Search Results for “"On Insurance Investing"” – Page 2

Best of the Aleph Blog, Part 24

Posted on 4 April 20144 April 2014 by David Merkel

These articles appeared between November 2012 and January 2013:

On Time Horizons

Investment advice without a time horizon is not investment advice.

This Election Will Solve Nothing

So far that is true of the 2012 elections.

NOTA Bene

We need to add “None of the Above” as an electoral choice in all elections.

Eliminating the Rating Agencies, Part 2

Eliminating the Rating Agencies, Part 3

Where I propose a great idea, and then realize that I am wrong.

The Rules, Part XXXV

Stability only comes to markets in a self-reinforcing mode, from buy and hold (and sell and sit on cash) investors who act at the turning points.

The Rules, Part XXXVI

It almost never makes sense to play for the last 5% of something; it costs too much. Getting 90-95% is relatively easy; grasping for the last 5-10% usually results in losing some of the 90-95%.

Charlie Brown the Retail Investor

Where Lucy represents Wall Street, the football is returns, and Charlie Brown is the Retail Investor. Aaauuuggh!

On Hucksters

Why to be careful when promised results seem too good, and they get delayed, or worse.

Bombing Baby BDC Bonds

Avoid bonds with few protective covenants, unless the borrower is very strong.

On Math Education

Why current efforts to change Math Education will fail. ?Pedagogy peaked in the ’50s, and has been declining since then.

On Human Fertility, Part 2

On the continuing decline in human fertility across the globe.

If you Want to be Well-off in Life

Simple advice on how to be better off. ?Warning: it requires discipline.

Young People Should Favor Low Discount Rates

If we had assumed lower discount rates in the past, we wouldn’t have the problems we do now. ?(And maybe DB pensions would have died sooner.)

Problems in Life Insurance

On why we should be concerned about life insurance accounting.

Investing In P&C Insurers

On why analyzing P&C insurers boils down to analyzing management teams.

Selling Options Cheaply (Did You Know?)

Naive bond investors often take on risks that they did not anticipate.

Book Review: The Snowball, Part One

Book Review: The Snowball, Part Two

Book Review: The Snowball, Part Three

Book Review: The Snowball, Part Four

Book Review: The Snowball, Epilogue

My review of the most comprehensive book on the life of Warren Buffett.

On Watchlists

How I met one of the Superinvestors of Graham-and -Doddsville, and how I generate investment ideas.

Why do Value Investors Like to Index?

How I admitted to not having ?a correct perspective on value indexing.

Evaluating Regulated Financials

Why regulated financials are different from other stocks, and how to analyze them.

Locking in a Smaller Loss

Why people are willing to lock in a loss against inflation, because of bad monetary policy.

The Evaluation of Common Stocks

Value investing is still powerful, but the competition is a lot tougher.

The Order of Battle in Financial Planning for Ordinary Folks

The basics of personal finance

Sorting Through the News

How to use my free news screener to cut through the news flow, and eliminate noise.

Matching Assets and Liabilities Personally

How to manage investments to fit your own need for cash in the future.

Penny Wise, Pound Foolish

How short-sighted, incompetent managers destroy value.

Expensive High Yield ? II

No such thing as a bad trade , only an early trade… high yield prices moved higher from here.

2012 Financial Report of the US Government

Chronicling the financial promises made by the Federal Government

On Insurance Investing, Part 1

On Insurance Investing, Part 2

On Insurance Investing, Part 3

The first three parts of my 7-part series on how to understand this complex group of sub-industries.

Even Buffett didn’t get super-rich by only investing his own money. ?He had to invest the money of others as well. ?The super-rich form corporations and grow them; they build institutions bigger than themselves.

The Product that Never saw the Light of Day

On the Variable Annuity product that would simply be a tax scam. ?Later I would learn that product exists now, just not in the form I proposed 8 years earlier when it didn’t exist.

Letter from a Reader

Posted on 27 February 2014 by David Merkel

Here’s a letter from a reader on insurance topics:

Hi David. I’ve been following your blog. Just want to say thank you for willing to share your knowledge in the public domain.

I have a question for you – as you know, “climate change” is happening… whether human caused or not, it certainly feels like we are seeing more extreme weathers of late.

How do you see this affecting P&C insurers? Does this give them the chance to start rising prices? ?

