http://www.zenpenny.com/july-performance-summary-and-looking-ahead-to-august/
WMIH is another financial sector holding that performed well during the month of July, appreciating 12.5% during the month. WMIH remains a large position in the portfolios since it was initiated in July of 2012.
During that time, WMIH has announced no relevant news to justify the 80% appreciation in the share price. It should be noted, however, that there wasn’t any relevant news to justify the companies assets selling for approximately $25 million when you strip away the cash at the 2012 lows either. The stock has simply been moving in a range that has reflected the mood of the market and the mood of its shareholders, at any given time.
The mood of the markets, as we are all witnessing, has been rather jolly as of late. With that comes a certain sense of optimism that companies like WMIH will find their relevant spot within the financial economy.
The scope of attention that WMIH ends up commanding is up for great debate. It doesn’t seem to be a question that anybody can answer with any accuracy. What shareholders, such as myself, can accurately surmise is what degree of risk we are taking when investing in a company that has such a wide degree of potential possibilities from both an acquisition/merger standpoint and future earnings power standpoint.
That risk, even at these levels, is negligible at best. While the potential reward remains substantial. With that said, there is no need for financial modeling of any degree. The only relevant model is the one that says you, as an investor, are risking one dollar to gain three, four or possibly ten.
WMIH qualifies as such a risk/reward tradeoff, which is why I have kept it more or less a large position since the time it was initiated.
