texalope

Counterintuitive Accounting: Ambac Edition

Last Quarter MBIA booked gains on lawsuits in progress. Talk about fantasy and low quality earnings?

Chart of the Day: Wells Fargo's Construction Loans

Why don't you point out these statistics represent a percentage of only 4.5% of their total portfolio.

This Rally Smells Fishy to Me

I disagree. Banks borrow short and lend long. They are making money every day. Retailers business is improving. Housing has improves. Check out the recent Hovanian conference call. Looking in the rear view mirror will not make money for you. In 2007 the people looking through the windshield made money. The same holds true today.

Notes from White Mountains Insurance Analyst Day, Part II

As a long time shareholder I remember Jack Byrne showing a chart at this same meeting, years ago. It showed how their results tumbled when they diversified into another business. I'm surprised the current management didn't consult with him. I guess the statement that " we learn from history that we learn nothing from history" is appropriate.

Is American Express Risking Its Cache in Current Treatment of Cardholders?

Keep in ming the Benjamin Graham allegory of Mr Market. In the short term the market is a voting machine. In the long term it's a weighing machine. If you were contemplating buying a privately held business and you could get a wonderful bargain during a business downturn you would have to seriously consider it.

Why I Prefer Excel Maritime to DryShips

There are 2 types of covenant violations. Technical or material.

A technical violation occurs when they breach a covenant like debt to equity (this can easily happen when prices of ships are falling). Under this scenario they are like our banks but they have liquidity due to their cash flow.

In a material breach the cash flows fall short. This is obviously much more of a problem. The banls' concern is how do we get paid? If the business revenues are falling the interest and principal payments are in jeopardy.

Stanislav, what insight do you have here regarding EXM.

It seems when they bought quintana one of the goals was to add the more predictable cash flows from their charter business. This should provide some insurance regarding a material breach.

Why I Prefer Excel Maritime to DryShips

Take this as constructive. This article does not make your reasons for preferring Excel over Dryships clear. My takeaway is the Dryships is overleveraged (no secret) and business is lousy.

Excel also has a weak balance sheet and faces the same business cycle. They've cancelled the dividend, postponed their earnings to negotiate with banks. What do you see that makes this a better investment or bet?

The High Dividend Stock Investor's Collapsing Dollar Survival Guide, Part 6B

We all know the stock market is a discounting mechanism that is likely to rise long before improving conditions are apparent. How do you propose to time the entry into these stocks?

If you buy today when prices have discounted awful outcomes and hold for 5 years it is not impossible to expect to achieve a double. This means a 15% annual return. Perfectly acceptable to me as an investor.

There's Revolution in the Air

What a ridiculous column. I expect more from you.

Dionex Corporation: Quality at a Discount

Hi Tom. I just read your recent article on MBIA. How has your trading strategy worked out this month.

Buffett Ambivalent on Mark-to-Market Accounting

In the long term whether an asser is marked to market or held to maturity the result should turn out to be the same.

In the short term the matket is capable of being wrong about the value, just as the CEO can be.

Buffet once again has a logical conclusion. Mark the asset to market, let the company explain why they disagree with these values and let the investor decide what's more accurate in the short term.

Bank examiners should have the same option. They can exercise forebearance or judge the bank to be underwater.

Another Way of Looking at Risk in Financials

Hi Tom. Have you thought about MBIA exposure to Pension Obligation Bonds and the comments from Warren Buffet .He concludes that insured municipals may be an accident waiting to happen. It will be large enough to wipe out years of profits.

Buffett's Financial Bets

If muni bond insurance is so dangerous, why is Buffet selling it. He said 77% is in a second position and he's being careful. How can you be careful? He's humasn so maybe he's talking his book. After all, MBIA is about to start selling again.

Stress Tests: Banks vs. Bond Insurers

Tom , I too own MBIA. The stock seems to go down daily. Do you have any thoughts on why the market is so negative on this company.

The CEO claims adjusted book value is $40. As I write theis the stock is at $2.67.

There is something seriously wrong. It seems like a competitor would snap this up.

Stress Tests: Banks vs. Bond Insurers

Excellent post. Thank you.