Erich Riesenberg

Ambac's Announcement is a Joke; Disagreeing with Whitman on Monolines

This is quite a contrast, with Whitman recently buying into Ambac, MBIA, home builders and mortgage insurers. Investors disagree all the time, but it is interesting to see successful, fundamental value investors disagree so starkly.

One thing I am curious about is why those short MBIA and Ambac don't cover and sit it out, with the stocks down 70 - 90%. I realize if they go to zero it is still theoretically a 100% gain from here, but with so much desire to prop them up and holding and opportunity costs it seems like so much has already been made. If any financial companies are "too important" to fail, these seem to fit the bill.

Another problem for owners of Ambac specifically, Whitman apparently thinks they have value even in case of runoff, but with common stock dilution at these levels that value, if it exists, is being diluted.

MBIA Is Still Whining About Ackman

I have never understood the urge some people have to explain their investment ideas, good investment ideas are hard to come by, but it is nonsense to blame the messenger rather than try to explain away the message.

Monoline shareholders should be blaming management, not investors who properly analyzed the companies.