Lastly, just wondering if you have an opinion about Markel and Lancashire and Allied world. I owned allied for a long time. Made some gains. But the recent blow up at tower and short attack at Am Trust prompted me to really stick with firms that have a much longer record. Which lead me to Markel and Lancashire. Not that this verifies these guys are clean. I’m not an accountant and nor do I think accountants can catch anything. Nonetheless, their long term record offers me a better sense of security in my mind.?

First, I *don’t* know that climate change is happening, except that it always happens.? Evidence for climate science is weak, like that for economics.? We don’t have a good model yet.? If we had a good model, we would have better predictions on hurricanes, which have been uniformly lousy for the last ten years.? And as for warm climates, the Earth has been warmer than now in the past, and far colder, if the history books are correct.

As to how it affects P&C insurers and reinsurers, for that we do have a simple and reliable model.? Look at industry surplus relative to the past — when it is high, as it is now, premium rates will be lower than the risk demands.? Most P&C pricing is weak now — I have been decreasing exposure to P&C insurers.

Markel and Allied World I know and respect.? Good companies both, though I own neither of them.? I’ve heard of Lancashire, but I do not know them in any detail.? To analyze, look in my On Insurance Investing series.

Thanks for writing.

On Understanding and Valuing Financial Companies

Posted on 2 January 2014 by David Merkel

I have readers all over the world.? Here is an example:

Hi Dave

I am a 25 year old from Pretoria, South Africa. I have been reading your blog for around 2 years and I thoroughly enjoy it (especially the book reviews). I might not agree with a few things you say, but it is rare that I don’t learn something while reading your work. I love how your personality shines through in your writing…a personality based on God.

I have had this fascination with finance and investing since I ran into a popular finance magazine here in South Africa around 2008 while stile in university. Since then I have been reading everything I could on business, investing and finance. I am also about to start training with a large wealth management firm in south africa to be 1 of their financial advisors. Training I am wholeheartedly looking forward to.

In all my reading, there is something I still struggle to wrap my head around, and that’s how to value Financial companies. You are undoubtedly the most informed person on financial company investing nd financials that I read. Hence my email: I was wondering if you could suggest a few readings for me to tuck into (preferably books) as I have found most of the things I have read only scratch the surface. Reading with maths that is not too elaborate.

I hope I am not asking too much.? Thank you in advance for any suggestions you might have, and I hope you keep up the good work on your blog.

Financial companies are difficult for several reasons:

1) The cash flow statement has almost no meaning.

2) It is very hard to know how much capital is needed to keep things going.? That data gets disclosed to the regulators, and not directly to stockholders.

3) It is difficult to know the riskiness of the assets that a financial company holds.

4) With complex financials, it is difficult to tell what the “run on the bank” risk is.

I will be reviewing a book on banks this month, but I have run into few books in my life analyzing financials.? It is a real hole in the investment literature.

Financial companies are valued off of their net worth, and their expected path of earnings.? Earnings retained, rather than paid out in dividends, or used to buy back stock, adds to net worth, and is new capital that can be used for growth.

The capital of financial companies can be divided in two: that which is required by the regulators for solvency purposes, and that which is free for deployment into new business.? With banks, look at the call reports to analyze the capital needs of subsidiaries.? With insurers, get the statutory reports.

To the extent you can, analyze the quality of assets owned.? Also analyze when liabilities may require cash, particularly if assets are financed by repurchase agreements.

Now over the last seven years, I have written a lot on financials, particularly insurers.? Here are the articles at my blog that would deserve attention:

A Summary of my Writings on Analyzing Insurance Stocks

A compendium of the best articles written prior to mid-2010.

Then there was the Flavors of Insurance Series.? In 12 parts, it went through the entire insurance space, explaining what make each area different.

Thinking about the Insurance Industry

Describes the changes that have happened since the financial crisis.? Bad financial models have been destroyed.

On Life Insurance and Life Reinsurance

Explains how life insurance is saturated but reinsurance is not.

On Complexity in Financials, and Insurers Specifically

Explains why complex financials are usually a bad investment.

Investing In P&C Insurers

Once you understand the model, many are simple companies, and easy to invest in.

Evaluating Regulated Financials

An attempt to explain to college students why financials are different from other companies.

On Insurance Investing

This seven-part series explained a wide number of factors in analyzing insurance stock investing.

