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American International Group, Inc. Message Board

  • georgespelvin@rocketmail.com georgespelvin Sep 23, 2008 5:10 PM Flag

    My basis

    I borrowed trouble when I invested in AIG at $20. Two thousand shares. I have not bought more because I realized quickly that I had no idea of the extent of the unregulated part of their business. I also bought BAC at $31. Two thousand shares. I have not bought a stock in six years other than CALM, which I made a 50% return on but it was only 500 shares. I was lucky in the Internet crash because I went sailing for several months and put stop losses under almost everything NASDAQ and when I got home I was dismayed to find out they had been executed and luckily I never got back in. But I still lost a lot of money and became disenchanted that the lying bastards and idiots who pimp stocks did not get punished.

    My major focus is unrated bonds. Every month interest comes in and then, if they dont go south, I get back the principle.

    Since 2002 I have averaged about 15% per annum before taxes. And I sleep at night.

    I did not make my money by investing and my goal is simply not to lose it by investing!

    I have found that for me and for most people it is easier to make money than it is to keep it. That is because when you make money you are talking to your supplier and talking to your customer and you understand the dynamics of the business you are doing.

    When you buy stocks there is a long line of thieves and morons between you and the rubber on the road.

    I used to get calls from young men who would say, "Yo! Bob, how are you t'day. Bob, I have a great opportunity for ya'. Are ya' interested in makin' money, Bob?"

    Those are the evil pricks and nitwits that prey on the public.

    I would ask them what their tip was and they would tell me something about a hard disk, which I know something about. I would ask them a technical question and they would not know the answer. Then I would ask them how rich THEY were. Then I would tell them, "Why should I buy a stock from you when you know nothing about the company, I do, and when you have almost no money and I do? I should be calling you. How on earth do you get off on calling anybody? You should go to school. First to learn English. There are g's at the end of most of your words. And second to learn respect. I am not Bob to you. That is what my friends call me. You are not my friend. I am 60 and rich and you are 24 and poor. Pick on someone your own size."

    I think I know that AIG insurance is good judging from what the state regulators have been saying and how willing NY State was to lend them money. I know that Warren Buffet thinks extremely highly of Hank Greenthe and that the current CEO could not have screwed it up horribly in the limited time.

    I dont know much about all these derivative securities but if you count mortgages I cannot imagine that selling a portfolio of anything for 20 cents on the dollar makes sense.

    The current Sec Treasury is a guy who made money on Wall Street by stealing from you and me. So can be counted on to deliver great value not to AIG or Lehman but to his buddies who will pick up the pieces for a pittance.

    And there seems to be a significant group of shareholders of AIG and interested investors who demonstrate an awareness of large value being unnecessarily poured down the drain.

    The last time George Bush said shut up, just sign here, there is an emergency, there was none.

    So although I will not buy more I will not sell. I will hold. Ultimately insurance companies make money. They raise rates. They generate huge cash flows because of tax laws that characterize the bulk of their revenue as contingent liabilities, not income. And not unfairly either.

    So I got in not at the bottom and not at the top and will stay put.

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    • If a man in your position feels that way about AIG, then I feel pretty good owning it at 2.95.

      Thanks for a great post.

      • 1 Reply to storm76591
      • georgespelvin@rocketmail.com georgespelvin Sep 24, 2008 4:38 PM Flag

        YOU should be golden. Congratulations.

        The 80% dilution of stock, the warrants, is not a given. That is simply security. I dont know and apparently most people dont know what is really there. It is possible that nobody knows. Leadbelly is often pitied because he sold "Irene, Good Night" for the low low sum of $500 in 1930 something. What few know is that he sold it about six times that day.

        It is possible that when all this crap is undone, we will see that the various securities were not secured by the underlying mortgages but rather, other derivatives of those securities. Very possible. Then the only issue is how many layers are there? This is tantamount to selling the same asset more than once.

        In any other world or environment this would be a crime.

        Wall Street is organized crime. Sanctioned crime. And every few years when someone gets caught in the furor of public attention the regulators open their heavy lidded eyes and move their fat asses and appear to do something consistent with public opinion.

        But at under $300 unless their insurance business is a wreck, which it cannot be, as I understand it, you are golden.

        If three years from now AIG is $30 I will have made 15% per annum on my money and that is fine with me.

        I have enough riding on one bet.

        But congrats to you. YOu are a true blood in the streets truffle hound. I saw pink and bit. You waited for the blood!

    • It all comes down to the warrants. If another plan comes together to get us out of the 80% stake then we possibly get back to the 20's. IMO

 
AIG
54.17-0.35(-0.64%)Sep 29 4:00 PMEDT

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