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Non-Tech : Berkeley Technology Limited (BLKYY) -- Ignore unavailable to you. Want to Upgrade?

To: J. Conley who wrote (272)	5/2/2000 12:49:00 AM
From: J. Conley	Respond to of 955

S&P Report: I agree with most of the comments already made on this news. I have a few comments, all FWIW. I, as well as others, noted the S&P report is a "stand-alone" analysis of LPLA. I'm not sure how you can fairly and properly and analyze this business as an entity completely apart from the others. Doesn't this business provide funding for other existing, and one new, subsidiary companies? Is it possible that investments in non-income producing assets like risky private equity "damaged" the stand-alone insurance rating of LPLA for 1998, but at the same time resulted in banner results for 1999 when the company (as a whole) reaped some of the reward for these non-income producing private equity investments? I believe A.M. Best rates the company as a whole. A.M. Best reaffirmed their rating in January. I posted the A.M. Best information regarding the rating, with links, in previous posts. In addition, Malone is an expert in insurance company analysis, is a previous WSJ all-star analyst in this area, and knows this company well. I wouldn't say place no weight in the S&P information; each investor can make their own determination regarding its import. I just wish it were more current and had to do with the company's more recent performance then what it did in a period which is 28 to 16 months ago. For example, I believe nearly one-half the 1999 sales of annuity products was from a new product introduced in 1999. Does this matter? Also, the insurance company had a, some would say significant, problem with an old debt portfolio even as late as last year and early this year. This was not unknown to anyone and in fact was mentioned by both FBR and BEST as a big item that needed resolution before the "non-VC" company could move forward. The matter was resolved very recently in a favorable manner as reported by BEST. Also FWIW, though I don't know all the details, the company was involved in litigation in a prior year(s) over various items related to transactions involving Govett. Perhaps someone could point out how damaging it is and the reason why it is relevant now. In sum, I do not conclude from the S&P report that the insurance company is now rickety or failing. Such an assumption places a great deal of weight and credibility on a report that is based on 1998 information, and by its own admission is not thorough. I do not believe I have ever once invested, or not invested, in a company due to a report or analysis that as a premise used financial information 16 or more months prior. Obviously, every investor would like to see a more recent analysis and one that considers the nature of LPLA's operations relation to the company as a whole. In this regard, I think Malone and A.M. Best are more current and reliable. Best regards One more note, I think some may miscalculate the loss for Q1 in their guesstimates, because they are not calculating the correct number of shares used in the EPS calculation. I haven't checked the numbers, but review the annual report for the correct number of shares...which was from memory I believe in the mid 50 million range.