SNSN schreef op 23 juni 2015 16:21:
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Hi appiehappie, good you are back, isn't it? Or you are still waiting?
Yes, it's a nice name "aegon".... to be in love with. Though, the fair value is just around ~7.50, and even if the fair value itself is not actually a ceiling, the stock will have a strong mt-resistance around ~8.0 ... (of course, if/when it's there).
As for the rising (short) interest rates (IR), just one point (actually there are much more) - don’t forget about the "term-structure" (it's a curve determining maturity dependences of IR at each point in time - google it for details) . It has many important general properties, these are just few of them:
- short rates (<1y) are much more volatile than the long rates (>10y)
- very low correlations ~0.2 between the short & long rates
Thus, when short rates rise (reasons are not essential) the difference between the short and long IR usually decreases.... resulting in lower "income" for financial institutions (which make profit on differences of short and long curve-ends). So, at rising basic IR the financial company (strategic) lt-performance will go down (in which extent depends upon diff stuff - the particular company business & operational models, degree of operational diversification, etc., etc.)
Again, as you know, "share buy-back" programs usually (but not always, and especially not in case of restricted "technical adjustments") show not only the fact that the company has quite enough "cash-flow" at the moment (though, even this is not the case sometimes), but also that the 'company-top' operations is really poor and doesn't have clear views and/or enough knowledge on future business-model developments, strategic operational changes, etc. That's why even if "share buy-back" programs may be considered as a "upwards price manipulation", it's actual impact is usually just a tactical one - works just on a reasonably short horizon of a couple years….
Don't also forget of (future) mortgages constraints, pension reg., possible insurance-products "restructuring", etc.