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Bill, I am no fan of (John) Augustine and he has left (Fifth Third Asset Management) 5/3 since that (Kudlow) show but your analysis is incorrect and misleading to your readers. If you look at HIG for the period from before your 2000 flat yield curve to after, you will see that HIG well outperforms the S&P during your flat period and for the succeeding periods. You owe to all your readers to be straight in your analysis no matter how much you dislike a person or a logo. /L"

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Hey, I have no problem with Fifth Third Asset Management. I happen to think they are among the best managed financial companies in the world " as my listing them in the Cara 100 shows.

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Fifth Third Bancorp [GICS 40, Cara 100]
(FITB: Yahoo Finance file)
(FITB: StockChart chart)
(FITB: Investertech chart)
(FITB: ADVFN Financial Data)
(FITB: ADVFN Financial Data)

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I also have no problem with John Augustine because anybody who achieved the position of Chief Investment Strategist for any of the Humungous Bank & Broker firms must truly be an expert. Moreover, on the surface, he seems like a heck of a good person, which is an admission on my part that I often take some things a little too far in order to make a point.

But I did make a point.

I did show the chart that the stock (HIG) of the Hartford Insurance Group " a fairly well managed company by the way (see below) " suffered immensely after the yield curve went flat and later turned negative in 1999.

Moreover, when the yield curve became quite steep " after the Fed rate went to 1 pct and short rates bottomed out " HIG then far out-performed the S&P 500.

So I am offended somebody would write me to say: "You owe to all your readers to be straight in your analysis no matter how much you dislike a person or a logo." I am straight in my analysis! Make no mistake about that.

This afternoon, I did try to prepare a chart that overlaid the HIG chart to the Living Yield Curve, just to answer my critic, but I couldn't manage it, and I'm disappointed in myself for wasting so much valuable time. Nevertheless, I still think my original position was not incorrect

All I was pointing out in the June article was that Augustine's advice on the Kudlow Show was not correct. HIG performance was not correlated to the decline in the slope of the yield curve, and may even possibly be shown to be correlated to the rise in the slope of the yield curve.

Traders can be awfully wrong by being six month's early, you know.

There is another point I'd like to make, which is that no advisor is going to be perfect or anything close to it. I happen to make a lot of wrong calls, but I have never been blinded by personal opinion or peer pressure.

Moreover, I assure you that if I had to do that Larry Kudlow Show thing of speaking in six to ten second bites, I'd make an awful lot more mistakes.

Analysis and advice is a serious thing. That's why I refer to the Wall Street professionals who go on those high-energy shows like Kudlow to be little more than "Talking Heads" or "Clowns". I feel the same about corporate executives who do it. I'd rather see them working in the office and not out being played in the financial media.

Maybe, however, I am envious of the very few who can pull it off " like Banc of America's Tom McManus, for instance. I think Tom is thoroughly professional and amazing to be able to do what he does " excellent analysis, excellent presentation and the ability to fit into a terse micro discussion that happens to be the most effective TV media format for audience retention.

I could not do that. I know my limits, and I wish others ("Talking Heads" and "Clowns") would as well.

As to my critic's support for the Hartford, all I can say is that the company, while certainly no loser, would never make the Cara 100. My objective pick in the insurance area is Manulife Financial.

Here's a few reasons why:

Now, I didn't bring this issue up today. I just don't like it when somebody writes to say I ought to be honest with my readers. I figure that person must have an axe to grind.

But if somebody wants to do the homework that proves conclusively that insurance stocks thrive in a flat yield and declining curve, and revert to the mean when there is a steep curve, please be my guest. If true, I'll publish it.

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Manulife Financial [GICS 40, Cara 100]
(MFC: Yahoo Finance file)
(MFC: StockChart chart)
(MFC: Investertech chart)
(MFC: ADVFN Financial Data)
(MFC: ADVFN Financial Data)

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Hartford Insurance Group [GICS 40]
(HIG: Yahoo Finance file)
(HIG: StockChart chart)
(HIG: Investertech chart)
(HIG: ADVFN Financial Data)
(HIG: ADVFN Financial Data)

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