18
2009
Is investing in AIG worth it ?
An article by 
The biggest problem that AIG has right now is two fold.
One that its most profitable sector mortgage insurance is non existing sector anymore. Therefore one should not expect AIG to ever make the revenues it made before this recession
Secondly that the home prices are still going down only. US housing sector is not going to pick up. As Microsoft rightly pointed out that overall the economy would stabilize at a much lower level. This means the insurance huge losses for AIG for many years to come.
Therefore from an investment perspective i think AIG is a wrong desicion. I highly avoid finance sector personally but if i would be picking a stock in finance it would be JPMorgan or Wells Fargo. Tight underwriting good balance sheets strong brand names.
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AIG is another giant set to fail for sure. Even after getting HUGE bailout money if you are distributing multi-million dollar bonuses to your executive, I don’t see any other outcome rather than a complete failure. Its almost foolish at this point to even think about AIG.
I would say that giving bonuses is not bad. Paying bonuses means you are investing in your people which is required for any firm to succeed. The problem with AIG is much more structural that is failure of the mortgage insurance industry