We first mentioned Ambac (ABK) with the Bank of America news… and while we didn’t recommend buying at the time, we did hear that some of you did buy around $1.
Today, sitting well above $2 a share, that’s more than a 100% gain in no time at all.
Even now, it’s a buy.
And Cramer, of all people, is confirming that idea.
JP Morgan may have come out this morning urging caution with Ambac (ABK) and bringing Ambac down… But who cares what they think?
It was Jim Cramer, some one that hates Ambac, that rode to its rescue post-sell off…
Here’s what he had to say:
I hate Ambac Financial. I believe the current stub of equity is worthless. The claims are too big and the cash too small. But so what. Ouch. That’s painful to write. Especially, when you consider the Columnist Conversation tune of Tim Collins, and the excellent work by Andrew Wessel at JP Morgan backing up that analysis. But it doesn’t matter. You could argue that none of these insurers are technically solvent: Radian, PMI, MGIC Investment, MBIA. It hasn’t meant a thing. MGIC has rallied 400% during its extended period of “worthlessness.” I want some of that worthlessness. Radian’s up 600% during its “worthless” period. I would have liked a piece of that worthlessness. How about grabbing a hunk of the 800% rally in the “worthless” PMI? Wouldn’t that have been delicious? Do you hold your nose and buy ABK because of those rallies? I believe, oddly, yes.
Could it be that Jimmy is making sense these days, worthy of my short attention span in the hour he’s on?
Could be.
I say screw what JP Morgan cautiously said… and buy.
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