Tuesday, July 22, 2008

Changing tone on MBIA

I have just sold my small holding of MBIA. I have been convinced - following a careful examination of documents issued for GICs - that this post is incorrect in several important ways. In particular the GICs at MBIA have a larger effect on parent company liquidity than GICs at Ambac.

I still have no opinion whatsoever on the solvency of the insurance company. [I intend to do that work - and if I form an opinion that is worth having then I will again take a position in the stock.] I now however take the view that if the insurance company is bad the parent company is likely bad.

And that the statement by Jay Brown about parent company liquidity in a recent letter to shareholders is actively misleading.

I have retained my holding in Ambac.

I make plenty of mistakes. This sort of mistake I enjoy. I made a profit.
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3 comments:

Unknown said...

_I now however take the view that if the insurance company is bad the parent company is likely bad._

Basis for such a big change of view?

July 27, 2008 at 8:36 PM
Anonymous said...

bill ackman has pointed out that MBIA SIV has a negative networth, the shortfall will have to be met by shareholders money, including that $900m

July 31, 2008 at 2:13 AM
Chris said...

John,

Any updates on MBIA? They seem to be gaining traction in court and it seems likely that the spinoff of National will be successful.

June 2, 2011 at 6:23 AM

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