ncsrs6302009.htm - Generated by SEC Publisher for SEC Filing

ITEM 1. REPORTS TO STOCKHOLDERS.

 

 For the six months ended June 30, 2009, the net  Portfolio structure, interest rates and the dollar, 
asset value per Common Share increased  among other concerns, largely depend on the infla- 
8.5%, while the investment return to our stock-  tion/deflation debate. Aggressive monetary and fiscal 
holders increased by 7.8%. By comparison, our  policies, with their attendant strength in commodities 
benchmark, the Standard & Poor’s 500 Stock Index  and Treasury bond yields, support the inflation argu- 
(including income) increased 3.2%. For the twelve  ment. However, rising unemployment, weak house 
months ended June 30, 2009, the return on the net  prices, elevated levels of consumer debt and excess 
asset value per Common Share was  manufacturing capacity suggest that deflation may be 
negative by 35.2%, and the return to our stockholders  the greater threat. Should government stimulus be 
decreased by 40.6%; these compare with a decline of  withdrawn prematurely, moreover, relapse into reces- 
26.3% for the S&P 500. During each period, the dis-  sion could follow. If withdrawn too late, or not at all, 
count at which our shares traded continued to fluctuate  the consequences for price stability and the dollar 
and on June 30, 2009, it was 18.1%.  might well be adverse.
As set forth in the accompanying financial statements 
(unaudited), as of June 30, 2009, the net assets  Information about the Company, including our 
applicable to the Company’s Common Stock were  investment objectives, operating policies and 
$732,059,359 equal to $22.89 per Common Share.  procedures, investment results, record of dividend 
  and distribution payments, financial reports and press 
The increase in net assets resulting from operations  releases, is on our website and has been updated 
for the six months ended June 30, 2009 was  through June 30, 2009. It can be accessed on the 
$56,351,375. During this period, the net realized  internet at www.generalamericaninvestors.com.
gain on securities sold was $6,877,321, and the   
increase in net unrealized appreciation was   By Order of the Board of Directors,   
$51,643,875. Net investment income for the 
six months was $3,648,823, and distributions to  GENERAL AMERICAN INVESTORS COMPANY, INC
Preferred Stockholders amounted to $5,818,644.  Spencer Davidson   
During the six months, 361,563 shares of the  Chairman of the Board 
Company’s Preferred Stock were purchased at an  President and Chief Executive Officer   
average price of $23.54.  July 15, 2009   
The market rally that began in the second week of     
March continued through most of the second quarter     
of 2009. Premised on sustained economic recovery in     
the near future, the market’s strength could dissipate     
should economic growth in the back half of the year     
lack vigor.     


      Value 
Shares                 COMMON AND PREFERRED STOCKS    (note 1a) 
AEROSPACE/DEFENSE (4.6%)     
300,000  The Boeing Company    $12,750,000 
418,700  Textron Inc.    4,044,642 
325,000  United Technologies Corporation    16,887,000 
    (COST $62,253,609)  33,681,642 
BUILDING AND REAL ESTATE (2.4%)     
1,872,000  CEMEX, S.A. de C.V. ADR (a)  (COST $24,109,388)  17,484,480 
COMMUNICATIONS AND INFORMATION SERVICES (9.8%)     
960,000  Cisco Systems, Inc. (a)    17,904,000 
224,100  Lamar Advertising Company Class A (a)    3,422,007 
128,000  Leap Wireless International, Inc. (a)    4,215,040 
1,110,000  MetroPCS Communications, Inc. (a)    14,774,100 
700,000  QUALCOMM Incorporated    31,640,000 
    (COST $72,279,284)  71,955,147 
COMPUTER SOFTWARE AND SYSTEMS (10.4%)     
1,480,000  Dell Inc. (a)    20,320,400 
570,000  Microsoft Corporation    13,548,900 
295,100  NetEase.com, Inc. (a)    10,381,618 
67,100  Nintendo Co., Ltd.    18,630,727 
565,000  Teradata Corporation (a)    13,237,950 
    (COST $88,075,780)  76,119,595 
CONSUMER PRODUCTS AND SERVICES (11.1%)     
350,000  Diageo plc ADR    20,037,500 
375,000  Heineken N. V.    14,184,754 
466,100  Hewitt Associates, Inc. Class A (a)    13,880,458 
450,000  Nestle S.A.    17,174,236 
285,000  PepsiCo, Inc.    15,663,600 
    (COST $78,280,572)  80,940,548 
ENVIRONMENTAL CONTROL (INCLUDING SERVICES) (5.6%)     
949,000  Republic Services, Inc.    23,165,090 
630,000  Waste Management, Inc.    17,740,800 
    (COST $38,960,134)  40,905,890 
FINANCE AND INSURANCE (20.2%)     
 BANKING (1.1%)     
155,000  M&T Bank Corporation  (COST $789,946)  7,894,150 
 INSURANCE (14.8%)     
175,000  The Allstate Corporation    4,270,000 
315,000  Arch Capital Group Ltd. (a)    18,452,700 
350,000  AXIS Capital Holdings Limited    9,163,000 
140  Berkshire Hathaway Inc. Class A (a)    12,600,000 
250,000  Everest Re Group, Ltd.    17,892,500 
500,000  Fidelity National Financial, Inc.    6,765,000 
280,000  MetLife, Inc.    8,402,800 
275,000  PartnerRe Ltd.    17,861,250 
83,000  Transatlantic Holdings, Inc.    3,596,390 
235,000  The Travelers Companies, Inc.    9,644,400 
    (COST $65,728,009)  108,648,040 
 OTHER (4.3%)     
375,000  American Express Company    8,715,000 
1,666,667  Epoch Holding Corporation    14,400,003 
635,000  Nelnet, Inc. (a)    8,629,650 
    (COST $31,822,434)  31,744,653 
    (COST $98,340,389)  148,286,843 



