AIG – Coming Out of the Blue!
December 2, 2013
Posted by on
“There are no second acts in American life”, the saying goes but sometimes there are exceptions. I was surprised as anyone when AIG had a positive transit of EBV-3 meaning, as some of you know; AIG – Coming Out of the Blue!
Let’s have a look at our model price chart
American International Group (AIG) with weekly price bars, EBV Lines (colored lines) and model price (dashed line)
As you can see from our model price chart, the first positive transit occurred back on the first week in August – noted on the chart. Since August the stock has been ‘saw-toothed’, back and forth using our calculated EBV-3 level as support. Again as you can see from our model price chart, AIG was performing well in October until its third quarter earnings release disappointed investors bringing the stock back to support or EBV-3. As AIG has been consolidating just over EBV-3 our calculation of model price has been gaining strength during the period covered on the model price chart above.
For those unfamiliar with the history of AIG, the company was one of primary causes of the financial crash of 2008. AIG was a recipient of US Federal government aid the day after Lehman Brothers went bankrupt. The Federal government in the bailout of AIG used a controversial sum of $90 billion the day after they refused to give a financial bailout to Lehman Brothers. AIG subsequently paid back all Federal monies and according to the US Treasury, the government had a net positive return on its AIG bailout of $22.7 billion. Wonderful for the US taxpayer and saved the world from a global depression – great deal!
For those unfamiliar with our unique “Coming Out of the Blue” investment strategy here are some additional links from my blog posts that may help you.
Questions and Answers about “Coming Out of the Blue”!
How Jumbo Gains are Possible Using Model Price – Part 1
How Jumbo Gains are Possible Using Model Price – Part 2
“Do these EBV Lines Work?”
Model Price – Conversations About EBV Lines