Burned By AIG

A long position in AIG looked like a hot trade but so far all it’s done is burn Stephen Weiss. What now?

Weiss, who is managing partner of Short Hills Capital made the fateful call on Thursday May 3rd.

“I own it in size,” he said at the time. His thesis was short and sweet. “They’re just going to liquidate their assets and buy back the stake from the government.”

However, this position cost Weiss a pretty penny. He’s down more than 10% in less than a week.

Now what?

“I doubled my position on Monday,” says Weiss. “The story hasn't changed. AIG is going to buy back 40-50% of the government’s stake. That’s hugely accretive. The pullback is an opportunity.”

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Trader disclosure: On May 7, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long JPM; Joe Terranova is long UPL; Joe Terranova is long CHKM; Joe Terranova is long HPQ; Joe Terranova is long LQD; Joe Terranova is long LPX; Joe Terranova is long CHRW; Joe Terranova is long BAC; Stephen Weiss is long JPM; Stephen Weiss is long AIG; Stephen Weiss is short NFLX; Jon Najarian is long call spreads AAPL; Jon Najarian is long call spreads CIEN; Jon Najarian is long call spreads GS; Jon Najarian is long call spreads FFIV; Jon Najarian is long call spreads FIO; Jon Najarian is long call spreads NFLX; Jon Najarian is long call spreads AH; Jon Najarian is long call CIGX; Jon Najarian is long call CBOE; Jon Najarian is long call CME; Jon Najarian is long call DDMG

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