Opinion on  American International Group Inc. (AIG)     Sector: Financial  >  Industry: Insurance (Prop. & Casualty)
AIG- - Short the Rallies

It isn't every day you get to shoot fish in a barrel but AIG is an obvious short in my opinion.  I think the tell tell signs are their.  I suspect they have a lot of hair in their portfolios and I don't just mean sub-prime. I think AIG has been an aggressive player in all sorts of complex securities and recently they made a move which baffled me.  They raised equity capital and continued to pay their dividend!  Why would they do that I wondered and the only thing I can come up with is this.  Some investors buy securities for the income and they only hold securities that pay regular quarterly dividends.  But in general companies that are bleeding cash conserve their life blood and cut dividends so when AIG didn't cut their dividend my alarm bells went off.  The only thing I can come up with is they didn't want to put further pressure on their stock by eliminating their dividend because I think they will be back in the market soon to raise more cash.  I am convinced equity holders will make money holding AIG common but it may not be the current set of share holders if you get my drift.  Do you own work because I am only a monkey but I sure wouldn't own this stock anywhere above low single digits (and that may be aggressive)