Thursday, November 1, 2007 0 comments ++[ CLICK TO COMMENT ]++

Ambac (ABK) Sell Off

The whole market is selling off but the one I'm watching is Ambac (ABK). It's a rout and it's down around 20% right now. BusinessWeek has an article questioning the viability of the debt insurers. The main rating agencies keep reaffirming their positive view of the debt insurers but others aren't so sure. Some skeptics also think that the rating agencies have a conflict-of-interest so one should discount for that.

I still like the stock and it is getting more attractive by the minute. Anyone entertaining the thought of taking a position should probably wait until the end of the year. Although it's hard to say who is selling right now but there is always the possibility of tax-loss selling still in front of us. Furthermore, most stock rating agencies still have a buy rating and there is a high possibility of them downgrading the stock (well after the fact, as usual).

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