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Author: [Investments] Topic: AIG
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#1
Posted: 4/9/2012 2:07:49 PM
going big here on Jan 2013 30.0 calls....

in 20k at $5.

incredible investment guru i've been following for years says it's the most confident he has EVER been in a stock price....ride it with me.
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#2
Posted: 4/9/2012 2:08:38 PM
actually only have 17k, but that's not the point.
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#3
Posted: 4/9/2012 3:18:48 PM
I dont like it..give me the reason why he thinks that?

AIG is still on the hook for tons of garbage..still weight overhead for the government to sell its position.
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#4
Posted: 4/9/2012 3:27:00 PM
Also..

The 27s are a better "value" they cost 2 bucks more in premium but they are 3 dollars in the money and will decay slower.

I see you already bought the 30 though at 5 per..
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#5
Posted: 4/9/2012 3:42:52 PM
i actually bought the 30's at 2.5 when the stock was trading at 28.50, but can't post that now....even though it's doubled...i love it.
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#6
Posted: 4/9/2012 3:47:55 PM
same reasons Tilson is buying it up...expecting a double in the next 2 years.

http://video.cnbc.com/gallery/?video=3000082677
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#7
Posted: 4/9/2012 3:48:12 PM
That is a good example. You bought OTM calls, the stock moves 4 pts and you only participate 2.5 of those 4 pts. Had you bought ITM your return would be strong and much safer.


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#8
Posted: 4/9/2012 3:57:16 PM
The guy is selling his wares, total homer.

I also think his tangible book value calculation is VERY off.

He is looking at cash/debt versus the "cost" of the potential liabilities they have for contracts sold and derivatives.

He is also way wrong on share count, he is assuming that they will buy back shares and not have any effect of the MASSIVE float the government will make by selling shares into any move higher.

The guy is a salesman..selling his position to make the stock go up.
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#9
Posted: 4/9/2012 4:40:11 PM
QUOTE Originally Posted by wallstreetcappers:

The guy is selling his wares, total homer.

I also think his tangible book value calculation is VERY off.

He is looking at cash/debt versus the "cost" of the potential liabilities they have for contracts sold and derivatives.

He is also way wrong on share count, he is assuming that they will buy back shares and not have any effect of the MASSIVE float the government will make by selling shares into any move higher.

The guy is a salesman..selling his position to make the stock go up.

he is also on the short list of best value investors in the world.
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#10
Posted: 4/9/2012 4:48:10 PM
QUOTE Originally Posted by wallstreetcappers:

The guy is selling his wares, total homer.

I also think his tangible book value calculation is VERY off.

He is looking at cash/debt versus the "cost" of the potential liabilities they have for contracts sold and derivatives.

He is also way wrong on share count, he is assuming that they will buy back shares and not have any effect of the MASSIVE float the government will make by selling shares into any move higher.

The guy is a salesman..selling his position to make the stock go up.

AIG is going to have billions of dollars (esp after the Maiden Lane II sell) to buy the government's stock out by the end of the year....how will that effect the float?  as Bernstein said in their latest upgrade of AIG to $45....“AIG will be able to execute its final asset sales & see the Government gone by year end.”
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#11
Posted: 4/9/2012 4:49:55 PM
from last week....

The Federal Reserve Bank of New York is considering selling assets in its Maiden Lane III LLC portfolio, which were assumed in the government bailout of American International Group Inc., the district bank said today.

“The change in the investment objective for Maiden Lane III reflects a strategic decision to explore possible sales of some of the assets in the portfolio in light of improving market conditions and the success of the Maiden Lane II sales,” Jack Gutt, a spokesman for the New York Fed, said in an e-mailed statement.

The New York Fed is seeking to accelerate the repayment of its loan to the Maiden Lane III vehicle after completing the sale this year of the assets in its Maiden Lane II LLC portfolio, another pool of debt assumed in AIG’s rescue. The central bank was owed about $9 billion under its loan to Maiden Lane III as of March 28, according to the New York Fed website.

