Tag Archives: dividend

Rising Dividend Investing

What all this means to me is that Ambac’s stock is pricing in a loss approximating the bearish estimates (but not the superbearish bankruptcy scenario). This means that, ignoring the current one-time loss issue, if the company earned what it did 7 years ago then it is 50% undervalued. Case II implies around 50% appreciation potential from current prices. 4 billion. Note that a superbear case can be made for bankruptcy, but everything I read likely implies that is unlikely. 3. For earnings, I’m picking a superbullish case (2006 earnings) and a reasonable case (pre-2004 5yr median). The 2006 number is likely peak earnings for the time being so I would not rely on that. AMEX only dropped around 40% whereas Ambac is down 75% from peak. If you want a beaten down financial that won’t result in a total loss, something like C, BAC, MER, etc should be investigated.

I have a habit–possibly a bad one–of trying to fit present opportunities into something that successful investors like Warren Buffett encountered. Buffett was also comforted by management honesty and, although I can’t tell from the distance, Ambac’s management seems to be clean. Things will have to be extremely severe and/or Ambac’s underwriting has to be truly incompetent. This post will capture the final piece of analysis I’ll do before purchasing Ambac (still depends on how events unfold over the next few weeks). He is the owner of the Simple Investor SG website, which provides the “Full Analysis V14”. If you get a thrill out of research and having control over what’s in your portfolio, you’re a DIY kind of an investor. The investor must also learn to assess the worthiness of a company in terms of credits. Some employers invest their 401K plan money heavily in their own company stock, which can be a problem if your company hits an unexpected financial crisis.

So the Buds of the world lose interest, over time, and eventually, Bud decides to sell his handgun on Craigslist, as he needs the money. To a great extent, the problems tend to correct themselves over time. FinanceOne of the biggest problems people have with their finances in today’s economy is their lack of understanding of the subject. The thing that is so hard for people and what sets some investors apart is an intense desire to learn from their own mistakes so they can avoid repeating them. Security expert from C5 Capital Andre Pienaar, said in a recent interview, “…When we started investing in cloud-based companies at C5 many people saw The Cloud as a blocker for cyber security. Once the Tribune (TRB) takeover closes (likely December 20th) then I’ll redeploy that capital into Ambac. I initially evaluated Ambac a few months ago so read that to get details on Ambac’s historical profitability and what it is capable of. If Ambac can handle the losses it will incur over the next few years, this is the value of Ambac. I expect income from structured products to drop off significantly over the next few years (US CDO market is toast).

600 million), then the stock can drop even more (-30%). For instance, if you think earnings won’t drop off to 2000 levels then the potential is even higher. 4 billion then the numbers will look even better. Or if the losses are spread out over time (meaning present value of losses is slightly lower) then the upside will be slightly better. And in order to do this, you have to own cars that are (a) paid for, and (b) inexpensive enough that you can afford to take the risk of not insuring them for Collision and Comp. A second type of risk is called specific stock risk. Youll get a good idea of the major repairs needed from your home inspector, so you can tailor your questions to the exact type of work you need done. I also have a habit of looking at Buffett’s AMEX investment in 1963 but I think it offers a good template for contrarian investing.