I’m getting to some Friday File-type chatter a bit early this week because things have been a little wild, and because some portfolio moves and questions have come up. We had a crazy week while I was gone for Thanksgiving, and I’m catching up with some portfolio moves and answers to some questions that readers have been throwing our way. I’ll probably have something to write to you about on Friday, too, but thought I’d get started now.
First, I should note that I added to my Lancashire Holdings (LRE.L, LCSHF) position when a limit order I had on file was triggered. The stock has been falling of late, and the lion’s share of that fall was because of the stock going ex-dividend last week (they’ll shortly be paying a $1.20 special dividend to shareholders who owned the stock as of November 28) — but the stock has come down substantially more than that $1.20.
Lancashire appears to me to be a really well-run insurance company, with excellent underwriting and great capital discipline (that’s why they return money to shareholders when they don’t need it, this year’s special dividend is typical)… they are in a tough business right now, with insurance competition so strong, but insurance is a necessary part of the global economy and they have consistently been a very profitable underwriter. That doesn’t go out of style for long, I will keep an eye on them but I think this is a stock I’d like to have in my insurance equity portfolio for a long time and I think the shares are largely down because investors who held primarily for that dividend have moved on and there’s been limited buying interested — which has a real impact on stocks that are not particularly liquid. (For those who haven’t been reading my missives for long, there are a lot of “different” insurance stocks that I like, including the several that I own — Berkshire Hathaway (BRK-B), Markel (MKL), Greenlight Re (GLRE) and Third Point Re (TPRE).
And I’ve also been interested in putting more money into Pershing Square’s new publicly traded closed-end hedge fund, though I try not to talk too much about it because it’s not easy for most individual U.S. investors to buy (PSH.AS, it only trades in Amsterdam at the moment — so folks might be able to buy it by calling ...