Stock gurus - buy AIG?

[JonW]

I have AIG insurance, and they've been very good to me. Their stock is about $2.50 a share right now. I can't believe the Feds are going to let them go belly up. Good time to buy?

[VaporDude]

I also have AIG but after their last fiasco, I wish I didn't have them as my insurance company. If you are several billion dollars in the hole, why would they sponsor a $400K retreat with $23K massages? I can see where their priorities are at. I think I am going to switch insurance companies. I am sure they will not miss my 5 vehicle coverage. I have no complaint as far as an insurance company goes, they have always treated me fairly.

[twobjshelbys]

I don't have them, but my gut feel tells me that over the short term they will be more interested in taking care of their shareholders than their policy holders - the way to improve the bottom line will be to increase income (raise policy rates) and reduce expenses (reduce policy claim payouts).

[black vert ss]

I will ask the expert - my wife - and let you know

[JonW]

Originally Posted by twobjshelbys

I don't have them, but my gut feel tells me that over the short term they will be more interested in taking care of their shareholders than their policy holders - the way to improve the bottom line will be to increase income (raise policy rates) and reduce expenses (reduce policy claim payouts).

I have them and have been very happy with them. They treated me very fairly when I totaled my Mustang GT. They didn't raise my rates on my last renewal, either.

So, in light of your theory of treating the stockholders well, does that make the stock a good buy right now?

[iceman]

My feeling is they got into this mess because they were poorly run...not because of the economic scare we had. I am no expert but I have done fairly well IMO and I try to avoid the companies that get into trouble by making poor choices. My one exception for this may be Ford. I think for pretty much the same price I'd go that way first mainly because as much as i hate to admitt it I expect Obama to win the election and pump $ into the states that support him (like MI) and the cash infusion will help the likes of the big 3 or 2 or what ever it is at that time.

The scary thing about it is that new cars are really a luxury most don NEED and I think buying companies that offer things people/other companies need and that are well run is a good strategy. AIG while they may have treated you good has not shown me they are run well.

but I bent over the last 2 weeks too so this should be taken as nothing more than me spouting off about things which I don't control.

[Carnut]

I thought AIG got their AID.

[black vert ss]

My wife said not to buy. They are still not out of the woods. Even though the stock is low if it is say $2.60 like you say if they drop a dollar you lose almost 40%.

[VaporDude]

Originally Posted by black vert ss

My wife said not to buy. They are still not out of the woods. Even though the stock is low if it is say $2.60 like you say if they drop a dollar you lose almost 40%.

What about Sirius Satellite radio (SIRI)? They are at .51.

[iceman]

Again I say no....this time because when under $1 there is too great of a chance for a reverse split to boost price per share and then be shorted back down at least some what and you lose your $ too easily.


I will some times give a start up a shot but as I am still here talking about it I have yet to hit it big.

[Alloy Dave]

I don't buy individual stocks, too risky. Any company is one bribe, one piss in the pudding, one sex scandal from extinction.

You say it can't happen? The list of companies that sunk quickly is long...Enron, Arther Anderson, Worldcom, AIG, IBM (still in business but look at what happened to them when they said the PC will never go mainstream), Kodak (thought digital cameras would never work), and on and on...

I buy mutual funds only.

Dave

[twobjshelbys]

Originally Posted by Alloy Dave

I don't buy individual stocks, too risky. Any company is one bribe, one piss in the pudding, one sex scandal from extinction.

You say it can't happen? The list of companies that sunk quickly is long...Enron, Arther Anderson, Worldcom, AIG, IBM (still in business but look at what happened to them when they said the PC will never go mainstream), Kodak (thought digital cameras would never work), and on and on...

I buy mutual funds only.

Dave

What funds? Are there any that weren't heavily invested in the mortgage crap?

They talked about "bundling up mortgages and selling them" it reminded me of what I see a recycling centers: Shredded newspapers bundled up into bales waiting to go get ground up. Those ground up newspapers are worth more than mortgages.

[rpretzel]

Originally Posted by twobjshelbys

What funds? Are there any that weren't heavily invested in the mortgage crap?

Mine obviously was. I lost $20K last month.

[Joe G]

Originally Posted by rpretzel

Mine obviously was. I lost $20K last month.

You only lost it if you sold then.


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[rpretzel]

Originally Posted by Joe G

You only lost it if you sold then.


-

Right. I lost $20K on paper.

[SLB8SNK]

Originally Posted by Alloy Dave

I don't buy individual stocks, too risky. Any company is one bribe, one piss in the pudding, one sex scandal from extinction.

You say it can't happen? The list of companies that sunk quickly is long...Enron, Arther Anderson, Worldcom, AIG, IBM (still in business but look at what happened to them when they said the PC will never go mainstream), Kodak (thought digital cameras would never work), and on and on...

I buy mutual funds only.

