DLai0001 (< 20)

Catching the falling dagger or just juggling knives..

July 10, 2008 – Comments (1) | RELATED TICKERS: SLM , UNCL

With the massive drops in stock prices for various lenders across the board, it seems like somewhere in the fray are lenders who have nothing to do with subprime lending that are taking more heat than they should for no reason at all.

 One segment of this industry I'm looking at is educatioal lending.  Many of the top lenders in this field are off by more than 10% the last week or so, but do they really deserve it?  P/E ratios in the industry are looking very sexy right now, almost makes my school girl in the library fantasys look like just another wet dream.

 I see education as a growing industry as trends in educatin will trend upwards as education is going to be the key differentiator in the work force today and years to come.  Education also (at a cost of interest rate) enjoys protection from bankruptcy, and doesn't leave the bank with a bunch of worthless REOs they need to get rid off.  Education also benefits from selective ignorance.  How many people will try to negotiate lower rates on their homes, their cars, etc... But does anyone really try to negotiate with educational lenders?  It's an industry that people just take at face value even though it's been privatized.

 Now the question is.. With all that is good going for educational lending, will morgage lending still be the black sheep in the family that continues to bring the family down?  Is this a good time to catch the falling knife, or are we juggling with forces out of our control?