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  2. Added DFH. Think there was some forced selling by BOMN to fund their SPAC deal.
  3. Kamesh Goyal is estimating they can get to an annualised run-rate of 6,500 crore (approx US$850 mil) in GWP by Oct-22 & expects to cross the 2% market share. Looks like they grew approx 4x faster than the rest of the industry in 1H FY22 https://economictimes.indiatimes.com/industry/banking/finance/insure/digit-insurance-eyes-rs-6500-cr-in-premia-sales-by-october-2022/articleshow/87081261.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst Fairfax-promoted Digit Insurance is confident of taking its premia sales to over Rs 6,500 crore when it completes five years of operations in the next October, a top official of the Bengaluru-based general insurer has said. While the industry grew 16-17 per cent in the first half, Digit has grown over 67 per cent to Rs 2,196 crore, driven primarily by the health segment, Goyal said. "Going by the company's faster growth rate so far at close to Rs 2,200 crore in premia sales in the first half of FY22, we will easily cross the FY21's Rs 3,243 crore with a minor profit which was crimped by the pandemic claims," Goyal said. He added that given a high base, "I hope to scale past Rs 6,500 crore with premia sales by the time we enter the sixth year of operation next October". Goyal expects to cross the two per cent market share by then, from the current 1.68 per cent of the over Rs 2.2 lakh crore as of June 2021.
  4. Today
  5. Theres also the fact that institutions, being the smart money, did what smart money typically does...they effectively missed both industrial and MF. Especially foreign money. The move up in the past few years really just got the appetite going. If you asked a European investment firm what they knew about US MF housing 5 years ago they'd scratch their heads. A lot of that is cultural. Nonetheless, when its likely the safest amongst the safe RE type investments you can make, and inflation protected, you better believe a long, hard rerate is coming. Except....there's really not much supply. These morons will be paying up, for a long time.
  6. I highly recommend this book to anyone remotely interested in PE. Hooke destroys the BS being peddled by the industry; that PE earns earns outsize returns (relative to public equity) while taking less risk. https://www.amazon.com/Myth-Private-Equity-Transformative-Investments-ebook/dp/B08ZJXHWM7/ref=sr_1_1?dchild=1&keywords=jeffrey+hooke&qid=1634584438&sr=8-1
  7. Uhgg. This is very applicable to investing, message boards and use of social media. Kahneman also talks bout this in his book, that's why I am posting this here: https://www.pnas.org/content/108/22/9020 Social groups can be remarkably smart and knowledgeable when their averaged judgements are compared with the judgements of individuals. Already Galton [Galton F (1907) Nature 75:7] found evidence that the median estimate of a group can be more accurate than estimates of experts. This wisdom of crowd effect was recently supported by examples from stock markets, political elections, and quiz shows [Surowiecki J (2004) The Wisdom of Crowds]. In contrast, we demonstrate by experimental evidence (N = 144) that even mild social influence can undermine the wisdom of crowd effect in simple estimation tasks. In the experiment, subjects could reconsider their response to factual questions after having received average or full information of the responses of other subjects.
  8. Yes a tremendous amount of capital has been redirected into rentals, but think about the displacement created by the Fed's balance sheet. They displaced trillions of dollars of institutional capital and I don't know anyone who genuinely feels they will actually unwind their balance sheet. We are clearly in a housing deficit today. Maybe we have an oversupply in the future but that's likely many years away.
  9. I dont think being super bullish in 2013 was the right move. The housing market really didnt do anything until 2020. The institutions can underwrite whatever they want but theres a very fixed supply of existing MF and SF housing and massive constraints for a long time until that can be built out. Best case if you start today is ~2-3 years assuming you have a great contractor and elite leasing team. Thats all that matters if you're in an area that people want to be. Ive got equal concerns about all the office overhanging NYC type markets being converted to MF as well...but whats that gonna take? 5-10 years to build?
