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

To: Spekulatius who wrote (36583)	2/2/2010 11:50:05 AM
From: Paul Senior	Respond to of 78748

Following you into NAVG, Spekulatius, with a small starting buy. I'm holding now several of these p&c insurers, and they're all about the same--- p/e below their historical averages; trading under bv; annual growth in book value; earnings every year or almost every year for the past ten years. Some of these companies seem to me to have niches that they operate in: Very roughly I'd say NAVG for ocean marine/Lloyd's of London business; HCC in professional indemnity (director's insurance)and aviation; AXS reinsurance and political risk and marine/aviation,etc.; EIG workers comp. We'll see if the insurance business reverts to its historical p/e and p/bv numbers. I'll hold a package and assume if there's a rising tide all will be positively affected. There's some reduction in business risk with any one company in holding a package of several. Otoh, these companies may all hold relatively large amounts of municipal bonds, and I keep reflecting on W. Buffett's admonishment that these bonds may be much more risky than even professionals believe. He's said that in the old days the bonds were held by goodly number of people the community in which they were issued, so that elected officials were very reluctant to consider defaulting which would certainly inflame these people, their constituents. Now with so much packaging up of the bonds and having them distributed so widely outside the community, the municipal managers aren't so much concerned that people like him (Mr. Buffett) might be burned if the municipalities decide to default. Thus decreased safety perhaps with the bonds, apparently not compensated for with their low yields.

To: Spekulatius who wrote (36583)	2/5/2010 12:54:51 AM
From: Spekulatius	Read Replies (2) \| Respond to of 78748

Lot's of stuff to buy: HCBK -good regional bank stock ATPG - seems cheap enough here, starter position More MRO, IPHS, NAVG, ASI Also added some HALL yesterday, an interesting small cap insurer. The CEO is/was a hedge fund manager and tries to run this as an investment vehicle and also looks to achieve best in class metrics (combined ratio). Trading at 0.7x tangible book here.