opportunity in their loss

Apart from the fact that all fund managers have been sold off (well, the few on my watch list anyway) the market does not seem enthralled with the "losses" that PPT is suffering due to their "guaranteed return" fund. I have a feeling that due to this the market has discounted PPT to a greater extent than its peers.

But is it as bad as the almost $20 million loss might imply? And more importantly does the current debt "crisis" creat a good opportunity for PPT to boost profits in coming years? Here are a few of my thoughts:

* PPT has stated what they have lost (not much) with the rest being paper / face value loss that will be written back as the loans mature. For simplicity sake, and in line with PPT's statements, we will assume that there will be no or at worse very little write off. So, negligible cash impact;
* PPT has said that cash inflows into this fund are healthy. A good thing if well invested;
* Given the current market turmoil, PPT can invest the new & rolled over funds at returns reasonably greater than would have been obtained 6 or 12 months ago.

The last point is the key. PPT's profit from this fund is the cream they make on top of their guaranteed return. New money being invested now will be generating a greater return of cash invested on the same guarantee to the investors. As such, more cream for PPT. I don;t know what the amount would be, however it would be interesting if PPT would comment on this as it makes sense. A 1% on average increase in interest / investment income would be over $10 million extra profit.

Any thoughts on my above assumption?

MJS