      Value 
             Shares  COMMON AND PREFERRED STOCKS (continued)    (note 1a) 
HEALTH CARE / PHARMACEUTICALS (4.0%)     
70,500  Cougar Biotechnology, Inc. (a)    $3,028,680 
529,900  Cytokinetics, Incorporated (a)    1,499,617 
119,500  Gilead Sciences, Inc. (a)    5,597,380 
425,400  Wyeth    19,308,906 
    (COST $28,140,990)  29,434,583 
MACHINERY AND EQUIPMENT (2.6%)     
1,200,000  ABB Ltd. ADR  (COST $13,364,456)  18,936,000 
METAL (0.7%)       
200,000  Alpha Natural Resources, Inc. (a)  (COST $11,589,075)  5,254,000 
MISCELLANEOUS (1.4%)     
  Other (b)  (COST $10,095,966)  10,263,344 
OIL AND NATURAL GAS (INCLUDING SERVICES) (13.7%)     
459,800  Apache Corporation    33,174,570 
100,000  Devon Energy Corporation    5,450,000 
800,000  Halliburton Company    16,560,000 
250,000  McDermott International, Inc. (a)    5,077,500 
2,050,000  Weatherford International Ltd. (a)    40,098,000 
    (COST $71,655,084)  100,360,070 
RETAIL TRADE (15.8%)       
575,000  Costco Wholesale Corporation    26,323,500 
250,000  Target Corporation    9,867,500 
1,675,000  The TJX Companies, Inc.    52,695,500 
550,000  Wal-Mart Stores, Inc.    26,642,000 
    (COST $52,835,965)  115,528,500 
SEMICONDUCTORS (2.1%)     
700,000  ASML Holding N.V.  (COST $16,353,613)  15,155,000 
TECHNOLOGY (3.3%)       
750,000  International Game Technology    11,925,000 
1,900,000  Xerox Corporation    12,312,000 
    (COST $34,368,474)  24,237,000 
TRANSPORTATION (0.8%)     
236,100  Alexander & Baldwin, Inc.  (COST $11,005,032)  5,534,184 
TOTAL COMMON AND PREFERRED STOCKS (108.5%)  (COST $711,707,811)  794,076,826 
  CORPORATE DEBT     
MISCELLANEOUS (3.6%)     
  Other (b) (c)  (COST $21,714,161)  26,555,480 
Shares  SHORT-TERM SECURITY AND OTHER ASSETS     
             100,970,429  SSgA Prime Money Market Fund (13.8%)  (COST $100,970,429)  100,970,429 
TOTAL INVESTMENTS (d) (125.9%)  (COST $834,392,401)  921,602,735 
Cash, receivables and other assets less liabilities (0.1%)    1,035,049 
PREFERRED STOCK (-26.0%)    (190,578,425) 
NET ASSETS APPLICABLE TO COMMON STOCK (100%)    $732,059,359 
(a) Non-income producing security.     
(b) Securities which have been held for less than one year, not previously disclosed, and not restricted.   
(c) Level 2 fair value measurement, note 8.     
(d) At June 30, 2009: (1) the cost of investments for Federal income tax purposes was the same as the cost for financial reporting purposes,   
     (2) aggregate gross unrealized appreciation was $208,878,460, (3) aggregate gross unrealized depreciation was $121,668,126, and (4) net unrealized 
     appreciation was $87,210,334.     
(see notes to financial statements)     



Contracts       Value 
(100 shares each)  COMMON STOCK/EXPIRATION DATE/EXERCISE PRICE  (note 1a) 
CALL OPTIONS       
     COMPUTER SOFTWARE AND SYSTEMS     
200  NetEase.com, Inc./July 09/$38.00    $7,000 
130  NetEase.com, Inc./August 09/$38.00    18,200 
  TOTAL CALL OPTIONS  (PREMIUMS DEPOSITED WITH BROKERS $60,995)  25,200 
PUT OPTION       
     AGRICULTURAL     
250  Monsanto Company/July 09/$80.00  (PREMIUMS DEPOSITED WITH BROKERS $104,222)  152,500 
TOTAL CALL AND PUT OPTIONS  (PREMIUMS DEPOSITED WITH BROKERS $165,217)  $177,700 


The diversification of the Company’s net assets applicable to its Common Stock by industry group as of June 30, 2009 and 2008 is shown in the following table.

