Watch BAM closely over the next week

As you're probably aware, in the USA and Europe short selling has been banned by the SEC for 799 financial sector companies. This is a temporary measure due to expire in 10 days.

Let's ignore the wisdom or folly of this move for a moment. Who are we to question the thoughts of giants? lol.

Brookfield Asset Management BAM and Brookfield Properties BPO are conspicuously absent from this list. I've written quite a few blog posts about BAM in the past and it remains one of my favourite long term holdings. Marty Whitman has described BAM as a company that he is "extremely bullish on". Tom Gayner, Chris Davis and recently Ken Fisher are adding to their stakes. Insider buying is steady and the insiders own about 17% of the company. Most of BAM's investments are not attributable back to the parent company so it is very well capitalized. It's a bit curious that BPO is not covered by the SEC edict as it doesn't even trade on the TSX. BAM owns 40% of BPO's shares (last time I read the financial report anyway). BPO owns premium Manhattan real estate (i.e. part of the World Financial centre) amongst other stuff. Its share price has been hammered as traders worry about leaseholders such as Merrill Lynch who may default/terminate the juicy payments.

Unfortunately, BAM has not been cheap and I've been looking for an opportunity to add to my position. The long term survival of this company is not in question here-- it's the contraction of the capital markets reducing opportunities for the type of investments BAM specializes in and a reduction in value of their considerable real estate and lumber stand holdings eating into their intermediate term profitablity. I wonder that if the short interest rises in the next few days (bored traders?) it might create an opportunity to own more of one the best managed companies in the world.

For the best presentation of the bull case for BAM, take a look at the Sept 08 webcast for Investor's Day.

For a sense of important balance, I need to include some of the bear concerns, well summarized here.

I'd buy below $25 enthusiastically and hold for the very long term.

l