Conseco Insurance (CNO) Message Board

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Non-Tech : Conseco Insurance (CNO)

CNO 40.33

-2.3%

Nov 5 3:59 PM EST

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To: BWAC who wrote (1959)	7/26/2000 12:34:50 PM
From: donjuan_demarco	Read Replies (1) of 4155

"How about $8 to gain per share IF you are 100% correct and accurate in your assumptions, but infinity to lose if you are just a little wrong?" BWAC, with ANY short position, your possible loss is infinity. So, if you are a worrywort, don't short stocks. "WHY is CNC worth such a deployment of your trading capital? WHY does it present such a good risk/reward scenario at $8?" Because CNC is very unlikely to repay the $1.5b in debt that it has coming due. If it fails to repay the debt, there is an almost absolute certainty that it will file chapter 11, where the common shareholders will receive, at most, a few warrants. You will next ask: How do you know it will not repay the bank debt? My answer: Call your broker's bond desk.

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