  10. I recently came across Ivy Zelman, who seems to be a well-respected housing market analyst. I think she made some good calls back in 2006 and 2013, as evidenced by the above video. Lately, there are lots of uniformed optimism for residential housing (including multi-family) in the market and this board so it's interesting to hear a contrarian view. There are a lot of videos on YT but the one I watched is Her general thesis: Tremendous amount of institutional capital has been raised to be deployed into SFH build-to-rent and multifamily markets (she specifically called out the Phoenix market). Much optimism has been built into the underwriting process such as the ability to raise rent. Couple that with the slowest household formation in the past decade, we will be looking at an oversupply and not a housing deficit. This will lead to many dissappointed investors who are expecting double digit lever returns.
  11. Tidefall Q3 Letter...RE: Fairfax https://tidefall.substack.com/p/q3-2021-letter
  12. Yes, she acknowledges we're constrained by real resources (I said that in my initial post, but upon rereading it, it's not clear that I'm summarizing what she's saying, rather than my own view). But in my view the back half of the book that talks about all the various programs that Prof. Kelton believes ought to be financed doesn't actually grapple with that constraint. Specifically, she does not explain why she believes the US has sufficient untapped real resources of the necessary kind that it can accomplish all that she claims it can without significant inflation. Quite left-leaning economists have tried to point this out, and I have not seen a direct response from Prof. Kelton or other MMTers. For example, see, e.g., Palley, Macroeconomics v. modern monetary theory: Some unpleasant Keynesian arithmetic and monetary dynamics, in Modern Monetary Theory and its Critics (2020) (Fullbrook & Morgan, eds.) From another review, here's a more eloquent way of saying what I'm getting at: "It is indeed correct to say that when the government is bidding for resources, the risk of inflation is low if those resources are idle. It is also correct that unemployment is an indication of idle resources. But just because some resources are idle does not mean that the government can spend wherever it would like without affecting prices. The government would have to be an especially perspicacious and adroit entrepreneur to advance its priorities while only using idle resources. Kelton does not explain why she believes that those currently without jobs would be a good match for her spending priorities. But without the ability to wave a magic wand to instantly transform the unemployed into teachers, skilled health care workers, and engineers specializing in energy alternatives, more spending in these areas would compete for scarce workers rather than soak up idle ones." Kling, Deficits -- Budgetary and Conceptual, available at https://lawliberty.org/book-review/deficits-budgetary-and-conceptual/ The point is necessarily context dependent. If we had Great Depression-like 25% unemployment, this point would have much less force.
  13. I'm not disputing that it sure seems like GSEs can be treated however the hell any POTUS wants, but securities laws would require any open market purchase program or tender to be announced in advance. Which means the prices wouldn't stay anywhere near 6% of par after such an announcement. All that said, I don't think financial engineering to maximize equity value is part of the plan here.
  14. Yes, I'm also a fan of Damodaran's treatment of the subject. Just in case readers are not aware, Damodaran used to recommend proactively adding leases to liabilities because they weren't typically present on the balance sheet. However, since 2019 operating leases are on the balance sheet (along w/ a corresponding asset for right-of-use). See ASC 842. I presume Damodaran has changed his treatment of leases somewhat since that time. And yes the idea of applying these adjustments to historical statements is interesting since we have the benefit of hindsight.
  15. A few cases of Eagle Rare 10 year. Preparing for the impending bourbon crisis.
  16. Every time I think of anything around Tesla I think of Munger's quote.
  17. Great Book. Haven't finished it yet but ripping through it pretty fast. Really enjoy it and has really explained MMT well. @KJP - Thanks for putting the book on my radar. Re your comment - This part of the book is hard to take too seriously because it’s never squared with the fundamental point that we’re always limited by our real resources. She addressed this constraint in the introduction.....literally on the second page of the book. See exert below. I don't agree with your assessment that she hasn't made clear that we are limited by our real resources. She did in the beginning of the book and makes references to this throughout the book as well. Do I believe the solution to all our problems is to simply spend more money? No, of course not. Just because there are no financial constraints on the federal budget doesn’t mean there aren’t real limits to what the government can (and should) do. Every economy has its own internal speed limit, regulated by the availability of our real productive resources—the state of technology and the quantity and quality of its land, workers, factories, machines, and other materials. If the government tries to spend too much into an economy that’s already running at full speed, inflation will accelerate. There are limits. However, the limits are not in our government’s ability to spend money, or in the deficit, but in inflationary pressures and resources within the real economy. MMT distinguishes the real limits from delusional and unnecessary self-imposed constraints.
