Insurance Theme Checkup and some Buys, Sells and Hedges

Friday File look at favorite insurers, updates on royalty companies, and thoughts on some recent quarterly results from our Universe.

By Travis Johnson, Stock Gumshoe, November 1, 2013

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I’ve got a whole passel of things to comment on for you today — I want to update my thoughts on some insurance company stocks that I own and that I touted as beneficiaries of a big switch in the insurance market over the past year or so, check in on a buy and a sell I just made in my personal accounts, and share a couple other thoughts about stocks I own or have covered for you in the past. We’ve also got a new column from Myron to share with you, we’ll probably get that out tonight or over the weekend so you can have some time to think about the tiny little stocks he likes.

Oh, and if you’re being dazzled by that “miracle water” pitch from Agora, where they’re hinting about a nine-cent stock that will solve oil drillers’ bacteria problems without chemicals, we covered that one for you, the Irregulars, about three weeks ago when it first started circulating — it’s Integrated Environmental Technologies (IEVM), it trades over the counter and is far too small for Agora to be promoting it to their huge mailing lists as they’re doing (which is why it bumped up by almost 50% over the last couple days). My note on that is here. I’ll just repeat what I said in that article: be careful.

Insurance Theme: Greenlight, Markel, Third Point, and Berkshire

I started out 2013 with my favorite “big picture” investment theme being that a subset of the insurance business should do really well: The insurance companies who are good equity investors and don’t rely overly on fixed income returns. Leading that list for me at the time were Markel (MKL), Greenlight Re (GLRE), and Berkshire Hathaway (BRK-B) (even though Berkshire is much more than just an insurance company these days), and I added Third Point Re (TPRE) to the list when Dan Loeb’s insurer went public and was briefly available at book value.

I hope to continue to have opportunities to add to Berkshire on dips and it’s my second largest holding these days (I added most recently at $111, though would wait for real market weakness to add aggressively), and they should be reporting the third quarter results sometime fairly soon (and maybe making another big acquisition before too long — Warren Buffett is again sitting on $20 billion in “extra” ...

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