Washington Mutual Credit Default Swaps
The demise of Washington Mutual (NYSE:WM) is being well covered in the financial press today. When I heard about it, I wondered what would happen to the company’s credit default swaps. If you remember, Fairfax Financial (NYSE:FFH) may own some of these securities and stands to profit from the company’s fall.
Here’s a look at the WaMu’s credit default swaps:
Hopefully Prem and the rest of the team Fairfax will keep us in the loop as they do some selling, they did so last week and it was great news to shareholders who have been patiently holding the company. I still think Fairfax is undervalued, the company is still not trading like its peers (1.5X book value) but I’m extremely pleased with the progress that we’re making right now.
It feels good to own a company that is well protected from Mr. Market’s turmoil!
2 Comments, Comment or Ping
Helen on Oct 13th, 2008
I’m wondering what WAMUQ.PK is all about and if it’s worth investing in on the chance that it goes to $1.00.
What’s your opinion?
Tariq on Oct 13th, 2008
Helen,
WAMU.PK is basically what’s left of WaMu (since JP Morgan picked up their deposit assets) that’s trading while in bankruptcy.
I don’t suggest on investing in it, chances are that this will be a 0, common equity holders are usually wiped out in bankruptcy so the probability of going from 9 cents to $1.00 are pretty low.
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Tariq Ali is studying Economics at the University of Texas at Austin, where he also operates a non-profit microfinance organization called TEEXAS.org. In his investing, Tariq draws upon the knowledge and experience of the great investors of our time, including Benjamin Graham, Warren Buffett, Joel Greenblatt, and George Soros. Tariq is actively pursuing a career in finance.
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