I think quantuon has done longs like myself a favor. He is forcing me to re-examine my investment decision. He has articulated his bear position, and done so logically. He's not a mindless basher stirring up trouble with vague attacks on the company.
People who own the stock should be able to say what they diasgree with in his points - or if they don't disagree with a point, why it doesn't affect their willingness to buy the stock.
One thing no one can disagree with - the company screwed up royally by insuring subprime mortgages, thinking they were AAA. And no one at ORI was held accountable. I acknowledge that and have weighed into my decision-making. And they did "double down" at the start of the crisis with their MI company investments, not grasping how severe it was going to be.
But since then, IMO the company has done the right things. First, they LIGHTENED their position in MGIC in early 2011 after a significant bounce. MGIC was over $10 per share in early 2011. It was perfect timing:
Next, IMO they were 100% correct to get the H out of that line of business and preserve their capital. They didn't "throw good money after bad." And I applaud Aldo for trying to spin off the toxic divisions completely. Wish he had been allowed to do so.
He is not a flashy speaker. He is a crusty good ol' boy that doesn't seem to care if Wall Street likes him or not. But his one-foot-after-another approach to finance is the best way out of this mess. The company was sitting on tons of cash as the crisis unfolded, and it probably helped save them.
As for the fiscal cliff/recession, that adds risk, but it's not company specific risk.
I'll look at the financing points again. But right now, I don't see anything to make me think I'd want to sell ORI. I was hoping for a panic selloff to lock in some 10% yield.