Penny Wise, Pound Foolish

On some of the pathologies inside badly-run insurance firms.

Two Insurance Questions

On reserving and valuation questions.

On the Designation of Systemically Important Financial Institutions

Why Insurers, no matter how large, should not be considered a threat to systemic risk.? (Please ignore AIG — no other insurer was a major party in derivatives.)? Also see: On Risk-Based Liquidity, and Financial Regulation

On Captive Insurers

Explains some of the nuances of statutory reserving/capital, and why some insurers want to fuddle it.

Classic: Financials are Different

A piece from 2006 at RealMoney, describing how financials are different from industrial stocks.

That should give you a start.? There aren’t many books dealing with the intricacies of financial companies, and of what few there are they are written by the big four auditors, or the rating agencies, for their own purposes.? I don’t own any of them.

But what I have written, from that you can benefit.

Six Years at the Aleph Blog!

Posted on 28 February 20131 March 2013 by David Merkel

Thanks to all of my readers, whether you read me via RSS, e-mail, twitter, or natively at the website.? But I have a favor to ask… if you read me elsewhere, drop by the site every now and then, because not all of my commentary gets republished by those that reprint my work.? Also, not that we get a ton of comments at Aleph Blog, but I appreciate the quality of almost all of the comments we get here, even if I may disagree with some of them.? If you read me elsewhere and want to comment, come to Aleph Blog and do so, or, just e-mail me.

Now for a few housekeeping items.? 1) People sometimes ask me for books to help explain insurance stocks, and in the past I have pointed to my own writings, especially this one.? My flavors of insurance series helps also.? I’ve also pointed to works from the Society of Actuaries, Casualty Actuarial Society, LOMA, CPCU, and others.? But now, I think this piece could be useful to some readers.? It’s relatively comprehensive, and not that long.? It’s not the way I do it, but it is well thought out.? It suffers from the same problem as one using the models of Aswath Damodaran; it’s too detailed.? I can’t think of anyone that uses such a model — it is overkill.? But maybe readers could what I would do with such a model: boil it down into something simpler.

That is what I am trying to do with my current series on analyzing insurance stocks.? There are three or so more parts left to write, and I should get them out in coming months.

2) Some people ask me how they can read the articles in my Major Article List, and I wish I could read them too.? Trouble is, TheStreet.com has lost them.? They are there, maybe, somewhere in their computer systems, but since they changed the way that they named files, the links to most pre-2008 posts has been lost.

Now, if any of you think you have a way to find those posts, let me know.? There are pieces on that list that are gold, silver, and bronze.? I would at least like to get the gold ones back.

3) Sometime soon, I will create a small website for my business.? It will explain what I do for a living for those that might want me to manage money for them.? I will not link to it here; I try to keep a separation between the blog and my business.

4) I write about a lot of topics, and I tend to go in streaks on given topics.? It’s not what I intended when I started this, but I can understand why I have readers follow me and leave me.? My blog is consistent over a long period, but over intermediate periods it concentrates on one area, then another.

5) I’m not out of things to write about.? Here’s what I am planning for the future:

Completion of my work on a new asset pricing model
Completion of my “On Insurance Investing” series
More posts on the idiocy of US & Global macroeconomic policy
Buffett’s Shareholder Letter and Annual Report.? (Note: the letter gets more press, but the Annual Report has more substance.)
Commentary on new ideas from the CFA Institute… some good, some bad…
More commentary on investments that rip people off.
And more, I have a long list of ideas to write about, and many book reviews to publish

6) I would have never expected? it, but February 2013 was my highest readership level at the blog directly, despite the short month.? Thanks to all who read what I wrote.? I try to write good stuff; I do not aim to be controversial, though I know that some of my views are controversial.

7) When I started this six years ago, I would have never dreamed how much I would end up writing.? I thought I wrote a lot for RealMoney.? If anything, I have written four times as much per unit time, which means that as prolific as I was at RealMoney, I have written 4-10x as much here.? And it all started with an extended conversation with readers on Jim Cramer’s “blog,” which led me to do what I had resisted for two years — start my own blog.

As I have developed this blog, I now earn more than I did writing for RealMoney.? That’s not much, but every little bit helps.

