Interesting news….http://news.morningstar.com/articlenet/article.aspx?id=780584
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Yes, they adjusted very quickly after the election — which surprised me a little, and has made some investors worry that Watsa is being a bit capricious after being bearish for a long time. I’m curious to see what happens next, and what they’ve done (if anything) with their deflation bets — it’s a well-run insurance company, but they’ve definitely suffered because of Watsa’s bearish positioning recently, which is one of the risks of an investment-focused insurance company like this (or like Third Point Re or Greenlight Re or, to a lesser extent, Markel). I like the company without the bearish hedge, and they’ve generally done very well over the long term, but it certainly doesn’t play as strategic a role in my portfolio without the bearish hedge so I’ll be thinking about that in the months to come.
I’m still thinking the bubble will burst sooner or later. What other bearish/defensive choices are out there?