Myth465

:( why's that? it's certainly speculative, but it's still asymmetrical. if the market misprices risk, it could pay off, especially with leaps. BECAUSE ITS A COMPLETE FRAUD!!!!! THERE IS NO LEVEL THAT IT WOULD BE A BUY AT!!!!!!!!! There is no real underlying business, no real profits! And the fact that you could suggest wanting to buy leaps after all of this, at any level, makes me sad as a result. Lol I understand the sad face now. :-[

All things equal, it would have to be cheaper than that for me to be interested... get it to 1/2 of what it's trading at, and I would prolly buy a bunch. Same here, I mean we have to account for the Management discount it deserves.

For me I will buy what ever gets killed un-rationally. Right now most of my stocks are down, but nothing out of the ordinary except for ALS. The oil side of things is down quite a bit but thats understandable. Whats funny is the 1 thing I do want is up. Leaps on FTR lol. I want it at a 10% yield and it was almost there but is up 1% today. DCG - I dont know. I think everyone is overreacting, but I wouldnt want to be in Toyko right now. If even 10% of what is being reported is possible or potential then ....

Hell the bottom just feel out of the US markets.

Exactly. You seem rather dismissive of any point raised. I think we just have to wait and see. Only time will tell. Eventually there will be an I told you so and a huge capital gain or capital loss. Prehaps, but there is no margin of safety here, just the suspension of critical thinking, replaced by wishful thinking that, like a prisoner on trial, the company is innocent until proved guilty, even though observed at the scene of the crime, performing the same actions as others who have already been convicted. This isn't a trial. This is like Buffett's no called strikes baseball game. Why would any batter concerned with having a good average even think about swinging at a pitch that looks like it could be a wicked screwball? This is the proper lesson inmo.

Thats nuts and we are still having Nuclear debates. Lets face it the Japanese are the most prepared people on the planet. If they cant handle it then we are nuts to try it. This gets about 5 times worse each day it seems. As far as I can see the market drops are warranted. Today I watched a 45 minute program on Japan and the nuclear disaster. A US ship 100 miles off the coast, moved away due to high radiation levels. In this 45 minute program no one mentioned the fact that Tokyo could be affected. I think we will sell off a bit as well. This is the third largest economy in the world basically taking a huge hit.

Most of my holdings outside of oil and gas. LRE, ATSG, and a few others come to mind. I think the beauty of Buffett is he is allocating the capital. He can continue to reinvest the funds from even mediocre or mundane businesses.

Out of curiosity, why do you think AHL deserve it? Well they had some exposure to New Zealand 1 and I was surprised they didnt sell off during New Zealand 2. They basically didnt move when I would venture to guess they would have additional exposure. I dont know about Japan, but based on the NZ earthquakes I would say they have exposure here. They are off about 7% points with other insurers being off a bit less. It makes sense to me. Basically I think a small sell off from the second quake in NZ was warranted. As you can see my reply is less than scientific :). I also didnt like that they had to come back and raise the reserves for the first quake. I could be wrong. It looks like its 1 big customer, but I dont know. Insurance is funny, you never know till you know and as a prior poster said by then its too late. http://seekingalpha.com/news-article/251716-aspen-insurance-raises-estimated-new-zealand-quake-losses tombgrt - I agree on Toyko. I also keep in mind that Katrina was no where near the perfect storm. Its all modeling, but now its check writing time. Who has the cash?

Here is some color hpmst3. The 100 year event. Typically means a 1 in 100 year storm, or a 1 in 250 year storm. Basically a storm so bad it would only occur 1 in xx amount of years. The question is what year event is this 1 in 50, 75, 100, or 250? Also what city / location? Finally what about both, is that 1 event or both events, or .... ? Do we add the totals together, does that include nuclear or disaster, what about reinsurance? We could go on for weeks. http://en.wikipedia.org/wiki/Return_period Return period as "expected frequency" The theoretical return period is the inverse of the probability that the event will be exceeded in any one year. For example, a 10-year flood has a 1 / 10 = 0.1 or 10% chance of being exceeded in any one year and a 50-year flood has a 0.02 or 2% chance of being exceeded in any one year. While it is true that a 10-year event will occur, on average, once every 10 years and that a 100-year event is so large that we expect it only to occur every 100 years, this is only a statistical statement: the expected number of 100-year events in an n year period is n/100, in the sense of expected value. Similarly, the expected time until another 100-year event is 100 years, and if in a given year or years the event does not occur, the expected time until it occurs remains 100 years, with this "100 years" resetting each time. It does not mean that 100-year floods will happen regularly, every 100 years, despite the connotations of the name "return period": in any given 100-year period, a 100-year storm may occur once, twice, more, or not at all, and each outcome has a probability that can be computed as below. Note also that the estimated return period below is a statistic: it is computed from a set of data (the observations), as distinct from the theoretical value in an idealized distribution. One does not actually know that a certain magnitude or greater happens with 1% probability, only that it has been observed exactly once in 100 years. This distinction is significant because there are few observations of rare events: for instance if observations go back 400 years, the most extreme event (a 400-year event by the statistical definition) may later be classed, on longer observation, as a 200-year event (if a comparable event immediately occurs) or a 500-year event (if no comparable event occurs for 100 years). Further, one cannot determine the size of a 1,000-year event based on such records alone, but instead must use a statistical model to predict the magnitude of such an (unobserved) event.

