Jonathan Christopher

Second U.S. 'Bank-for-Businesses' Faces Bankruptcy

I'm afraid that the truth lies somewhere between the author's position of a bank nearing bankruptcy, and CGM's that they are paying their bills and can pay off their debts by selling assets.

To make things clear, I have a position in ACAS, and like it long term - if it survives. However they will need to replace some of their outstanding debe in about a year. At that time they could file for bankruptcy, not because they are not current on their bills, bu because a balloon payment id due. Selling entire companies at this point is difficult, and if everyone knows you are a forced seller, you will not get anywhere near the book value or real enterprise value.

So be cautious, Since Aug 20, 2008 I have purchased the stock at 21.02, sold it at 23.32, bought it at 14.20, sold it at 14.29, bought it a week later at 8.21, and started buying more at 2.71. Sold part of my position today, and am up 30% from the first buy, including those lovely past dividends. I will buy it again when I feel more confident.. Profits can be made, but it will be difficult and depend on luck and timing. This is not a buy and hold stock!!

I did not want to sell - but the short term dangers, at times, overwhelm my interest in holding.