      PERCENT COMMON NET ASSETS* 
INDUSTRY CATEGORY  COST(000)  VALUE(000)  2009  2008 
Finance and Insurance         
         Banking  $790  $7,894  1.1%  2.5% 
         Insurance  65,728  108,648  14.8  13.5 
         Other  31,822  31,745  4.3  3.8 
  98,340  148,287  20.2  19.8 
Retail Trade  52,836  115,528  15.8  13.3 
Oil and Natural Gas (Including Services)  71,655  100,360  13.7  23.1 
Consumer Products and Services  78,281  80,940  11.1  9.7 
Computer Software and Systems  88,076  76,120  10.4  13.1 
Communications and Information Services  72,279  71,955  9.8  7.6 
Environmental Control (Including Services)  38,960  40,906  5.6  4.6 
Miscellaneous**  31,810  36,819  5.0  4.1 
Aerospace/Defense  62,254  33,682  4.6  6.0 
Health Care/Pharmaceuticals  28,141  29,435  4.0  3.5 
Technology  34,369  24,237  3.3  2.3 
Machinery and Equipment  13,364  18,936  2.6  2.5 
Building and Real Estate  24,109  17,484  2.4  5.0 
Semiconductors  16,354  15,155  2.1  — 
Transportation  11,005  5,534  0.8  0.9 
Metals  11,589  5,254  0.7  1.4 
  733,422  820,632  112.1  116.9 
Short-Term Securities  100,970  100,970  13.8  0.2 
         Total Investments  $834,392  921,602  125.9  117.1 
Other Assets and Liabilities - Net    1,035  0.1  0.4 
Preferred Stock    (190,578)  (26.0)  (17.5) 
Net Assets Applicable to Common Stock    $732,059  100.0%  100.0% 
* Net Assets applicable to the Company’s Common Stock.       
** Securities which have been held for less than one year, not previously disclosed, and not restricted.     
(see notes to financial statements)         



INCREASES  SHARES TRANSACTED  SHARES HELD 
NEW POSITIONS     
  Alpha Natural Resources, Inc.  —     200,000 (b) 
  Devon Energy Corporation  —     100,000 (b) 
  International Game Technology  750,000     750,000 
  The Travelers Companies, Inc.  —     235,000 (b) 
  Wyeth  425,400     425,400 
ADDITIONS     
  Arch Capital Group Ltd.  15,000     315,000 
  Fidelity National Financial, Inc.  125,000     500,000 
  Nelnet, Inc.  117,500     635,000 
  PepsiCo, Inc.  30,000     285,000 
  Wal-Mart Stores, Inc.  80,000     550,000 
DECREASES     
ELIMINATION     
  Patterson-UTI Energy, Inc.  500,000  — 
REDUCTIONS     
  American Express Company  50,000     375,000 
  AXIS Capital Holdings Limited  90,000     350,000 
  CEMEX, S.A. de C.V. ADR  3,862  1,872,000 
  Lamar Advertising Company Class A  150,000     224,100 
  M&T Bank Corporation  10,000     155,000 
  NetEase.com, Inc.  120,000     295,100 
  Target Corporation  83,100     250,000 
(a)  Excludes transactions in Common and Preferred Stocks - Miscellaneous - Other.     
(b)  Shares purchased in prior period and previously carried under Common and Preferred Stocks - Miscellaneous - Other.   
(see notes to financial statements)     



ASSETS
INVESTMENTS, AT VALUE (NOTE 1a)     
         Common stocks (cost $711,707,811)    $794,076,826 
         Corporate debt (cost $21,714,161)    26,555,480 
         Money market fund (cost $100,970,429)    100,970,429 
                 Total investments (cost $834,392,401)    921,602,735 
CASH, RECEIVABLES AND OTHER ASSETS     
         Cash  $548,353   
         Receivable for securities sold  982,339   
         Premiums deposited with brokers for options written  165,217   
         Dividends, interest and other receivables  1,504,639   
         Qualified pension plan asset, net excess funded (note 6)  2,803,835   
         Prepaid expenses and other assets  3,073,658  9,078,041 
TOTAL ASSETS    930,680,776 
LIABILITIES
         Payable for securities purchased  1,252,958   
         Accrued preferred stock dividend not yet declared  220,581   
         Outstanding options written, at value (premiums deposited with brokers $165,217) (note 1a)  177,700   
         Accrued supplemental pension plan liability (note 6)  3,257,101   
         Accrued supplemental thrift plan liability (note 6)  1,895,298   
         Accrued expenses and other liabilities  1,239,354   
TOTAL LIABILITIES    8,042,992 
5.95% CUMULATIVE PREFERRED STOCK, SERIES B -     
         7,623,137 shares at a liquidation value of $25 per share (note 2)    190,578,425 
NET ASSETS APPLICABLE TO COMMON STOCK - 31,980,872 shares (note 2)    $732,059,359 
NET ASSET VALUE PER COMMON SHARE    $22.89 
NET ASSETS APLICABLE TO COMMON STOCK
         Common Stock, 31,980,872 shares at par value (note 2)  $31,980,872   
         Additional paid-in capital (note 2)  608,855,253   
         Undistributed realized gain on investments  6,860,405   
         Undistributed net investment income  9,408,005   
         Accumulated other comprehensive income (note 6)  (6,193,381)   
         Unallocated distributions on Preferred Stock  (6,049,646)   
         Unrealized appreciation on investments and options  87,197,851   
NET ASSETS APPLICABLE TO COMMON STOCK    $732,059,359 
(see notes to financial statements)     



