Guest Bronco Posted July 7, 2010 Share Posted July 7, 2010 Vinod - well maybe the best thing you can hope for is for me to sell my Loews stake. Then it is bound to go up. What I really like about Loews right now is Tisch & Co. have no problem holding $3B because they can sleep at night. That reminds me of Buffett. And that is your biggest margin of safety - since that $3B can be used to weather all the storms that have happened and may happen again. I think CNA could surprise a lot of people - interest income is low but I think the write-offs from 2 years back are mostly over (knock on wood). That is why my "cheap" insurance play is CNA through Loews ownership. The only thing that sucks right now is DO and its huge dividend. My fear is that this will get cut severely, at least for the next 6 months. But we'll see. I am in for the long-term, and am extremely patient. Link to comment Share on other sites More sharing options...
Myth465 Posted July 7, 2010 Share Posted July 7, 2010 I would be fine with a div cut. I would like them to do something strategic and they are building up cash so we may see something soon. DO should buyback stock or buy assets in the drilling space. Link to comment Share on other sites More sharing options...
Guest Bronco Posted July 7, 2010 Share Posted July 7, 2010 Myth - I partially agree, but my fear is the stock (DO) gets pounded. I am getting too old for this man. My heart can't take all this. Pipelines getting shut down. AIG preferred stock getting written to zero by the government but the common survives. Now an oil spill. Enough already. I am somewhat kidding, but you get my gist. I am waiting for the stars to align with this stock...still waiting. Link to comment Share on other sites More sharing options...
Myth465 Posted July 7, 2010 Share Posted July 7, 2010 Lol I would say they are due for some good news pretty soon. Link to comment Share on other sites More sharing options...
Guest HarryLong Posted July 8, 2010 Share Posted July 8, 2010 Wise men say: "Thou shalt not sacrifice quality for price." Link to comment Share on other sites More sharing options...
StubbleJumper Posted July 8, 2010 Share Posted July 8, 2010 Thou art not a value investor? Link to comment Share on other sites More sharing options...
Myth465 Posted July 8, 2010 Share Posted July 8, 2010 Monish Pabrai - "Plan A is always to buy the Coke and Moody's of the world at 50% off. If you buy these type of businesses at that discount and it takes 2-3 years to trade at intrinsic value, you'll do very well. Intrinsic value will be much higher in 2 to 3 years. So 50 cents may be worth $1.30 or $1.40. This is always Plan A. But plan A is virtually impossible to execute across the entire portfolio because they are so very very rare. (Work Horse Positions) When plan A fails, we go to plan B. Plan B is to buy at half off, regardless of business quality (as long as you're pretty sure intrinsic value is very unlikely to decline). Most of Pabrai Funds investments over the years have been Plan B." Link to comment Share on other sites More sharing options...
ExpectedValue Posted July 8, 2010 Share Posted July 8, 2010 Monish Pabrai - "Plan A is always to buy the Coke and Moody's of the world at 50% off. If you buy these type of businesses at that discount and it takes 2-3 years to trade at intrinsic value, you'll do very well. Intrinsic value will be much higher in 2 to 3 years. So 50 cents may be worth $1.30 or $1.40. This is always Plan A. But plan A is virtually impossible to execute across the entire portfolio because they are so very very rare. (Work Horse Positions) When plan A fails, we go to plan B. Plan B is to buy at half off, regardless of business quality (as long as you're pretty sure intrinsic value is very unlikely to decline). Most of Pabrai Funds investments over the years have been Plan B." Plan B did not work so well when he invested in financials. Link to comment Share on other sites More sharing options...
Myth465 Posted July 8, 2010 Share Posted July 8, 2010 Very true, but it has worked well for most of his other investments. The issue was in the implementation and not soo much with the strategy. Plan A didnt work well with Freddie, Fanny, or AIG for some who thought they knew what they were getting. With that says Loews should be bought despite CNA, not because of CNA. At least those were my first thoughts. CNA has a horrible record, but I think its fairly cheap bought via Loews and has a good chance of turning. 1 PC is doing pretty well, though the other one and investment side still need work. DO, BWP, and the Cash pile will drive growth. CNA is a nice kicker which may workout well. --- A wiser man said, there are no bad assets, just bad prices. Link to comment Share on other sites More sharing options...
Guest HarryLong Posted July 8, 2010 Share Posted July 8, 2010 Wow, thanks for missing the point. SUR, great quality, great price. No need to do a value/price tradeoff. We already went over it. Who would buy CNA, when you could buy SUR? Link to comment Share on other sites More sharing options...
Guest HarryLong Posted July 8, 2010 Share Posted July 8, 2010 ACAP agreed to a buyout offer today. Scary business, but they handled it pretty well the last 4 years, bringing down the combined ratio nicely. Link to comment Share on other sites More sharing options...
