dealraker

Gotta watch macro forcasting...'casue if you get one right you'll spend the rest of your life trying to repeat that experience.

Don't get me wrong, I love Parsad's topic and the discussions!

LOL. Read Acres of Diamonds, not that you need to because you don't! But because the book is tiny with very few pages. But oh my is it so revealing of human nature and insight.

Greg you can tell that I missed parents telling me stories when young, thus I... LOL, tell stories!

Back and forth we sway like braches in a storm. I've watched storms before, 20% prime rates in the early 1980's "whip inflation now" era - when "stuff" like stocks were worthless - right on through years and more years of interest rates falling so low that things like crypto and SAAS stocks at 80 times sales became the norm. And of course the living genius arrived with an electric car and rich man fireworks (rockets) via inflated stock free play. Amazingly, to top it off with gusto, Cathie came along and stood on the shoulders of this euphoric bunch shouting "GENIUS SAYS MORE!" Something new; clear view. Right on cue; too few. It's a zoo; scary too. What ya gunna do? I'll follow you. "They say" that William the Conqueror killed most of the steadfast courageous English nobility at the Battle of Hastings. The result was that hundreds of years of nobility 'watch-then-join the winning side' evolved topped off by the Stanley's behavior at Heny VII's improbable Bosworth Field victory. But always remember the great majority of English had nothing to do with these battles, they just heard about them or watched from a distance. Anyway, as I ramble without a cause here my worthless wild ass guess is that those looking for a market plummet may be looking too close given that it seems from what I hear the chant is "recession but 2nd half is good" and whatnot. What's "the market" looking at? I surely don't know.

SD interesting post. I'll simply say you may not understand.

Doo as I read this in my reading nook overlooking the lake I turn 90 degrees and my eyes go just past my 1978 Brascan (Brookfield) stock certificate and there it was...Russell H. Conwell's book: Acres of Diamonds!

I enjoy these posts. I've spent nearly 30 years trying to get someone, anyone, to discuss insurance brokers without success. This thread got started without me! Life is truly great these days! By the mid 1990's I had all the brokers in my porfolio and I did buy some BRP when for some reason it tanked below $17 or something like that...I simply logged on and saw that and bought a little...without a clue about what was happening. But anyway, I've not bought personally a dollar more since the 1990's. If I had just bought the brokers I'd have about three times as much money! Ha! I don't need money but I do laugh. The phrase "While you look all around far and wide--- most often the diamonds are under your feet." LOL, me...the royal dumbass of all time.

RedLion I'll reply that this question is very likely better answered by someone other than me. As you prob are aware I've owned AJG for about 30, but the Lexington Investors Club bought it at $34 or so in 2012 and along the way several members of my club asked, "Is it a buy near $50?" and I was hesitant to reply as the PE was about 20 and price to FCF about 17 or so. The club sold at $90 in 2020 I voted against and one other did also. But anyway the lone disenter other than me is a CPA who sort of obsesses over out-of-the-mass-focus growth stocks and he said "buy-buy-buy" and I just said, "Well...maybe so but..." In any event I obviously know less than the market so surely I'm not the person to speak up. That's why I'm not a seller much on anything.

Not referring to those posting here, but crypto enthusiasts are like medival Scottland clans in that they'd much rather war between themselves than battle outsiders. Only religion gets more intense debate.

Crypto is a very simplistic model of ongoing wealth tranfer between people who value their efforts and outcome in traditional dollar bills. No two people on earth have the same views as to crypto; everybody is allowed to make up the story they want or the story that serves them best in their effort to claim dollars or dollar value. Crypto has and will always fail in dollars.

Interesting perception, likely somewhat accurate. Beginning about 3 years ago and buying until about 1 year ago I put 5% of what I got overall into energy and don't plan to sell. I put it in based on energy market cap to total market cap. I think there is a good chance, but of course it is a wild-ass seat of the pant guess, that his 5% of my whatnot mess of energy stuff literally outperforms all my other "categories" over the next 20 or so. Of course I'm the same guy who got his posts deleted and kicked off the MF Berkshire board a year ago by very pleasantly suggesting that Buffett was correct on buying OXY and not TSLA, FB and GOOG (FB was $225-$250 and GOOG $120-$140). So getting agreement ain't what happens. I did enjoy the "off topic" notifications from the MF Berk board moderators...you know the stretch to think OXY was relevant was a long one. Being silly of course as to any prediction----- because I REALLY-REALLY don't have a clue.

