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

To: Paul Senior who wrote (50522)	1/6/2013 3:14:10 PM
From: Spekulatius	1 Recommendation Read Replies (1) \| Respond to of 78476

Nice post regarding insurance companies. I think your numbers are essentially correct and your conclusions I agree that MKL growth in book value has slowed (in the single digits), so it does not stand out much, compared to cheaper peers. What has helped peers so, is that they were able to buy back stock at prices below book, which MKL has not been able to do, since their stock was more expensive. I also think that the lift from bond appreciation will reverse itself and slow the increase in book values for those that exclusively invest in bonds. I own RGA, NWLI and MHLD. FWIW, RGA expertise is in underwriting, not on the investment side. They run a low risk operation with dull bonds. NWLI book does not include AOCI (from bond holding appreciation that they intend to hold to maturity), including that, the book would be 350$/share (I believe).

To: Paul Senior who wrote (50522)	1/6/2013 5:45:15 PM
From: Jurgis Bekepuris	Respond to of 78476

Insurance: I mostly agree with your reasoning. I still think that MKL performance, equity holdings and good management (?) are worth higher multiple. Is it worth 1.1P/B? Well, I'm not sure, but I am interested to buy it here. Your reservations are noted though - you may turn out right that their best days are in the past. Out of the remaining stocks mentioned by you, I would consider buying RNR, RGA (have a small position), NWLI. I am not interested in others. BTW, though 2x growth in 10 years looks impressive, it is actually less than 10% annualized growth, which IMHO is pretty low. I would like to see at least 11% annualized growth. I also hold AHL, AXS, BRK, RE, which I consider buys. I hold AFSI, which I considered fairly valued to overvalued; and FRFHF which had horrible performance last 2 years, so I can't give a fair opinion about it. I may sell AFSI and FRFHF if I decide that they are not great long-term holds.