Saturday, March 28, 2015

In-Sure Things!

Everyone always needs proper protection in this uncertain world! Now that interest rates are so low, insuring things is a sure thing! Common knowledge! Can't lose!

March 27, 2015
Analysts Say Low Interest Rates to Drag on Insurer Profits, Dividends Long-Term

Credit rating agency Moody’s said it expected interest rates to remain at a low level, cutting the return that insurers earn from investing in new bonds as they replace their stock of maturing, higher-yielding debt.

Fortunately, this is no doubt already priced into Jeremy Siegel's wise and all-knowing forward looking stock market (using several hundred years of backward looking historical returns and extrapolating them into the distant future).

And since it is fully priced in, what's the worst that could happen?

Investors have been piling into insurance stocks on the expectation of higher dividends and share buybacks from insurers that are not able to put that cash to work in the business, where premiums are pressured by stiff competition.

If you wish to sleep well at night, I will hope for your sake that you do not have a vivid and/or active imagination. Further, being color blind when it comes to seething red might also help.

Oh, man. Did I just say seething red? Freudian slip. I meant seeing red! You know, like "needing" big fat investment returns in the black and then finding out there aren't any. The seething actually comes moments later. Sorry about that.

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