Why the E*Trade Shorts Have It Wrong

E*Trade's (ETFC) management is doing everything right to turn the
company around, and their efforts will reap benefits for shareholders
sooner rather than later. The stock has obviously taken a serious hit
due to its careless investments in commercial mortgage-backed
securities and other derivative products.<!--more--> The company has also done a
great job disclosing the magnitude of future writedowns, namely $3
billion over the next two years, which in turn has painted a clearer
picture of future performance. Joe Moglia, the CEO of TD Ameritrade (AMTD),
recently mentioned on CNBC's Fast Money that the defection of customers
from E*trade has already taken place.

Despite thefinancial turmoil, management has shrewdly decided to focus oninvesting in its core competence. The company is continually investingin its trading platform; after having had an account with TD Am