INCOME
         Dividends (net of foreign withholding taxes of $220,016)  $7,515,904   
         Interest  1,366,444  $8,882,348 
EXPENSES
         Investment research  2,599,819   
         Administration and operations  1,322,096   
         Office space and general  829,808   
         Directors’ fees and expenses  149,129   
         Miscellaneous taxes  121,288   
         Auditing and legal fees  91,000   
         Transfer agent, custodian and registrar fees and expenses  60,782   
         Stockholders’ meeting and reports  59,603  5,233,525 
NET INVESTMENT INCOME    3,648,823 
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1, 4 AND 5)
         Net realized gain on investments:     
                   Securities transactions (long-term, except for $123,799)  6,752,287   
                   Written option transactions  125,034   
  6,877,321   
         Net increase in unrealized appreciation:     
                   Securities  51,656,358   
                   Written options  (12,483)   
  51,643,875   
NET GAIN ON INVESTMENTS    58,521,196 
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS     (5,818,644) 
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS    $56,351,375 


  Six Months Ended  Year Ended 
  June 30, 2009  December 31, 
OPERATIONS  (Unaudited)    2008 
         Net investment income  $3,648,823  $13,446,046 
         Net realized gain on investments  6,877,321  16,414,799 
         Net increase (decrease) in unrealized appreciation  51,643,875  (523,757,542) 
  62,170,019  (493,896,697) 
         Distributions to Preferred Stockholders:     
                   From net investment income  —  (3,474,724) 
                   From long-term capital gains  —  (8,425,276) 
                   Unallocated distributions  (5,818,644)  387 
                   Decrease in net assets from Preferred distributions  (5,818,644)  (11,899,613) 
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  56,351,375  (505,796,310) 
OTHER COMPREHENSIVE INCOME (Adjustment to apply FAS 158; Note 6)  583,228  (7,885,172) 
DISTRIBUTIONS TO COMMON STOCKHOLDERS       
         From net investment income  —  (6,024,428) 
         From long-term capital gains  —  (14,620,307) 
DECREASE IN NET ASSETS FROM COMMON DISTRIBUTIONS  —  (20,644,735) 
CAPITAL SHARE TRANSACTIONS (NOTE 2)       
         Value of Common Shares issued in payment of dividends and distributions  —  7,928,339 
         Cost of Common Shares purchased  —  (1,986,688) 
         Benefit to Common Shareholders resulting from Preferred Shares purchased  526,955  59,398 
INCREASE IN NET ASSETS - CAPITAL TRANSACTIONS  526,955  6,001,049 
NET INCREASE (DECREASE) IN NET ASSETS  57,461,558  (528,325,168) 
NET ASSETS APPLICABLE TO COMMON STOCK       
BEGINNING OF PERIOD  674,597,801  1,202,922,969 
END OF PERIOD (including undistributed net investment income of $9,408,005 and     
         $5,759,182, respectively)  $732,059,359  $674,597,801 
(see notes to financial statements)     



  The following table shows per share operating performance data, total investment return, ratios and supplemental data for the six
months ended June 30, 2009 and for each year in the five-year period ended December 31, 2008. This information has been derived
from information contained in the financial statements and market price data for the Company’s shares.

  Six Months           
  Ended           
  June 30, 2009                 Year Ended December 31,     
  (Unaudited)  2008  2007  2006  2005  2004 
PER SHARE OPERATING PERFORMANCE             
         Net asset value, beginning of period  $21.09  $38.10  $40.54  $39.00  $35.49  $33.11 
             Net investment income  .11  .42  .31  .34  .19  .32 
             Net gain (loss) on investments -             
                   realized and unrealized  1.85  (16.15)  3.39  4.72  5.85  3.48 
             Other comprehensive income  .02  (.25)  .02  .03  —  — 
         Distributions on Preferred Stock:             
                   Dividends from net investment income  —  (.11)  (.02)  (.04)  (.03)  (.09) 
                   Distributions from net short-term capital gains  —  —  (.03)  (.01)  (.08)  — 
                   Distributions from net long-term capital gains  —  (.27)  (.36)  (.36)  (.30)  (.32) 
                   Unallocated distribution  (.18)  —  —  —  —  — 
  (.18)  (.38)  (.41)  (.41)  (.41)  (.41) 
         Total from investment operations  1.80  (16.36)  3.31  4.68  5.63  3.39 
         Distributions on Common Stock:             
                   Dividends from net investment income  —  (.19)  (.33)  (.29)  (.15)  (.23) 
                   Distributions from net short-term capital gains  —  —  (.38)  (.04)  (.44)  — 
                   Distributions from net long-term capital gains  —  (.46)  (5.04)  (2.81)  (1.53)  (.78) 
  —  (.65)  (5.75)  (3.14)  (2.12)  (1.01) 
         Net asset value, end of period  $22.89  $21.09  $38.10  $40.54  $39.00  $35.49 
         Per share market value, end of period  $18.75  $17.40  $34.70  $37.12  $34.54  $31.32 
TOTAL INVESTMENT RETURN - Stockholder             
             return, based on market price per share  7.76%*  (48.20)%  8.72%  16.78%  17.40%  8.79% 
RATIOS AND SUPPLEMENTAL DATA             
         Net assets applicable to Common Stock,             
             end of period (000’s omitted)  $732,059   $674,598   $1,202,923  $1,199,453 $1,132,942 $1,036,393   
         Ratio of expenses to average net assets             
             applicable to Common Stock               1.61%**  0.87%  1.11%  1.06%  1.25%  1.15% 
         Ratio of net income to average net assets             
             applicable to Common Stock               1.12%**  1.31%  0.78%  0.86%  0.51%  0.94% 
         Portfolio turnover rate  9.30%*  25.52%  31.91%  19.10%  20.41%  16.71% 
PREFERRED STOCK             
         Liquidation value, end of period (000’s omitted)  $190,578   $199,617   $200,000  $200,000  $200,000  $200,000 
         Asset coverage  484%  438%  701%  700%  666%  618% 
         Liquidation preference per share  $25.00  $25.00  $25.00  $25.00  $25.00  $25.00 
         Market value per share  $24.00  $21.90  $21.99  $24.44  $24.07  $24.97 
         *Not annualized             
         **Annualized             



