What are you buying today?

[kab60]

12 minutes ago, Gregmal said:

AIG. Thanks @kab60 for mentioning in the other thread. Pattern recognition kicked in pretty much right away and this one should print money for a good while with the setup. Got all the traits of something that can surprise from here. Hadn't followed it since maybe 2014/5 or so. Will always have a soft spot for the ticker as well as its one of the first(along with Apple) investments I went huge on back when starting my business that ended up being monster winners. 

You're welcome @Gregmal. I started following when Dan Loeb wrote about it in Q4 and thought it was an obvious opportunity as well. Then it got killed along with most other financials during March and May even though there's no deposit flight risk, and I sorta wondered if I was missing anything, but I don't think I did, so I bought... (they have some office exposure+HTM losses in their investment portfolios, but they don't have a ton of duration and investment yields are ticking up nicely...)

 

I talked with some folks at some big funds about it, but they'd rather buy Chubb and WR Berkley with decades of good returns behind them and pointed to the meager ROE of AIG. Rearview mirror versus looking ahead, I think. I'm not saying those are bad picks either, they're great businesses and all, but they're also trading at 2-3xTBV versus <1x here, and this one is engaged in humongous capital returns AND unlocking of value through spinning off and selling down Corebridge+various subs... Next big levers is taking out a ton of costs, as the CEO wants AIG to become a pure-play insurer with a lean structure versus this bloated conglomerate with tons of costs and inefficiencies...

 

This guy did some good write-ups on the opportunity: https://seekingalpha.com/article/4600871-aigs-underwiting-performance-is-deserving-of-a-higher-valuation (I think perhaps he was even on a podcast recently talking about the opportunity in Fairfax and AIG.).

 

Edited August 7, 2023 by kab60

[nwoodman]

7 minutes ago, kab60 said:

You're welcome @Gregmal. I started following when Dan Loeb wrote about it in Q4 and thought it was an obvious opportunity as well. Then it got killed along with most other financials during March and May even though there's no deposit flight risk, and I sorta wondered if I was missing anything, but I don't think I did, so I bought... (they have some office exposure+HTM losses in their investment portfolios, but they don't have a ton of duration and investment yields are ticking up nicely...)

 

I talked with some folks at some big funds about it, but they'd rather buy Chubb and WR Berkley with decades of good returns behind them and pointed to the meager ROE of AIG. Rearview mirror versus looking ahead, I think. I'm not saying those are bad picks either, they're great businesses and all, but they're also trading at 2-3xTBV versus <1x here, and this one is engaged in humongous capital returns AND unlocking of value through spinning off and selling down Corebridge+various subs... Next big levers is taking out a ton of costs, as the CEO wants AIG to become a pure-play insurer with a lean structure versus this bloated conglomerate with tons of costs and inefficiencies...

 

This guy did some good write-ups on the opportunity: https://seekingalpha.com/article/4600871-aigs-underwiting-performance-is-deserving-of-a-higher-valuation (I think perhaps he was even on a podcast recently talking about the opportunity in Fairfax and AIG.).

 

Won’t hold you to it but do you think it is fixed? At least this will give me cause to do my own DD.  

[kab60]

8 minutes ago, nwoodman said:

Won’t hold you to it but do you think it is fixed? At least this will give me cause to do my own DD.  

If AIG is 'fixed'? I'm no insurance expert, far from it, and it's always difficult to know anyway considering how much damage can be done with a pen and how big some of these things are, but I think the below suggests things have improved since new management took over about five years ago (not as CEO initially):

 

 

I never invest in financials unless I'm very comfortable with the jockey, so I spend most time reading up on management and obviously like what I see.

[nwoodman]

6 minutes ago, kab60 said:

If AIG is 'fixed'? I'm no insurance expert, far from it, and it's always difficult to know anyway considering how much damage can be done with a pen and how big some of these things are, but I think the below suggests things have improved since new management took over about five years ago (not as CEO initially):

 

 

I never invest in financials unless I'm very comfortable with the jockey, so I spend most time reading up on management and obviously like what I see.

Greatly appreciated

[Spekulatius]

Bought a starter in PYPL this AM.

