I would have loved to have owned Assurant (and several other insurance names, like Prudential and MetLife) over the last several years, but I could not do so because I there are limitations on the stocks that I can own in my personal account. I pick insurance stocks for the hedge funds that I work for. I can’t personally buy if the stock is within 10% of the price that I recommend the funds to buy. I can’t sell until the last share held by the funds is sold.
This has held back performance on my broad market portfolio. Value managers always own financials. So what financials do I own now? Allstate, but I bought it prior to coming to the hedge funds, and ABN Amro, Barclays plc, Royal Bank of Scotland, and Deerfield Triarc. I offered each one to the hedge funds and they passed (excluding Allstate). I’ve made good money on all of them.
I would also add that I would buy HCC Insurance in this environment, though the funds I work for have passed on it. It would be politically ugly for me to get clearance to buy it, but I pass it on to my readers as a well run, high quality insurer trading at a cheap price.
I do have a few other restrictions that I should mention. For the good of the firm that I work for, I can’t mention companies that we are short without permission from the legal area. Also, I don’t mention companies that we own until we have built our initial position. Also, I usually don’t discuss microcaps that we own, but I’m willing to discuss any company that readers bring up, and my firm’s 13F is a matter of record. Finally, for now, I can’t talk about Scottish Re, which was my major mistake in 2006.
Beyond that, I can talk about almost anything. Let’s get the conversation started.Disclosure: the funds that I work for are long Assurant, Prudential, MetLife, and a teensy amount of SCT.? I am presently long DFR, ABN, RBSPF, and BCS.
Are you allowed to discuss RAMR. thanx, Steve
Yes, I can discuss RAMR. The firm I work for is no longer long the company. If I were a small cap value manager with a long time horizon, I would own it here. Unfortunately for holding RAMR, I work for a bearish hedge fund that has a view against systemic risk, and thus, the financial guarantors are out.
That said, I like the management team and the strategy. The valuation as measured by adjusted book value isn’t bad either. It’s just not likely to grow that fast in 2007.
Hi David,
Can you comment on NCC and PNC? Also, what did you think about Cramer’s post the other day about how a continuing increase in the price of gold could derail the financials?
thanks,
long ABN, NCC, PNC, GLD
PNC and NCC look cheap-ish, but I don’t have a strong opinion on either. I own ABN. Still seems cheap, but the Dutch government may limit the ability to have a takeover.
The link between gold and the market is weak, as Howard Simons has pointed out , and will no doubt continue to do so. It allows for bearish financial chatter. Now, if there is a big move in gold, like over $800, we should revisit the issue, but this move in gold has been slow and steady, rather than discontinuous.
As of 7/31/2007, the restrictions are null and void.