Category Archives: Insurance

Out and About with The Aleph Blog

1. Recently I appeared on RT Boom/Bust again.  The interview lasts 6+ minutes.  Erin Ade and I discussed: Who benefits from lower energy prices. The No-Lose Line for owning bonds, Whether you are compensated for inflation risks in long bonds How much an average person should invest in stocks with any assets that they have […]

On Financial Risk Statements, Part 1

Most formal statements on financial risk are useless to their users. Why? They are written in a language that average people and many regulators don’t speak. They often don’t define what they are trying to avoid in any significant way. They don’t give the time horizon(s) associated with their assessments. They don’t consider the second-order […]

AIG Was Broke

There’s a significant problem when you are a supremely big and connected financial institution: your failure will have an impact on the financial system as a whole.  Further, there is no one big enough to rescue you unless we drag out the public credit via the US Treasury, or its dedicated commercial paper financing facility, the […]

The Art of Extracting Large Commissions From Investors

The dirty truth is that some investments in this life are sold, and not bought.  The prime reason for this is that many people are not willing to learn enough to save and invest on their own.  Instead, they rely on others to corral them and say, “You ought to be saving and investing.  Hey, […]

Ranking P&C Reserving Conservatism

About 1 1/2 years ago, I wrote a seven-part series on investing in insurance stocks.  It is still a good series, and worthy of your time, because there aren’t *that* many writers freely available on the topic. This particular article deals expands on part 4 of that series, which deals with insurance reserving.  I wanted […]

The Shadows of the Bond Market’s Past, Part I

  Source: FRED Above is the chart, and here is the data for tonight’s piece: Date T1 T3 T5 T7 T10 T20 T30 AAA BAA Spd Note 3/1/71 3.69 4.50 5.00 5.42 5.70 5.94 6.01* 7.21 8.46 1.25 High 4/1/77 5.44 6.31 6.79 7.11 7.37 7.67 7.73 8.04 9.07 1.03 Med 12/1/91 4.38 5.39 6.19 […]

Understanding Insurance Float

Warren Buffett has made such an impression on value investors and insurance investors, that they think that float is magic.  Write insurance, gain float, invest cleverly against the float, and make tons of money. Now, the insurance industry in general has been a great place to invest, but we need to think about float differently.  Float is […]