[brobro777]

Bought more Nintendo

[Sweet]

33 minutes ago, Spekulatius said:

Bought a starter in PYPL this AM.

Hope it works out for you.  Looked at it, agree it’s interesting, but think there are too many headwinds.

[Dinar]

4 hours ago, throw123 said:

ADRs`?

Local shares., NOT ADRs.  

[throw123]

added to DG

[cameronfen]

2 hours ago, throw123 said:

added to DG

3i a London-based P/E firm owns Action the DG of Europe.  Action has no dollar store competition or even much mass-market competition like Walmart or Costco.  Action is 60% of NAV and market cap.  Growing revenue at 33% (22% same-store sales), income maybe 60%.  I'll post a write-up at some point.  The thread is here though atm: 

 

[Malmqky]

Bought some SAVE

[changegonnacome]

HSW

[dipod]

FRFHF

[Saluki]

Added a little FRFHF, and picked up a few shares of NTDOY to start a position.  Bargain hunters, get ready for the 20% drop that happens after I buy.  

[RedLion]

APO. I cleared up space in my 401k account to load up which takes me up to about 10% more than OWL for my biggest position. This buy was bigger than my recent sale in the taxable account, so at least my APO position is larger than ever.

 

Also doubled my Nintendo position by buying ntdoy inside 401k. I can’t trade overseas shares currently since that account is at Schwab. 

Edited August 8, 2023 by RedLion

[brobro777]

Even more Nintendo

 

All that time I spent playing Contra and Blades of Steel on my NES have to mean something

[Spekulatius]

Bought just a small starter in $C.

[StevieV]

2 hours ago, RedLion said:

APO. I cleared up space in my 401k account to load up which takes me up to about 10% more than OWL for my biggest position. This buy was bigger than my recent sale in the taxable account, so at least my APO position is larger than ever.

 

Also doubled my Nintendo position by buying ntdoy inside 401k. I can’t trade overseas shares currently since that account is at Schwab. 

 

Do you know why APO does convertibles rather than straight debt financing?  If I recall correctly, ARES has done some equity financing in the past as well (at much lower prices).  I assume they have good reasons.

[LC]

51 minutes ago, Spekulatius said:

Bought just a small starter in $C.

 

Welcome to the thunderdome. 

[StevieV]

$OWL

 

[Eng12345]

1 hour ago, Spekulatius said:

Bought just a small starter in $C.

Didn't you just sell USB due to the "yield curve". 

 

Just want to understand your thought pattern. 

 

Proud owner of C and looking forward to 2026ish

[Spekulatius]

27 minutes ago, Eng12345 said:

Didn't you just sell USB due to the "yield curve". 

 

Just want to understand your thought pattern. 

 

Proud owner of C and looking forward to 2026ish

USB has more issues with NIM than C, imo. They have a lot of low yielding paper on their balance sheet for once- C does not have that particular issue. I also want to point out that C for the first time seems to have a decent CEO (Fraser).

 

That said, i am chicken and my C position is just a starter at this point.

 

 

[RedLion]

2 hours ago, StevieV said:

 

Do you know why APO does convertibles rather than straight debt financing?  If I recall correctly, ARES has done some equity financing in the past as well (at much lower prices).  I assume they have good reasons.

 

I don't know anything other than what I read in the press release. "each share of Mandatory Convertible Preferred Stock will automatically convert into a variable number of shares of common stock on or around July 31, 2026 (subject to postponement for certain market disruption events). The conversion rates, dividend rate and the other terms of the Mandatory Convertible Preferred Stock will be determined at the time of pricing."

 

https://ir.apollo.com/news-events/press-releases/detail/463/apollo-to-offer-series-a-mandatory-convertible-preferred

 

So I'm reading this that we don't the actual conversion rates and other terms until the preferred stock is priced, but I'm HOPING they are doing this with variable number of common shares depending on purchase price so that this is less dilutive to APO shareholders if the share price is substantially higher on July 31, 2026 than it is when the preferred is priced. 

 

Won't really be able to analyze this until the numbers come out, but I know they're actively buying back APO stock and retiring shares, so it's not surprising to me that they're looking for another type of equity security to issue to reduce the dilution so I hope that's what's happening. 

[CorpRaider]

$LAMR

[KJP]

IAC