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    Not my Homework

    Do you think that when State Farm moved into the world of banking they were engaging in related diversification or unrelated diversification?

    Or more to the point, do you think that banking and providing insurance are similar industries?
    What?

    #2
    Era depending. Banking was originally a form of monetary security, muck like modern insurance is a form of financial security based on liability and medical costs.

    State farm exhibits a form of unrelated diversification, but has probably realized the securities from insurance pay out much less than the federal interest gains by banking without penalty instead of utilizing a separate financial institution. Reasoning is that modern banking is about choice and convenience and less about being robbed while transiting on your stagecoach.

    it is almost double dipping in the stock market, a wise investment strategy for any business looking to maximize their customer base.
    Textually Active

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      #3
      Unrelated diversification. Banking is holding your money for you. Insurance is paying someone else to cover risk with their money. I understand that both are financial concepts, but that is as far as the link goes in my opinion.
      Go Space Force!!!

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        #4
        I prefer Farmer's personally.
        This sig didn't cost me any money.

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          #5
          same thing, both profit off of imaginary credits and debits.
          ~" If you suck ass long enough, pretty soon you start choking on shit."~

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            #6
            def unrelated in my book, although a lot of banks are insuring and it seems a lot of insurance companies are offering investment portfolios.

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              #7
              Buy term, invest the difference.

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                #8
                Unrelated diversification.
                A day may come when the courage of men fails, when we forsake our friends and break all bonds of fellowship, but it is not this day. An hour of wolves and shattered shields, when the age of men comes crashing down! But it is not this day! This day we fight! By all that you hold dear on this good Earth, I bid you stand, Men of the West!


                https://s-media-cache-ak0.pinimg.com...db54dcd316.jpg

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                  #9
                  I don't understand the question.
                  I don't know.

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                    #10
                    Reminds me of a Michael Douglas movie were he was a rich guy hunter.

                    His guide asked him if he made his money in finance. Douglas says no he sells insurance. And the guide asked who he sells Insurance to, Douglas replied finance.

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                      #11
                      Thank you for your opinions on this topic that Im interested in. 🤗
                      What?

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                        #12
                        Originally posted by Jenn View Post
                        Thank you for your opinions on this topic that Im interested in. 🤗

                        Can I change my answer? It's related diversification. Ie if I were a bank, and I wanted a related area to diversify into, it wouldn't be sheep shearing, it would involve earning money by having money. It would be getting money for nothing.

                        So in the general scheme of things it's very related.

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                          #13
                          Originally posted by Jenn View Post
                          Do you think that when State Farm moved into the world of banking they were engaging in related diversification or unrelated diversification?

                          Or more to the point, do you think that banking and providing insurance are similar industries?
                          Unrelated.

                          Banking, in my opinion, is not at all a similar product or entity as insurance. Nor is banking at all similar to securities and stock investment. There's a reason these two were separated historically by the Glass-Steagall Act. They are two completely different classifications, entities, they operate under completely different regulations. Combining banking with securities/ investments/ insurance / etc.. represents a conflict of interest (in my opinion), and helped usher in two of the biggest financial crises in the last two centuries, the last one coming close to bringing down the global financial market. When I was a bank manager,/ lender I had to learn these laws and regulations, look at the history behind them, why they were enacted. The common metaphor was the pendulum of regulation, swinging back and forth. We learn from a mistake, a crisis - enact legislation to counter the problem. But then enough time passes, we delude ourselves into thinking we won't make the same mistake twice, and deregulate or enact legislation reversing the checks and balances we put in place. The pendulum swings the other way.
                          .

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                            #14
                            My bank is a piggy, my insurance is a gun. Totally unrelated diversification!
                            Screw diplomacy...........bring it!

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                              #15
                              I stand with Israel.
                              I don't know.

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