The billionaire investor had some interesting thought sin a recent interview..
In the interview he said:
Q:How is the credit market looking now?
A: The market isn’t going to stay broken forever. Citibank (C) is selling loans back to borrowers. $12 billion is not the end of the earth, but it’s a good start. Citi must feel that they’ve marked loans properly to market. If you haven’t marked these to market, you can’t really sell them because that would crystallize a loss.
Similarly, Goldman Sachs (GS) announced recently that they had sold some of their Chrysler debt at 63 cents on the dollar. That’s a terrible number, but at least they found a taker for them and offloaded some debt.
Every time some of this logjam is reduced, it’s constructive. But remember that there’s hundreds of billions of paper that’s stuck, versus tens of millions that’s only recently become unstuck.
Q:So what’s the duration? Six months? A year?
A: I doubt this will take longer than 24 months.
With his purchases of Assured Guarentee (AGO), American Home Mortgage and Option One, Ross is buy far making the largest individual bet that the end of the mess is near. Based on his almost flawless history, I would have a hard time betting against him.
Disclosure (“none” means no position): Long C, GS, none
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