There's complexity in insurance and the brokers/agents that can run circles around even the most active and knowledagle minds. Near 50 years ago Buffett's quote that the insurance broker business was better than the underwriting one, that he made an error not going into the broker side---- was quite simplistic. In the end, or at least until today, the broker business holds up well and has probably proved once again how basically brilliant Warren Buffett is. Today the stocks aren't cheap, generally aren't cheap, and deciding what to invest in isn't an easy one. With experience my view is, and that mention of experience is really nothing but time along with a lessening of ability to keep up, I'd suggest investing in the industry in liew of attempting to decide which will do what or which - or which one will "outperform" the others and Mr. Market and such. My guess is that if you attempt that endeavor it has a greater chance of failure than success...and that would be the case even if you are an expert in the industry. Spitzer's lawsuits as to contingent commissions routed the stocks to bargains in the early 2000's, but even if you bought just before that blistering you'd still have done incredibly well. Here's a typical outcome from what I've watched: My investment club bought Brown (may have still been Poe and Brown) and Brown sometime - can't put a finger exactly on it We were propositioned to sell Brown and buy Cisco, and the vote "won out" by a tiny fraction in the club. We've made about 3 times our money in cisco since then including dividends. That's about the time (I've owned Brown a few years longer) my brother-in-law asked me to make an investment for him (just for the hell of it, he's rich, and was undecided) and I went all Brown as the stock was cheap-cheap-cheap. Bro-in-law's made about 25 times his $. That was a surprise of course given my basis was "don't lose money", but not too much off the average of all of the brokers since then. Cisco was the Tesla-of-today - of that day and time (era). Where do we go from here? Will the busines get interrupted or massive competing capital? Which "one" or which category of these will do best? Who the heck knows? Again, as I've mentioned so many times, the most successful investors I know do not overthink valuation, there's more of a sustained committment model in their formula.

Ha!.... boilermaker75...the price ended up not falling much so my bid won't go through. Maybe later in the day.

Old dealraker's view: Here in the US we did pretty good with the Covid thingy...and still are. I live in a place where only 30% got a vax, some unexpected deaths and blistered lungs that now require 24/7 O for life came about. But in the end, given this NEW NEW THING pushed our existing (or lack thereof) models, we did fairly well with it. This upcoming economic event, the one change repeatedly gives a detailed precise certainty to...and then Greg says, "Well, maybe not..."? I have one observation: It is by far, by leaps and bounds, the most predicted inflation/recession market plunge of all my lifetime. We shall see.

Bruce was incredibly insightful back in the early 90's up until about 2005. He temporarily blew a fuse! It was really bad. But he has been a huge eye opener for me.

Bottoms? Sling out a number, you'll get more reward and attention for being the lowest of the predictors. When stuff is falling we obsess over overall market bottom numbers...and when things are going up we obsess over individual stocks. In the long run you won't remember any of either. Successful investing involves neither of those things.

And as I've mentioned before, for at least ten years now I've been brought to the realization that Well coverage of the insurance brokers has simply been downright superb. That has been quite the surprise to me. There's much more but it it posted such that I can't forward it. Summary: Wells is still most positive on AJG; second is AON; then MMC, WTW, and BRO. They are positive on BRP and its valuation.

Stock Rank Order Exhibit 3 - Insurance Coverage: Stock Rank Order Summary AJG Insurance Broker 7 5 Down Will see a meaningful expansion in geographic exposure from its acquisition of Willis Re, seeing strong organic revenue growth, and continuing to find good bolt-on acquisitions. MMC Insurance Broker 9 6 Down In 2023 MMC should continue to benefit from the new employees they have hired, which should be additive to its organic revenue growth. RYAN Insurance Broker 10 14 Up Upgraded to Overweight from Equal Weight. RYAN should show double-digit organic revenue growth, with margins coming in around 30%, and revenue being aided by a small amount of incremental M&A. BRP Insurance Broker 14 13 Down BRP is unique among the publically traded brokers by giving investor access to a smaller cap company that also happens to be outgrowing its insurance broker peers. AON Insurance Broker 16 17 Up AON has a large account and global presence, and is seeing strong organic revenue growth, and continues to expand its margins. The company has also said that they could add to their leverage as they look to continue to return capital to shareholders. BRO Insurance Broker 17 18 Up Given its lack of an expense management program, BRO could see margins contract more versus peers. BRO is also bringing on larger international deals, which should carry integration risk and greater exposure to FX. WTW Insurance Broker 18 19 Up WTW's organic revenue growth is expected to continue to lag peers at least through the remainder of the years. We think the concerns surrounding its organic growth trajectory, outweigh the low valuation of the shares.

