Monday, October 14, 2013

Quick Thoughts on Syncora and Ambac

As expected, Syncora reported its worst quarter since the 2009 MTA last quarter (as measured by change in the Dragon's ABV metric.) If you lightened up in the mid 60s as we suggested, getting back in today at the .52 offer will lock in a good trade. While that trade has been working out, Puerto Rico isn't about to default and JP Morgan is confronting RMBS litigation reality (among other issues) in its litigation reserves. If you made the same trade on Ambac, banking profits there might be wise too. The patient investor will buy and snooze. No need to check headlines, the stocks will tell you when a deal is wrapped up.

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