I have added AIG at $31.40. I like the risk/reward profile and the technical picture generally. The double bottom on the 2-year chart is obvious from a technical perspective. Risk can be managed by using the recent low around $27 as a stop out.
As I mentioned with Citigroup, I like the idea of investing with the government. I believe the government will do whatever it takes to make their investment a winner. Earlier this week, the government agreed to provide long term support to FNM and FRE and I believe it is worth a small bet that we’ll see positive news flow for AIG as well.
My position size is only .6% so I’m not making a huge bet here. I consider AIG to be part of my secondary offering/recapitalization portfolio even if it doesn’t fit that mold expressly.
My portfolio can be viewed as a barbell. One one end, I have the high flying momentum names such as IBM and AAPL. In the middle I have stability in XOM. On the other end I have the junky/value ideas such as BAC, C, CNO, LYG, AIG and UNG.
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Doctor Stock
