Ambac Financial Group, Inc. (ABK)

Ambac Financial Groups share price pop today at least 2 of the 3 of the following three things.

1. Proof that the average investor can't read earnings reports. The $2.19 Billion in quarterly "Profit" was due to "a big accounting boost"...(ie. paper magic). "bond insurer reported $2.87 billion in net unrealized gains on credit derivative contracts during the latest quarter". Math, $2.19B profit, minus $2.87B paper magic = NEG 680 Million. "Ambac also said it paid $315.1 million in claims during the latest period, up from $182.4 million in the same period last year. Those claims were mainly from guarantees it sold on residential mortgage-backed securities." AND RISING... " Ambac said it expects to pay at least $2.5 billion in claims through the end of 2010". I like the term "at least".

2. Proof that the average investor never learns, (i.e. CIT's BK this week).

3. Proof that I suffer from red thumb syndrome and Mr. Market, rational or not will crush me.

Let's go for risky asset

nice to have
cheap
tarp money will cone , dont worry

this giant still asleep. Wait till they start posting earnings, everyother institution will jump in.

Big company has sometimes big problems but once u solve them, then you are even stronger and bigger comp.I got time..

Down, but not out. This company seen a steady increase of profits and, had it not been for the housing bubble burst, would have probably continued that trend.

Ambk will go up once they get over their derivatives problem.

Low PE.

This account goes contrarian to free media-based bear or bull calls that aren't related to actual news within the company. In "The Bond Buyer's" publication entitled "Ambac's Suit a Long Shot" an unidentified lawyer quotes," 'If they just have a standard contract, then I'm not sure what Ambac's smoking,' said one leading swap lawyer, who asked not to be identified because the attorney's firm hadn't approved the comments."

Over shorted, last squeeze got us to the $7.00 range.

Last trade $1.61, an easy double or triple, fast moving trade!

These people will get their share of the business over the next several years.

go on abk

no cash, a lot of debt. and no business because no one is lending except the Fed on behalf of you and me. Do you think the Fed needs to insure the loans that it is purchasing? I don't.

Stock is held down by rating agencies downgrades. ABK is very actively traded, and it gets shorted everytime it moves higher. ABK insures $20+ billion in toxic CDOs. Depends who you ask. There is a current "threat" by S&P to re-price the CDOs insured by ABK, in which case ABK stated once that they would not be able to meet reserve requirements. ABK counter-threatened the rating boys, and a stalemate has been reached now. S&P now thinks that ABKs proposal to be included in Paulson's rescue package "has merit". I think that the rumors/fears that the muni insurance business is dead are overblown, like every other rumor these days. The Connie Lee subsidiary launch is in limbo, because the $1B capital is tied up as a counter measure to the S&P downgrade threats. There may be more behind this, like S&P not being willing to issue AAA rating to Connie Lee. Unlikely, but I don't have enough info on that scenario.

Since I do not believe in Buy&Hold (dead practice of the past), I am only trading the stock. Resistance is at $6, or at $8 if you have the guts. I am buying the stock below $2, and I am consistently making 100%-200% in every trade cycle. I recommend 4:1 (400%) cash reserves to limit risk for this volatile trade and a stomach made of steel. Otherwise it is easy money.

Confidence will improve

they will get more money from the fed or fed surrogates (banks). bouncing around usual lows now and will move up soon once the announcemetn comes. Not sure how this caps thing works, 3 weeks time frame i guess is about the closest to my idea, but all the other time frames work too. How do i close this pick once i get my gain? or does it naturally close after '3 weeks', or can i close it manually after '7 days'. (See my blog on my 1st pick: chk).

I guess the market forgot that these sub-prime insurers were in trouble. It seems their "safe" market (muni's) are in trouble now too.

Ambac is going down to $1.90 in the short term. They will probably go lower but I will take my winnings and go buy a soda.