Armin S.: re ING. Man, these Dutch companies are on the move! ING, AHold, ABN. Buying up lots of good USA companies. Never thought to grap hold of AHold, but I'm still flyin' with KLM. Pretty hard to go wrong with ING for a long term investment. I've always thought Equitable of Iowa was a premier insurance co., so having them in the ING fold lends credibility to ING for me.
Some aspects make me cautious here though. First, the price is fair at 1.5 book and okay div yield. Fair -- but not great. Second, ING is going like gangbusters. But pleeze. It's an insurance co. with tons of competitors. The growth is coming from buying other companies--yes I see that; maybe from going into new markets (I can't tell), maybe from cost efficiencies (I don't see why they are better than many other insurance companies - even if they are Dutch -g-), maybe from increased GIC sales. Oops. I don't think I like that. You guarantee the purchaser a payoff % and you assume/think/expect to make a profit on the higher % you assume/think/expect. Very risky IMO. Misprice those insurance contracts too low, pump 'em out the door - all the sales guys pushing 'em to make their bonuses -- eventually write-offs follow. Not saying this is being done or that any bad consequence would happen --I'd believe ING is too smart to let this occur. But for me, I'd pick other insurance companies to invest in at this time and price point (and those other companies have problems too -g-) Good investing, Paul Senior |
