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This blog is produced by David Merkel CFA, a registered representative of Finacorp Securities as an outside business activity. As such, Finacorp Securities does not review or approve materials presented herein. By viewing or participating in discussion on this blog, you understand that the opinions expressed within do not reflect the opinions or recommendations of Finacorp Securities, but are the opinions of the author and individual participants. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security or other instrument. Before investing, consider your investment objectives, risks, charges and expenses. Any purchase or sale activity in any securities instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Finacorp Securities is a member FINRA and SIPC.

David Merkel

At my blog there are two main purposes: teaching investors about better investing through risk control, and tying all of the markets into a coherent whole.

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    Afternoon Actions

    I sold Lithia Automotive in the late morning for the same reason as Group 1 Automotive.  Mid-afternoon, I replaced the position with PartnerRe.  As I commented at RealMoney:


    		 David Merkel
    Bought Some PartnerRe
    8/16/2007 3:35 PM EDT
  • Trades well below adjusted book.
  • Reserves are conservative even prior to the fact that they don’t discount their reserves.
  • Reasonable P/E multiple
  • Quality balance sheet
  • Quality management team.
  • Conservative asset policy
  • Not overexposed to southeastern property risks.

    • Position: long PRE

    What I didn’t mention was how much not discounting their reserves is worth after-tax: nearly $20/share.  Take out a few other items, and you get an adjusted book value of around $85 on a very strong and diversified reinsurer.  I can live with that.

    Full disclosure: long PRE

    This entry was posted on Thursday, August 16th, 2007 at 5:50 pm and is filed under Insurance, Portfolio Management, Stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

    One Response to “ Afternoon Actions ”

    1. Josh Stern Says:
      August 17th, 20079:02 am at

      I like to see a little higher ROA%, but so many of these insurers, especialy reinsurers are so cheap and beaten up, that I have to think that the industry is just one acquisition away from serious relative performance.

      I became a first time holder of CLF today. We’re going to fix some bridges. Rate cut has to help autos. Shipping is booming. Commercial real estate that uses steel is still okay. CLF is no RIO, but I like it’s positioning here.

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