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Anyone buying AIG?
Old 03-31-2005, 05:33 PM   #1
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Anyone buying AIG?

I've begun to think of AIG, they're trading at 11.1X this year's earnings. This is the cheapest they've been valuation-wise in a very long time. One of the premier financial services companies in the world, and they should continue to do well once this obscurity over earnings rises. The worst case scenario was a $1.1 billion restatement. In the big picture, that's only about 10% of their earnings for last year alone, and that restatement would be an inflation that occured over many years. If Buffett is involved with AIG that can't be too corrupt .

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Re: Anyone buying AIG?
Old 03-31-2005, 06:20 PM   #2
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Re: Anyone buying AIG?

It's closer to $1.7B, and their credit was also downgraded. Many companies (and people like myself) use credit worthiness as a factor when shopping for insurance, so an AAA rating is worth something (and worth paying slightly more for).

Who knows what else will come out of the woodwork with AIG. Regardless, if you buy, you're not really investing as much as you're speculating.... it's not wrong to speculate at all, but there is an important distinction. I favor investing, so I will pass on this for now until I know more about the situation.

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Re: Anyone buying AIG?
Old 03-31-2005, 06:37 PM   #3
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Re: Anyone buying AIG?

If I were in a mood to buy individual stocks, I'd be waitin' a little while longer, or at least just dip now for about half what I want to own and then hang in there.

These things tend to not be "oops, one small thing, we're ok now", they tend to cascade...
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Re: Anyone buying AIG?
Old 04-01-2005, 03:50 AM   #4
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Re: Anyone buying AIG?

Who knows what else will come out of the woodwork with AIG.
When you see one cockroach...

The old CEO ran that place for a long time. As the regulators & analysts dig into it, he'll be dropping more "other shoes" than the Rigas family's millipedes.

A year ago I would have also jumped into this mess when the numbers lined up, but (1) I'm maxed out on my current holdings and don't care to trade in any of them for AIG and (2) I think the bad news is only beginning. Review a summary of the Nortel saga, and one begins to suspect that right now even Warren Buffett couldn't restore the integrity of AIG.

Hmmm, but Buffett does have $40B cash and he does like owning insurers. AIG's value is dropping into quite a margin of safety... Berkshire Hathaway still has their AAA rating... no one is accusing them of malfeasance any longer... their price is dipping & recovering... naaah, couldn't possibly happen.

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