Dollar Stocks here - get em while they are still solvent

[Smazz]

Well,

alot of companies we've had discussions about through this medium, we are now seeing in the $1 range - companys that were trading in the double digits easily.

 

I'll post first:

 

KFS.TO  For Sale by owner (not me :D) $1.67 or best offer! ;D

 

BTW, I do not encourage buying said company.

[Smazz]

Not the $/share category but Damn, WTM taking a beating less than $0.50 / Dollar on the BV

 

http://biz.yahoo.com/e/090227/wtm10-k.html

 

Is anyone else still on to this company?

 

I do not own any shares.

 

White Mountains has taken several steps to protect its capital from further deterioration, including reduced exposure to equities and property catastrophes.

Will be interesting to see what the plans are to generate alternate rev streams.

[ShahKhezri]

Smazz,

 

There are a couple of other threads about some insurance company's out there, once my two weeks notice is effective this Thursday, I hope to shed some light. 

[JAllen]

Are you moving to a new job Shah?  I've always wondered exactly what you do/did and whom you work(ed) for. 

 

Your inside industry comments and insights are always greatly appreciated.

[Partner24]

Smazz,

 

There are a couple of other threads about some insurance company's out there, once my two weeks notice is effective this Thursday, I hope to shed some light. 

 

I'm looking forward with interest to hear you Shah.

 

Cheers!

[Guest misterstockwell]

Smazz,

 

There are a couple of other threads about some insurance company's out there, once my two weeks notice is effective this Thursday, I hope to shed some light. 

 

I'm looking forward with interest to hear you Shah.

 

Cheers!

 

+1

[Smazz]

Smazz,

 

There are a couple of other threads about some insurance company's out there, once my two weeks notice is effective this Thursday, I hope to shed some light. 

 

I'm looking forward with interest to hear you Shah.

 

Cheers!

 

+1

+2 keep us in the loop my brotha!

[Alekbaylee]

Not the $/share category but Damn, WTM taking a beating less than $0.50 / Dollar on the BV

 

http://biz.yahoo.com/e/090227/wtm10-k.html

 

Is anyone else still on to this company?

 

I do not own any shares.

 

White Mountains has taken several steps to protect its capital from further deterioration, including reduced exposure to equities and property catastrophes.

Will be interesting to see what the plans are to generate alternate rev streams.

 

Looks like insiders are buying...

 

As the stock was trading near its 52-week low, Brouillette Yves, Director at White Mountains Insurance Group Ltd (WTM) has reported buying $195.00K today.Over the last four weeks insiders at White Mountains Insurance Group Ltd (WTM) have bought more than $638.26K:

- Barrette Raymond Joseph Rene, Chief Executive Officer: bought $443.27K increasing total holdings by 2%

 

- Brouillette Yves, Director: bought $195.00K increasing total holdings by 187%

 

 

http://www.tradingmarkets.com/.site/news/Stock%20News/2208390/

[ShahKhezri]

Pof,

 

Yes, I am changing careers, it came at a very opportune time when I was interviewing (Oct. 2008).  I was an underwriter at Travelers and now I will be working at Mr. Buffett's favorite bank (and now FFH's). 

 

Now regarding the industry:

 

-I don't know exactly what the solution is to this AIG fiasco, but I think they need to spin off all the operating units (keep the hedge fund side under gov. control) because AIG PnC under gov. control (the cripple Buffett was referring to in his annual letter is undoubtedly AIG) will turn the whole industry in a disaster.  Most CC's that I've read for the 4th quarter all refer to a competitor out there cutting prices 10-20%.  Truth is, we need AIG PnC without gov. guarantees on a stand-alone basis for a healthy PnC atmosphere. 

 

-Based on my count, three company's recorded increase in book value for 2008: FFH, TRV, and HCC.  I would highly encourage people interested on details to read the HCC cc.  Their management is top notch and they have interesting policies aligned with shareholder interests (for example: only buyback shares below book value).  Now TRV is the largest pure PnC company in the United States by market cap, it's a good bet that sometime in the near future TRV will be added to the DOW.  To answer your question Oldye posed in a previous thread, TRV manages their investment portfolio very conservatively.  Jay Fishman, ironically was the right hand man for Sandy Weil, his left hand man was of course Jamie Dimon. 

 

-In previous posts on MSN I was very hesitant to claim "2009 hard market" because the numbers just don't make any sense.  For example, take the largest premium slice of a policy (GL- General Liability), the exposure it is rated and priced at is Gross Receipts or a budget, and if the consumer is suffering (business and personal) you can't pass a premium increase.  I have a friend that writes one of the same lines as a Northbridge sub (long-haul), and there is no way he can price higher.  With that said, the process for a hard market is in the cards, let's just use Property and a GL for a business, now like I stated, you can't price higher, but you can hold price and write better business.  For property, say you had a 1K deductible, to keep that deductible for this year premium would increase, but you can sell it at a flat rate now with a 2.5K deductible.  For GL, you can reduce limits from 2M to 1M to keep flat premium.  I personally did a lot of that most recently.  Increasing property deductible from 1K to 2.5K and decreasing limit on GL from 2M to 1M is better business and certainly affects the loss ratio, this dramatically changes the risk characteristics and profile of your book of business.  You don't go straight from soft to hard in this industry, too many irresponsible competitors.

 

-On the Agency side, just like most businesses, the 80/20 rule is true.  So say Jim & John agency managed 500 accounts, 400 was written with one insurance company, and the other 100 were written with several different insurance company's.  I think the times have changed because the 400 used to be written by AIG.  Another interesting aspect of this transition is that say policy count at a certain company was 80-90% (which is true for most), the new premiums that insurance company's will write will be sticky.  Benefiting the survivors!  One caveat is that AIG PnC needs to be spun off, confidence in the whole industry will be bolstered.  Agency's are spreading risk and going away from the 80/20 rule and spreading more business around to more insurers. 

 

-Regarding WTM, I think you have to make some serious considerations.  They have made a large investment in Esurance and the question to ask here is do you think there could be 3 successful players in this sector with Progressive and Geico?  I just have a hard time grasping that.  I think Geico's moat increases every day and Buffett has stated his plans: we will advertise to death.  I'm not sure I want Geico as a competitor and Progressive is not too shabby.  This had to be one of the reasons Buffett sold off his WTM stake, and the money he received from the divestment probably went straight to Geico advertising.  One more thing, I have no idea what the heck they were doing with One Beacon, last year I kinda went off about it on my blog but for the sake of discussion, when WTM still owned 70-80% of One Beacon (I don't know what the % is now) but they issued a special one time $2 dividend for no reason, I never understood why?  One Beacon actually has some nice niches, my unit competed directly with one of their units, their limits were always higher and were really aggressive.  My boss who hired me left to One Beacon (so there is some sentiment).  Also, I could never understand why they spun off One Beacon in the first place and when they issued the $2 dividend, it really jacked up the capital structure, plus it was taxed to WTM anyways.  Put simply, I'd rather own FFH at .9 Book than WTM at even .5 Book.  I don't think the discount is sufficient for an apples to apples comparison.  They should have took the day off and played golf than divesting and dividends. 

 

I also think arguments on the CR for FFH are somewhat crazy, but I'll comment on that in the proper thread.

 

 

[oec2000]

Shah,

 

Thanks for your insights - most helpful. Look forward to your comments on FFH.

 

oec

[Smazz]

yes Shah thanks for sharing