 

1. SIGNIFICANT ACCOUNTING POLICIES - General American Investors Company, Inc. (the “Company”), established in 1927, is registered
under the Investment Company Act of 1940 as a closed-end, diversified management investment company. It is internally managed by
its officers under the direction of the Board of Directors.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires man-
agement to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.

a. SECURITY VALUATION Equity securities traded on a national securities exchange are valued at the last reported sales price on the
last business day of the period. Equity securities reported on the NASDAQ national market are valued at the official closing price on
that day. Listed and NASDAQ equity securities for which no sales are reported on that day and other securities traded in the over-
the-counter market are valued at the last bid price (asked price for options written) on the valuation date. Equity securities traded pri-
marily in foreign markets are valued at the closing price of such securities on their respective exchanges or markets. Corporate debt
securities, domestic and foreign, are generally traded in the over-the-counter market rather than on a securities exchange. The
Company utilizes the latest bid prices provided by independent dealers and information with respect to transactions in such securi-
ties to determine current market value. If, after the close of foreign markets, conditions change significantly, the price of certain for-
eign securities may be adjusted to reflect fair value as of the time of the valuation of the portfolio. Investments in money market funds
are valued at their net asset value.

b. OPTIONS The Company may purchase and write (sell) put and call options. The Company typically purchases put options or writes
call options to hedge the value of portfolio investments while it typically purchases call options and writes put options to obtain equi-
ty market exposure under specified circumstances. The risk associated with purchasing an option is that the Company pays a premi-
um whether or not the option is exercised. Additionally, the Company bears the risk of loss of the premium and a change in market
value should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner
as portfolio securities. Premiums received from writing options are reported as a liability on the Statement of Assets and Liabilities.
Those that expire unexercised are treated by the Company on the expiration date as realized gains on written option transactions in
the Statement of Operations. The difference between the premium received and the amount paid on effecting a closing purchase trans-
action, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss on written option transactions in the Statement of Operations. If a call option is exer-
cised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Company has real-
ized a gain or loss on investments in the Statement of Operations. If a put option is exercised, the premium reduces the cost basis for
the securities purchased by the Company and is parenthetically disclosed under cost of investments on the Statement of Assets and
Liabilities. The Company as writer of an option bears the market risk of an unfavorable change in the price of the security underly-
ing the written option. See Note 5 for written option activity.

c. FEDERAL INCOME TAXES The Company’s policy is to fulfill the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all taxable income to its stockholders. Accordingly, no provision for Federal
income taxes is required. As of and during the period ended June 30, 2009, the Company did not have any liabilities for any unrec-
ognized tax positions. The Company recognizes interest and penalties, if any, related to unrecognized tax positions as income tax
expense in the Statement of Operations. During the period, the Company did not incur any interest or penalties.

d. FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such currencies versus U.S. dollars on the date of valuation.
Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the
exchange rate in effect on the transaction date. Events may impact the availability or reliability of foreign exchange rates used to
convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using proce-
dures established and approved by the Company’s Board of Directors. The Company does not separately report the effect of changes
in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized
gain or loss from investments on the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade
and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign
withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains
and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in secu-
rities held at the end of the reporting period.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S.
companies as a result of, among other factors, the possibility of political or economic instability or the level of governmental super-
vision and regulation of foreign securities markets.

e. DIVIDENDS AND DISTRIBUTIONS The Company expects to pay dividends of net investment income and distributions of net realized
capital and currency gains, if any, annually to common shareholders and quarterly to preferred shareholders. Dividends and distri-
butions to common and preferred shareholders, which are determined in accordance with Federal income tax regulations are record-
ed on the ex-dividend date. Distributions for tax and book purposes are substantially the same. Permanent book/tax differences relat-
ing to income and gains are reclassified to paid-in capital as they arise.

f. INDEMNIFICATIONS In the ordinary course of business, the Company enters into contracts that contain a variety of indemnifications.
The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or loss-
es pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote.

g. OTHER Securities transactions are recorded as of the trade date. Dividend income and distributions to stockholders are
recorded as of the ex-dividend dates. Interest income, adjusted for amortization of discount and premium on investments, is earned
from settlement date and is recognized on the accrual basis. Cost of short-term investments represents amortized cost.

2. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - The authorized capital stock of the Company consists of 50,000,000 shares of
Common Stock, $1.00 par value, and 10,000,000 shares of Preferred Stock, $1.00 par value. With respect to the Common Stock,
31,980,872 shares were issued and outstanding on June 30, 2009.

