I’m long bytcheS!!! got in a small position (<5%). 33.40
Hank Greenberg was a BSD, which is the male version of HCB.
Nice, What’s your investment view, entry point, potential exit point, catalyst?
I’m a big fan of Berkowitz but this was a horrible pick for him. How much does the government still own…$60B? I have no idea, probably more. Why get in bed with them? Should be fun as they unwind their position. You have a known gigantic, nearly perpetual seller. That’s not good.
The seller itself should not make a difference, as the share count is still the same. rather it could be seen as an advantage as you have a seller that’s not selling on fundamentals.
US govt recently sold. they have roughly 18%.
this is a restructuring story. the operations are turning around. balance sheet has been cleaned up. from my estimate, they are behaving conservatively with balance sheet figures. Derivatives from AIGFP still sizeable at around $180b but down 95% from height and “contained”.
operatons should see ROE in the area of 8% once normalized. on a 0.6x Tangible Book Basis, I estimate I can earn my 15% on a private acquisition basis. within 2 years as situation normalize, dividend should be reinstated (this is a management objective).
It does when it’s the US government. So long as they have a stake there are massive restrictions on the company, notably on executive comp and perques. That makes it hard to attract and retain top talent among other things. No one wants to work for or invest in the government. Just ask GM how it’s going for them.
The actual act of selling the shares, as it relates to the available float, isn’t the issue. Nevertheless, go back and check the price action on AIG or GM whenever the gov’t announces plans to sell part of their stake. Price drops substantially. Still, it will be a good thing when they exit completely. That won’t happen any time soon though. Not before the elections.
Considering all that I have a hard time imagining there aren’t better opportunities to be found.
Government being the seller is a good thing. Would you rather be buying from Warren Buffet or the USG?
Price on AIG has actually gone up over the year despite government selling.
Gov’t does put a lot of restrictions on comp pay,dividends etc…on the other hand, the government rid the company of a lot of complexity. The company is still tough as nails to look at, but compare that back to 2006 and you’ll see the diff.
I was referring to the price action on the actual day of announced government selling. Generally the price drops by 2-3% that day. Maybe brokers just want to screw the gov’t out of a few bucks before they exit. But yes, obviously it’s good for the long term outlook when the gov’t reduces its stake.
What sort of premium do you have to receive to get in bed with the gov’t? I’d say 10% over comp companies. If you expect that more power to you.
AIG didn’t get in bed with the government. the government rescued AIG and deserves to be made whole.
I don’t care how they got there but they most certainly are in bed with them. And who cares if the gov’t is made whole? (From an AIG shareholder standpoint, not as a US taxpayer.)
I think you were being facetious. At least I hope so. Hard to read you Canadians.
Frank – I saw your post on seeking alpha. Or else it’s an imposter trading on your name.
doubt anybody would imposter me…yeah i think i write one liners there…i normally read the stuff on stocks I own or about to own…i post more on here and corner of berkshire and fairfax