Life Partners (LPHI) is a company reporting current success but likely heading towards inevitable failure. Life Partners had a track record of failure from 1991 to 2004, accumulating a loss of $4.9 million as a small, viatical settlement provider. A viatical settlement refers to the purchase of death benefits from the holder of an insurance policy who is terminally ill with a life expectancy of less than 2 years. Life Partners played the role of middleman, purchasing the viatical settlements on behalf of investors for a fee. Life Partners continues to suffer additional losses from the viatical settlements it faciliated prior to 2004, due to lawsuits that continue to be filed against it, and resulting from Life Partners being forced to buy back many of those viaticals.

Life Partners will likely be inevitably forced to report the same results with its life settlements business. As the viatical business dried up,

This article describes why I believe a recent decline of over 20% in the stock price of CVB Financial (CVBF), a California bank, may create an excellent investment opportunity. This article discusses the economics of the business of lending, describes CVB Financial's low cost of loans and conservative lending practices, describes how CVB Financial has been able to maintain profits despite deterioration in its loan portfolio, and explains why CVB Financial may be undervalued. The article goes on to explain the flaws in the short sellers’ arguments, reasons why the SEC subpoena may not lead anywhere, and why the resolution of the SEC subpoena may serve as a catalyst for an increase in the perception of CVB Financial's value.

Economics of the Business of Lending

The two most important factors to a bank's success is the bank's cost of funds and the bank's lending criteria. The cost of funds is