AIG - the long term

Quote from Ivanovich:

"... I bought at 7. It's at 1.70. Most of my capital is gone. It's a cash trade. At this point it might make sense to hold the $1.70 if one believes, say $5 is possible in a few years. It's an investment.
More...

Definition of "investment"... "a busted trade" --- Ed Hart (late and great)
 
Here is some logic...you never know what the future will bring. Ladenburg Thalman (LTS) traded at 6 cents in the darkest days of 2003. It had come down from about 4 dollars (from the best days of 2000) then it rebounded to $1.45 in about a year...in four years it went as high as 3.80.

Yahoo traded down to 4-5 dollars in the darkest days of 2003 but then went on to trade as high as 40 dollars.

Lets say you invested 10,000 at 7 dollars then you would have 2471. The most you can lose is 2471 by holding at this point. However, the sky is the limit on how much you can gain.

You dont know where the stock will be in a year. Some are expecting the market to go lower, some are expecting it to go higher. The fact is that we will have a new president with a new cabinet and things might just get better. They have a better chance of getting better under Obama then under Bush. The company is under a new ceo and there is a new senior management.

Downside is limited at this point where as upside is unlimited. I say keep the shares. Read the posts dated 2003 on Yahoo for LTS and Yahoo where everyone forecasted bankruptcy for each.
 
Sun Life eyes AIG units in bid for US expansion - Globe and Mail (20.58 ) : Globe and Mail reports the co is looking to bid for pieces of American International Group , sources say, as Canada's life insurers increase their focus on acquisitions. Sun Life completed the sale of its $2.3-billion stake in CI Financial Income Fund last week, a move executives say they made to bolster the insurer's finances so it could more easily pounce on potential deals. While there are many potential acquisition opportunities, Sun Life is concentrating on pieces of AIG that are being put up for grabs. A key priority for Sun Life is beefing up its presence in the U.S., where it wants to expand in both the consumer life insurance business and the annuities business. Takeovers in Canada are low on Sun Life's checklist, but it is keeping an eye on opportunities in Asia.
 
I would think the asset sales would be most important to you. There really is a shroud of mystery at AIG. The amount of money the government has to spend through them to pay off JPM and friends, is staggering.

So you have that debt to pay back. But.. if you hold long enough they may pay it all back. Question is, what are they left with? Will they fire sale everything? Or will they have a profitable core. Insurance is a good business, ask Berkshire. It really just remains to be seen what will be left. I would watch any and all asset sales.

Also AIG, if it's not already too late, needs a V recovery. The cds are piling a debt at an incredible rate. They need to stop making payments, but is it too late?

I would dump it, if not, I would be watching if they begin to sell off assets. And if the core they have has any chance of paying back the debt.

I would be very concernced that the Treasury is using AIG to funnel cash to wall street and once wall street is done they will toss aig in the trash.
 
Without being glib, I seem to remember something about cutting your losses and letting your winners ride.

Nice time of year for a tax loss, too.
 
You must log in or register to reply here.
Back
Top