Guest HarryLong Posted July 21, 2010 Share Posted July 21, 2010 RLI reported quarterly earnings. 74.7 combined ratio for the quarter. Absolutely outstanding. Link to comment Share on other sites More sharing options...
Guest Bronco Posted July 22, 2010 Share Posted July 22, 2010 Harry - I feel like buying your recommendations just to tank your portfolio. Link to comment Share on other sites More sharing options...
Guest HarryLong Posted July 22, 2010 Share Posted July 22, 2010 Harry - I feel like buying your recommendations just to tank your portfolio. ? I haven't recommended anything. I have ranked insurers using their combined ratio and reserving numbers. Link to comment Share on other sites More sharing options...
Guest HarryLong Posted August 2, 2010 Share Posted August 2, 2010 Quarterly numbers came out for SUR. It was an excellent quarter. 73.5 on the combined ratio: http://finance.yahoo.com/news/CNA-Surety-Announces-Second-prnews-1300028399.html?x=0&.v=1 Link to comment Share on other sites More sharing options...
Myth465 Posted August 2, 2010 Share Posted August 2, 2010 Looks like the boat is turning at CNA. They had a great quarter with a good combined ratio. Specialty appears to be a crown jewel, and they appear to be turning around the other division. I still need to review the call to get some color on the liability / float sale to Berkshire. It will cause a lose quarter, but I think it was a move in the right direction. The float isn’t adding much value for CNA and it’s probably best to selloff the risk. Hopefully it also helps them get an upgrade at some point. Hopefully things keep improving. The only downside I see is Aspen and other insurers look to be much better and are trading at a similar discount to book. I also don’t see a similar FFH hedge on the equity portfolio so they will get hit should we get a pullback. I really need to find the downtime to dig further into SUR, and a few of the others on my watch list. Link to comment Share on other sites More sharing options...
twacowfca Posted August 3, 2010 Share Posted August 3, 2010 Quarterly numbers came out for SUR. It was an excellent quarter. 73.5 on the combined ratio: http://finance.yahoo.com/news/CNA-Surety-Announces-Second-prnews-1300028399.html?x=0&.v=1 Good news. Good company. :) Link to comment Share on other sites More sharing options...
Myth465 Posted August 5, 2010 Share Posted August 5, 2010 LRE earnings Release. Great as expected. http://www.lancashiregroup.com/lre_group/media/releases/2010/2010-08-05/ Link to comment Share on other sites More sharing options...
Rabbitisrich Posted August 15, 2010 Share Posted August 15, 2010 Anyone have thoughts on SUR's excess capital? It seems like they have plenty of statutory surplus, flattish written premiums, and a low yielding portfolio. Assuming that loss experience doesn't hike up, it seems that management should pay dividends or repurchase stock. They could have done so from 2008, actually, if we assume a steady loss experience. Link to comment Share on other sites More sharing options...
Guest Bronco Posted August 15, 2010 Share Posted August 15, 2010 Rabbit - you bring up an interesting point. You don't really see a lot of insurance companies with dividends. A stock I like, Aspen-ahl, is buying back what could be twenty percent of the company. Fnf I believe pays a great dividend. I won't revisit the share buyback debate, but if it were me, I would start buying preferred shares in other companies (I like Aspen here as well) or common. Some great opportunities in big caps with multiples at 8,9,10 or 11. I am not as familiar with sur, but if they do buyback shares, that is a higher ownership stake for my beloved loews. In general, seems like there are a lot of well capitalized Insurance companies trading well below book. Some good investments IMO. Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted November 1, 2010 Share Posted November 1, 2010 CNA Financial bids $22 a share for rest of CNA Surety. Link to comment Share on other sites More sharing options...
Myth465 Posted November 1, 2010 Share Posted November 1, 2010 Too bad I never bought. Been on the watch list for quite a while. Congrats guys. Things are really heating up with the buyouts. Link to comment Share on other sites More sharing options...
Guest HarryLong Posted November 1, 2010 Share Posted November 1, 2010 You're all very welcome! ;D Who bought after I brought SUR to the board's attention? Link to comment Share on other sites More sharing options...
Rabbitisrich Posted November 1, 2010 Share Posted November 1, 2010 Harry, don't tell me you are happy with the bid. Unless management anticipates the effects of hidden liabilities, there is no reason for such a low price. For an insurance company with the historical results of SUR, unless there are huge, looming costs, the price should be at least 2X book value. Link to comment Share on other sites More sharing options...
Guest HarryLong Posted November 1, 2010 Share Posted November 1, 2010 Harry, don't tell me you are happy with the bid. Unless management anticipates the effects of hidden liabilities, there is no reason for such a low price. For an insurance company with the historical results of SUR, unless there are huge, looming costs, the price should be at least 2X book value. Offers are the best catalyst to bring up precisely the valuation issues you raise. And yes, you're still welcome. Anyone who bought SUR since I brought it to the board's attention has made some nice $$$. ;D Link to comment Share on other sites More sharing options...
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