RE:Jermone Hass on BNN.....Wow.....
A few other comments:
Jerome Hass' argument is a good one IMO......He basically stated that if HCG is going to go the route of Street Capital, HCG will likely end up being worth a lot less than Street because Street will have assets in this particular space that will dwarf what HCG will likely possess when HCG's business model transition is complete should Home Capital decide to compete in Street Capials' space......
In any event, if the mortgages HCG hold end up being of low quality, the stock could still go down to $1 or less. The true test of the quality of HCG's mortgage book will come when there is a downturn in the Canadian housing market , the econmy in general, and/or a rise in interest rates.......
In the words of Warren Buffett: "Only when the tide goes out do you discover who's been swimming naked"......I think longs should keep this in mind before they get too excited about HCG's prospects going forward.....Remember, HCG is having these problems during one of the biggest bull markets in the history of Canadian Real Estate......How will they and the "quality" of their mortgages fare if the GTA real estate market goes south.....?
Finally, if HCG is looking to sell their mortgages they need to find buyers, and it doesn't look like potential suitors are exactly banging down the doors trying to acquire HCG's mortgage book.....Lots of rumours, but no deal yet.......I suspect potential buyers are simply kicking the tires......If / when a deal is finalized, the market would then be in a position to evaluate the deal. Until then, it is just rumour / speculation....