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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (10192)	3/19/2000 12:30:00 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78519

Blankmind, I am learning to hate the insurance business and the stocks thereof -g- Allstate (ALL), imo represents an okay buy at this point for a value investor. Sorry I did not buy more in high teens. Somebody is very, very, wrong about ESG Re (ESREF). So far it's me. But I have a lot of company. There is a bunch of insider buying all the way down on this stock. Well, with a great price/book, maybe 2x cash, no LTD, they do have some financial reserve. If they could only now make some money. How they might do this I don't know. Still, I may add to my position just on what I perceive as cheap price to its assets. I'm believing now it's going to be about appropriate business models. We've read on the Buffett thread how GEICO will increase its marketing by $1B. Two companies which might have models that could work to help them fend off this onslaught are ALL and CGI (which I've posted on before). With Allstate, you might not (won't?) get the cheapest auto rates, but you will be easily and conveniently able to keep all your insurance requirements with them. ALL has the money to spend to set up an e-business. They will spend if they have to and it will cause them turmoil and bucks. It's in the stock price now, I hope. With CGI, the dominant auto insurer in Massachusetts, you get the inertia of people comfortable with CGI. Plus CGI's marketing ploy is to groups - if x number of your members sign up with us, we'll give you all a very good price break. I've been selling some CGI - the only insurance co. I have whose stock price is above my cost - and I will likely start a position in UNUM (UNM)- another troubled carrier, but the dominant player in disability ins. fwiw, Paul S.

To: blankmind who wrote (10192)	3/24/2000 4:23:00 PM
From: Allen Furlan	Respond to of 78519

Blankmind, thanks for posting on esref, sounds interesting and I will request investor package. Thread, re insurance companies: Being an old handicapper I know that sometimes the best bet is with the jockey/trainer and not the horse. So how about afg. Lindner has a million dollars worth of June options at strike prices of 25 and 30, re WSJ article. Purchased options in December and he also bought 584,000 shares on open market. Stock up about 4 dollars since Feb 15 article. Anybody have opinions on this? P.S. bought Fletcher Challenge Forests(ffs) yesterday at 2 7/8. Some of their holdings may be near big natural gas discovery in New Zealand. Had company on my watch list because of recent spate of merger consolidations in paper industry.

To: blankmind who wrote (10192)	4/19/2001 3:49:37 PM
From: Paul Senior	Read Replies (3) \| Respond to of 78519

fwiw blankmind, et. al.,I'm doubling up today on my losing exploratory position in ESREF. On the surface, the financial ratios look all right, and there's still good insider buying. However, that was all so true last year also - before ESREF announced losses. There are several dangerous aspects to ESREF: 1) They apparently are/were in a new type of medical insurance for European countries -- a business they did not understand (and neither did or do I - ouch), and an arena where maybe no one else has tread before either. With good reason - there's no evidence it's a viable or profitable segmentation. 2)Worse - that business, as well as other reinsurance businesses they are in, are long tailed. Which, as you know, (but I'll repeat) for ESREF apparently means they get their premiums (money) now but they don't know when they'll see a claim, how many claims they will see, when their exposure will end, or how much their exposure is. That has bitten them in the past. (As can happen to insurers who are in the long tail stuff (except maybe Berkshire -g-)) So, in spite of ESREF trying to shore up their reserves, these losses might not be done with yet, and could harm ESREF even more. One thing though that I find interesting, if not somewhat reassuring, is that there are (according to Yahoo) several 'value' funds and institutions who are in this stock. I don't know when they've bought (or if they are still in), but it's likely, I will guess, that I am buying today at a price below which some of them have bought their shares. It's my 'we're in it together' and 'misery loves company' approach to investing. -g- Paul Senior