AIG and the Fed have benefited from the rebound in mortgage-linked assets, such as those assumed in the bailout. The insurer may use proceeds from sales of Maiden Lane III assets to help buy back more stock from the U.S. Treasury Department, Josh Stirling, an analyst for Sanford C. Bernstein & Co., said in a note to clients today. AIG advanced 5.3 percent to $32.52 at 4:02 p.m. in New York, the most since February.

“The Fed will only transact if it deems that a particular transaction represents good value, is done competitively and is not market disruptive,” Gutt said. No auctions were announced.

After selling the last group of bonds in the Maiden Lane II pool in February, the New York Fed said that taxpayers earned $2.8 billion on their $19.5 billion loan to that vehicle. It was created in 2008 to buy holdings that AIG handed the Fed in exchange for a cash injection.

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#12
Posted: 4/9/2012 4:56:57 PM
i have never given stock advice on this site, but AIG is going to be a HUGE winner.
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#13
Posted: 4/9/2012 5:00:00 PM
QUOTE Originally Posted by wallstreetcappers:

That is a good example. You bought OTM calls, the stock moves 4 pts and you only participate 2.5 of those 4 pts. Had you bought ITM your return would be strong and much safer.


 how is a 100% gain not strong or safe...not following at all.  it's about percentages, not point gains, right?  if one feels that a stock may double and one wants to maximize your gains, why would you buy ITM calls?
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#14
Posted: 4/9/2012 7:26:32 PM
QUOTE Originally Posted by sims_key:

 how is a 100% gain not strong or safe...not following at all.  it's about percentages, not point gains, right?  if one feels that a stock may double and one wants to maximize your gains, why would you buy ITM calls?

Its about playing the best odds and surviving, not what is the greates rate of return.

Hell you could go and buy the 45's for less than a buck? If your theory about a double occurs it would make for a MUCH better ROR than the 30s.

The point is doing an analysis of what provides safety and return. If you are blowing 15k on some options I would think you might want to balance risk and return, but maybe not?

I also think you are mixing what AIG owes in money and the ownership of shares the government has. The government is not going to get money FROM AIG in return for shares..thats not how it works. The USG will sell their shares on the open market and dilute the common holder, suppress the share price and thus dilute an option holder by that suppression. 

link

So you can look at the current share count and almost double it to get the government out..then you have the fun little game they are playing about FASB mark to market. Their assets are not being properly valued, they are propped up due to accounting changes to protect companies like AIG. Who knows how much their "assets" are worth or the details of their liabilities..how much potential liability they have in a market unlike what we have now.
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#15
Posted: 4/10/2012 8:22:55 AM

Wells Fargo upgrades AIG on likely bailout exit

(Reuters) - American International Group Inc will likely be independent from the U.S. government over the next year, Wells Fargo Securities said upgrading the shares of the bailed-out insurer to "outperform."

Since AIG restructured its relationship with the US Government over a year ago, the company has made tremendous progress in reducing its government ties, Wells Fargo analyst John Hall wrote in a note to clients.

AIG had to be rescued during the financial crisis of 2008 through multiple bailouts, with the U.S. government at one point pledging $182 billion to keep the insurer afloat.

In the last few years it has been selling off non-core assets to pay back the government.

In March alone, the Treasury recovered more than $14.6 billion on its investment in AIG, including $6 billion from its sale of the insurer's stock.

AIG still owes taxpayers an estimated $45 billion for the bailout it received during the financial crisis. The government still holds a 70 percent stake in the company.

AIG now has only one remaining tie to the government apart from the 70 percent interest it holds in the company - a $9 billion interest in the SPV Maiden Lane III, analyst Hall said.

Wells Fargo expects the Maiden Lane III portfolio, created during AIG's bailout, to continue to wind down. It sees the government's stake to be reduced through a combination of secondary offerings and sales to sovereign investors as well as share repurchase.

In March, AIG sold part of its stock in AIA Group <1299.HK> to repay part of its bailout. It is also considering launching the initial public offering of its airplane leasing business ILFC in the second quarter.

