At Legg Mason, the Daylight You See May Be a Train

I came across this great article on LM's earnings miss today. Here's a teaser:

• Today was Mark Fetting’s first earnings call as CEO of Legg Mason. He was presiding over its first quarterly loss since the company went public in 1983. Losses are pretty rare for asset management companies.
• Fetting seemed a bit nervous. In his opening remarks, he used the term “focused” nine times in describing how to deal with Legg’s many problems. The underperforming investment teams are “focused.” The U.S. distribution teams remain “focused.” Bruce Sherman and Greg Powers, two of Legg’s worst performing managers, are “focused laser-like.”
• By the end of Fetting’s remarks, I too was nervous and “focused.” Focused on how bad Legg Mason’s results were. And on how powerless Fetting and his management team are to change the company’s increasingly unhappy destiny.

The Option Addict recommends buying June puts, with a target price of $52.