  18. My original post on it was actually a comment not a question and I wasn't looking for a debate on whether it was actually happening because I don't think it is. But your comment raises an interesting point which is your assertion that the GSEs are constrained from taking certain actions. I view the GSEs as de facto extensions of the Biden administration given the SCOTUS ruling, and view them as very unconstrained given the SCOTUS ruling. I see any action or inaction as more of a willful choice of the administration, rather than lawful constraints. Perhaps I'm wrong about that. But who would stop the administration from doing whatever the hell they want?
  19. thanks nwoodman re Digit capital raise Q. How is your solvency ratio looking like? It was 180 as of June 30. After the approval of the recent capital raise I would expect it to be more than 300 by December 31. It will be one of the highest in the industry. Hoping the approval should come sometime this month and we will close the transaction within thirty days. from Q2 2021 results as previously reported, upon closing of the Digit Insurance equity issuance in the third quarter, and upon final approval by the Indian government of its previously announced intention to increase foreign ownership limits, we anticipate recording an additional gain of approximately $1.4 billion or $46 in book value per basic share.
  20. Yesterday
  21. How many of you folks have seen this? lol...I mean the first rule when you find yourself in a hole is to stop digging...and his responses afterwards on twitter are 100% cringe...especially the fact he got someone to film him in his lambo giving a middle finger to his "trolls".
  22. I'll have to check again but I thought he divided SG&A & M&A in half... For his Intel example. Considered that was the cost of running the business & rest was for growth. What if the entire industry is non profitable? So you really need to understand the industry to guess the margins? Any books you would recommend?
  23. ...which is now closed. Cheers! https://finance.yahoo.com/news/big-short-investor-burry-says-215758318.html
  24. Interesting article. It resonates with some of the ideas that Prof Damodaran preaches. He has got a few more up his sleeve such as treatment of long term leases on property and treatment of R&D as a capex and the adjustments necessary to do so. Recognition of these ideas would have been very useful in valuation during early years of Amazon as its value was hidden behind the apparent close to zero net income.
  25. Never Been A More Exciting Time To Be In General Insurance, Says Digit Insurance’s Goyal (moneycontrol.com) - OCTOBER 15, 2021 A few key quotes: Q. From Digit’s perspective, how has the journey been so far? "Our customer ratings substantially improved on the back of digital and self-service processes and subsequent investments have gone here. Last year, we saw growth of 44 percent. In the current year, as the second wave hit, many players had stopped underwriting Covid-19 health insurance but we continued to do that and other business lines also saw a good amount of growth. So far, the first half has been good and growth has been almost 67 percent." Q. How is your solvency ratio looking like? "It was 180 as of June 30. After the approval of the recent capital raise I would expect it to be more than 300 by December 31. It will be one of the highest in the industry. Hoping the approval should come sometime this month and we will close the transaction within thirty days." Q. Any plans on listing? "Do we want to list? Yes. When? We don’t know at this stage. This is something we always thought that we wanted to be a listed company and have completed four years, we have raised a recent capital round. We will see where we are in 6-12 months’ time."
  26. From my hazy recollection, Greenwald suggested dividing the increase in sales by the increase in gross PP&E, right? To calculate some sort of incremental asset turnover ratio? There's an interesting idea in there to connect an output like sales or earnings to invested capital. And you could treat some SG&A as investment if you want. A more general approach is just to look further up the income statement and make estimates based on industry norms. i.e. go from net income to EBIT to EBITDA to gross profit to sales to users until you find a positive number. Then work in reverse making estimates to arrive at a potential future FCF figure.
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