Longterm Investing
A place to put my posts
正文
if you check insider transactions, insiders started to buy at 5.5 when financial panic hit at the second time last Oct, insiders got burnt at the first time, they did not get smarter, they continued to buy starting at 5.5. So think 5.5 means sth. But around March this year, the highest buy price is 3.59.
I think the real problem is not about price, is about life or death. Financial crisis is not over yet, at least not for mbi, otherwise it won\'t be so low. Having insiders\' buy, just an increase of confidence, you are hoping insiders know what they are doing. MBI has a law suit against banks about $5 billion, alleging that mortgage generators like countryside violate their contracts by not validating incomes when issuing loans. If mbi survives, any price under 5 would be too low. if not, any price is too high.
Ago on the other hand, is more worry free, of course its price is higher. Ago does not have much risk towards residential real estate. I would say ago maybe safer. but what do I know.
Investment is about making decision under uncertainties, if everything is certain, no one need your money.
My answer probably is not satisfying your question, but what I say is reality. if you want to have a simple answer as if the price is too high, I would say no, since i would have sold it if I think it is too high. I am based my thinking on the assumption that mbi will not die in foreseeable future.
Finally, in investment, price is just a projection of real situation, or market majority\'s popular thought about reality at that time. price go lower does not necessarily mean your judgment is wrong, it just mean your opinion is different from majority. when you invest, your eyes should be focused on final outcomes. This aspect is probably out of scope of this discussion. Just be aware of it, in case you need it.
I think the real problem is not about price, is about life or death. Financial crisis is not over yet, at least not for mbi, otherwise it won\'t be so low. Having insiders\' buy, just an increase of confidence, you are hoping insiders know what they are doing. MBI has a law suit against banks about $5 billion, alleging that mortgage generators like countryside violate their contracts by not validating incomes when issuing loans. If mbi survives, any price under 5 would be too low. if not, any price is too high.
Ago on the other hand, is more worry free, of course its price is higher. Ago does not have much risk towards residential real estate. I would say ago maybe safer. but what do I know.
Investment is about making decision under uncertainties, if everything is certain, no one need your money.
My answer probably is not satisfying your question, but what I say is reality. if you want to have a simple answer as if the price is too high, I would say no, since i would have sold it if I think it is too high. I am based my thinking on the assumption that mbi will not die in foreseeable future.
Finally, in investment, price is just a projection of real situation, or market majority\'s popular thought about reality at that time. price go lower does not necessarily mean your judgment is wrong, it just mean your opinion is different from majority. when you invest, your eyes should be focused on final outcomes. This aspect is probably out of scope of this discussion. Just be aware of it, in case you need it.
评论
gam
2009-07-26 16:32:19
回复
悄悄话
thank you. very insightful.
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