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Non-Tech : HMN -- A poor man's GEICO? -- Ignore unavailable to you. Want to Upgrade?

To: Duker who wrote (63)	1/27/2000 8:57:00 AM
From: Duker	Read Replies (1) \| Respond to of 72

Some of my rantings ... With the stock sitting on the left side of $20, I went back and read over this thread to walk through my 'thinking.' I can't help but think that this is a tad overdone. Sure, more 'unusual' storms in GA and NC. That is why people buy insurance. The industry environment stinks -- in terms of Wall Street's perception of the P&C business. PGR had a release that was less than stellar. Rising rates screw up the people who use a Price:Book discipline -- though the upside in increased investment income. The industry appears to have fallen through the cracks. HMN, in particular, has fallen through the cracks in the cracks. In all this pessimism, I am starting to see opportunity. First, rates have to rise. Willy-nilly underwriting at any cost ain't going to cut it. Second, The Board owes us. I doubt that they are going to announce a big repurchase (concerned about pooling and the 10% in 24 months issues). Still, any help on the buy-side would be appreciated. We are all a bit punch-drunk from the 'Sale Process.' Bitterness, however, is not an attribute that lends itself to smart investment decisions (though I sometimes wonder if I am capable of smart investment decisions after my HMN debacle!). We have had a bunch of money move out of HMN for industry and company-specific reasons. The 'closet arbs' are gone and the rest of the people just think P&C stinks. Fine. In terms of the amount of discretionary cash that HMN can and should generate on a consistent basis, it seems that the only decision I need to make relates to how much HMN is too much? I have been so incredibly wrong over the last year in HMN that I don't trust myself anymore. I have owned a stake in this business since March of '95/96 (so long ago that I can't remember). My judgement is suspect to say the least. If I were able to buy one company in total, I think that I would buy HMN at these prices. I have no skill at running any business, especially not the insurance business. But, I would love to allocate the free cash that this business consistently generates. It would be better than winning the lottery. Some money to gain market share, some to buy shares in MAT. Some more money to upgrade the systems, some money to buy BRKb. Some money to compensate the management team for achieving the 10% profitable written premium growth that a private business can achieve. Some money to buy a piece of MO's $11bn in free cash flow. That would be my dream. Come to think of it, it sounds like Lou Simpson's job! Now, if I could just get my hands on about $1.7bn or so ... Sorry for the ranting. --Duker