UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next
Author: howardgt One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35351  
Subject: Re: MBIA Bonds? Date: 12/14/2012 11:46 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
altstrat91,

you think there is any upside to get in now?


I don’t know if your question was directed to Charlie or me, but since Charlie hasn’t responded yet, I’ll add my 2 cents.

I really have no idea if MBIA will survive in the long run, but I’m guessing the odds are on their side now. MBIA bonds presently represent about 2% of my junk allocation, so I don’t think I want to add more exposure now. Experience has taught me that diversification is the key to making consistent profits in high-yield assets.

I bought MBIA debt awhile back in the 70’s because I thought they would do everything possible to avoid default. Default would be catastrophic for a company in their business. Also, I respect Bruce Burkowitz’s (Fairhome Funds) opinion, and he is a holder of MBIA equity and has said he thought they would come out whole in the end. Now that they have won "consent approval", I think the odds are even more positive than when I first bought.

Here is an article about CreditSights opinion on the company:
http://www.4-traders.com/MBIA-INC-13464/news/Recent-maneuver...

But I know that anything can happen... I have learned that if I diversify enough, I can make sufficient profit on the surviving majority of my holdings to more than cover the small percentage that may default. So I think MBIA may be worth a small weighting in a junk portfolio.

Howard
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Not Cheering the Shire Deal
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement