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

To: Freedom Fighter who wrote (2618)	7/20/2000 3:03:13 PM
From: LauA	Read Replies (1) \| Respond to of 4690

HMN - not sure that I would want to pay more than book. Has a nice niche and a nice combined ratio, but also is totally invested in bonds, 25% of which are BBB and worse. Revenue is stalled. Profitability is tracking other P+C's. I was told by a small P+C last quarter that price competition is declining, but pricing power is not there. Haven't parsed out the annuity business, but it could be sweet. They've been buying back shares. (Most came in at $26/share, with recent purchases at $15 and $100 million to spend.) B/O offer ~$30. Was that serious? Note that they farm out their investment decisions. This Fx and the niche could be attractive features for someone. BV should stabilize when interest rates go flat. It looks like they're able to roll their bonds, so they should be able to bake in these higher rates. Short of a random B/O, don't know why the stock should go up much from here near-term. Lau

To: Freedom Fighter who wrote (2618)	7/20/2000 3:39:59 PM
From: Michael Burry	1 Recommendation Read Replies (1) \| Respond to of 4690

Soon after I posted that, I picked up some. The industry is ripe for consolidation, and Horace Mann's ratio issues appear temporary - a confluence of unfortunate events. I think management can turn it around. But it may be bought before then. The ratio even in bad times is still well into profitability. I also picked up Carnival Cruise Lines. I've wrestled with this one. All the bad news. And the obvious fact that there's more to come. But I think this is a good place to start a position. Favorable demographics, much like my RV pick, National RV. Except much, much, much bigger. And one absolutely knows this business will come back. Mike