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Any ideas people are exited about...?


hundredwaters
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I am relatively new to investing and despite nearly getting in to BAC at $5, sadly, I ended up reading too much of the Hussman and ECRI gloom, plus I got quite singed last year on one decision and overall I have been feeling a bit gunshy...  So I consequently I havent committed much cash this point...  It didn't help that zerohedge called one of the issues I was burned on, so I ended up paying it a bit too much credence...  Do anyone know who these writers are BTW and what their agenda is?

 

Anyway...  Ideas...  Are people still feeling good about AIG?

 

 

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I am relatively new to investing and despite nearly getting in to BAC at $5, sadly, I ended up reading too much of the Hussman and ECRI gloom, plus I got quite singed last year on one decision and overall I have been feeling a bit gunshy...  So I consequently I havent committed much cash this point...  It didn't help that zerohedge called one of the issues I was burned on, so I ended up paying it a bit too much credence...  Do anyone know who these writers are BTW and what their agenda is?

 

Anyway...  Ideas...  Are people still feeling good about AIG?

 

Hi Hundredwaters, welcome to the board!  One word of advice...if you are asking others for ideas, you are going to get burned again or be hesitant to invest.  Best to check out the posts on an idea, read the quarterly and annual report for the company or investment you may be interested in, and then on things you have questions about...ask away.  Anyone familiar with the investment will respond. 

 

Over time, if you do the legwork and trust your analysis, you'll always feel comfortable with a decision...and the opinions of others won't sway you either way.  Cheers!

 

 

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Much appreciated.  I still do my own due dilligence, but am suffering a bit of the sense of 'missing the boat'...  I am currently trying to do some work on AIG...

 

I do find it odd that I keep reading that there is a high trend currently of insider selling...

 

Investors always feel like that after a significant rally.  We are in the fourth consecutive year of market gains in the U.S., so the odds are that things are significantly less cheap than they were in the past...even with better balance sheets and higher profits. 

 

We are building cash, as there is always a new opportunity around the corner.  Patience is the hardest part of this game.  Be patient and only buy when you feel something is truly cheap.  And I would not be surprised if insider selling does increase significantly, if it hasn't already.  Cheers!

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Listen to Parsad. I am doing the same, with that said I will acquire AIG once I get my head around it, and after I have raised more cash. I am waiting for a pullback though. Also keep in mind that you sound like everyone who missed the boat, they will likely get in while the smart money continues raising cash.

 

So one last little bounce, then a move down on any decent bad news. You want to be the smart money, not the guy inching to get in. I would only get in if you see something cheap. I would probably buy AIG, ATSG, FTP, and POOSF with new capital. POOSF was the last thing I bought, and right now I am looking to raise cash. Those listed are cheap, but if things pull back, they will all move down.

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The treasury sold days ago some further 207 million shares of AIG for $29. AIG bought back half of this block (around 103.5 million shares). That’s about 3.5% of the currently outstanding shares, and they were repurchased at just over ½ book value. So this 3.5% buyback by AIG resulted in a 5.7% increase in book value for the remaining outstanding shares, with book value per share growing from $55.33 to about $58.52. Now we should wonder what the share price did after this repurchase announcement - well,... it languishes around at almost the same price as before, currently about ~$28 per share.

 

We own AIG common and also the warrants of 2021, and I'm not bothered if AIG's share price might languish for some short while (weeks or months),  as I would also want to quote Buffett from this year shareholders letter about his IBM investment. A share price that languishes some short term can be good for long term investors, because a company can repurchase very cheaply their shares. So in a good way AIG follows these smart steps. We also hold on to our much bigger position in BAC common, BAC A-warrants and the 2014 leaps ($10 strike) and we currently have no plans to sell as we think this is almost the same situation in comparison as with WFC in 1992 and the now legendary investments done by Buffett, Joel Greenblatt (founder of Gotham Capital and author two books: "You Can Be a Stock Market Genius", "The Little Book That Still Beats the Market"), and Bruce Berkowitz 1992 write-up in OID. But an investor should be wary after these significant run ups, that shares are less cheap, even with better earnings or balance sheets, so it's good to have some cash.

 

----------

AIG: Strong Upside Potential This Year

March 18, 2012

http://seekingalpha.com/article/440591-aig-strong-upside-potential-this-year?source=yahoo

 

Quoting Warren Buffett, "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."

----------

 

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There was a quote an investor I know has said in the past that I really like:

 

"Cheap stocks are like busses, if you miss one there will be another ten minutes later."

 

There are 40,000 equities worldwide, don't feel like you missed the boat because of one or two stocks people have made money on.  There are thousands of cheap stocks globally, you just need to be willing to look in areas others avoid.

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Listen to Parsad. I am doing the same, with that said I will acquire AIG once I get my head around it, and after I have raised more cash. I am waiting for a pullback though. Also keep in mind that you sound like everyone who missed the boat, they will likely get in while the smart money continues raising cash.

