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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: In a previous answer, you wrote:

"SLF cites that a 10% downturn in real estate assets would lead to a $175 million decrease in net income. With operating net income in Q2 of $474 million, while a real estate decline would 'hurt', we do not think it would be a company ending event."

The figure you cite here represents a 37% loss of net income in a 10% downturn. I've heard a number of times that a 40% downturn is possible, or worse, so wouldn't that mean SLF could find itself in very serious trouble? If so, are there any other insurance companies (Canadian & US) that you might recommend as a way of capitalizing on rising rates, which could weather a severe real estate decline more easily? The names I've been considering are POW, MFC in Canada and AIG, MET, PRU, CB of in the USA. Thanks for any thoughts on these or other companies.
Read Answer Asked by Brian on March 06, 2017
Q: In these financial stocks I am currently up on PRU but down 13% with JPM and it looks as if these dollars are probably dead money for the next 6 to 18 months. I would like to reallocate the funds from one of them to the Staples or Industrials sectors. What are your thoughts on this? Which holding should be better to reduce, or sell completely, and would you have a preference for a reallocation at this time? Thanks.

Harvey
Read Answer Asked by Harvey on July 05, 2016
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