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TORM A/S Message Board

j0n_48195 65 posts  |  Last Activity: Jul 30, 2015 3:16 PM Member since: Apr 2, 2001
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  • Reply to

    i say crashand burn AIg

    by kopach Jul 29, 2015 3:06 PM
    j0n_48195 j0n_48195 Jul 30, 2015 3:16 PM Flag

    catharsis

    Sentiment: Buy

  • Reply to

    Help me to understand - PLEASE

    by oagworld Jul 29, 2015 4:47 PM
    j0n_48195 j0n_48195 Jul 29, 2015 10:29 PM Flag

    If you believe in AIG, then you have to believe the warrants are a better value. But you might not own enough to "move the needle" as they say. If that's the case, I'd set a limit sell order at say $30.50, good till cancelled, and let one of the high tides take them off your hands. You could, on the other hand, if you're bullish, sell your common and wait for boredom to let the warrants slip back into the 27's and double down. There's a lot of time between now and 2021. I wouldn't hold both with a small position though. Just my opinion.

    Sentiment: Buy

  • Reply to

    i say crashand burn AIg

    by kopach Jul 29, 2015 3:06 PM
    j0n_48195 j0n_48195 Jul 29, 2015 3:50 PM Flag

    Mark Twain once said, "Get your facts straight first. Then you can distort them as much as you like." Fact: AIG was the rug under which all other bank's and financials were allowed to sweep their dirt. Hank Paulson make sure of that. Fact: AIG still paid back all of their bailout, plus a $22 billion profit for Uncle Sam. You're welcome. Fact:: Bubbles are a malfunction of the whole ecosystem, not just a few greedy guys at the top. Many of your "victims" knew, or should have known better. Fact: AIG no more resembles the company it was before 2007 than Coke resembles IBM. Fixating on a name, without reference to the reality behind the words is immature. Fact: I lost most of my bankroll in the "great recession". I'd love to see a few bad actors do jail time myself. But if I can pick up the pieces and move on, maybe you should too. We are living in an age of unparalleled prosperity. We have more to be grateful for than to complain about. Fact: Life is not perfect. Your self-righteous blather has no resonance with me. Go build something. Earn the right to complain and you will find less need to do so. .

    Sentiment: Buy

  • Reply to

    Today's Price Action 7/29/2015

    by kmcmahon38 Jul 29, 2015 12:02 PM
    j0n_48195 j0n_48195 Jul 29, 2015 2:38 PM Flag

    Any interest rate hike will be a small token. There's a global currency race to the bottom and we stand to lose trade and jobs if rational interest rates keep our currency too strong. However, Yellen & Co. know all too well that when the deflation/inflation tide turns, inflation could build like a tsunami. A small, but reasonable, interest rate bump at least gives her some options to respond in either direction.
    In the meantime, AIG has to focus internally. Yellen cannot help them as much as they can help themselves. Peter seems to get that. Progress has been maddeningly slow. He seems to be on the right road, just moving well under the posted speed limit. I'm inclined to give him a pass though. His initiatives all seem to take several quarters, if not years, to bear fruit. Nevertheless, using Buffett's litmus test. If I couldn't sell AIG for another 10 or 20 years, this is how I'd want AIG managed.

    Sentiment: Buy

  • j0n_48195 by j0n_48195 Jul 28, 2015 8:13 PM Flag

    We were up by almost a dollar by midday on heavy volume. It has usually been the pattern for the buyer to dump enough shares near the close to mask their buying. Bullish at one level, frustrating at another. Sometimes I wish I was a day trader.

