hasilp89

is this the same reason why: during ZIRP the US Treasury did not issue a huge amounts of 10-30 year debt at abnormally low rates (as every pundit now in hindsight claims they should have done) - basically the market wouldn't have supported it, no one would have bought them?

will save everyone the 17 pages. Is AI a bubble? Maybe.

np, i really enjoyed it as well. had never heard him talk before. think the media / movie / twitter distorted my view of him. more personable than i expected and very thoughtful

https://omny.fm/shows/against-the-rules-with-michael-lewis/michael-burry-speaks

I especially liked the part about living by the golden rule. i also like that Prem made a point to talk about the same thing at the 24 annual meeting. I believe he said they put up a golden rule poster at all their subsidiary offices. the culture runs deep.

I put down some thoughts in the broker thread. similar to @Marco Van Basten a friend in the industry had for a few years commented that he likes the specialty players. When Pat Ryan bought $15M of shares he told me to take another look. The trend has been a move from admitted to E&S - 8% in 2000 to 24% in 2024. To understand if it will continue ask why has it happened. Primarily due to increased risk complexity and severity + limitations of admitted markets based on state by state regulations and limits to rate increase approval. So is the expectation that this changes? Will the world become less complex as it relates to risks that need to be insured (I'd say no). Will the admitted market open up quickly to the emerging risks and higher premiums + more complex underwriting structures in the world (again i'd say no). I'm looking for wholes in the thesis but specialty brokerage appears to have good fundamentals and RYAN is in the middle of it. I also like the MGA part of the business (similar thoughts as to niche risks that need specialist to underwrite) and the general trend of panel consolidation that will benefit large incumbents.

Ryan results out and look pretty good. @dealraker apologies if you have already discussed above but curious on your thoughts for this business. I have a friend who used to work for BRP who turned me on to them and highlighted the $15M purchase by Pat Ryan as significant. (i did not realize he founded AON) It seems the future prospects for they types of insurance they broker (wholesale specialty & E&S) and the potential for their MGA business (recent deals with nationwide and markel) are strong. As the world gets more complex specialty and non-admitted lines will become more prevalent and hard to underwrite - thus the need for specialized talent and MGA's. While retail brokerage is more sticky it doesn't seem as specialized and mostly relationship based (ie. i could start selling car insurance tomorrow) - on the other hand what Ryan/Amwins does is less sticky but more specialized and difficult for me to start doing tomorrow. I like their ability to quickly pivot into niches where prices are firming - this all because of their deep talent pool - that seems to result in a virtuous cycle - best talent wants to go work for them because they have the most opportunity in their niche - clients then flock to Ryan because they have the best underwriters for each risk. I've been thinking more about the MGA business in general - historically ive always been skeptical - why would an insurer want to outsource what could be the most important thing for them - underwriting and pricing the risk. But then i think of parallels in other industries - whether endowments using PE or a hotel developer using 3rd party management - if someone else's expertise in a field is better and they are better able to manage the capital you let them do it (with guardrails) - so the whole MGA thing makes more sense to me now especially on the specialty side and given the increasing complexities of risks. Bit of a ramble - in short its a question of - Is Ryan's business as good as the Retail brokers business? Are it's prospects actually better? Does it warrant the same multiple or a discount? curious on your thoughts.

@Marco Van BastenI just started looking at it today - so no view - just thought the Amrize comparisons where interesting. I believe @Spekulatius has owned it as part of a basket and i saw his question on the recent price jump and later saw that Palliser had taken an activist position and released a presentation. They are the market leader in Japan, but the market has been slowly declining. It seems their US business may have some value but it needs to be unlocked. It seems some Japanese businesses are finding religion when it comes to capital allocation. Still hard for to predict though.

and look at that - palliser pointing out how their US operations are better than Amrize's @Marco Van Basten - have you had a look at this japanese cement co? Edit: presentation is interesting - has a case study of the amrize spin as they recommend the same for calportland.

https://www.businesswire.com/news/home/20251021293730/en/Palliser-Capital-Publishes-Value-Enhancement-Plan-for-Taiheiyo-Cement palliser going activist (edit: likely the price spike on the 21st)

That is very helpful, Thank you!

i hear you - and I'm not panicking - I'm just trying to understand what might / could happen - and maybe trying to understand if i should be also be adding. Nothing new but an important part of investing is to know oneself - I'm younger than a lot of folks on this site and have a lot less experience in drawdowns and certainly the cycles of the insurance industry. One thing i know about myself and it is probably true of most investors is that if they don't understand why something is drawing down they panic -> sell. The wiser ones, who know what they own, understand the noise, they will be that investor that can hold the duration of the BRK chart.

what's the point? That BRK price has gone up in Hard and Soft Markets? Could argue that BRK became more and more valuable as U/W profits declined as a % of total profit?

That makes sense in theory but is there anyway to validate it or is it anecdotal? Reserve releases have increasingly become a greater share of U/W Profit for YTD which is a function of Q1 wildfires. How can you know what amount of reserves can be released? With property pricing coming down (Some additional comments from WRB and RYAN) wouldn't flat premium volumes and a single CAT event push combined ratios above 100? I understand this is all part of the cycle, Short term trends and not a reason to panic (I am not selling shares) but i think some skepticism about the range of near outcomes is warranted. WRB - The reinsurance marketplace, clearly, the property market, particularly property cat, that bloom is off the rose. From our perspective, there's still margin in the business. We'll see how long that lasts. It's without a doubt eroding. And to that end, you can feel the growing groundswell, but frankly, it's palpable around 1/1 and the appetite that's going to be coming from the reinsurance market. So we'll have to see what 1/1 holds. RYAN - We saw a rapid decline in property pricing as the quarter progressed, especially in the month of June. We expect this significantly soft pricing environment to continue at least in the near term, which drives our expectation for property to decline modestly for the full year. Despite this rapid decline in property insurance pricing, flow into the channel remains strong. And we took share, won head-to-head against our competitors and had another quarter of high renewal retention. RYAN - I would just add that our property submission flow remains very strong. Our retention levels are high. But the month of June, the rate deceleration accelerated. Last quarter, we saw a 10% to 20% reductions on average. This quarter, 20% to 30%. So June really accelerated. We're continuing to win head-to-head in the field.

Thanks Crip. Hard to disagree with that and appreciate the thoughtful insight.

Similar to Broker updates WRB call seemed pretty negative on property pricing and E&S. Fairfax is very diversified but is it safe to assume premium growth slowed in Q2? "And that is -- I think the past 90 days is just a continuation of clear evidence that the insurance industry is still a cyclical industry. And for whatever the reason may be, some would say, fear and greed. The industry continues to seemingly make an art out of self-sabotage when it comes to its own success."

pretty sure you can open a wells brokerage put $100 in and get access. same with BAML and JPM (through chase).

thank you!

Apologies if it has already been mentioned somewhere but is there a railroad history book (similar to Yergin's The Prize) that anyone would recommend.

@Spekulatiushave you looked at TBBB. Checks all the boxes for me except for valuation - not against paying up for quality, but still struggling.

3i - action tbbb

Thanks Spek, missed this on Friday. Worthy of an addition to your Japan basket? Hope you are surviving the CLT heat!

@Spekulatius any chance you've heard of this company. not sure if you've come across them in your day to day work.

Curious what your thesis is? (I've owned it for a while and am still long)

@Marco Van Basten his 2024 letter says 10.8% since inception but it doesn't provide further details.