In the past five years I have found some fantastic investments, and noted them. American Home Mortgage (NYSE: AHM) is not one of them and it's time to face the facts and take the hit. IT WAS A BAD CALL ON MY PART, even it was not a direct recommendation. There is no getting around it, AHM is in trouble and to say it was my worst call since the bubble burst is not much relief.

I wrote a story in May titled Someone asked about Amercian Home Mortgage, and although I only said this one is worth watching, I was still calling attention to a stock that did not pan out and for that I deserve at least some boos from the crowd. The following was taken from the story:

• The most recent Standard & Poors report from May 2, 2007 rates AHM four stars with a buy rating. Quoting from the report, "While we see AHM's exposure to the ALT-A market affecting near-term earnings, we believe it remains well capitalized and positioned for long term growth." They go on further to state that "...the price is warranted by what we see as it's strong balance sheet." I must point out that this was written about the same time as AHM Shares Fall on Stock Sale when AHM sold common shares to increase it's liquidity and numerous analysts expressed concern about it's financial strength. I am not sure this is accounted for in the S&P report.

A few days ago I received the following inquiry from a frequent reader of my blogs on Chasing Value.

Hi Sheldon, what do you think about: Gannett Company (NYSE: GCI)

P/S - 1.72, P/B - 1.65, P/cash - 9.9, dividend - 2.1%, P/E - 12.4

Publishing sector - quite hot at the moment? ...alex

Alex , you are developing a pretty good understanding of the numbers I look at. Now you should add something else to your calculations. The actual business it is in. When we look at American Home Mortgage Investment (NYSE: AHM) (see Someone asked about Amercian Home Mortgage) or IndyMac Bancorp (NYSE: IMB) (see Chasing Value: IndyMac Bancorp - once in a lifetime,) or many other fallen banks and mortgage companies, we can be confident they will bounce back if they survive the lows. There will always be banks.