    Sentiment: Buy

  • Reply to

    Q2 Buybacks

    by momentum_play Jul 22, 2015 12:17 PM
    j0n_48195 j0n_48195 Jul 26, 2015 10:46 AM Flag

    We are fortunate that so many other companies are buying their shares too. This allows AIG to continue unnoticed. I'm a bit miffed by the general complaining about buybacks, particularly among the business channel "gurus", and including Hillary's recent comments. The logic being that it's too easier and safer to buy shares, rather than invest in expanding the business. Nonsense. If the stock is well undervalued, management owes it to its shareholders to use excess cash-flow to reduce the float. The market is telling the company it wants to reduce its capital base by discounting it. I know a lot of companies are overvalued, but AIG isn't.
    Nobody complains about dividends. Buybacks have much the same effect, except they give management more flexibility to return capital to shareholders as market conditions warrant. If there is a better place for that capital to be reinvested, it's up to the shareholders to find it. What does Hillary think happens to those buyback dollars anyway? Investors either spend it or invest it elsewhere. AIG has enough cash left to grow their business and manage their debt. Buybacks are the most prudent use of what's left after that.

    Sentiment: Buy

  • Reply to

    Q2 Buybacks

    by momentum_play Jul 22, 2015 12:17 PM
    j0n_48195 j0n_48195 Jul 22, 2015 2:32 PM Flag

    As a warrant holder, I'm all over buybacks. But I have no clue how to predict how much management will commit to them. My emotional self says , by God, bet the ranch before the market figures out this is a buyout "selfie". A company can literally buyout (most of) itself. But I get management''s snail's pace buybacks. Their measured pace has allowed them to keep buying without drawing attention. Larger buybacks signal a sense that "the cat's out of the bag" and that the window of opportunity is closing. Anything between $1.5 B and $4 B, will be a good sign. More or less, will signal that the game's about to end. Long term holders want this recovery to continue with buybacks.

    Sentiment: Buy

  • Reply to

    Managing earnings example with warrants

    by iq_investement_tw Jul 2, 2015 5:59 AM
    j0n_48195 j0n_48195 Jul 3, 2015 9:33 AM Flag

    I'm not debating the wisdom of buying back the warrants, I think that's exactly why we're holding ours. I just don't see it happening. The float is too small to move the needle. Holders, like Berkowitz, are disinclined to sell. And despite the huge payoff in 2021, as I understand accounting, not a penny (or should I say dime?) of it will be realized on the books (by the absence of dilution which would otherwise occur) until 2021. On the other hand, if Hartford can do it, why not? If I were Peter, I'd just give their brokers discretion to buy both the common and the warrants, based on their relative prices in the moment.

    Sentiment: Buy

  • Reply to

    Managing earnings example with warrants

    by iq_investement_tw Jul 2, 2015 5:59 AM
    j0n_48195 j0n_48195 Jul 2, 2015 4:30 PM Flag

    I too am in up to my eyeballs in the warrants (though only about a quarter of nei's, it appears). But I didn't see the filing and would probably be too ADD (lazy) to read it through with your level of care. Regardless of who's wiser or smarter, you deserve props for that. I believe I'm right about the accounting though, if it did happen- a dollar for dollar write off, but nothing more. I think that is what spartan said (any chance he's an MSU grad too?). but I'm not too sure. I'm amazed HIG had the guts to do a warrant buyback, since I don't think it helps their balance sheet until after the exercise date. Maybe AIG does have the discipline to make a 5 year no-win decision like that. Kudos if they do. You gave us food for thought. Nevertheless, you've again raised as many new questions as retired old. Did HIG do a tender or buy on the open market? If they can catch Berkowitz in a moment of weakness, they might even swing a private deal. Finally, what kind of price would it take to shake yours loose? Hypotheticals are always hard to pin down, but I think I'd need to see $40 to bail early on a tender. $35 to consider it. Any thoughts?

    Sentiment: Buy

  • Reply to

    Managing earnings example with warrants

    by iq_investement_tw Jul 2, 2015 5:59 AM
    j0n_48195 j0n_48195 Jul 2, 2015 10:49 AM Flag

    So, just to clarify. If AIG buys 10M warrants for $300M, or $30 per, they write off (because the cash disappears from the balance sheet) $300M, not $750M? Is that what you're saying?

