AIG stock question

[SoCal]

I am not a hobbiest trader (at least not yet), but AIG's stock has caught my eye and I have a question for those of you more savvy. It's a very basic question really. I did a quick look at the stock and saw that before the financial failures and the ensuing bailouts, AIG was trading at +1100 range? Wow. Didn't even realize stocks traded that high unless I am reading the chart wrong. After the bailout, AIG stock could be had for less than $5 a share (much less and I am sure someone can tell us exactly how low it was). And now... here it is about 2 years later and ... if I am reading the chart correctly, it's trading in the +50 range?

What an absolute killing that is .... Buying dirt cheap and having the stock trade at 50 a few years later? This is a behemoth company that seems like a no brainer?

Please tell me you guys who dwell in this part of the forum made some money on that... $peculating about companies that may be the next big thing is fun. I can see there's quite a bit of thought and research in the numerous threads here. Some great stuff. But surely... the AIG roller coaster has to be appealing to the traders here..

Now feel free to tear me to shreds if I have gotten something wrong in my basic numbers posted here. The main observation being that... did AIG really go from less than $5 to $50 in this short amount of time? If that's true... what's to stop the company from continuing to go up? Why speculate when you have an absolute monster company rising up from the ashes? Am I wrong or is/was this not the opportunity of a life time to invest... Surely riding it from less than $5 to what it is now should have been the stock play of the century so far and an easy one at that. Yes/No?

 

[snoop]

think they did 1-20 split two years ago, meaning its pps now is higher than pre-crisis level. Lol.

If I want to invest in insurance industry, I rather have my $$$ with Metlife, Aflac, Prudential...etc.

 

[SoCal]

Well, I understand the reservation Snoop. I'm not suggesting AIG is a model profile right now. What I am pointing out is that the stock was trading for around $5 a share.. down from $1100. We all know / knew they weren't going under and sure enough... they are now trading at $50+. I am not sure how anyone ESPECIALLY ON A GAMBLING FORUM - was NOT taking a shot buying AIG at $5 a share? Myself included. A 2k investment would now be worth 20k a mere 2 yrs later. I think AIG is safer than any team in any sport I could possibly bet on. Will they experience more trouble? Perhaps? Will they fail? Comeon... no way. The more savvy investors on here I am sure can produce some evidence of why AIG has numerous pitfalls ... but standing way way back from this... there seems to be some money that can be made from buying aig low and selling when it jumps a little.

 

[SoCal]

Ok - I did some academic research and I now see how the pricing went up as per your post. I had actually heard about the reverse split before but didn't understand it. A reverse split essentially means that shares are consolidated and the value goes up... So my logic about buying at $5 and being able to sell at $50 is invalid. If there have been gains, they have been minimal and certainly not enough to be the deal of the century I suggested. All that being said... I would be more apt to buy at .39 cents a share (which is what it once was) vs the post reverse split value.

 

[tiznow]

Who knows what it's worth at this point

Aig has sold off a bunch of its various subsidiaries to raise cash to pay debts and such

 

[eek.]

Distressed debt was the big opportunity at the height of the credit crisis.

The one I looked at was worth 0.3cents...now worth 30cents....

No doubt the opportunity will arise again in 20 odd years....

The whole market had gone up at the low point and no-one was buying, most folk were too afraid because as they quite rightly reckoned, those companies were bust.

It was only massive government intervention which gave them any value again.

 

[tiznow]

It's a hindsight 20/20 sorta thing too was many that went completely bust

Countrywide financial, bear sterns, Lehman bros, Washington mutual, gm (original shareholders cleaned out) to name a few bigger names at the center of the crises and than you had gobs of other perifery names that went under

Easy to say Aig would be saved now.....without major government loans (which is being paid back by Aig by selling off various parts of it and whatever remains when thats done is what the new aig is) Aig was as bankrupt as bankrupt gets in the wake of the Lehman collapse (in a free market not this we select who fails and doesn't market)

Plus they needed all the fed money pumping to bring back the markets and about the current speculative bubble so they could sell their various pieces for higher prices and have a shot of having something left for shareholders