Re: SubPrime Woes and it's relation to price drop
bookr...@yahoo.com
mkcool wrote:
> If the percentage of
> investment in subprime is not more than 10% then the question arises
> why the stock prices of financial companies going down when the
> company is more likely to show profit at the end of the quarter
If the percentage of investment in subprime is 10% and you're working
at a 20:1 leverage, then 50% losses in subprime are enough to wipe you
out completely. That's why, in a nutshell.