On September 24, 2003, the Company issued and sold 8,000,000 shares of its 5.95% Cumulative Preferred Stock, Series B in an under-
written offering. The Preferred Shares were noncallable for the 5 year period ended September 24, 2008 and have a liquidation prefer-
ence of $25.00 per share plus accumulated and unpaid dividends to the date of redemption. On December 10, 2008, the Board of
Directors authorized the repurchase of 1 million Preferred Shares in the open market at prices below $25.00 per share. A total of 361,563
Preferred Shares were repurchased at an average cost per share of $23.54 during the six month period ended June 30, 2009. The aver-
age discount of $1.46 per Preferred Share, $526,955 in aggregate, was credited to additional paid-in capital of the Common Stock.
There were 7,623,137 Preferred Shares outstanding on June 30, 2009.



  2. CAPITAL STOCK - (Continued from bottom of previous page.)
The Company is required to allocate distributions from long-term capital gains and other types of income proportionately among hold-
ers of shares of Common Stock and Preferred Stock. To the extent that dividends on the shares of Preferred Stock are not paid from
long-term capital gains, they will be paid from ordinary income or net short-term capital gains or will represent a return of capital.

Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage of at least 200% of the Preferred
Stock. In addition, pursuant to Moody’s Investor Service, Inc. Rating Agency Guidelines, the Company is required to maintain a cer-
tain discounted asset coverage for its portfolio that equals or exceeds a Basic Maintenance Amount. The Company has met these
requirements since the issuance of the Preferred Stock. If the Company fails to meet these requirements in the future and does not cure
such failure, the Company may be required to redeem, in whole or in part, shares of Preferred Stock at a redemption price of $25.00 per
share plus accumulated and unpaid dividends. In addition, failure to meet the foregoing asset coverage requirements could restrict the
Company’s ability to pay dividends on shares of Common Stock and could lead to sales of portfolio securities at inopportune times.

The holders of Preferred Stock have voting rights equivalent to those of the holders of Common Stock (one vote per share) and, gen-
erally, vote together with the holders of Common Stock as a single class.

At all times, holders of Preferred Stock will elect two members of the Company’s Board of Directors and the holders of Preferred and
Common Stock, voting as a single class, will elect the remaining directors. If the Company fails to pay dividends on the Preferred Stock
in an amount equal to two full years’ dividends, the holders of Preferred Stock will have the right to elect a majority of the directors. In
addition, the Investment Company Act of 1940 requires that approval of the holders of a majority of any outstanding Preferred Shares,
voting separately as a class, would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Stock
and (b) take any action requiring a vote of security holders, including, among other things, changes in the Company’s subclassification
as a closed-end investment company or changes in its fundamental investment policies.

The Company classifies its Preferred Stock pursuant to the requirements of EITF D-98, Classification and Measurement of Redeemable
Securities, which require that preferred stock for which its redemption is outside of the company’s control should be presented outside
of net assets in the statement of assets and liabilities.

There were no transactions in Common Stock for the six months ended June 30, 2009. Transactions in Common Stock for the year
ended December 31, 2008 were as follows:

  Shares  Amount 
Shares issued in payment of dividends and distributions     
 (includes 103,047 shares issued from treasury)  509,861  $509,861 
Increase in paid-in capital    7,418,478 
 Total increase    7,928,339 
Shares purchased (at an average discount from NAV of 19.8%)  102,047  (102,047) 
Decrease in paid-in capital    (1,884,641) 
 Total decrease    (1,986,688) 
Net increase    $5,941,651 

  3. OFFICERS’ COMPENSATION - The aggregate compensation paid and accrued by the Company during the six months ended June 30, 2009
to its officers (identified on back cover) amounted to $2,214,500.


4. PURCHASES AND SALES OF SECURITIES - Purchases and sales of securities (other than short-term securities and options) for the six
months ended June 30, 2009 amounted to $74,859,403 and $68,440,944.

5. WRITTEN OPTIONS - Transactions in written covered call and collateralized put options during the six months ended June 30, 2009
were as follows:

  Covered Calls   Collateralized Puts 
  Contracts  Premiums  Contracts  Premiums 
Options written  1,530  $341,881  250  $104,222 
Options exercised  (1,200)  (280,887)  —  — 
Options outstanding, June 30, 2009  330  $60,994  250  $104,222 

  6. BENEFIT PLANS - The Company has funded (qualified) and unfunded (supplemental) noncontributory defined benefit pension plans
that cover its employees. The plans provide defined benefits based on years of service and final average salary with an offset for a por-
tion of social security covered compensation. The components of the net periodic benefit cost (income) of the plans for the six months
ended June 30, 2009 were:

Service cost  $185,658 
Interest cost  387,880 
Expected return on plan assets  (482,878) 
Amortization of prior service cost  13,463 
Recognized net actuarial loss  176,926 
Net periodic benefit cost  $281,049 

  The Company also has funded (qualified) and unfunded (supplemental) defined contribution thrift plans that are available to its employ-
ees. The aggregate cost of such plans for the six months ended June 30, 2009 was ($490,408). The qualified thrift plan acquired 14,600
shares, sold 8,144 shares, and transferred out 152,418 shares of the Company’s Common Stock during the six months ended June 30,
2009 and held 498,825 shares of the Company’s Common Stock at June 30, 2009. The supplemental thrift plan’s unfunded liability at
June 30, 2009 was $1,895,298.