Further Insurance Brokers — Business Mix Should Be A Focal Point In 2023 Business mix will matter more than ever. In our view, the focus on insurance brokers will remain organic growth and margin expansion, and we feel that key determinants in 2023 will be business mix, especially to the high-margin, high-growth reinsurance brokerage segment, as well as companies' ability to benefit from higher levels of fiduciary income. Our top picks in the sector are AJG and MMC. • AJG has guided to 2023 Brokerage organic growth in the 7-9% range (versus the above 9% they are expecting this year), which we expect should be bolstered by the company's presence in the reinsurance brokerage business (AJG has typically guided conservatively and been able to beat the guidance that they have laid out). AJG should be able to bolster its organic growth with continued bolt-on acquisitions and grow its EBITDA. The company should also be able to continue to finance acquisitions as they have ~$4 billion of capacity for transactions. • MMC should also continue to post mid-to-high single-digit organic growth aided by their reinsurance brokerage business (MMC is the second-largest reinsurance broker). MMC should also receive the largest benefit from fiduciary income among our coverage companies. As such, we expect the company to expand margins at a pace that is in-line or above peers in 2023. Additionally, MMC has ample capital flexibility, and we expect the company to return a sizable amount to shareholders in 2023 (we are forecasting capital return at ~4% of its market cap next year). • RYAN should post double-digit organic revenue growth while maintaining margins above 30%. While the company screens high on an EV/EBITDA basis, we believe that is reflective of the high organic growth and margins it is seeing. While the company is facing headwinds from lines such as public company D&O, it stands to benefit from exposure to the property market, which is multiples of its D&O book in size. The company also has ample cash on hand to complete strategic acquisitions. The stock pulled back meaningfully after Q3 earnings due to a guide down in Q4 organic as well as management commentary around potential headwinds, but we feel this presents a buying opportunity, given the company's strong underlying fundamentals and its ability to participate in a hardening specialty lines market in 2023.

Some Wells from today as promised (as I cut and paste pieces relevant): Insurance Brokers: the year of the reinsurance broker. We believe a big differentiator for insurance brokers will be their presence in the reinsurance market as that is where we expect the strongest rate increases next year. As reinsurance rates rise at 1/1, this should lead to outsized growth at reinsurance brokers, of which AON, AJG and MMC are the market leaders. RYAN could also benefit from its presence in the E&S market as property rates harden post Hurricane Ian.

Thanks Spek.

Like the episode in 1969 when I went to Joe's Beach where not one of 200 people believed in the moon landing... the huge belief today as to what is real and what isn't, Cathie type promotion/success/faceplanting has been around intermittently for all time. Back in the 1990's a two time bank robber (yes true) became Wall Street's high tech guru, with both a newsletter and mutual fund. CNBC once a week.., and more. He claimed 5 times his money in x period and then... ...in the end investors in his fund got 10% of their original capital back. He, like Cathie, stood fast on his "picks" ... then, just as Cathie did and does, began to promote/bail/swap/promote/bail/swap and so forth. Life is great...if you can stand it! Here's a brief on Michael Murphy: https://money.cnn.com/magazines/moneymag/moneymag_archive/2000/10/15/289518/index.htm

Agree.

Spooky Parsad has bought some of the big tech, you may get him to clarifly what, he may have already done that a while back. I have $ in Google and Meta but I'm done with those as to adding. And things like Microsoft don't interest me whatsoever. I'm anti-cloud focused all the way at this point, to me the theme has the entire world chasing it endlessly. The asset managers are obsessed upon too. I like homebuilding and banks, but these aren't continual performers of course...they aren't the sustainable types. But Joe may be. Joe is exceptionally stimulating to me these days. I'm trying to read some each day about Joe and let it add up. I began following Bruce Berkowitz by early 1991 when he worked for Smith Barney and was chanting up the value stuff big time. I was an original investor in his mutual fund (the only fund I ever bought) and got a 3x outcome. But his foray into stuff, particularly his hiring of his bro-in-law and the ponytail...then his multi-swapping of stocks...AIG and such, lost me and I got out. But we all stray and I think Bruce with Joe may be on to the game again. Rambling. I'll add to all the exchanges and rails should time and price come around. Then those insurance brokers are always out there and continually messing with my limits of belief- to prove me dead wrong yet again!