    Sentiment: Buy

  • Reply to

    Managing earnings example with warrants

    by iq_investement_tw Jul 2, 2015 5:59 AM
    j0n_48195 j0n_48195 Jul 2, 2015 9:27 AM Flag

    You've stumped me. (I know, not hard to do.) From my perspective, since the warrants have as yet no paid in capital or retained earnings on the balance sheet, AIG would merely write off the money paid to retire them. To my knowledge, that $3.3B isn't on the books till the warrants are exercised, so that $45 per warrant retired never existed on the balance sheet. Also, would this show up in the earnings statements at all, or just the balance sheet? Am i wrong again? Enlighten me.

    As an aside. I've only seen warrant buybacks discussed on these boards. Have you seen any indication that management has or would ever consider them?

    Sentiment: Buy

  • Reply to

    Can't wait for Aug 3rd

    by momentum_play Jun 27, 2015 12:25 PM
    j0n_48195 j0n_48195 Jun 30, 2015 10:56 AM Flag

    Never heard of Elan. The fact remains that management has a lot of discretion about when and how they book revenues and expenses- reserves, debt restructuring, there was even a recent write off to move employees to lower cost locations as part of a restructuring. The timing of those is never completely arbitrary. Since there is often no single correct way to recognize those events, let alone in what quarter, management is not helpless when it comes to smoothing earnings that would otherwise appear more erratic. That does not change a company's profitability over the long haul. You just get better mileage if you keep your car at a steady speed on the highway. You are right. that I am no expert. But I've been investing for 35 years. Invest in a few companies that do cross the line. Read a few books about accounting and "quality of earnings" and you start to appreciate just how amorphous those numbers really are. As for insurance, I definitely have my betters here. But investing is more about good arithmetic than good math. I believe AIG is a deceptively healthy company, in a great market position. I've more than doubled my money in the warrants since 2011 (up 150%- not much to brag about in this bull market though) and I believe the best is yet to come.

    Sentiment: Buy

  • Reply to

    Can't wait for Aug 3rd

    by momentum_play Jun 27, 2015 12:25 PM
    j0n_48195 j0n_48195 Jun 29, 2015 12:37 PM Flag

    Thanks again for indulging me and keeping me honest. That's all out there, but I get lazy about rechecking the details. The bottom line appears to be somewhere near $600M for write downs this quarter. I'm curious to see if your prediction plays out. With reported earnings at least 50 cents higher than adjusted earnings, which will drive the price? Or maybe your supply/demand thesis is more valid. We'll see in about 5 weeks. I'm encouraged to see Paulson getting in, but he's such a short term trader I take that with a grain of salt.

    Sentiment: Buy

  • Reply to

    Can't wait for Aug 3rd

    by momentum_play Jun 27, 2015 12:25 PM
    j0n_48195 j0n_48195 Jun 29, 2015 10:39 AM Flag

    Thanks. They didn't sell all 96 million though. Am I wrong again? I thought they sold something like 87M. Would they write the others down at the same time? Sorry bout the poor math on the per share loss though. Also, I get roughly the same range on bond hit making cruder assumptions I'm sure.

    Sentiment: Buy

  • Reply to

    Can't wait for Aug 3rd

    by momentum_play Jun 27, 2015 12:25 PM
    j0n_48195 j0n_48195 Jun 29, 2015 9:38 AM Flag

    Agreed. Especially hoping for extended buybacks. But just to clarify: You think there will be an $700M write off for AER? (Roughly 900M shars times $8/ share loss, if I understand your $52.50 correctly?) Any guesses on the write down for called bonds? Good luck with those calls BTW.

    Sentiment: Buy

  • Reply to

    Can't wait for Aug 3rd

    by momentum_play Jun 27, 2015 12:25 PM
    j0n_48195 j0n_48195 Jun 29, 2015 6:01 AM Flag

    I'm not sure there's anything wrong with that, as long as the ethics and business rationale are sound. Your assumption is that there is such a thing as "real" numbers. There isn't- at least not when you start sweating the decimals. That;s why a lot of fund managers look at the tax reporting. It gives them that "second opinion" on the health of the company. It is also why the analysts bother with conference calls at all. Numbers alone have no meaning without context. So they "adjust" the numbers in any variety of ways they consider helpful. As investors, it's our job to do the same. We get earnings and "adjusted" earnings. We have 3 different "book" values (with and without DTAs or AOCI) and at least as many different ways of counting shares. I know. I'm an "honest money" guy myself. But I had to learn that, while numbers don't lie, they never tell the whole truth either. AIG isn't "hiding" anything. They just understand that steady growth is more healthy for the company over the long haul than a roller coaster.

