Posts from the ‘MBIA’ Category

Jul 8

Tying up Loose Ends with the last of my June Position Changes (FFEX, IMH, MBI, TVL,)

As I mentioned in my June update, I was away on vacation for a couple of weeks and at the same time the city I live in was hit with the flood of a century, and these two events transpired to put some delays on the posting all the details of the monthly portfolio update that I put out.

In subsequent posts I have talked about the two major theme changes that I made in June, with those being that I sold all of my gold mining stocks with the only exception being Midas Gold (the decision to sell is looking rather prescient right now) and that I had bought a number of REIT’s that I believed were being sold off indiscriminately by investors lumping together all REITs into a single bucket (maybe not quite as prescient as the gold miner sell but I’m doing okay on this one so far).

There were, however, a couple of other portfolio changes that I made in the month of June that I didn’t get a chance to mention. I want to use this post to do some house-cleaning, talking about the remaining portfolio changes I made in June. Read more

May 9

8 Comments

Updates on a few positions during a very busy week

This last week has been jam packed full of news, earnings and outsized moves. I don’t think I have ever had as many 10%+ days for stocks that I own (or have recently owned but unfortunately sold) as I did in the last week. While some of these moves do not seem attributable to any specific news (such as First Mariner and Atlantic Coast Financial) most of them do. And while I have not had time to fully digest all of the news (I haven’t had time to review what announced spin-off for IDT and so therefore won’t be touching on that) I did want to discuss the stocks that I have reviewed and can comment on in the paragraphs below:

MBIA (MBI)

I sold out of MBIA in all but one account about two weeks ago, which is unfortunate timing given what has transpired. Nevertheless I had my reasons, they remain valid, and you gain little by looking back at bad luck. When the stock dipped into the $13’s on the day of the announcement I was really surprised, I mean the Bank of America deal was what we had all been waiting for, but I took advantage of the opportunity and loaded up the truck with stock. Therefore MBIA is a large position for me right now – it seemed very close to a sure bet in the mid-13’s and so I bought 11% position, going on some margin to do so.

At some point shortly I am going to have to reduce that position (I’m uncomfortable with it being this large) but I am waiting for at least the conference call tomorrow to do that. And what I do with my shares will really depend on what is said – in particular what management says about structured unit on call. They may come out and say that they have commuted the worst exposure, the unit isn’t going to regulator, and they expect to realize ABV of $10 from it. In that case maybe MBIA is worth quite a bit more than National alone. We shall see. Read more

Apr 28

8 Comments

Week 95: Setting the table (hopefully)

Portfolio Performance

See the end of the post for a full portfolio breakdown.

Update

Since my last update I exited Radian Group, Arkansas Best and MBIA. The sales reflect a desire to redeploy cash in other opportunities as well as some lingering concerns about each company.

With Arkansas Best, its my uncertainty about the outcome of union negotiations. The negotiations were extended this week for a second time. An escalation to a strike does not seem out of the question. If a strike occurs the stock price may or may not get hit; while a positive resolution could be quite good for the stock in the long-run (see my original post about how Arkansas Best would benefit from a contract structured in a similar manner to the one that YRC Worldwide operates with) the uncertainty may drive panic selling. I’ve decided to wait this one out for a few weeks and see how it plays out. Read more

Mar 10

4 Comments

Week 88: Take-off (MTG, RDN, MBI, PKI, NTI, IMH, WD)

Portfolio Performance

See the end of the post for Portfolio Composition and weekly trades.

A week of Significant Gains from RDN, MTG, MBIA

The last seven days have been extremely good ones for my portfolio. This has been primarily due to the price appreciation of MGIC, Radian Group and MBIA. As regards MGIC and Radian, I have written so much about these two names, done so much work trying to understand the business (and trying to understand how other people were trying to understand the business), that it is quite rewarding to see it play out the way that it has.

It is amazing to me that MGIC has more than doubled (from a $2.40 low to a $6.10 high) during 5 days when the only notable disclosure was that the company had the ability to raise capital. Someone with an interest in market psychology should really write a piece on MGIC – you could call it the Existential Security.

I reduced my position in both Radian and MGIC by a little more than half during the early part of this week. My sales of MGIC occurred around $5.20 while those with Radian were at a little over $10. I don’t have plans on selling any more of either.

I sold the positions down because they were getting very large (particularly in the case of MGIC) and because my thesis, that these companies would be able to survive, has now played out. What is going to drive the stocks going forward is the long-term potential of the mortgage insurance business and how well each company can capitalize on it. Read more