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Non-Tech : Berkeley Technology Limited (BLKYY)
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To: George the Greek who wrote (945)7/3/2002 5:02:21 PM
From: Paul Senior  Read Replies (1) of 955
 
They had a risky strategy, but that was ameliorated I hoped by their long-time presence in Silicon Valley and by the skill and success they had with some of their earlier tech investments. Other insurance companies capitalized their portfolios (Berkshire Hathaway being the outstanding example) and have been successful with their apparently more diversified and non-tech holdings. Seemed to me LDP had a reasonable chance of doing well (not just for for their two year blip).

On the ride up, there were two red flags for me:

1) Occasional rumors or innuendos about Mr. Truegar's honesty and/or past business ventures.

2) The fact the company was not only foreign based, but based in the Channel Islands - a place that seems to me to have hosted some unsavory businesses. (But I can't recall any specifically, and I may be mistaken about this.)

On the way down:

one signal was when they started marking-to-market in their reports and media releases. I got the impression that there would be write-downs of some of the public holdings and this would be reflected in reduced book value of the company. And that this might continue for a while (couple of quarters?) I assumed if the investments worked out well though (which they didn't of course), LDP would then be writing them back up, so I'd wind up being okay. I was wrong.

Secondly, I totally missed the signal provided by the dividend cuts. I really should have picked up on this. Although some insurance companies do come back after cutting their dividends (OCAS, for example), cuts or eliminations seem to provide an indication of great risk for stock holders who hold on.

just my opinions: I'm wrong a lot --- and certainly my handling of LDP is one confirming instance of that.

Paul Senior
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