Understanding Brookfield's Malaise

Brookfield Asset management (BAM) is a very fine firm. I hold it as one of the main positions in my UpDown account and in my real accounts. I believe that the market is currently holding down BAM's share price for several reasons. The firm faces formidable competition in the execution of its asset management strategy but, on balance, I'm optimistic that they will emerge as a leader in the field.

The stock is probably worth about U.S. $35 today (about five dollars more than its current price), and should trade significantly higher in the 2009-10 time frame as the housing inventory overhang clears, commercial real estate finds its legs, and as the market wakes up to the many other positive attributes of Brookfield. Details follow.