Proceeds from the sales of ILFC, its remaining holdings in AIA, and the retained interest in ML III can help AIG buy back $21.3 billion of its shares, Hall said.

"(Once independent from the government), we expect AIG to become an increasingly active capital manager, which could be accretive to its earnings per share and return on equity," Hall said.

Wells Fargo raised its earnings per share estimate for the insurer for 2012 and 2013 to $3.38 and $3.06 respectively.

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#16
Posted: 4/10/2012 8:25:34 AM
QUOTE Originally Posted by wallstreetcappers:


Its about playing the best odds and surviving, not what is the greates rate of return.

Hell you could go and buy the 45's for less than a buck? If your theory about a double occurs it would make for a MUCH better ROR than the 30s.

The point is doing an analysis of what provides safety and return. If you are blowing 15k on some options I would think you might want to balance risk and return, but maybe not?

I also think you are mixing what AIG owes in money and the ownership of shares the government has. The government is not going to get money FROM AIG in return for shares..thats not how it works. The USG will sell their shares on the open market and dilute the common holder, suppress the share price and thus dilute an option holder by that suppression. 

link

So you can look at the current share count and almost double it to get the government out..then you have the fun little game they are playing about FASB mark to market. Their assets are not being properly valued, they are propped up due to accounting changes to protect companies like AIG. Who knows how much their "assets" are worth or the details of their liabilities..how much potential liability they have in a market unlike what we have now.

AIG is going to buy back shares that the gov sells in the open market...the remaining float increase will not hurt the stock due to the fact that the government will be out of the company...which is a far greater positive.

4th upgrade in the the last 3 weeks...another $45 price target too.

up 2% premarket.  
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#17
Posted: 4/10/2012 8:28:47 AM
QUOTE Originally Posted by wallstreetcappers:


Its about playing the best odds and surviving, not what is the greates rate of return.

Hell you could go and buy the 45's for less than a buck? If your theory about a double occurs it would make for a MUCH better ROR than the 30s.

The point is doing an analysis of what provides safety and return. If you are blowing 15k on some options I would think you might want to balance risk and return, but maybe not?


i bought 30.00 calls because i wanted to make 10x if the stock doubled...5x if the stock went up 50%...break even if the stock went up 10%....which was a given.  that was my analysis...very little risk with tremendous upside.  of course i could've bought 25's like you said, but the upside would be much less on a huge run...which is what i expect to happen and is happening.
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#18
Posted: 4/10/2012 10:36:48 AM
huge blocks of buying when it got close to 32...expect that to continue.

if it's doing this in a down market, imagine when the markets rebound again...

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#19
Posted: 4/10/2012 12:29:42 PM
Well I hope you hit that 10 bagger, on 15k or so invested that would be a huge hit.
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#20
Posted: 4/10/2012 12:57:19 PM
thanks...probably won't double before jan but i think we see mid to low 40's...at which case would mean around a 4-5x.
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#21
Posted: 4/11/2012 10:37:17 AM
this is a very privileged company with what seems to be unlimited acess to taxpayer monies, so i can see someone in the know being privy to inside info, that would make this an excellent bet. The only thing that would worry me, is that the worm might be turning in the market, not sure the cpus and printing presses can keep the market from dropping before NOvmber

link - more freebies for the privileged at the expense of the taxpayer
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#22
Posted: 4/12/2012 10:05:46 AM
AIG moving again based on this rumor...

Buffett's Berkshire interested acquiring $15-18B US treasury stake in AIG.
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#23
Posted: 4/12/2012 11:04:38 AM
ripping on nice volume.
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#24
Posted: 4/12/2012 2:32:11 PM
QUOTE Originally Posted by sims_key:

i actually bought the 30's at 2.5 when the stock was trading at 28.50, but can't post that now....even though it's doubled...i love it.

sitting on 121% gain...looking for a lot more...esp if Buffett is indeed behind this.
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#25
Posted: 4/12/2012 3:02:12 PM
Nothing like a hollow Buffet rumor to bump a stock.


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