8 ) You can’t believe how many people write me asking to do a guest post at my blog.? It happens about 15 times per month.? Then there are the scummy advertisers, who don’t want their advertisements to be labeled as such.? I have a strict policy that all advertising should be identified as such.? Why?? Because I never want to scam my readers.? When you come here, I want you to be comfortable that I am saying what I say for reasons of truth, not profit.? Profit is incidental here.? Truth is paramount.? I know how I could make this place more profitable, and I reject it because I would compromise my message.

9) I began with thanks to readers; I end there as well.? Truth, I treasure all of the emails giving me praise, but my internal response is “Wow, you’ve all been so great to me over the years.? It really gets to me, you know.? I hope I always make you proud.? That’s all.”? (What the Flash said to the citizens of Center City… yeah I know, a little dumb, but you had to see it.? Start it at 8 minutes.)

My main focus is on ethics in investing, and secondarily explaining how things work.? I hate seeing people ripped off by investment firms, or their dishonest governments.

I have no idea how long I will continue this blog, but I would love to do it as long as I live.

Sincerely your friend,

David

Sorted Weekly Tweets

Posted on 2 February 2013 by David Merkel

God gave proverbs to the Jews; Epigrams were of the Romans. Now we do the same through tweets, why do I sense bad omens? #badpoetry Feb 02, 2013

Credit

One of Warren Buffett’s Greatest Trades http://t.co/wnU2g1z4 Comparing Buffett winding up his partnership to lack of distressed opps now $$ Feb 01, 2013
Be Very Afraid When Fear Disappears From Markets http://t.co/t8wKalsQ Low implied vols, low yields, High Q-ratio & CAPE10 $$ Feb 01, 2013
How a $91 million loan on the Marlins ballpark will cost Miami-Dade $1.2B http://t.co/F2u2rZbP Poway-style debt in Florida $$ cc @munilass Jan 31, 2013
Big, Rich, and Wobbly: Wall Street Banks Are Still Sicker Than You Think http://t.co/irKmQqLy Mohamed A. El-Erian explains the problems $$ Jan 30, 2013
In US Debt We Trust- The Transfer from Private to Public Debt http://t.co/2nq1pGCn Total debt hasn’t declined much from peak, gov debt up $$ Jan 30, 2013
Chavez?s 681% Returns Mean Socialism Buoys Goldman http://t.co/IYPD6fEJ Give Chavez credit, at least his country paid what they owed $$ Jan 30, 2013
4 Reasons the Junk Bond Rally Will Continue in 2013 http://t.co/r7SF05NJ Check my comments. I like this site, but disagree w/the thesis $$ Jan 30, 2013
Pimco to DoubleLine Leveraging as Yields Retreat http://t.co/LBUsmfQ6 Here comes leverage; PIMCO and Doubleline gear up to get returns $$ Jan 30, 2013
US Not So High Yield Bonds : “It’s Starting To Feel A Lot Like 2007” http://t.co/PZ0dOyzC More like 2005-6, we need more leverage 4 2007 $$ Jan 30, 2013
The US High-Yield Corporate Bond Conundrum http://t.co/w0wlsn7s & this leads to buybacks & M&A. It all depends on how aggressive it gets $$ Jan 30, 2013
Investors Pivot Back to Banks http://t.co/ixvSSGf8 Bank bonds are likely safe, the stocks r another matter $$ Jan 30, 2013
Too Soon to Celebrate for Europe’s Banks http://t.co/cKT6OXli Let them deal with the mountains of bad debt & restructure them $$ Jan 30, 2013
Can anyone tell me why HY loan defaults are up, while HY bond defaults are down? http://t.co/gxfVA5za Usually they move in tandem $$ Jan 29, 2013
And very few LP CEFs at discounts, which is also true for HY bond CEFs. Preferred funds look a little more promising, but still pricey $$ Jan 29, 2013
Looking at bank floating rate closed end funds, a few r at high prems 2 NAV, such that if u bot the trust 2 liquidate would get 0% return $$ Jan 29, 2013

