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

To: Paul Senior who wrote (6681)	4/12/1999 12:47:00 PM
From: John Stichnoth	Respond to of 78579

Paul, I'm just being overly technical, but this statement: For insurance companies: High ROE is a negative! Too competitive a business to have high ROEs usually- co. could be underpricing/mispricing its business. should probably be stated "co. could be under-reserving its business". That's what gets them in real trouble in later years, especially in longer-tail business, because they have to make up in one or two years reserve shortfalls that they were making for years. (In a sense, they can get away with underpricing, as long as they recognize that they're doing so.) Always enjoy your insights. JS