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Comfort Zone Investing: Aftershocks of the Disaster in Japan

Japanese flagThe Japanese devastation is almost incomprehensible. First there was the earthquake, followed by the tsunami, followed by radiation. It seems the disaster has no end. The people are suffering beyond imagination. It will be a long time for the country to heal. In the north, it will take decades.

Investors are trying to understand what the economic aftershocks will be. Which industries will be hurt and which ones will benefit? Because the crises change from day to day, it's extremely difficult to ascertain. But there are a few themes that seem to be emerging. Some of these will be short lived, such as the closing of the Japanese auto manufacturers. While they will lose days of production, the long-term effect will be minor, unless supplies are interrupted, causing further delays.

Continue reading Comfort Zone Investing: Aftershocks of the Disaster in Japan

Chasing Value: Insurance Stock Review -- Part 2

AIG logoDo you have any interest in insurance companies amidst the turmoil, disaster and current crises in Japan? A crises that followed so closely on the heals of the destruction of the New Zealand city of ChristChurch by a 6.3 magnitude earthquake. Perhaps you think this is even a poorer idea than catching that proverbial falling knife we are always hearing about when stock prices are collapsing.

Certainly there will be billions of dollars in claims. On the other hand, perhaps the burden will be spread around the globe to reinsurer's such that none is struck too hard and this is a buying opportunity. After all, when the dust settles, insurers will cry for mercy, and in particular, rate increases. It is also likely those that never saw the need for insurance have been awakened and demand will increase.

Continue reading Chasing Value: Insurance Stock Review -- Part 2

Chasing Value: Insured Profits or a Mountain of Risk?

Ten weeks into the year and never a dull moment. Pondering the remaining 42 weeks and beyond, where will value be found? We know that "my pal Warren" is on the prowl waist high in Berkshire Hathaway cash to invest, and he is on record as chomping on the bit to do so. Just this morning it was reported that Buffett had closed a $9 billion deal to buy Lubrizol Corp. (LZ), the Wickliffe, Ohio-based maker of engine lubricants.

More evidence of this abounds: Wednesday March 2, (Reuters) - US-based Berkshire Hathaway aims to enter the Indian insurance sector as a corporate agent of Bajaj Allianz General Insurance.

This is part 1 of a series examining the insurance market for expansion, stock valuations, potential risks and opportunities, excluding health care focused companies, a whole other breed of enterprise.

Continue reading Chasing Value: Insured Profits or a Mountain of Risk?

Traders Exit Insurance Stocks to Avoid Earthquake Exposure

MET logoMetLife (MET - option chain) stock is trading lower today along with most other insurance companies this morning after the cost to insurers related to Friday's earthquake in Japan was estimated to be between $15 to $35 billion. Prudential Financial (PRU) and AIG (AIG) are also down so far in today's trading. Even if these insurance companies are actually on solid footing financially with regard to their expected claims, I expect investors could be frightened for several months to come, which could keep share prices depressed. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on MET.

Continue reading Traders Exit Insurance Stocks to Avoid Earthquake Exposure

Serious Money: Buffett's Next Buys -- You Pick'em

Prognosticators the world over are throwing in their 2 cents about "my pal Warren's" next market moves; especially since he announced last week that his trigger finger was itchy. When Warren Buffett, chairman of Berkshire Hathaway (BRK.A and BRK.B) speaks, investors listen.

On Wednesday March 2, this investor threw in his two cents worth (see:Serious Money: What Should Warren Buffett Do Next?) discussing possible acquisitions. Since all the "pro's", I use the term loosely, have had a say I thought I would give readers a chance to express some of their ideas too.

Continue reading Serious Money: Buffett's Next Buys -- You Pick'em

After Christchurch, Assessing AIG's Risk to Earthquakes

AIG flagAIG (AIG) is a leading international insurance organization with operations in more than 130 countries. It provides life insurance, health insurance, auto and home insurance, retirement solutions and investment plans. It competes with other established insurance companies like MetLife (MET), The Hartford (HIG) and Prudential (PRU).

We have a price estimate of $30.36 on AIG's stock which is about 24% below the current market price.

Continue reading After Christchurch, Assessing AIG's Risk to Earthquakes

U.S. Stock Futures Up as Crude Oil Prices Stabilize

U.S. stock futures are higher Friday morning as crude oil prices stabilized. Futures for the Dow Jones Industrial Average gained 55 points to 12,092.00, while those for the S&P 500 index climbed 7 points to 1,309.70. Futures for the Nasdaq 100 index rose 15.50 points to 2,323.75.

U.S. stock market closed mixed yesterday, with the Dow Jones Industrial Average dropping 37.28 points, the Nasdaq Composite gaining 14.91 points and the S&P 500 declining 1.30 points.

Continue reading U.S. Stock Futures Up as Crude Oil Prices Stabilize

ALICO Accelerates MetLife's International Growth

MetLife (MET) increased its international presence substantially after the acquisition of ALICO in 2010. MetLife competes with AIG (AIG), The Hartford (HIG), Prudential Financial (PRU) and New York Life Company.

MetLife reported a 36% increase in premiums, fees and other revenues from the insurance business outside of the U.S. in the year 2010, mainly due to the addition of about $836 million from ALICO's one month operations. MetLife acquired ALICO for about $15.5 billion from AIG as a part of its strategy to grow internationally. The acquisition has enabled MetLife to serve 90 million customers in over 60 countries and has significantly boosted MetLife's position as a leading insurance company in the U.S, Japan, Latin America, Asia Pacific, Europe and the Middle East.

