I predict this coming week will be a watershed. In 3 months or so the big wheels may say, "Where did it start?", and the answer will be, in Florida during the week of 17th April.
Like the infamous tsunami it'll start with what looks like a little wave, easily ignored at first. Ignored by general counsel and buddies, it has the potential to develop it's own motion, touching credibility, market share, ratings, and finally when it's too late to stop it could have the power to hit the share price.
I also predict the media will have a field day. Comparisons with the AIG blood-letting will be drawn; insurance and reinsurance deals, regulators, General RE, Imagine RE, NICO, Berkshire Hathaway, all already in place. Add the old buddies Buffett and Byrne, massive jumps in share price, $750m in profits over 4 years - it'll be too tempting for the media to ignore.
I'll watch developments, with some relish; couldn't happen to a nicer bunch. Some people are in for a rough ride.
Actually I have been in meetings where people like Dave Nicholson-no longer there, Drew Carnese and Morgan Davis have said that they would sell anything WTM owned if they could get a sucker for it. One time, Morgan even got up and crowed about a possible purchase of Firemans Fund, saying that it would be so sweet to sell FF to the Germans for $3BN and buy it back for 1/3rd of that price. Not that it was a good deal, only that he could look good by humbling Allianz. How is that good for anyone?
All real comments addressed to OBI folks by the Company execs. If you were inside the Company having these things said to you, then possibly, you might feel the same as others who post here.
Look, you've probably made a lot of money on the stock and thats great, but don't hold it too long.
Harry. Let me see if I understand.
Somebody writes in Buffy's report that insurance eventual losses are hard to predict and that makes it OK for WTM to have under-reserved or to have bozo actuaries? The same WTM that believes that a "strong balance sheet" is a principal?
That means it's ok for OBI to have botched the claims on discontinued business?
Did I get it right? Will WTM ever get it right?
"Whereas it's common knowledge hereabouts that OBI's been for sale right from the git-go"
I love it. My investment strategy with this co is everytime I read an unsubstantiated fact (like the one above) I buy more stock. It's been working very well....
'It does, however, seem better than those managements that have no stated principles and then make them up as they go along.'
That's just dopey.
'...doesn't sound by the tone of the annual for the last 3 years that these are anything but relatively permanent holdings.'
Whereas it's common knowledge hereabouts that OBI's been for sale right from the git-go. So, so much for forthrightness and communication.
Y'all had best HOPE they sucker some poor fools into buying OBI soon. The franchise is worth less and less every day.
You're absolutely right. Look at all the happy shareholders at St. Paul Travelers, AIG, CNA, Zurich, Converium, Harleysville, Fairfax, XL, Ohio Casualty, Cincinnati, Fireman's Fund, not to mention Reliance, Royal, Frontier, PMA. If only White Mountains could get its act together, they could become one of them!
It does, however, seem better than those managements that have no stated principles and then make them up as they go along. A principle gives you something to shoot for, much much better than leaving it open ended. But in their history, how many of their major assets has WTM actually sold? When we speak of buying and selling operating companies, what's WTM's history on that, doesn't sound by the tone of the annual for the last 3 years that these are anything but relatively permanent holdings.
I'm not sure that they care to understand. As this isn't a widely traded stock, my guess is that they are insiders to the point where they are benefiting from the rise in the stock price. They really don't see the day to day issues that we have become concerned about. IF the stock tanks another 70 or 80 a share, I think that they might become worried about their perormance shares.
You're not getting it. This is something that really pisses people off. We all hear what White Mountains SAYS. They SAY really neat stuff. But there isn't any substantial correlation between what they post on their web site and how they actually conduct their daily operations.
Besterman-those are really good operating principles. From an insurance standpoint, they are very appropriate.
My daddy used to say that it doesn't matter what people say, rather its what people do.Look not what is said in the glossy color brochures,but what is done at OBI-the performance shares given to management reward stock performance, not underwriting profit or any other metric.
WTM is a great investment vehicle, but that is not the same as as being a great insurance company. Investment companies buy and sell units as they were commodities as that is how they view the parts of their firm. Insurance companies know intrinsicly that you need to fufill the promise of risk transfer and financial stability repeatedly over the course of many years to earn a good place in the industry and make an appropriate profit for the stockholders. There is a difference.