Dave

True and smart. I do the same. If I was to single out a stock or two to buy, it would be short term risk with hopes of short term gains... such as, buying Ford or GM at rock bottom, a few bucks, watch it with a sell or strike point. Meaning if you buy Ford at $2 and want to sell at $4, could happen, set the sell and move on. However for long term, mutual funds are the only way to go. For example, market doing what is has, I lost over $40k in the last 2 months, over $60k for the last 6 months... ON PAPER... so unless I sell today, it means crap. To many people are dumping and running and that creates a problem. I invest long term, and plan accordingly. If you are a long term person (more than 5 years out) your investments will rebound just fine. If you are a short term investor, I would highly suggest staying away from risk or moderate risk investments and move your cash into bonds or certificates of deposit. You are guaranteed a lower return, but one no matter (unless your bank goes under) and then only move cash in $95k accounts or less, to make the FDIC insurance work for you..... the key to investing is play it smart from the start and reduce risk as you get closer to retirement or needing the cash. My .02

[twobjshelbys]

Originally Posted by SLB8SNK

True and smart. I do the same. If I was to single out a stock or two to buy, it would be short term risk with hopes of short term gains... such as, buying Ford or GM at rock bottom, a few bucks, watch it with a sell or strike point. Meaning if you buy Ford at $2 and want to sell at $4, could happen, set the sell and move on. However for long term, mutual funds are the only way to go. For example, market doing what is has, I lost over $40k in the last 2 months, over $60k for the last 6 months... ON PAPER... so unless I sell today, it means crap. To many people are dumping and running and that creates a problem. I invest long term, and plan accordingly. If you are a long term person (more than 5 years out) your investments will rebound just fine. If you are a short term investor, I would highly suggest staying away from risk or moderate risk investments and move your cash into bonds or certificates of deposit. You are guaranteed a lower return, but one no matter (unless your bank goes under) and then only move cash in $95k accounts or less, to make the FDIC insurance work for you..... the key to investing is play it smart from the start and reduce risk as you get closer to retirement or needing the cash. My .02

Don't tell me paper losses will be recovered. I bought a boatload of that garbage. If you're in your 20's or 30's paper losses don't matter much. If you're in your 50's it matters a bunch. My losses from the dot com bubble burst have NEVER been and never will be recovered. My 401K that I put over 150K in contributions in is and has been at 40K for almost 7 years. Forget gains, this was a straight cash loss. (The funds available were severely limited and there was no bailout strategy. Fund manager for this company sucked.)

[SLB8SNK]

Originally Posted by twobjshelbys

Don't tell me paper losses will be recovered. I bought a boatload of that garbage. If you're in your 20's or 30's paper losses don't matter much. If you're in your 50's it matters a bunch. My losses from the dot com bubble burst have NEVER been and never will be recovered. My 401K that I put over 150K in contributions in is and has been at 40K for almost 7 years. Forget gains, this was a straight cash loss. (The funds available were severely limited and there was no bailout strategy. Fund manager for this company sucked.)

Tony, you described what I said to a t! Meaning LONG term versus SHORT term... I am not in my 50's yet (soon, very soon) but when you are indeed in your 50's-60's, the market is the last place you should be... conservative is the name of the game at that point. As well, yes you are partially correct... paper losses will only recover "IF" what you had originally invested in was indeed not the market that drove prices downward (like the dot.com era) and the housing market now. Diversification is the biggest rule of wise investments... do not put any large sum in a single market, here or over seas! I am still hopeful that my paper losses will fully recover, as I am a moderate risk taker... I liked my 8-12% gains well enough and no need to get greedy! hope your luck turns and you make back you lose and much more!

[Carnut]

Originally Posted by SLB8SNK

True and smart. I do the same. If I was to single out a stock or two to buy, it would be short term risk with hopes of short term gains... such as, buying Ford or GM at rock bottom, a few bucks, watch it with a sell or strike point. Meaning if you buy Ford at $2 and want to sell at $4, could happen, set the sell and move on. However for long term, mutual funds are the only way to go. For example, market doing what is has, I lost over $40k in the last 2 months, over $60k for the last 6 months... ON PAPER... so unless I sell today, it means crap. To many people are dumping and running and that creates a problem. I invest long term, and plan accordingly. If you are a long term person (more than 5 years out) your investments will rebound just fine. If you are a short term investor, I would highly suggest staying away from risk or moderate risk investments and move your cash into bonds or certificates of deposit. You are guaranteed a lower return, but one no matter (unless your bank goes under) and then only move cash in $95k accounts or less, to make the FDIC insurance work for you..... the key to investing is play it smart from the start and reduce risk as you get closer to retirement or needing the cash. My .02

Well I am in those safe bond funds. I just lost 100k over that last several weeks. So much for friggin safe.

[iceman]

Originally Posted by Carnut

Well I am in those safe bond funds. I just lost 100k over that last several weeks. So much for friggin safe.

I didn't get beat up that much but I did take about a 40-50K hit which for me is a big one. I have a mix of the funds and stock....but my stock is my higher risk higher rewards (or higher loss as it may be) gambling if you will. I bought into Denny's a while back which seems like a joke but they were liquidating owned property and had a cash infusion coming. I was right - the stock jumped...but I was wrong and din't get out. Now I am sitting on a chunk of it hoping to see $4 again so I can get out up a little....3.63 I think is even and looking good now. I got Parker drilling (PKD) too and it's a pig that is killing me. I've said 2 times if it hits 10 I'll dump it and I have not - now breaking even at mid 7's seems like a pipe dream.

I did dump a lot of them when I said I would and as long as I do that I tend to be OK - when the run and I say I'll just hold on for X is when I get bent over....it NEVER works out.....and I am a slow learner. My 98 yr old grandma has pushed me hard for CD's so I keep a bit in there too but I am only 36 so I don't really want to put it all in there.....but 4-5% looks pretty good these days. I wish I had enough $ to live off that rate and then I'd be all set.