 

So one last little bounce, then a move down on any decent bad news. You want to be the smart money, not the guy inching to get in. I would only get in if you see something cheap. I would probably buy AIG, ATSG, FTP, and POOSF with new capital. POOSF was the last thing I bought, and right now I am looking to raise cash. Those listed are cheap, but if things pull back, they will all move down.

 

While one can make money in anything, I would say that for a new investor getting their feet wet it's easier (and usually far more profitable) to investigate the smaller companies.  ATSG is a good example--there was one small twist back in the dark days of trading under 20 cents, that if you understood, you'd know that in bankruptcy, the company should have been worth at least a dollar.  Everything since then has been gravy.  I would say ATSG is easier to understand now.  There are certainly many tiny companies even easier to understand.  Even if you don't end up investing in them, it's a good way to get started without sinking into trying to figure out behemoths like BAC and AIG.

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Thanks for everyone's input.  Believe me - I have been waiting for a pullback since BAC had been sitting at $8 - although perhaps its not as safe as AIG given the latter's close scrutiny and that it is nearly out of the woods...

 

I am curious though - where does the ECRI or Hussman go wrong and why does broad insider selling not concern people here? 

 

The spectre of a China hard landing, a widely recessionary Europe, and Japan falling into a chasm seem to have largely evaporated, yet I dont see any substantial change other than that governments can sometimes make a decision together...  Note that I do recognize the folly of making investment decisions about individual companies from macroeconomic predictions, which prove to be largely unpredictable...   

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Thanks for everyone's input.  Believe me - I have been waiting for a pullback since BAC had been sitting at $8 - although perhaps its not as safe as AIG given the latter's close scrutiny and that it is nearly out of the woods...

 

I am curious though - where does the ECRI or Hussman go wrong and why does broad insider selling not concern people here? 

 

The spectre of a China hard landing, a widely recessionary Europe, and Japan falling into a chasm seem to have largely evaporated, yet I dont see any substantial change other than that governments can sometimes make a decision together...  Note that I do recognize the folly of making investment decisions about individual companies from macroeconomic predictions, which prove to be largely unpredictable... 

 

It's just the manic-depressive nature of the markets.  You are just watching it in action.  ECRI and Hussman are probably correct in their assessment, but missed the timing.  The problem with forecasting is that you will be correct eventually...be it in a week or 70 years...the problem is the little gap in between! 

 

That's why investors should ignore the markets and focus on individual stocks only.  After significant runs, start looking at obscure investments.  We are back to hunting for unloved, small, distressed businesses...not companies you would find in the broader market. 

 

There were people screaming on here that a few of us were wrong, that the S&P500 was at historical highs on profit margins, that macroeconomic events were ominous, that the Fed was running a ponzi scheme...you name it.  My argument was always I'm buying individual securities, not the market, so I don't give a rat's ass!  But I always get more cautious when everyone else starts joining me...thus as the margin of safety diminishes relative to intrinsic value, I start pulling back.  Cheers!

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Thanks for everyone's input.  Believe me - I have been waiting for a pullback since BAC had been sitting at $8 - although perhaps its not as safe as AIG given the latter's close scrutiny and that it is nearly out of the woods...

 

I am curious though - where does the ECRI or Hussman go wrong and why does broad insider selling not concern people here? 

 

The spectre of a China hard landing, a widely recessionary Europe, and Japan falling into a chasm seem to have largely evaporated, yet I dont see any substantial change other than that governments can sometimes make a decision together...  Note that I do recognize the folly of making investment decisions about individual companies from macroeconomic predictions, which prove to be largely unpredictable... 

 

It's just the manic-depressive nature of the markets.  You are just watching it in action.  ECRI and Hussman are probably correct in their assessment, but missed the timing.  The problem with forecasting is that you will be correct eventually...be it in a week or 70 years...the problem is the little gap in between! 

 

That's why investors should ignore the markets and focus on individual stocks only.  After significant runs, start looking at obscure investments.  We are back to hunting for unloved, small, distressed businesses...not companies you would find in the broader market. 

 

There were people screaming on here that a few of us were wrong, that the S&P500 was at historical highs on profit margins, that macroeconomic events were ominous, that the Fed was running a ponzi scheme...you name it.  My argument was always I'm buying individual securities, not the market, so I don't give a rat's ass!  But I always get more cautious when everyone else starts joining me...thus as the margin of safety diminishes relative to intrinsic value, I start pulling back.  Cheers!

 

Agreed 100%.  I also like buying family businesses, ones that have been around for years.  These are the sorts of companies that can pump out a steady return regardless of the market.  Management has seen everything, they know their market, they know their clients they just keep executing.

 

A lot of investors are scared of family held companies worried that the family will cut and run with the money.  I figure if they haven't cut and ran in the last 20 years what makes today any different?

 

Small obscure stocks are my bread and butter, lots of family held companies in there as well.

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