With shares of Ambac Financial Group (NYSE: ABK) in the toilet amid concerns about the company's credit rating, billionaire investor Wilbur Ross is mulling an investment in the company.

Fortune writer Roddy Boyd sums up his reaction in the headline: "Has Wilbur Ross lost his mind?"

He goes on to say that ,"Here's why Ross's involvement -- if it's real -- seems unlikely to help. The company's stock is issued is by a holding company; it is virtually impossible that Ross would inject capital here, because 'the parent' can only receive cash when its insurance or portfolio management subsidiaries send it dividends. In short, it does no real business. More likely, Ross would invest in or purchase Ambac's regulated insurance subsidiaries, because those are the only parts of Ambac's business that seem likely to generate earning any time soon, if ever."

William Ackman's bearish calls on Ambac and MBIA Inc. (NYSE: MBI) have been spot-on so far -- and I'm a lot more inclined to trust his analysis of these companies than their own executives. Ackman is still banging the drum on just how terrible these two companies are, even sending a letter to the ratings agencies explaining why they should be downgraded.

Ackman has demonstrated a better knowledge of these businesses than anyone else out there. As usual, the Wall Street analysts totally missed this train wreck in the making, and one has now taken the unusual step of blaming naked short sellers.

As long as Ackman is bearish, I'd watch from the sidelines.

Is Wilbur Ross nuts? Roddy Boyd thinks so originally appeared on BloggingStocks on Sat, 26 Jan 2008 12:40:00 EST. Please see our terms for use of feeds.

Continue reading Pumping penny stocks on CNBC

Pumping penny stocks on CNBC originally appeared on BloggingStocks on Mon, 26 Nov 2007 17:30:00 EST. Please see our terms for use of feeds.