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Politics : Ask Michael Burke

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To: Joseph G. who wrote (30253)	7/25/1998 2:25:00 PM
From: Knighty Tin	Read Replies (4) of 132070

Joe, I hate to admit this, but I haven't followed The St. Paul since I worked there. It is not one of my favorite plays in the insurance area because it is fairly conservative and doesn't get the wide swings of some of the others. So, short answer is, I don't know on this one in particular. However, they do have a decent, mostly muni fixed income portfolio which would be devastated by a rise in rates or a cut in tax rates. But, since eps and dividends are determined mainly by the interest payments from these bonds (and no longer my dividend capture wheeling and dealing), I don't see them collapsing. They did not collapse absolutely in 1974, if I remember correctly. They simply did not grow anywhere close to the rate of inflation, which caused the stock to tank. That is the sort of thing I see more likely than a dividend cut. It was more of a pe ratio implosion than an earnings swan dive. MB MB

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