Companies

Newell Rubbermaid Goes After $127B Health Market http://t.co/lcarSSmS Interesting 2c consumer prods comps go after the healthcare mkt $$ Feb 01, 2013
Chevron Realigns Its Gas and Midstream Organization http://t.co/u1WoIl2Y Sort of thing u do, prior to splitting co into 2 | FD: + $CVX $$ Jan 31, 2013
Good 4 refiners $$ http://t.co/q3lVpoI5 US crude oil inventories are well above the upper limit of the average range for this time of year Jan 31, 2013
Container Shipping Faces Merger Urge as Money Dries Up http://t.co/7Kur08t6 Capital-intensive biz is tough when financing not plentiful $$ Jan 31, 2013
Oh, Full disclosure two tweets ago, I am long Valero, $VLO Jan 30, 2013
$ACE ?s Greenberg Asks ?Why R We Doing Guidance?? http://t.co/dKtvopDX Evan has impressed me after leaving $AIG | Chip off the ol block $$ Jan 30, 2013
Valero Looking at Rail, Barges to Ship Canadian Crude to Gulf http://t.co/diLQGBZC Cheap oil in middle of N. America wants2get2the Gulf $$ Jan 30, 2013
Singer Chases Icahn With Stake in Cheapest Oil Company Hess http://t.co/Hk4ynp6q Worth reading 2 understand activist investors $$ Jan 30, 2013
Fund Outflows? Blame the ‘Cliff’ http://t.co/QOq13Jn8 $TROW is a good firm. If anyone should not get fund outflows, they would b one $$ Jan 30, 2013
Fannie To Allow Walkaways by On-Time Borrowers http://t.co/Nnx00VfR & so taxpayers will pick up the losses for walkaways on FNMA mtges $$ Jan 30, 2013
Software Firms Find Tax Advantages http://t.co/5G2QXmmD A good transfer-pricing accountant is worth his weight in gold. $$ Jan 30, 2013
Apple Reverse Convertibles: How Brokerage Firms Pervert Everything http://t.co/4ugTpgTe Don’t buy structured notes. Listen2 @reformedbroker Jan 29, 2013
How Apple’s Fall Bit Bondholders, Too http://t.co/60fmfhle Structured notes: Wall St. gives u a small increase in yield & lots more risk $$ Jan 27, 2013

Central Banking

Japan’s lessons for America’s budget warriors http://t.co/ftUKEJPa Think this might be the start of unsterilized monetary policy globally $$ Feb 01, 2013
What finally convinced me to sell my long bonds 30 bps lower than now was market’s reaction to the Fed in December. http://t.co/vQONtgBC $$ Feb 01, 2013
The Fed?s Actions Are Counterproductive http://t.co/THDwyijc If printing $$ or issuing credit could bring prosperity, it would be here now Jan 31, 2013
2 early to celebrate ECB’s balance sheet reduction http://t.co/srQiQJ4Q @soberlook right again: off-Bal Sheet gtees dwarf BS improvement $$ Jan 31, 2013
Fed Policy Is a Drag on the Economy http://t.co/T3Wx0ezh I have argued the same here: http://t.co/l7MyjNLM John Taylor 4 Fed Chairman $$ Jan 30, 2013
Anyone else notice that all FOMC meetings are now 2 days long? Gives them more time to come up with creative errors in monetary policy $$ Jan 30, 2013
The Ghosts of 1994 http://t.co/Hdf2UFLi 2 things are different now: Fed was hawkish in ’94, few expected prepays 2 decrease so much then $$ Jan 30, 2013
What Happened To Markets The Last 15 Times The Fed Tightened… http://t.co/zq4TRGxg Long article, but instructive on tightenings $$ Jan 30, 2013
With Each Central Bank Move, Nations Are Impoverished More http://t.co/70lBSDeQ Combined actions of Central banks create global infation $$ Jan 30, 2013
USD-JPY: Short Term Reversal? – Hara-kiri http://t.co/K9N3Viom Japan leads the race to the bottom. Will they stop sterilizing asset buys? $$ Jan 30, 2013
There are two things lacking that were present in 1994: a hawkish Fed, and expectations that RMBS prepays… http://t.co/DHekaqIN Jan 29, 2013
The Unintended Consequences Of The Greatest Economic Experiment http://t.co/0hEH3VS1 The Fed won’t admit it, but it is flying blind $$ Jan 28, 2013

