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  • AIG: Are the Losses Accelerating? [View article]
    Large investors just saw fit to invest $20 Billion in new capital at right around book value for new AIG shares.

    What do you know that these major investors don't? The very fact that so much new capital can be raised makes it very likely they see it a great chance to buy into a company with great long-term prospects at a rock-bottom price.

    The only thing holding back financial companies was the lack of confidence that they could 'weather the storm'. The new capital takes away this risk.

    A year or two from now these same companies will be doing massive 'write-ups' of mis-priced assets they were able to keep on their books and you'll be sorry you didn't join the big money investors buying in at the bottom.

    Weak companies [like Bear Sterns] could not attract the new capital injections they needed. Good ones like AIG can and did.
    There is a big difference between temporary problems and permanent ones.

    1 -3 years from now these out-of-favor giants will be the best stock market performers and fortunes will have been made by patient investorsa who ignored the media hype.
    May 22 08:53 am |Rating: +1 0 |Link to Comment
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