely a dip today
I hope that you are right because the stock is getting increasingly cheap. Hopefully they don’t lose too much credibility and that customers stay with them.
Might trigger a buy-in by speculators. I’m surprised and not surprised that the stock’s been all over the place. I wonder how badly marketmakers will keep fudging around with ETFC and screwing us up.
stevearno: I would be surprised if speculators buy in when the clear trend of this thing is down.
However, I hope someone does since I’m not even sure why I’m still holding on to this anymore as I’m “hoping” rather than “believing” that it is going to go back up.
Hang in there… Remember why you bought the stock? Etrade is an excellent broker that lost its way into the mortgage mess. Citadel is cleaning up that part of their books… This isn’t going to end today, or tomorrow. It needs time to heal. But it will - unless america goes bankrupt. In which case, buy guns and booze. Take a vacation and come back a check out ETFCs price in 2009.
Hi friends,
ETFC is putting their house in order and expecting profitability for ‘08. I like their ads - the ones talking about trading in foreign markets. I brought down my cost basis to $6.10. I think, we should do very well in coming months. As Pablo said, hang in there!
GIdoc: Good for you. I think ETrade will hang in there too and I also bought some more. My basis is a little higher at $7.14. If the stock can really turn a profit in 2008, 2009 will an amazing year for ETFC.
MoneyNing: Thanks. I agree with you re: 09.
Folks, ETFC is coming back bigtime! Now my shares are down only 19%. The stock moved some 135% from its low of $2.08 recently.
Etrade continues to be strong. My cost basis now is $6.01. My shares are down only 17.24%. Actually, I had a 1000 share windfall I didn’t realize! I have forgotten an order for additional 1000 shares at $3 that apparently got filled on 1/15/08. Pleasantly surprised!
Hang in there folks, we will be rewarded.
Wow what a nightmare. I remember seeing when ETFC was down and thinking about all the people that lost money. Just keep price averaging and you should be fine!
Well looks like I’m ready to pick up some junk Etrade shares too…however since I waited I get the better discount.
As a company they totally suck like any other leech USA company, flog the workers till they do no more then replace.
If you like E trade then you got sucked in by the corporate advertising and deserve losses so you can learn.
Meanwhile the preferred shares are at $5 so maybe I’ll get them as I rule !
I love etrade and use it and bought shares NOT because of bad advertising ploys..but because i had ameritrade accounts first and the portfolios were SO confusing, when I tried etrade, i ABSOLUTELY LOVED IT and told everyone I knew NOT to open amtd accounts….darn it!!
I cant understand why amtd has such a stupid portfolio deal. I stil lhave some accounts with them and they have not improved as well as etrade.
E*Trade is a good broker, however, Mr. Bhatia from Citi dragged the stock down for a long time. He might have personal reasons to put ETFC negative but the fact is: E*Trade made big mistakes and paid the responsable CEO 10 or 12 million Dollars.
That stock is only for highly speculative investors.
Love Etrade……..no respect.