Earlier this month I wondered if Manulife might not actually be a buy. It has since gone about a dollar deeper but has come back almost all the way. To be bullish on MFC could be suicidal considering the company’s vulnerability to the stock market through many of its variable annuities, that effectively guarantee a return of your money at , at least, par at age 65 or after 10 years. This is one of those things that could not possible happen in a million years but actually did within a very short period of time after launching the Income Plus product, which was a great success at the time.
The other side of the coin is that when applying EW one should try not to think and keep an open mind. Most brokers are pretty good at the first but fail miserable at the second. It is very hard not to let prejudice enter into the equation but , in this case I will try not to let preconceived ideas influence the outcome.
Here are the charts again;
On the left is the shorter term chart and on the right the longer term. There are those that believe the correction from the lows may continue longer than we (I) think postponing the second down-leg to about June/July of 2011. It will still happen but just a little later in that scenario. Looking at MFC (and also POW, Power corp. and SLF, Sunlife) that may in fact be what is in store at least for this stock. Manulife is no slouch internationally and is one of the very few Canadian companies to have ventured abroad successfully. Particularly in the emerging markets of China and Indonesia. Insurance companies have also been more intensely regulated than banks and so far nothing has come out of the woodwork to suggest an imminent catastrophe. Its front lawn on Bloor street remains , as always, a dream to behold, not a single blade of grass is out of line. Perhaps we should give this one the benefit of the doubt, albeit with a fairly tight stop!