Hedge Fund Manager Kyle Bass Buys 4.9% Stake in mortgage insurer MGIC

A closely followed hedge fund manager known for correctly betting on the housing market’s collapse four years ago purchased a small stake in the nation’s largest mortgage insurance company in a bet that the housing market has neared bottom.

J. Kyle Bass, portfolio manager at Dallas-based Hayman Capital Management LP, bought the 4.9% stake in MGIC Investment Corp, according to federal filings. He said on Monday the bet reflected his view that the housing market’s losses had largely been absorbed. “You can see that the pig has moved through the python in terms of U.S. housing losses,” he said.

Shares of MGIC are about 10.2% higher in Monday afternoon trading, to $2.82.

http://blogs.wsj.com/deals/2011/11/07/hedge-fund-manager-buys-4-9-stake-in-mgic/

 

Is he calling a bottom or expecting fed to buy mortgage securities?

 

He is calling a bottom.

 

He is calling a bottom. I was wondering why Warren Buffet was buying like crazy in the third quarter. Now, it makes sense. These guys are looking for a huge rally in the next months ahead. I don´t want to be on the worng side of these gentlemen. Delta hedged all positions (yeah, it costs tons of money) and long equity indices and long our "correlation currency" EUR/USD (with 85% of speculators short EUR/USD that´s going to be a hell of a trade), too.

 

You were wondering why Buffet was buying and now you feel enlightened after Kyle Bass - who has a horrendous timing track record - bought a tiny $10 million stake in a quasi-bankrupt financial?

 

Can you give a few examples?