I wanted to comment on this in the main blog, because I'm seeing an increase in what I find to be very disturbing - comparisons of certain CEOs to Joe Nacchio (who just was sentenced) and other ugly things.

Let me state here at the outset - the entire point of running a corporation or any other company is to make a profit! If you don't believe in making profits, then what the hell are you doing in the financial markets trying to make a profit?!

Ok, with that out of the way, let me get into something a bit more specific. And I'm going to actually come to the defense of one of the companies that I personally think still has a major overpriced stock, Countrywide Financial.

That's right - I'm actually going to defend Angelo Mozillo. Ok, up to a point - I still think the guy buys the ugliest suits and ties I've ever seen on anything that walks on two legs, and I wouldn't be caught dead in public in his wardrobe. (Heh, gotta have some humor here, right?)

There have been a number of people calling for Mozillo to be hauled off in irons for "not telling us that your firm's prospects suck bilge water."

Well, I don't see it that way guys. I've been watching the same TV you have, and reading the same papers, 10Qs and 10Ks. And nowhere do I see an actionable statement. Indeed, what I see are a fairly honest set of statements.

I see omissions, but there's no obligation to answer questions that are not asked!

What I do see is people who were apparently educated in Government Schools and thus have this penchant for creating words that weren't actually spoken, inserting them liberally, or just outright making **** up.

Let's take one example - Cramer "pounding the table" on Countrywide. You saw it, I saw it, it resulted in a significant stock price pump.

Did he say Countrywide was going to be taken over? No.

He said that he believed that Bank America would be crazy not to.

Do you understand the difference between that and "the firm is going to be taken over"?

If not, you have no business investing in anything other than a spade to work your back 40.

Or take the alleged statements of the CEO - that they will be "the last man standing" in the mortgage space, to paraphrase roughly.

I believe Angelo may be correct in that statement. I don't believe that Countrywide will go bankrupt. Could they? Sure. Any company can go bankrupt.

But is it likely, given what I see on their balance sheet? Not that I see. What I do see is what I believe is an overpriced stock - one that is trading - even at these levels - with the expectation that there will be more business than I forsee in the lending space. So as a consequence I'm short the stock and intend to remain short until I either decide that I'm wrong about where I think the stock should trade or my downward price target is hit.

But let me ask you a question - did you hear him say that his stock was a good investment, or that Countrywide would survive and take market share from those who went out of business?

Don't you see the difference between those two statements?

If you heard what he said, but decoded it as "our stock will be $100 next month" you are the idiot.

Second, on his prearranged trading plan. You guys who are calling for this guy to be arrested and hauled off because he's selling on a prearranged plan while the lending space implodes around him are fools.

Insider trading is what caused the development of those plans.

Angelo is under no obligation to update that plan as things develop once it is originally filed. You can only get him on insider trading if he knew at the time he filed the original plan that the business would deteriorate.

Good luck proving that.

With that said, I know what I think when someone sells nearly half a billion dollars worth of stock, and its not very complicated to figure out.

I think they're (1) overpaid by their company, thus the firm is likely to underperform, and (2) they think the price of the stock will not be higher tomorrow.

But - its not like all this happens in secret! The Form 4s are filed and public data!

So where's the beef guys? Its all out there where you can see it.

You know what I think? I think a bunch of people got caught offsides by this market plunge the last couple of weeks. You got all giddy with Dow 14,000 and thought we were going to the moon. You piled in late and now you're getting raped, taking big losses. Maybe you were real fools and went out there on Margin and have doubled your trouble!

Well, how is this anyone else's fault?

If you're incapable of actually reading what's written on a page or spoken without adding your own words in the middle, go back to school and get out of the market until you're capable of parsing English without a fanciful twist.

If you're just looking for someone to blame for bad investment decisions, go get up, look in the mirror, and stare. There's your problem.

If there have indeed been materially false statements made by insiders in these companies, it will come out. The law exists for that purpose and as Kenny Lay, Skilling and others have discovered, while the wheels of justice do turn slowly, they do indeed turn.

In the meantime, however, quit trying to wishcast what you think someone said into what you ACTUALLY say! Grow a brain and read some 10Qs. Learn how to read a balance sheet, income statement and P&L.

If you don't know how to do these things get the hell out of the market until you learn, because you're going to get forking crushed buying and selling individual stocks without being able to read their financials!

'Nuff said - we now return you to our regularly scheduled stock market crash.