The Company applies the recognition provisions of Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting
Standards No. 158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” which requires employers to
recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the Statement of Assets
and Liabilities and to recognize changes in funded status in the year in which the changes occur through other comprehensive income.



7. OPERATING LEASE COMMITMENT - In June 2007, the Company entered into an operating lease agreement for office space which expires
in February 2018 and provides for future rental payments in the aggregate amount of approximately $10,755,000, net of construction
credits. The lease agreement contains clauses whereby the Company receives free rent for a specified number of months and credit
towards construction of office improvements, and incurs escalations annually relating to operating costs and real property taxes and to
annual rent charges beginning in February 2013. The Company has the option to renew the lease after February 2018 for five years at
market rates. Rental expense approximated $538,800 for the six months ended June 30, 2009. Minimum rental commitments under the
operating lease are approximately $1,075,000 per annum in 2010 through 2012, $1,183,000 in 2013 through 2017, and $99,000 in 2018.

8. FAIR VALUE MEASUREMENTS - Various data inputs are used in determining the value of the Company’s investments. These inputs are
summarized in a hierarchy consisting of the three broad levels listed below:

Level 1 - quoted prices in active markets for identical securities (including money market funds which are valued using amortized cost
and which transact at net asset value, typically $1 per share),

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.), and

Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those
securities. The following is a summary of the inputs used to value the Company’s net assets as of June 30, 2009:

Valuation Inputs  Investments in Securities  Options Written 
Level 1 - Quoted prices  $895,047,255  $177,700 
Level 2 - Other significant observable inputs (see (c), page 3)  26,555,480  — 
Level 3 - Unobservable inputs  —  — 
   Total  $921,602,735  $177,700 

9. SUBSEQUENT EVENTS - Subsequent events have been evaluated through July 28, 2009, the date the financial statements were available
to be issued. There are no events to report subsequent to June 30, 2009.


  Purchases of the Company’s Common Stock as set forth in Note 2 on page 10, may be made at such times, at such prices, in such amounts and in
such manner as the Board of Directors may deem advisable.

The policies and procedures used by the Company to determine how to vote proxies relating to portfolio securities and the Company’s proxy voting
record for the twelve-month period ended June 30, 2009 are available: (1) without charge, upon request, by calling us at our toll-free telephone num-
ber (1-800-436-8401), (2) on the Company’s website at www.generalamericaninvestors.com and (3) on the Securities and Exchange Commission’s
website at www.sec.gov .

In addition to distributing financial statements as of the end of each quarter, General American Investors files a Quarterly Schedule of Portfolio
Holdings (Form N-Q) with the Securities and Exchange Commission (“SEC”) as of the end of the first and third calendar quarters. The Company’s
Forms N-Q are available at www.generalamericaninvestors.com and on the SEC’s website: www.sec.gov. Also, Forms N-Q may be reviewed and
copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the SEC’s Public Reference Room may be obtained
by calling 1-800-SEC-0330. A copy of the Company’s Form N-Q may also be obtained by calling us at 1-800-436-8401.

On April 30, 2009, the Company submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on which the Company’s prin-
cipal executive officer certified that he was not aware, as of that date, of any violation by the Company of the NYSE’s Corporate Governance list-
ing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Company’s principal executive
and principal financial officer made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q relating to, among other
things, the Company’s disclosure controls and procedures and internal control over financial reporting, as applicable.


DIRECTORS

Spencer Davidson, Chairman
Sidney R. Knafel, Lead Independent Director

Arthur G. Altschul, Jr. John D. Gordan, III
Rodney B. Berens Daniel M. Neidich
Lewis B. Cullman D. Ellen Shuman
Gerald M. Edelman Raymond S. Troubh
                           OFFICERS

Spencer Davidson, President & Chief Executive Officer
Andrew V. Vindigni, Senior Vice-President
Sally A. Lynch, Vice-President
Eugene S. Stark, Vice-President, Administration &
Chief Compliance Officer
Jesse R. Stuart, Vice-President
Diane G. Radosti, Treasurer
Carole Anne Clementi, Secretary
Craig A. Grassi, Assistant Vice-President
Maureen E. LoBello, Assistant Secretary
                     SERVICE COMPANIES

COUNSEL TRANSFER AGENT AND REGISTRAR
Sullivan & Cromwell LLP American Stock Transfer & Trust
Company
INDEPENDENT AUDITORS
59 Maiden Lane
Ernst & Young LLP
New York, NY 10038
CUSTODIAN 1-800-413-5499
State Street Bank and www.amstock.com
Trust Company

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
GENERAL AMERICAN INVESTORS COMPANY, INC.

We have reviewed the accompanying statement of assets and liabilities of
General American Investors Company, Inc., including the statement of investments,
as of June 30, 2009, and the related statements of operations and changes in net
assets and financial highlights for the six-month period ended June 30, 2009. These
financial statements and financial highlights are the responsibility of the Company’s
management.

We conducted our review in accordance with the standards of the Public
Company Accounting Oversight Board (United States). A review of interim finan-
cial information consists principally of applying analytical procedures to financial
data, and making inquiries of persons responsible for financial and accounting mat-
ters. It is substantially less in scope than an audit in accordance with the standards
of the Public Company Accounting Oversight Board, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the interim financial statements referred to above for them to be in con-
formity with accounting principles generally accepted in the United States.

