A Poor Man’s Advice

Remember the NovaStar REIT that was the subject of this sad NY Post article about six months ago? (If you haven’t, read up. It’s a telling tale about diversification and trusting anoymous message board folks with your financial decisions).

The article includes this quote from a pained investor:

Mary Helburn, who owns 60,000 shares, told The Post that she was down nearly $500,000 in a week, but is optimistic on NovaStar’s future. “I’m holding for the long haul,” Helburn said.

Well, things just got worse for poor Ms. Helburn as Friedman Billings Ramsey analyst Scott Valentin downgraded the stock yet again and set a price target of $0. That’s not a typo.

Since it’s 2003 peak, NFI is down 98%.
Since February’s aforelinked article, NFI is down 85%. Mary Helburn’s 60,000 shares, if she has still holding on, have lost $1,717,800.00 since the article went live.

Why anyone would have such a large amount of money in one speculative stock is beyond me, but if you needed another reason to diversify into the entire market, Ms. Helburn’s tale is good enough. If she sells now, she will have plenty of money to buy the Boglehead’s Guide to Investing and invest in a globally diversified index portfolio.

If she holds on, she may not even have enough for the Guide.

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