Rest of the World

Greek Companies Test Bond Waters as Exit Risks Fade http://t.co/fOgUn41S I guess every dog has its day. Sleep w/dogs, wake up w/fleas $$ Feb 01, 2013
Best Stock Pickers Trawl Frontier Markets as US Funds Lose http://t.co/yfAKqI7t When mgrs seek unusual venues 4 investing, risk is up $$ Feb 01, 2013
Deutsche Bank Improved Its Capital Ratio By Changing Risk Measures http://t.co/jWTc73pR Risk mgmt is easy when you can alter standards $$ Feb 01, 2013
Spain’s crisis strategy under fire as economy buckles again http://t.co/Qeaeotx0 The ECB?s Mario Draghi is ?itching? 2buy Club Med bonds $$ Jan 31, 2013
Japan?s Government Proposes First Spending Cut in 7 Years http://t.co/DHpOH3II The journey to fiscal sanity begins w/a single cut $$ Jan 30, 2013
Canadian Mega Housing Bubble http://t.co/GwbpWMGs Quietly, the average Canadian HH has accumulated more debt than US & UK HHs. Who knew? $$ Jan 30, 2013
Chinese currency 2 loosen exchange rate: business chief http://t.co/q6zNLSGh Easier said than done; is China willing 2 absorb volatility $$ Jan 30, 2013
Scandal of Italy’s Monte Paschi means questions for Draghi http://t.co/mufcYFkI Had some reg oversight over Monte dei Paschi solvency $$ Jan 30, 2013
The Super Bowl, Chicken Wings and the FED – a Risky Mix ? http://t.co/EDCV958k The Fed has no idea what it is doing, the same as in 2007 $$ Jan 30, 2013
Why We?re at the End of Cheap China http://t.co/kSW2tbWG Argues there is more consumption going on in China, hidden in coprporate perks $$ Jan 26, 2013
The Biggest Housing Bubble in the World Is in … Canada? http://t.co/GgUfyM74 Interesting 2c France, Sweden, HK, & Singapore on the list $$ Jan 26, 2013

Speculation

Forget the ‘Rotation’, Here’s the Source of the Money Pouring Into Stocks http://t.co/tn4Dxs39 ~$30B of special dividends get reinvested $$ Feb 01, 2013
ML Fund Managers Survey – Jan 2013 http://t.co/GR19wML6 Professionals r hedging less equity risk, flexible capital increasingly committed $$ Feb 01, 2013
Bill Gross: Be very afraid of the markets http://t.co/k7Ouhax3 Favors: Currencies of creditworthy countries, short bonds, gold, HQ debts $$ Jan 31, 2013
Whan financial institutions start buying gold as an inflation hedge, only 2 possibilities remain: a top in gold prices, or hyperinflation $$ Jan 30, 2013
SP500 Earnings Optimisim : But let’s revise them lower! http://t.co/bPXqFSos We should expect actual earnings 2 come in below projections $$ Jan 30, 2013
Upside Risks http://t.co/AuT58IEC @reformedbroker gives us the bull’s case; I’m agnostic on market direction; think long yields will rise $$ Jan 29, 2013

Market Dynamics

Goodwill Is Bad News for US Assets http://t.co/8ctt5UeQ Not all goodwill is bad; if it produces extra cash deserves 2b treated as asset $$ Feb 01, 2013
It’s the Stocks You Don’t Own That Matter http://t.co/M3pDaeFl @herbgreenberg talks about new Forensic Accounting ETF $FLAG | Good idea $$ Jan 31, 2013
Your ETF Owns Too Little Amazon, &Other Index Quirks http://t.co/UOZINiEc Float-weighting underweights ?owner-operators? which do better $$ Jan 31, 2013
Asset Allocation & Rebalancing: (Still) Competitive Together http://t.co/FrLCygAY Rebalancing global value-weighted index: good strategy $$ Jan 31, 2013

US Economics

US GDP Q4 2012 Weaker with a Strong Mix http://t.co/ZmVlZZ52 In Q3, few talked about the weak mix, but yes, result better than headline # $$ Jan 31, 2013
U.S. Economy Unexpectedly Contracts in Fourth Quarter http://t.co/dmKSsHlf After getting upside surprises, shouldn’t we get one down? $$ Jan 30, 2013

US Politics

US government warns of hack threat 2 network gear http://t.co/lZvMgyOe Disable feature known as Universal Plug & Play on your network $$ Jan 30, 2013
How President Obama Lost His Shirt to John Boehner http://t.co/VZwfxqiw Interesting argument; not sure it’s correct. Seemed like a tie $$ Jan 28, 2013
Women?s Path to Ground Combat Strewn With Obstacles http://t.co/DkVG9UDM Only the strongest ~5% of women will be able 2b in combat $$ Jan 28, 2013
Bipartisan Immigration Plan Counters Republican Orthodoxy http://t.co/nL9Q8RFp Has some chance of passing 4 the 1st time in 6 years $$ Jan 28, 2013