We have previously audited, in accordance with the standards of the Public
Company Accounting Oversight Board, the statement of changes in net assets for
the year ended December 31, 2008 and financial highlights for each of the five years
in the period then ended and in our report, dated February 3, 2009 we expressed an
unqualified opinion on such financial statements and financial highlights.

New York, New York                                             ERNST & YOUNG LLP
July 28, 2009


A Closed-End Investment Company
listed on the New York Stock Exchange

100 PARK AVENUE
NEW YORK • NY 10017
212-916-8400 • 1-800-436-8401
E-mail: InvestorRelations@gainv.com
www.generalamericaninvestors.com

ITEM 2. CODE OF ETHICS.

Not applicable to this semi-annual report.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable to this semi-annual report.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable to this semi-annual report.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to this semi-annual report.

ITEM 6. SCHEDULE OF INVESTMENTS

The schedule of investments in securities of unaffiliated issuers is included as part of the report to stockholders filed under Item 1 of this form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END

MANAGEMENT INVESTMENT COMPANIES.

Not applicable to this semi-annual report.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to this semi-annual report.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

(a) General American Investors Company, Inc. Common Stock (GAM)

Period  (a) Total Number  (b) Average Price  (c) Total Number of Shares  (d) Maximum Number (or Approximate
2009  of shares (or Units)  Paid per Share  (or Units) Purchased as Part  Dollar Value) of Shares (or Units)
  Purchased  (or Unit)  of Publicly Announced Plans  that May Yet Be Purchased Under
      or Programs    the Plans or Programs
01/01-01/31 -  -  -  550,553 
02/01-02/28 -  -  -  550,553 
03/01-03/31 -  -  -  550,553 
04/01-04/30 -  -  -  550,553 
05/01-05/31 -  -  -  550,553 
06/01-06/30 -  -  -  550,553 
Total for year  0      0 

  Note- The Board of Directors has authorized the repurchase of the registrant's common stock when the shares are
trading at a discount from the underlying net asset value of at least 8%. This represents a continuation of the
repurchase program which began in March 1995. As of the beginning of the period, January 1, 2009, there were
550,553 shares available for repurchase under such authorization. As of the end of the period, June 30, 2009,
there were 550,553 shares available for repurchase under this program.

(b) General American Investors Company, Inc. Preferred Stock (GAMpB)

Period  (a) Total Number  (b) Average Price  (c) Total Number of Shares  (d) Maximum Number (or Approximate 
2008-2009  of shares (or Units)  Paid per Share  (or Units) Purchased as Part  Dollar Value) of Shares (or Units) 
  Purchased  (or Unit)  of Publicly Announced Plans  that May Yet Be Purchased Under 
      or Programs    the Plans or Programs 
01/01-01/31  31,196  22.3174  31,196  953,504 
02/01-02/28  16,747  22.2395  16,747  936,757 
03/01-03/31  46,420  22.6121  46,420  890,337 
04/01-04/30  104,800  23.8872  104,800  785,537 
05/01-05/31  42,200  23.9841  42,200  743,337 
06/01-06/30  120,200  23.9459  120,200  623,137 
Total  361,563    361,563   

  Note- The Board of Directors has authorized the repurchase of the registrant's preferred stock when the shares are
trading at a price not in excess of $25.00 per share. This represents a repurchase program which began on
December 10, 2008. As of the beginning of the period, January 1, 2009, there were 984,700 shares available
for repurchase under such authorization. As of the end of the period, June 30, 2009,
there were 623,137 shares available for repurchase under this program.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Directors as set forth in the registrant's Proxy Statement, dated February 20, 2009.

ITEM 11. CONTROLS AND PROCEDURES.

Conclusions of principal officers concerning controls and procedures

(a) As of June 30, 2009, an evaluation was performed under the supervision and with the participation of the officers of General American Investors Company, Inc. (the "Registrant"), including the principal executive officer ("PEO") and principal financial officer ("PFO"), to assess the effectiveness of the Registrant's disclosure controls and procedures. Based on that evaluation, the Registrant's officers, including the PEO and PFO, concluded that, as of June 30, 2009, the Registrant's disclosure controls and procedures were reasonably designed so as to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure.

(b) There have been no significant changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the Registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

ITEM 12. EXHIBITS

(a)(1) The code of ethics disclosure required by Item 2 is not applicable to this semi-annual report.

(a)(2) Certifications of the principal executive officer and the principal financial officer pursuant to Rule 30a-2(a)under the Investment Company Act of 1940.

(a)(3) There were no written solicitations to purchase securities under Rule 23c-1 under the Investment Company Act of 1940 during the period covered by the report.

(b) Certifications of the principal executive officer and the principal financial officer, as required by Rule 30a-2(b) under the Investment Company Act of 1940.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

General American Investors Company, Inc.
By:     /s/Eugene S. Stark
          Eugene S. Stark
          Vice-President, Administration

          Date: August 3, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:      /s/Spencer Davidson
           Spencer Davidson
           Chairman, President and Chief Executive Officer (Principal Executive Officer)

            Date: August 3, 2009

By:      /s/Eugene S. Stark
           Eugene S. Stark
           Vice-President, Administration (Principal Financial Officer)

           Date: August 3, 2009