Continue reading ALICO Accelerates MetLife's International Growth

Options Update: Proshares UltraShort Barc 20-Year Treasury ETF Calls Active on Rally

Proshares UltraShort Barc 20 Year Treasury ETF (TBT) closed up 3% on a weak five-year auction. Wednesday is the seven-year auction. February 39 and 40 calls are active on total call volume of 31K contracts, 12K puts. January put option implied volatility is at 31, February is at 33; compared to its 26-week average of 34, according to Track Data. Active call volume suggests investors could either be putting on outright bullish positions or hedging short underlying shares.

AIG (AIG) is trading near a 28-month high. January 60 and 62 calls are active on more total call volume of 33K contracts compared to 15K puts. January call option implied volatility is at 48, February is at 49, May is at 45; compared to its 26-week average of 45, according to Track Data, suggesting non-directional price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Options Update: AIG Options Active on Low Volatility as Shares Rally 8%

AIG (AIG) closed up on an interview with The Deal magazine and AIG Chairman Robert Miller, who said the insurer was beginning to think about acquiring insurance operations instead of selling them. December 55 and January 66 calls are active on total call option volume of 168K contracts (90K puts). January call option implied volatility is at 43, February is at 41, May is at 38, versus its 26-week average of 45, according to Track Data, suggesting decreasing price movement.

Take-Two Interactive Software (TTWO) is scheduled to report Q4 EPS on December 16. December 12 straddle is priced at $1.00, January is at $1.60, according to Track Data, suggesting larger near-term price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Closing Bell: Mixed Markets Down to the Wire (AIG, LULU, HGSI, SIRI, HELE, BAC, LEDS)

Despite jobless claims data and despite House Democrats vowing to vote against the tax-cut extension approval, stocks tried to close up. The DJIA was in the red, but NASDAQ and S&P 500 were in the black today right at the closing bell.

Here were today's unofficial closing bell levels:

Dow Jones 11,370.06 -2.42 (-0.02%)
S&P 500 1,233.00 +4.72 (0.38%)
Nasdaq 2,616.67 +7.51 (0.29%)

Top Analyst Calls

Continue reading Closing Bell: Mixed Markets Down to the Wire (AIG, LULU, HGSI, SIRI, HELE, BAC, LEDS)

Another Day Down to the Wire (AIG, YOKU, DANG, GERN, OREX, HD, SOLR)

Another day that went right down to the wire. We had a real rise in rates and a move against commodities today. Irish banks had more help again early this morning. The end of day close was a coin-toss between red and black until the last few minutes. Here were the unofficial closing bell levels:

Dow Jones 11,372.48 +13.32 (0.12%)
S&P 500 1,228.28 +4.53 (0.37%)
Nasdaq 2,609.16 +10.67 (0.41%)

Top Analyst Calls

Continue reading Another Day Down to the Wire (AIG, YOKU, DANG, GERN, OREX, HD, SOLR)

Serious Money: AIG Takeover by Fairholme Capital?

Perusing through the 13D filings in Barron's November 29 issue I came across news reported by InsiderScore.com regarding American International Group, Inc. (AIG). It was noted that "Fairholme Capital raised its holdings to 39,990,099 shares (29%), by buying 1,765,900 shares from Nov. 5 to Nov. 16 at prices ranging from $41.72 to $43.59."

I do not usually make mention of such things but owning 29% of a company capitalized at $5.6 billion dollars is a lot. I would even go as far as to say that in some circumstances that might equate to controlling interest. Prior to "my pal Warren" (Buffett) making an offer to acquire the Burlington Northern Santa Fe Railroad for Berkshire Hathaway (BRK.A) it only owned 23% of the outstanding shares.

Continue reading Serious Money: AIG Takeover by Fairholme Capital?

AIG Slips on Huge Q3 Loss

AIG logoAmerican International Group (AIG - option chain) stock is trading lower today after the company reported fiscal-Q3 earnings this morning, posting a loss of $2.4 billion, or $17.62 per share, hurt in part by a $1.84 billion loss ($13.65 per share) from discontinued operations, a $1.3 billion deferred tax asset valuation allowance charge, a $1.3 billion goodwill impairment charge on pending sale of AIG Star and AIG Edison. Excluding one-time items, AIG lost $1.47 per share on revenue of $19.09 billion.

Most analysts declined to forecast quarterly results for AIG, due in no small part to its ongoing divestment of some assets to pay off its government bailout. The reason AIG isn't down more on this news is that these kinds of results are expected right now from the insurance behemoth. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AIG.

Continue reading AIG Slips on Huge Q3 Loss

Closing Bell: QE2 and Currency Woes Debase Mixed Markets (APSG, APOL, BAC, WL, AIG, RVBD, BIDU)

The market won't let QE2 go ahead of the G20 meetings. Now the talk is that the second wave of quantitative easing is mostly priced in, as well as fears of ongoing currency wars. The markets were mixed at the open, but shares were lower by the close on the DJIA, and trying to hold on to positive in the NASDAQ and S&P500.

Here were the unofficial closing bell levels:

Dow Jones 11,132.26 -14.31 (-0.13%)
S&P 500 1,183.05 +2.79 (0.24%)
Nasdaq 2,479.39 +19.72 (0.80%)

Top Analyst Calls
Next Week's Top Earnings

Continue reading Closing Bell: QE2 and Currency Woes Debase Mixed Markets (APSG, APOL, BAC, WL, AIG, RVBD, BIDU)

Next Page »

Symbol Lookup
IndexesChangePrice
DJIA-89.2312,801.23
NASDAQ-23.352,903.88
S&P 500-9.311,342.64

Last updated: February 10, 2012: 05:51 PM

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