On Financial Intermediation
I appreciate Steve Randy Waldman, who writes the excellent blog Interfluidity. Even before I started blogging, while I was at RealMoney, we interacted over CPDOs, along with Alea, and several others that were onto the scam. That was a fun time, because aside from the Canadian rating agency Dominion, there was no one else questioning...
Two Reasons for Life Insurance
A reader wrote to me: I periodically read your blog and it seems like you have a strong grasp of the insurance industry. As well, given your background as a life actuary I imagine you might have some valuable insights on whole-life products. I am having a baby in the late spring and have been...
Industry Ranks January 2012
I’m working on my quarterly reshaping — where I choose new companies to enter my portfolio. The first part of this is industry analysis. My main industry model is illustrated in the graphic. Green industries are cold. Red industries are hot. If you like to play momentum, look at the red zone, and ask the...
On Insurance Stock Indexes
I’m still toying with the idea of starting an insurance-only hedge fund. I own a lot of insurers, and I think that I get the better of that market. Where I have a harder time is with what to short. Shorting is tactical not structural, and I am less good at the tactical vs structural. ...
The Rules, Part XXVII, and, Seeming Cheapness vs Margin of Safety
The market takes action against firms that carry positions bigger than their funding base can handle. Temporarily, things may look good as the position is established, because the price rises as the position shifts from being a marginal part of the market to a structural part of the market. After that happens, valuation-motivated sellers appear...
Risk-Based Liquidity
When there is financial failure, it comes as a result of illiquidity. Now, truly, these parties are insolvent, because they took the risk of not being able to pay cash when it was due. Illiquidity and insolvency are really the same thing, though many obfuscate. If you can’t pay cash, it doesn’t matter what your...
Risk-Based Liquidity
When there is financial failure, it comes as a result of illiquidity. Now, truly, these parties are insolvent, because they took the risk of not being able to pay cash when it was due. Illiquidity and insolvency are really the same thing, though many obfuscate. If you can’t pay cash, it doesn’t matter what your...
Deal Profile: Tokio Marine to Acquire Delphi for $2.66 Billion
Japanese outbound M&A continues unabated as the year draws to a close, as Japan’s largest nonlife insurer Tokio Marine Holdings Inc. agrees to buy Delphi Financial Group Inc. for US$2.66 billion.
Industry Ranks December 2011
I’m working on my quarterly reshaping — where I choose new companies to enter my portfolio. The first part of this is industry analysis. My main industry model is illustrated in the graphic. Green industries are cold. Red industries are hot. If you like to play momentum, look at the red zone, and ask the...
An Insurance Hedge Fund
Some friends of mine asked me if I could create an insurance-centric hedge fund. I said that it was unlikely because I’m not good at shorting. They pressed me on it, because they knew if I had good longs, with my quantitative skills, I could create a credible short position that might hedge the longs....
Heading to Chicago
Next Monday I head off to the Society of Actuaries Annual Meeting in Chicago. I’m giving talks at two sessions: the first one on Monday afternoon is called Being Social–It’s a Game Changer. It is meant to introduce and encourage actuaries in the use of social media. My next blog post is going going to...
