getting into BAC/AIG without investing directly

[mhdousa]

Hi all -

 

I have a very specific question. 

My wife works for a certain large consulting company and has to declare her and her spouse's stock and fund holdings.  Because it's a large company there are a ton of entities that are considered "restricted", including BAC, AIG, and the Fairholme family of funds, the three of which make up a large % of our net worth.  As we all know, the big gains in these are yet to come and so it pains me to consider divesting them, but we have to.

Can anyone think of any roundabout ways to invest in the warrants (preferable) or common without either buying stock directly or through holding Fairholme?

 

Thanks.

-M

[constructive]

Since you already own them and probably don't plan to trade actively, why doesn't your wife just apply to the accounting dept for an exemption? Can't hurt.

 

 

[Kraven]

Hi all -

 

I have a very specific question. 

My wife works for a certain large consulting company and has to declare her and her spouse's stock and fund holdings.  Because it's a large company there are a ton of entities that are considered "restricted", including BAC, AIG, and the Fairholme family of funds, the three of which make up a large % of our net worth.  As we all know, the big gains in these are yet to come and so it pains me to consider divesting them, but we have to.

Can anyone think of any roundabout ways to invest in the warrants (preferable) or common without either buying stock directly or through holding Fairholme?

 

Thanks.

-M

 

Are you sure you need to divest as opposed to applying for an exemption as Constructive mentioned?  In my experience restricted lists are there to prevent people from buying the stock and selling the stock without approval, but if you already own it (or got permission to buy it) you can continue to hold so long as you don't have some kind of controlling position.  I assume if you are working for a living you don't have a controlling position in BAC or AIG, so that would be ok.  At the end of the day though some places are more strict than others with the stock of clients or even potential clients.  It's not worth it to them to raise an issue because some guy on the team owns 200 shares. 

 

You don't want to mess with the restricted list at your work.  That will likely be a firing offense.  Don't try to get around it either, it isn't worth it in my opinion.  Buy Fairholme or something, but don't try to play any games by trying to own it indirectly.  Chalk it up to a missed opportunity and find some other cheap stock.  Just my 2 cents.

[mhdousa]

Since you already own them and probably don't plan to trade actively, why doesn't your wife just apply to the accounting dept for an exemption? Can't hurt.

 

Interesting - I didn't think of that as an option.  I'll look into it.

 

[tng]

Most places that I know of don't force you to sell shares, because both buying and selling are direct actions that may be insider trading. Think about what it looks like to outsiders if I had a lot of money in XYZ stock and I join a consulting company that has business relationships with XYZ. I sell all my shares because I am "forced" to do so, and XYZ implodes and the stock plunges. DO NOT sell your shares until you reread all the rules and understand them, because selling them might be a violation of the rules (it would be at the firm that I work at). At most companies, open-ended mutual funds like Fairholme are okay, but read the rules carefully.

 

If you can't own any of the stocks directly and you can't own mutual funds, then you might be happy owning the financials ETF. Remember that Berkowitz is betting on the entire financial system. If the BAC and AIG thesis plays out, JPM, WFC, C, GS, MS, etc will all do extremely well, and those big banks make up most of the financial sector. Remember that Berkowitz had or still has them in some form (warrants or common) before his clients withdrew their funds.

[Olmsted]

Good discussion.  I'll be in the same boat here by the end of the year.  To the point that I am starting to calculate in my head what will pay me more in 2014 - my AIG and BAC shares or my new job...