Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: DJessen33 who wrote (68874)	10/10/1999 10:26:00 AM
From: Freedom Fighter	Respond to of 132070

DJ, I agree with you. Some of the foods are still too expensive and some are down to what I consider to be a reasonable prices. However, I did buy Flowers Industries (FLO) and Interstate Bakeries (IBC). Neither is a screaming value or even up to my highest standards. But I think both are modestly undervalued. They're also more leveraged than I typically like, but they have nice brands so I'm not too worried. In the Prop. Cas. business I'm focusing on Berkshire Hathaway because I've owned it for a long time and understand it best. I also own shares of Mercury General (MCY). They have a nice business is California and are in the early stages of expanding elsewhere. Currently, there's a lot pricing pressures. But I recently did some comparison shopping (via internet) to see how MCY stacks up. MCY is almost always one of the cheapest. And despite that, the company has consistently generated underwriting profits and continues to do so. I like that. Some people think the direct guys like Geico (BRK) have an advantage. Others think the internet will change the way people shop for auto insurance. I sort of agree with both points but I don't know how it will all shake out. MCY uses the independent agent model. Honestly, I don't understand all the nuances of all the models. The one advantage independent agents gives you is that they can act as a front line underwriter and send you the best business. In any event, it's hard for me to dispute MCY's success. Volumes continue to grow despite lower prices. I think they will come through the down cycle fine and I think the price makes sense given MCY's high long term average return on equity and underwriting success. Wayne