Strangest thing happened...

On Monday I was browsing through my RSS feeds and saw that ETrade's stock dropped 50% of its value. It was about 3:00 EST and I was like, "This would be a good experiment on the idiodicy of the short term market."

What I read was that Etrade (NYX:ETFC) had a bunch of bad mortgages on their books and they were going to write it off. Although, I don't use Etrade as a bank or brokerage, I am familiar with their service. Their website is cool and they get a lot of competition from other discount brokers, but come on 50%?

ETFC has a p/e now of 5.33. ETFC has millions of users and a lot of money in deposits. I believe they are worth at least $11.00. It would be a great time for a rival to buy up ETFC and merge all the accounts.

I got ETFC at $3.95. Unfortunately, I did not have a lot in my brokerage account, but maybe if I did have more I would not have bought. It is a fun learning experience. The next day it was up. I almost sold the next day but after I looked at the fundies I knew this stock was worth more than what it was selling for this day. I'm going to hold onto this and see what happens for the next month or two.