    Sentiment: Buy

  • Reply to

    Can't wait for Aug 3rd

    by momentum_play Jun 27, 2015 12:25 PM
    j0n_48195 j0n_48195 Jun 28, 2015 10:04 AM Flag

    I've been criticized by posters for suggesting AIG is "managing" their earnings. (Whitney Tilson used that word a few years back.) I get that. I'm as annoyed by conspiracy theories as anybody here. But the fact remains that management has a lot of legal discretion and strategic options to give them the "wiggle" room they need to send their intended message. That message? Slow and steady progress. An earnings spike does them little good. They'd lose their buyback discount at a time when they are generating a ton of free cash. And as soon as they have an "off" quarter, the stock would get pounded.

    So what are they doing? They have discretion about reserving for losses, which they upped in the last quarter. I'd expect more of that this quarter, since spring storms and fires have been more about headlines than real damages. (Texas rain damage might be the wild card there.) Also, these bonds that are being called (and refinanced) help a few years out, but cause write offs in the current quarters. My prediction? A solid earnings beat, but no home run. Progress on combined ratios and ROE will be significant, but modest enough to underwhelm the analysts. AIG will rise a few dollars, then give half of it back within a few weeks. Traders with short attention spans will get bored and leave. Investors will have their patience tried, but will be able to remind themselves that this boring stock continues to yield in the mid to upper teens, with no end in sight.

    Sentiment: Buy

  • Reply to

    АИГ-ВТ Message Board

    by ventureshadow Jun 15, 2015 2:58 PM
    j0n_48195 j0n_48195 Jun 26, 2015 12:40 PM Flag

    It's funnier that Yahoo has had a week and a half to fix it and seems in no hurry. Does the hack count if nobody cares?

    Sentiment: Buy

  • Reply to

    The warrants strike back....

    by j0n_48195 Jun 8, 2015 4:08 PM
    j0n_48195 j0n_48195 Jun 24, 2015 2:58 PM Flag

    If I may, a couple of points: Now that the warrants are "in the money" they can't help but track with the common, minus a penny a day ($2 per year) in lost time value . That $2/yr in time value varies somewhat though. It grows as fear and interest rates rise (making the warrants more valuable relative to the common), and shrinks as complacency sets in. The current $1.50 discount I see in the warrants suggests stable interest rates and complacency. Since over time that spread should shrink regardless, warrant holders should be rooting for the common. Our warrant values cannot be far behind.

    Sentiment: Buy

  • Reply to

    Judge showed the wisdom of Solomon

    by fbertital Jun 15, 2015 6:28 PM
    j0n_48195 j0n_48195 Jun 23, 2015 3:26 PM Flag

    Wow! You haven't lost it yet. I have to laugh every time you suggest there's more than one of me, or that I'm actually getting paid! A couple of points. First: I've never tried to get anybody to act on my "sentiment"- consistently "buy". ( I consider it cowardly to post a comment without a sentiment ranking.) There's nothing in it for me. Why should I? By the way, comparing today's results to the last multiyear high, is a bit disingenuous, don't you think? I never buy during those runs and don't advise others to either. I buy on the dips. Secondly: I'm putting my own money where my mouth is. I've had two flat years in the warrants. I'm well over 90% invested in those alone. If I'm wrong, there isn't a person on this board who will suffer more. But the essence of good investing is knowing what your stuff is worth, sometimes ignoring the current market price. By my calculus, which I've explained in several previous posts, the warrants are about a buck and a half underpriced relative to the common- and the common is underpriced relative to it's performance and potential. My advice to you is to short all I have to say. Get rich by proving me wrong and I'll toast you for that.

    Sentiment: Buy