At These Prices, It's Time to Go Overweight Quality Financials

If Prudential (PRU) drops much further, I am buying some. With an estimated 2009 PE below 8, it would be hard to go wrong on such a high quality company. I am also hoping that Assurant (AIZ) drops below $53, where I will buy more.

The industry fundamentals are generally favorable. Honestly, I could get juiced about StanCorp (SFG) below $50, Principal (PFG), Protective (PL), Lincoln National (LNC), Delphi Financial (DFG), MetLife (MET).

There are quality companies going on sale, and my only limit is how much I am willing to overweight the industry. Going into the energy wave in 2002, I was quadruple-weight energy. Insurance stocks are 16% of my portfolio now, which is quadruple-weight or so. This is a defensive group, with reasonable upside. I’ll keep you apprised as I make moves here.

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[Harmonymonkey]

Please read Nouriel Roubini......