Other

Psst…This Is What Your Co-Worker Is Paid http://t.co/3lUOLmT9 I’m not sure this is a good idea. What someone is paid is personal $$ Jan 31, 2013
Bombarded by Ads, Few Drivers Switch Car Insurer http://t.co/LsyjydyM Average ppl have an agent they trust until they get burned $$ Jan 30, 2013
Backyard Farming Gets Fancy http://t.co/0FqwgxRr High-End ‘Homesteaders’ Want Pricey, Stylish Tools; The $1,300 Chicken Coop $$ #noway Jan 30, 2013
15-Year-Old Creates Test for Pancreatic Cancer http://t.co/qrRalNtv This fellow beat the child of a friend of mine who came in third $$ Jan 30, 2013
Derivatives trader: ‘The trouble is, regulators are idiots’ http://t.co/PTJpQe9G In general, true. This is why dumb regulation is better $$ Jan 30, 2013
Liability Issues Create Potholes on the Road to Driverless Cars http://t.co/VDVux7vV If a driverless car has an accident who pays? $$ Jan 28, 2013

Wrong

Wrong:Piracy and Fraud Propelled the US Industrial Revolution http://t.co/JONyDRPd Doubt that explains more than 3% of American Success $$ Feb 01, 2013
Wrong: Alan Blinder:Everything You Think You Know About the Crisis Is Wrong http://t.co/gTVjTm4t TARP a failure; encourages moral hazard $$ Jan 31, 2013
Wrong: Morgan Stanley Buys Argentine Stocks as YPF Deal Lures BlackRock http://t.co/MdXXq1uu Until expropriation ends, avoid Argentina $$ Jan 31, 2013
Wrong: Bitcoin?s Gains May Fuel Central Bank Concerns http://t.co/bXNdgp9c Chart here: http://t.co/Xaz8cxbh Thin speculative market $$ Jan 28, 2013

