MBIA, Inc. (MBI)

MikeRehling (34.86) Submitted: 12/31/07 8:42 PM

Recs: 0 | Rec This

Most of the 'risk' they insure is in municipal deals, not the current sub-prime mess that was a small part of their total exposure. They need more capital, but in a few weeks that will get solved based on the baked in profit, and their core expertise in Municipals. Warren Buffett will take awhile to get licensed in all the right states and then develop market share. MBIA will be back in the game quickly once they settle the issue of their AAA rating. Don't see a significant downturn in profits this next year with the capital infusion behind them, and look for the rates they charge to go UP. Still like this a lot IF you can stomach the pain of the first quarter. In this one for the long haul.

Report this Post Reply

XMFJordan (89.58) Submitted: 4/24/08 2:04 PM

Recs: 0 | Rec This

Do you really think that most of there risk is in municipal deals?

They took on a ton of risk in highly toxic sub-prime notes.

Warren Buffett is now licensed in 48 states and the District of Columbia. Has $2B in reserves (much greater than MBIA) and a true triple-A rating.

Do you think they will be able to increase rates with Warren coming into the business? And do you think that a Municipal authority is going to chose MBIA over the Buffett vehicle?

I am ending my position here. Not because I believe that this isn't going to zero, for it is. And I am backing that with my money in the real world having just bought 20 Jan 2010 puts at $10 a share. Got them for $2.80 a share, and expect to make 3x on them within 18 months.

The reasoning I am ending it here, is that I want to "bake" my Bankrupt standing (the little gavel) on this one. I know it is silly, but I like the little icons and hate when I lose them. I have baked a 200 standing (though I didn't think that was going any further).

If you want to burn a bunch of capital, feel free to back up the truck on MBIA...

Report this Post Reply

XMFJordan (89.58) Submitted: 4/24/08 2:15 PM

Recs: 0 | Rec This

Ok, ok. I am going to close off this position. I want to lock in my Bankrupt position (score of more than 90 on an under perform).

I know that is silly, but it is a little quirk in me. Like my little icons as my badges of honor and want to keep them.

But, here are some closing comments here on MBIA - because I do believe this is going to a big, fat, zero - for you bulls on this one to consider:

This company has taken on a ton of toxic, sub-prime notes. This one is headed to zero with a vengeance and a few factors are going to push it along.

Warren Buffett is now licensed in 48 states and the District of Columbia. Has $2B in reserves (much greater than MBIA) and a true triple-A rating.

They aren't going to be able to increase - or even maintain - rates with Warren coming into the business. Why would I select MBIA to insure my bonds, when I can go to Buffett's vehicle with much stronger reserves and a true triple-A rating?

Why would I go with a company which fired the rating agency (Fitch) which was asking hard questions?

I do believe this is going to a zero and I am backing that with my money in the real world having just bought 20 Jan 2010 puts at $10 a share. Got them for $2.80 a share, and expect to make 3x on them within 18 months.

To all you bulls out there, if you want to burn a bunch of capital, feel free to back up the truck on MBIA...I am going to take my winnings and attend another Value Investing Congress...

Report this Post Reply