John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (9830)	8/14/2008 7:26:12 PM
From: Hawkmoon	Read Replies (1) of 33421

I think it's very interesting that the MI's are performing so well in this market. The announcement that PMI was selling it's Australian operations for $1 Billion seems to be what set the stage. And then MGIC announced they had sold their stake in Sherman Financial for $200 million back to Sherman's management in order to raise capital helped RDN along nicely. RDN holds 22% in Sherman and it appears Sherman has an option to repurchase that stake from RDN by Sept 19th. It's just been amazing what I've learned by investing in RDN. It's a company with a book value of $35/share, and $1 Billion in cash, trading at $3.85/share (AH's price). I don't believe I've ever seen such a value play previously. It seems to strengthen my belief that the MI's will lead the way out of this financial mess. A strong MI sector that has accumulated sufficient capital to offset potential mortgage default claims is integral to getting the mortgage industry (and housing prices) back into business. Hawk

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