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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (21020)	4/3/2005 7:44:55 PM
From: muwis123	Read Replies (1) of 78704

Paul - Could you paste a copy of the Barron's article on MBI? It's been on my radar recently. MBI looks cheap at 0.78 times its adjusted book value. I think the lowest it has ever traded was 0.7 times when Gotham Partners came out with that negative report a couple of years ago. However, I do think the stock will remain volatile with headline risk relating to the SEC and Spitzer investigations. On top of that, the outlook for bond insurers aren't that great with high interest rates dampening debt issuance and increasing price competition from new entrants. I like MBI's mgt team. They are disciplined and conservative, exactly what I want in an insurance company. If they wanted to please the Street in the sort term, they could easily increase the amount of premiums they write by loosening their underwriting standard or lower its prices. Both of which they refused to do. The chance of them losing their AAA rating like AIG is slim. They work closely with all the rating agencies. The agencies constantly monitor their capital levels and know exactly what MBI is doing everyday. I'm looking to get into the stock below $48 if it ever gets there.

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