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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (28205)	9/24/2007 4:37:06 PM
From: Jurgis Bekepuris	Read Replies (2) of 78740

If you compare WSC to insurance stocks, the big advantage is that we know that Munger (and Buffett) don't chase questionable insurance deals. If they don't like the pricing, they walk away. This cannot be ascertained in any other insurance companies. I have not compared WSC to other insurance companies quantitatively though. For me the most interesting is recent divergence of BRK and WSC. On one hand, Munger was saying for years that WSC is not a "smaller Berkshire" and the performance should diverge. On the other hand, it never happened up to now. So the question is: has something changed or is the gap going to close again? I cannot really understand why WSC is a separate company anyway. BRK owns 80%. Munger probably spends more time at BRK than at WSC. It would be more efficient to handle all the WSC float internally at BRK - it is already being invested by BRK! I guess there is some issue regarding shareowners - Munger may not want to haggle with Buffett over the price and low price would not be acceptable maybe... OK, let's ask another question: is WSC or BRK a better investment than SP500 index fund? Why or why not? ;) (Both companies have worse 5 year returns than SP500).

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