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

To: Paul Senior who wrote (12765)	7/13/2001 11:08:00 AM
From: Tommaso	Read Replies (3) \| Respond to of 78508

Thanks. I think Principal is a pretty good company so I think I will hold the stock. Now I am worrying that the very large loan I took (at 5% interest) may have reduced my share in the company, but it's too late to do anything about that. They said the shares were calculated on something like "the value of your policy to the company" ! Getting a cheap loan doesn't help the company a lot. Incidentally, the example they give suggests an IPO price of $19 and the IPO is to be late 2001 or early 2002. Maybe I should cash in my policy as soon as I get my shares and buy more of the stock.

To: Paul Senior who wrote (12765)	7/15/2001 4:47:55 PM
From: Tommaso	Read Replies (2) \| Respond to of 78508

A quick perusal of your Yahoo list of insurance stocks shows a great deal of insider buying for most of them, though sometimes the amounts bought are not very large. With the example of many of these companies, following demutualization, it appears that the life insurance business on average has a lot of assets that have not been valued highly enough. At some point there could be a series of acquisitions or mergers now that they are stock companies, much as banks have been merging and acquiring one another. Because I think that the general stock markets are badly overvalued, along with the dollar itself, I am worried that the stock prices of insurance companies might take a while to benefit from these circumstances. Having been able to buy Royal Dutch Petroleum in 1974 at a P/E of 3 and a high yield, I know that the best companies can be terribly undervalued in a serious market decline.

To: Paul Senior who wrote (12765)	7/18/2001 2:32:59 AM
From: Kevyn Collins-Thompson	Read Replies (2) \| Respond to of 78508

Speaking of insurance-related stocks, I'd like to share some info on a wonderful company: RNR, RenaissanceRe, a global re-insurer that I've been investing in for about 4 years now. The price is now around $70 - may no longer be the complete steal it was in early 2000, but still solid value in my opinion, and an especially good counterweight to my normally tech-heavy portfolio. Here's an excellent summary lifted from S&P Ratings below. Cheers, Kevyn ==== 1. Very strong operating performance. RNR has extremely strong operating performance, with an ROR and an ROE in 2000 of 41% and 20%, respectively. RNR's five-year average ROR is 45% despite the industry-wide catastrophe loss activity in that period. RNR's operating performance exceeds those of its specialist peer group and the reinsurance industry in general. 2. Strong business position. Although most of RNR's insurance liabilities are associated with property catastrophe exposures, it has broadened its business position from strictly property catastrophe risk bearing. Based on its competitive advantage in catastrophe modeling, it outsources its expertise in a variety of ways, including establishing a fee-income managed-catastrophe-risk business that allows it to write risk on the capital base of third parties. 3. Conservative reserving. RNR has historically been well reserved despite the short-tailed nature of its liabilities. 4. Potential volatility in operating results. As a property catastrophe writer, RNR bears considerable exposure to high-severity catastrophe events and therefore is subject to volatility in its operating results. This risk has been mitigated in recent years by its very strong catastrophe modeling skills but remains a key rating factor. 5. Active capital management. RNR has remained independent, is publicly traded, and has a smaller capital base than some of its competitors. It has opportunistically repurchased shares as its resources allow and when its share price dips.