by Travis Johnson, Stock Gumshoe | January 22, 2017 8:06 pm
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Source URL: https://www.stockgumshoe.com/2017/01/annual-review-insurance-and-conglomerates/
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OH MY TRAVIS! Were you gazing over my shoulder or I over yours? With one exception, Fosun, a company I’d not heard of till this article but will promptly read all I can find about it. And, possibly buy 1% of it as well! This portion of ‘our portfolios’ mirror each other in stock name AND percentage owned! I’ve never experienced a situation as unique as this in my 35 years as a stockbroker. I began in the brokerage business many years ago, prior to many women becoming a stockbroker. There still are very few. Sadly or maybe not so sadly, I was unaware there were few women in the brokerage business when I applied to the five top houses in Dallas, TX. All agreed to hire me, if I passed the test. Upon completion and passing, I needed to take my ‘paperwork’ to each firm, leaving it for the “authorities” to review. AGE was so kind, understanding, courteous and ever so friendly; for no other reason I chose to work for them. How fortuitous to have done so! My first 29 years were with A G Edwards – a marvelous firm by all regards, and many will tell this to anyone who asks. A new brokerage, Benjamin F Edwards & Company, began in 2005. It was established and is thriving under the leadership of Benjamin (Tad) F, Edwards IV, a son of the last A G Edwards 46 year CEO, Ben Edwards. What a magnificent man and leader he was. Beloved by all his employees. The new Edwards is fashioned after the same beliefs in quality, and service -but service first and has many of the previous leader of the old A G Edwards on staff, ensuring a continuation of the ASG standards.
Interesting, or to me it is, but this has nothing to do with the similarities in ‘our portfolios’. You mentioned additional portions of your portfolio – where might I find these? My curiosity now has been elevated to see where else we ‘thought alike’ when buying. I’m only a couple of month old new member of your paying group – the irregulars? I look forward to an answer as to where I might find you portfolio. Curiosity, what other companies do we hold ‘together’?
Thank you for your fine and detailed research. The one aspect I miss not being with a brokerage firm. You help fill in this gap. but MOST IMPORTANT, as well as you excellent srvice for those gullible enough tto buy a newsletter and actually believve what they spoon fed you – till it is soon discovered – ‘What in the world IS this? And what do they think they are doing with my money – if that person actually buoght the newsletter in order to know what stock was being so ridiculaouly pushed onthe unsuspecting punlic! A GREAT SERVUCE!
http://www.stockgumshoe.com/2017/01/annual-review-technology/
http://www.stockgumshoe.com/2017/01/annual-review-natural-resources-metals-mining/
I am hesitant to ask this question as it clearly shows my inexperience and it seems most of your posters are far more knowledgeable than I but as my mother always says, “there is no such thing as a stupid question”…”just stupid people”. lol
Seriously though Travis, you seem to prefer warrants over options and as warrants require dilution I was hoping you, or someone else could explain; in simple terms the advantage of warrants verses options.
Thanks for all the great discussions and sorry for the stupid question.
Travis, as always this is a great review. Thank you. It was a coincidence that today I started looking into some Chinese insurance companies as I believe they are operating in a secular growth market. I ran into the PICC group. They are priced cheaply, with 3% dividend and low P/E, P/FCF and reasonable P/B compared to their growth. Here is their latest presentation – http://www.picc.com/res/PICCCMS/structure/44cfadfdf2690638336b963d2c5015ce.pdf. I would appreciate your thoughts?
Anybody has thoughts on PICC group (ticker PPCCY)? They show 14% CAGR top-line growth in the last 5 years.
Hi Travis,
You’ve mentioned London-listed Lancashire Holdings Limited (LRE.L) in the past. Do you still hold this stock and what’s your current view on it? BTW I’ve been an Irregular for many years now and love your work!
I sold a while ago when I was raising money for something else, mostly because I didn’t see a big opportunity for them to grow and I expect their large dividends to be significantly smaller in the future (which I figure is likely to deter some of the investors who had held the shares mostly because of that 10%ish series of special dividends). I do like the company very much and think they are among the best and most consistent underwriters out there, but it’s not a “hold forever” or “hold at any price” stock because they don’t really compound — they get rid of their excess capital quickly by paying it out to shareholders, they don’t use it to build the company. A very legitimate strategy, and a good counter to the relentless compounding focus of some other insurers, but it’s not a stock I can hold and say that I’m confident will be substantially higher in ten years.
On the flip side, Lancashire would also be among the most appealing takeover candidates in the insurance world — the stock doesn’t look that cheap on a price/book basis because they pay out all that capital in dividends, but it would be a good fit for insurers who want a foothold in the Lloyd’s market and a great underwriting team (assuming, of course, that they can keep their talent). So there’s always the possibility that we’ll wake up one day and it will be 30% higher on a takeover bid.
I was reluctant to sell, as I am with most quality companies I own shares of, but not painfully so because I think it’s pretty fairly valued here.
Buffett’s Berkshire Buys German Pipe Company Wilhelm Schulz
https://twitter.com/BloombergDeals/status/823505947687550976
One issue I have about Berkshire Hathaway. Maybe nothing to most. But to me CEO Warren Buffets age of 87 come August 30, 2017. And what if the Wizard of Omaha, Oracles of Omaha, or ths Sage of Omaha. Where to pass away what would happen to largest shareholders position. Just thinking?
The vast majority is going to the Gates Foundation on Buffett’s death, and some of it has already been transferred. That will create more selling pressure on the shares than has been typical of Berkshire over the years, since the foundation is likely to gradually sell down the position to fund its work, but I would expect that to be gradual and not terribly meaningful over the long term. It’s also possible that Berkshire will change gears a bit and begin to pay a dividend at some point, particularly if new management can’t find ways to spend the increasing pile of cash that keeps rolling in the door, and that would lessen the foundation’s selling pressure to some extent… but that’s probably splitting hairs (and I think a dividend remains unlikely).
The age of Warren Buffett has been a significant issue for shareholders for at least 10-15 years, and it becomes slightly larger as an issue each year (and Charlie Munger, Warren’s partner and sounding board, is 93 — but still sounds awfully sharp to me) — but Warren and the board have done a better job of being clear about the transition to new management when it has to happen. Investments will be transitioned to the hedge fund managers that Warren brought on a few years ago to help with the portfolio, and operations will transition probably to one of the CEOs of one of the major subsidiaries, though Buffett has only said that they have a few internal candidates and are ready when the time comes.
I have grown increasingly confident that Berkshire’s culture of long-term management will survive Buffett and Munger’s passing, but the company will certainly change when that time comes.
Any thoughts on QCOM?
just can’t figure out what is going on…;-))
thanks!