Comments & Retweets

RT @japhychron: The Real, and Simple, Equation That Killed Wall Street | Guest Blog, Scientific American Blog Network http://t.co/9YDmZu … Feb 02, 2013
RT @BankersUmbrella: @AlephBlog …buying on margin at 5y high in NYSE, fund inflows higher than just before techbubble burst, net sales … Feb 01, 2013
You can say that again $$ RT @paulnovell: @AlephBlog unless you own an east coast refinery. Mid continent refiners are killing it Jan 31, 2013
@GlennBusch I almost moved to Poway to work for the last remaining large life insurer in San Diego; Offer fell through, company failed later Jan 31, 2013
@steve13smith So how are you doing at Minyanville & otherwise? Jan 31, 2013
@steve13smith Are you my friend from RealMoney days? Good to hear from you. Yes, I signed up on a Wednesday. It’s a useful summary to me. Jan 31, 2013
You can say that again RT @credittrader: $SPY vs $VIX – oops – http://t.co/ARvpNfRP Jan 30, 2013
Feels like it to me. RT @StockTwits: Has Value Turned a Corner? http://t.co/GQnUMCcw via @eddyelfenbein $$ Jan 30, 2013
@RossJaklik I don’t market. People ask me to manage their money. They get a clone of how I invest my own money. If that is not legitimate… Jan 30, 2013
@RossJaklik @faithmight @abnormalreturns In order to receive fees for investing OPM, you must pass the regulatory hurdles Jan 30, 2013
@RossJaklik @faithmight @abnormalreturns And to manage OPM legitimately, u have to start a firm like $TROW $LM $JNS $BEN $$ Jan 30, 2013
@wesbury @cabaum1 I want to get rid of the neoclassical economics monoculture at the Fed, & replace w/Actuaries & Value Investors $$ #dreams Jan 30, 2013
@prchovanec Enjoy it, friend. I have 8 kids, 5 adopted. Every age is fun, & has sorrows. Enjoy your kids while u can; they grow up fast $$ Jan 30, 2013
Little kids r so cute $$ RT @prchovanec: 3-year-old son William on new twin baby sisters: “Can they talk? What did they say?” Jan 30, 2013
Thanks, have ~3 more to go $$ RT @BarbarianCap: Great “101-level” series in the last few days on insurance investing over on @AlephBlog #ff Jan 30, 2013
+2 RT @niubi: ?@prchovanec: Twin baby girls Alice and Rachel Chovanec born at Amcare hospital in Beijing at 6:45am this morning!? Congrats Jan 30, 2013
premiums r so migh my nose is bleeding! $$ The RT @groditi: HY and Levered Loan CEF discount snapshot http://t.co/HH8tyX7x Jan 29, 2013
“You are not going to get as much from me, then. Not going 2 use Stocktwits as my Twitter client.” ? David_Merkel http://t.co/78eWsIVF $$ Jan 29, 2013
+1 RT @allstarcharts: Here is one chart that bothers me: $IWM vs $DJIA spread peaked weeks ago as $SPY makes new highs http://t.co/Bt9c6mlB Jan 29, 2013
@aenbrnood @GuldbergPeter I think both of your ideas have merit, thanks Jan 29, 2013
“”As for the part of the budget that won’t take care of itself, President Obama fought an ugly and?” ? David_Merkel http://t.co/ueQBGOkp $$ Jan 29, 2013
@prchovanec Leverage at each point in the chain of lending amplifies the impact of dodgy nonbank lending, esp when loans r short-dated Jan 29, 2013
A weakness in investment grade bonds RT @Convertbond: $DELL 5 Year CDS, Lesson on what an LBO can do to a credit.. http://t.co/foe7W2gf $$ Jan 28, 2013
@Danny_5079 That covenant is only common with junk bonds, though a few BBB bonds have it. That’s all. Jan 28, 2013
@Danny_5079 via arbitrage. Should have no effect on the deal, unless the bonds had a covenant requiring buying the bonds @ 101% in a buyout Jan 28, 2013
@Danny_5079 of the company & its pre-existing debt, thus leading to a decline in the value of debt, raising yield spreads. CDS reacts to it Jan 28, 2013
@Danny_5079 In a buyout debt is issued to finance the purchase that is equal or senior in terms of claim priority, reducing creditworthiness Jan 28, 2013
“They have to lure retail back in before the next bear?” ? David_Merkel http://t.co/lCQ1ex1c Jan 27, 2013
“If the risk parity players r still levered long credit, then they r the CDO equity of this cycle. End will b ugly” http://t.co/uR8ji9Ty $$ Jan 26, 2013
My problem is this: we have a dysfunctional credit market where yields are too low, and protections are… http://t.co/7mYgP0VQ Jan 26, 2013

FWIW

My week on twitter: 46 retweets received, 7 new listings, 87 new followers, 32 mentions. Via: http://t.co/SPrAWil0 Jan 31, 2013

A Summary of my Writings on Analyzing Insurance Stocks

Posted on 6 June 20106 June 2010 by David Merkel

Well, whaddaya know?? I received a nice mention at The Ideas Report For Serious Investors. Unexpected, and an honor. I really like their blog and have added it to my RSS reader.? So, I left them this comment, which is not published yet:

Hey, thanks for mentioning me. Here’s a bonus for those with access to RealMoney:

And away from RealMoney:

I hope you enjoy these. They are the bulk of my thoughts on insurance stocks, aside from issue-specific commentary.

David

Disclosure: long ALL NWLI SAFT RGA AIZ PRE CB

I went back through all of my blog posts in insurance to analyze what were the best things I had written on insurance investing.? I also added one more blog post idea to my list.? A long time ago, I wrote a 16-page paper summarizing the whole insurance industry for a former employer.? It was urgent, so I pulled an all-nighter at the ripe old age of 43.? He was deeply grateful for the piece, and then it never got published.? It was supposed to span three issues of his newsletter, but it never appeared in one.? I have no idea why it never ran, but it bugged me that it never did.? So, with a little updating, I hope to release it in serial form sometime in the next few months.? I have lost the original file, so I will have to scan it in and edit it.

But enough of that — the articles listed above are a reasonable summary of how I analyze insurance and other financial stocks.? For those that invest in stocks, I hope you enjoy these posts.

Postscript — Apologies to PlanMaestro, Manual of Ideas republished his work, and I appreciate the two mentions from him at his blog, Variant Perceptions.? He expands his thoughts on my most recent piece on AIG’s under-reserving.? Keep it up PlanMaestro, and remember, PartnerRe does not discount its reserves.