See Goldman Sachs research on insurance companies from a month ago. AIG has gone far below zero, not sure why our gov't feels the need to support AIG shareholders when they clearly deserve nothing? But the one big mistake of AIG's astronomical $150bn plus bailout dollars, is AIG is now under-bidding on insurance products which puts pressure on the remaining insurance companies. Even if PFG is not directly affected, insurance companies have tough road ahead as far as investing premiums. Bonds, stocks, money-market funds and just about every asset class is treading on thin ice lately, and insurance companies have lots of exposure. This is not a thoroughly-researched idea, but then again, what dedicated insurance analyst has any idea what's on the balance sheets of the companies he/she follows? This is a stock ideal for generalists that don't get too detailed. Insurance companies = higher risk, and not sure the stock price entirely reflects this-- although the price drop presents plenty of upside risk for shorts, as evidenced by the 50% gain in the past few weeks-- beware.
$18.94 (12/16/08)
