Monthly Archive for April, 2011

Bank of America Settles With Assured Guaranty (AGO)

Posted on April 15, 2011, 7:28 am. Closed

Bank of America recently agreed to pay Assured Guaranty (AGO) $1.1 billion in cash to settle AGO’s claims related to rep and warranty breaches on RMBS deals AGO insured. The deal also includes a loss-sharing agreement worth about $470 million to AGO. AGO received $850 million yesterday, which is worth about $4.62 to AGO. AGO’s shares are up over 25% on this news. And there is still another $720 million in value that is due to AGO, or another $3.92 in value.

Like I’ve said before, it is just a matter time before other banks settle with AGO. However, headline risk still remains in regards to the fiscal problems of cities and municipalities and will likely stick around for another year or maybe two, which means the price of AGO will likely remain volatile. But again, it is just a matter of time before these problems are solved. At current prices, AGO might be an even better bargain due to the increased likelihood of additional, positive legal outcomes.

Running Goals

Posted on April 3, 2011, 12:41 pm. Closed

I used to be a cyclist until I got to Atlanta. I am now back to being a runner. Last year I finished a half-marathon in 1:32:45 at a 7:04 pace. I took 61st out of 2,800+.

This year I’ve started training much, much earlier with the goal of making this my first full, competitive running season since high school. I’m already on my second week of 35+ miles. I fully intend on dropping at least 4 minutes from my half-marathon time and finishing in the top 40 in this year’s race.

I had to write this down because I feel really good right now and very excited about what I think I am capable of doing. I also hope by making my goal public that the odds of me following through will increase.

Why Leaders Don’t Learn From Success

Posted on April 3, 2011, 6:57 am. 1 Comment

From April’s Harvard Business Review:

In this article we argue that success can breed failure by hindering learning at both the individual and the organizational level. We all know that learning from failure is one of the most important capacities for people and companies to develop. Yet surprisingly, learning from success can present even greater challenges. To illuminate those challenges—and identify approaches for overcoming them—we will draw from our research and from the work of other scholars in the field of behavioral decision making, and focus on three interrelated impediments to learning.

The first is the inclination to make what psychologists call fundamental attribution errors. When we succeed, we’re likely to conclude that our talents and our current model or strategy are the reasons. We also give short shrift to the part that environmental factors and random events may have played.

The second impediment is overconfidence bias: Success increases our self-assurance. Faith in ourselves is a good thing, of course, but too much of it can make us believe we don’t need to change anything.

The third impediment is the failure-to-ask-why syndrome—the tendency not to investigate the causes of good performance systematically. When executives and their teams suffer from this syndrome, they don’t ask the tough questions that would help them expand their knowledge or alter their assumptions about how the world works.