Your post made me laugh out loud - I think it was Bargain Value Hunter who posted FSR. I dont know them, and they are getting killed, but I think similar to AHL they may deserve it. Its probably a bit overboard, but I would be speculating by saying it definitely is. I definitely agree with you. Why go down with the ship when you arent on it. I will wait to see if she floats, then jump on board when the news crews come to film the rescue. Less ballsy but I save my 9 lives, and sleep better. If anyone goes in my advice is go in tiny using leaps or long dated options. Every body seems to agree insurance is a black box and a bet on Management.

MOI I think you should toot your horn. That was a great call.

As I mentioned in an earlier post - i believe the companies dont even know what the liabilities will be - not at this point. Go back and look at most of the Katrina estimates - way off. Thats true but its the best you are going to get in terms of a starting point. We arent going to know much at all. Take the estimate and discount it as much as you like. I would also guess some insurers are better then others, depending on if they have cap limits and reinsurance. I think some can accurately give you a maximum exposure number depending on how the policies are setup. My experience has been the stocks will get pummeled.. the estimates will come out - the stocks get pummelled - the real numbers come out - the stocks get pummelled. All the info is now there and they dont move for a while because for whatever reason Insurance Cos dont accelerate quickly after a closer number has come out. I have profited with this method but doesnt mean it works for everyone - especiallly if you dont have the patience. LOL I am afraid you are correct and will follow your lead. Just let us know when you start buying ;D. I have my names picked out - LRE, FFH, and perhaps AHL if they go significantly below an conservative current book value number. Just have to wait to see what happens. hpmst3 - I believe you are on the right path, but feel like no one really knows the answer to your question. Thanks for the info though, its helpful because I own LRE. Those numbers could have been put togteher under any variety of scenarios. I would guess those numbers are for Toyko being hit. They probably dont include Nuclear or who knows. As a LRE and FFH shareholder, I am of the opinion this too shall pass. Would have been nice not to hold at all and to be able to buy now, but I dont plan on selling to rebuy later (though I would have sold AHL if I hadnt 2 weeks ago). I will pickup shares if either sell off significantly and will look at any insurer which seems to be getting punished a bit more than warranted. From what I have seen Smazz is right though. Things get killed for a few weeks and you can usually buy when its clear from 5% - 10% off the bottom. All types of things are rallying (LNG related stocks or construction, and are getting killed Hitachi) best to just wait and watch. LRE will make up for this loss if they survive and I am sure they will survive. DWH was highly profitable for me and them, and hopefully this will be as well. With that said, it sucks to talk finance when people are truly suffering. Also thanks to whoever posted that blog post from that Engineer. It was very helpful to see what it looks like on the ground without the sensationalism.

I hate to say it, but ok I wont say it. Instead I would like to quote one of our great presidents. GW Bush - Fool me once, shame on — shame on you. Fool me — you can't get fooled again. Some how I seem to understand where he is coming from. Was anyone holding shares?

As I mentioned in an earlier post - i believe the companies dont even know what the liabilities will be - not at this point. Go back and look at most of the Katrina estimates - way off. Thats true but its the best you are going to get in terms of a starting point. We arent going to know much at all. Take the estimate and discount it as much as you like. I would also guess some insurers are better then others, depending on if they have cap limits and reinsurance. I think some can accurately give you a maximum exposure number depending on how the policies are setup.

I would guess only those inside the company know what the real numbers are. I think we will find out in a few days.

You think both have very little exposure? Considering their speciality underwriting I wouldn't think their share in the claims will be that big, but who really knows? And FFH? Their marketcap in premiums for Asia is still very small compared to their other markets and is especially located in Singapore/Hong Kong/India (?) ? I have no ideal. They and Aspen and every other insurer should be issuing updates throughout the week. LRE know the exposure to DWH was $25 million and I am sure has a decent idea of what this will cost. AHL will probably get killed and deserves it. New Zealand 1 was a decent size lost and we have already had NZ 2, plus Japan.

My focus will be babies thrown out with the bath water traded on US exchanges. Right now its insurance. I want no part of this Japan mess, but would love to pickup something of high quality being sold off for no good reason. I am awaiting an update from LRE and FFH and hope both sell off.

It is when you take into account his prior letters and attacks on management teams.

BP was picking up pennies in front of a bulldozer. I mean you dont always get hit by the bulldozer. If that well was still spewing BP would be toast. But you are right, it worked out well. But worked out better for those who bought unimpaired and uninvolved oil and gas holdings ;D, and worked out best for those that bought leaps on these names. Im not saying dont buy insurance. I am saying dont buy the one with the most exposure to a large cat event. Auctually do whatever you want, I am saying I wont buy ......... :)

And the moment we have all been waiting for .... The real question is who is still holding shares - short or long?

Where is the opportunity. Looks like the decline in insurers is warranted considering New Zealand, Japan, and a pending Tsunami which effects have not been quantified. I mean there is a reactor offline due to coolant issues. Sounds like picking up pennies in front of a ..... I will wait till the dust settles unless I can find an insurer with no exposure which has been thrown out with the bath water.

I haven't actually lived through (well, I was alive, but not paying attention) an insurance cycle going from soft to hard. What does it usually look like, and how long does it take before the insurers that are disciplined can take advantage of the hard cycle? I havent either auctually. I would assume whatever causes the markets to fall (either massive investment larges or large cats) will also take down share prices and book value. One can get in at the lower book value, and profit from the market hardening. My assumption, may not match reality. I just dont see insurance stocks rallying on stock / bond losses or large cats.

This is why I dont own much FFH or Insurance. Plenty of time to buy when the market hardens.

Thanks again for the warning. Just wise I sold a bit more lol.