So many opportunities, and yet also a lot of risk.  Our objective has been to minimize risk while sticking with what our research has brought us to believe in.

Not to long ago, we used a not so uncommon move to create a paper loss for the tax year, while incurring no loss at all.  How?  We sold NFI (our major holding with TradeKing) at a low, only to buy it right back.  We still own our shares in the equity, but won't have the tax burden at the end of the year.

Today, we made a bold move to increase our share in the ownership of NFI by selling at $9.94 and buying right back at $9.57.  We didn't hold the profits in cash, but rather increased the number of our shares by 70.  Not a whole lot we admit, but not bad for only the cost of the commissions (less than $10.00).

Novastar seems to hold it's own and make the right moves at the right times.  They've had no problems raising additional operating capital, and targeted the right market for recent news of staffing cutbacks (their wholesale division).

Some may think bigger is better when you think of weathering a storm, but fundamentals have to play a large role.  Countrywide for example, relies heavily on selling their debt for loans they've originated in order to keep enough cash flow to continue lending.  Other (however smaller institutions) do their own originations, funding, and servicing, which gives them much better control over their fate.  In regards to NFI, the wholesale division was an area in which they had the least control.