P&C market pricing

[rranjan]

I was using fat and lazy only as an example to make the point, not literally. LVLT should have dedicated section or by default should always appear on the 10th page for anyone interested ;D

[S2S]

Bronco - do you really believe that JNJ is an easy to understand business? Its Consumer division has received a disproportionate amount of media coverage (albeit not always for the right reasons), but contribution to profits is modest relatively to the Medical Devices & Diagnostics (DuPuy, Ethicon, Lifescan etc) and Pharma businesses, the latter might be the swing factor given the high-risk, high-reward nature of drug pipeline. If you find a diversified pharma or HC equipment business "simple", you would be one of the smartest people I know. Easily.

[Guest Bronco]

S2S - let's just leave it as I am one of the smartest people you know.

 

Although fictional, let me bask in that for a while.

[Guest HarryLong]

OK, back to stocks....has anyone noticed that being long a cat insurer/reinsurer is mathematically similar to being short gamma?

 

For reference:

http://www.google.com/#sclient=psy&hl=en&site=&source=hp&q=short+gamma&aq=f&aqi=&aql=&oq=&pbx=1&bav=on.2,or.r_gc.r_pw.&fp=403b8f2dd3c17a17&biw=1366&bih=673

 

 

[rjstc]

Harry; The ultimate proof of the merger model will have to await the detection of gravitational waves -- ripples in the fabric of space-time predicted by relativity. Is this related to the "Black Hole Theory"? Thanks for the guide of something new to study. Ron

[Guest Bronco]

Blue coat up 3% today.  Maybe when it hits $30 we can start talking about it.

 

 

[link01]

OK, back to stocks....has anyone noticed that being long a cat insurer/reinsurer is mathematically similar to being short gamma?

 

For reference:

http://www.google.com/#sclient=psy&hl=en&site=&source=hp&q=short+gamma&aq=f&aqi=&aql=&oq=&pbx=1&bav=on.2,or.r_gc.r_pw.&fp=403b8f2dd3c17a17&biw=1366&bih=673

 

 

 

i've only noticed that when there's a catastrophic loss...

 

actually, no. gamma is a measure of the rate of change of an options' (or other derivatives) delta. a stokcs delta is always 1 if you're long, -1 if you're short. no delta, no gamma.

 

 

care to share your own insight? maybe i'm missing something? the joke perhaps?

 

oh, but an insurers business is similar to being short options, yes, so in that sense they are short gamma. and by extension, i suppose, an investor in an insurance co is also short gamma...was that your slant?