ABK, worthwhile investment?

I

IzzyfoShizzy

I remember less than a year ago when ABK was at $90 a share. It's now trading around $8 a share. I know people are talking about how ABK and MBI are the devil and how we should all be staying away from them, but isnt it a steal at this price? Its a tough time right now for the bond insuring agency, but it will eventually get better. Mike Callen, CEO of Ambac, made some great points in his interview on CNBC (www.ambac.com left hand side if youd like to see it) and almost got me to purchase the stock.

Even if not for a long term investment, it seems to be an extremely volatile stock, where you can probably make a decent profit in a short amount of time.

Should I go for it, or keep away? What do you guys think?
 
Quote from IzzyfoShizzy:

I remember less than a year ago when ABK was at $90 a share. It's now trading around $8 a share. I know people are talking about how ABK and MBI are the devil and how we should all be staying away from them, but isnt it a steal at this price? Its a tough time right now for the bond insuring agency, but it will eventually get better. Mike Callen, CEO of Ambac, made some great points in his interview on CNBC (www.ambac.com left hand side if youd like to see it) and almost got me to purchase the stock.

Even if not for a long term investment, it seems to be an extremely volatile stock, where you can probably make a decent profit in a short amount of time.

Should I go for it, or keep away? What do you guys think?
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I played both 2 weeks ago actually. They are on my radar again.

I am tempted to make a play but am on the sideline with them.

I would prefer another dramatic drop on a downgrade and lower rating. Maybe a halt....


They are eerily similar to the CFC and ETFC trade. I say steer clear.
 
What about after the downgrade, if there is a dramatic drop then, would it be a definate play then? If so, how big of a drop should i wait for before jumping in?

I also thought that since everyone is expecting downgrades, that it might already be factored into the price and there may not be a dramatic drop after an announcement.
 
Quote from IzzyfoShizzy:

What about after the downgrade, if there is a dramatic drop then, would it be a definate play then? If so, how big of a drop should i wait for before jumping in?
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Why does it have to go back up? Just because it was a 90 dollar stock doesn't mean at some point it should go back up.

I just read your other thread about buying and holding AAPL from 170 all the way down to 119 (and still holding).

It seems like you have no idea about trading/investing. Is that the case?
 
Quote from Longhorns:

Why does it have to go back up? Just because it was a 90 dollar stock doesn't mean at some point it should go back up.

I just read your other thread about buying and holding AAPL from 170 all the way down to 119 (and still holding).

It seems like you have no idea about trading/investing. Is that the case?
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Yea it is. I'm definately a beginner. I recently started and I'm just trying to learn as much as I can.
 
your feeling a urge to buy because it went down so much and that has made your greed go up. no bear argument can stop you, go ahead and buy it, not a lot, just enough to give you pain and teach you a lesson of not getting involved in things you dont know about out of greed
 
Quote from IzzyfoShizzy:

What about after the downgrade, if there is a dramatic drop then, would it be a definate play then? If so, how big of a drop should i wait for before jumping in?
More...

If there's a downgrade, it's done. bond-insurers cannot do business if they aren't rated AAA.
 
bond insureres insure their "ratings" ...

wall street ibanks come up with mortage backed securities which they sell to goverments and pension funds that need to "gauranteed" returns. Bond insurers like MBI put AAA ratings on these mortgage bonds. When everyone found out these bonds were actually junk, bond insurers had to cover the losses since they "insure" their AAA ratings. No enough money to cover. it's like when a major natural disaster hits a large city, life localized insurance companies go broke.
 
Quote from neutrosphere:

bond insureres insure their "ratings" ...

wall street ibanks come up with mortage backed securities which they sell to goverments and pension funds that need to "gauranteed" returns. Bond insurers like MBI put AAA ratings on these mortgage bonds. When everyone found out these bonds were actually junk, bond insurers had to cover the losses since they "insure" their AAA ratings. No enough money to cover. it's like when a major natural disaster hits a large city, life localized insurance companies go broke.
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That's not true. They don't insure ratings, they insure the principal and coupon payments (see Orange County's default years ago). The bonds (like munis) get AAA rating because the bond insurer, being AAA rated, guarantees the viability of the bond. They don't put a rating on anything (nor can they - that's done by the rating agencies). An AAA bond (guaranteed by ABK) going to A-, in itself, has no effect on ABK.
 
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