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Selective Insurance Group Inc. Message Board

  • steeltrader99 steeltrader99 Oct 8, 2008 6:16 AM Flag

    Anybody think SIGI could go under?

    They are going to have to raise additional capital as I'm sure their portfolio has taken a beating the past couple weeks.

    Not sure how they will go about raising capital in this environment.

    Any thoughts?

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    • It's due to a market sickness known as reverse "stockholder value".... Or was there ever such a thing? Notice.. those stocks (outside of the financial area) that pay a decent dividend are being hurt less.

      So much for "stockholder value" without dividends as a reason for investing your hard earned money. That's what Swaps, Derivatives, and sub prime shit were based on.


      • 1 Reply to stockholderrr
      • Nice try, PJ. But you can't wipe away a decade's worth of catastrophically incorrect posts with a pair of parentheses.

        If you want to comment "(outside of the financial area)" there are many fine message boards you can pick from. Meanwhile, everything you've ever advocated has been destroyed "(inside of the financial area)". The financial stocks that did what you screamed about all these years have been murdered. Your claim repeated a thousand times that if only a stock will raise its dividend its stock value will go up has proven horrendously wrong. And the current irony is that your SIGI stock is giving you more in current income alone, with more to come, than hundreds of other financial stocks you could have chosen. So have nothing to complain about except for the other problems in your life, which is what your posts have always been about, thus their now wholly disproven assertions.

        By the way, I understand that General Motors is doing just fine (outside of the factors related to it being an auto stock).

        Enjoy the weekend.

    • Yes, I have a thought: What are you smoking?

      The entire time this message board has been up, the overwhelming argument has been over SIGI's capital management. Critics have complained (for their own personal reasons, but let's not get into that) that SIGI was too conservative, primarily on the dividend payout ratio, but on other matters as well. Often this was encapsulated by the thought: "They are generating excess capital, where's mine?"

      Well, the reasons for SIGI's conservative approach THEN are precisely showing up NOW in today's environment. Even when discussing their largely fixed-income investment portfolio, SIGI executives make a point of saying that if a particular issue has bond insurance, they only consider it "insurance-enhanced" and not the primary reason for making that investment -- the entire portfolio undergoes separate underwriting analysis.

      Your question implies that you think (assume?) that SIGI is one of those outfits whose primary purpose is to generate insurance float in order to build a stock market portfolio, like Buffett does (and he'll be fine) and like some Buffett imitators try to do (and they'll be murdered). Well, it's not. You want a comparable insurance company that's tried this approach, go comment on Cincinnati Financial. They blew a large wad of capital on their hometown bank, Fifth Third. Nothing remotely comparable has happened at Selective.

      Frankly, if a serious dilution were about to happen, there's no way the stock would be holding up as well as it has. Actually, through well-timed and not overdone buybacks, Selective has enhanced, not diluted, existing shareholders.

      I have no doubt that SIGI holds some securities that, rightly or wrongly, have to be marked to market in some sense. But unless you can point to some knowledge to show you were just firing blanks at any old insurance company, then I don't know what you're driving at (except the usual amateurish "be fearful when others are fearful, greedy when others are greedy" behavior you see on stock message boards).

      I often counsel people to actually study the investment materials (10-Qs, 10-Ks, investor presentations). You know what? I really mean it! This thread shows precisely why.

      • 1 Reply to playthekeys27
      • Now I ask, what were you smoking thinking SIGI was going to be able to weather the financial crisis without taking a hit to their investment portfolio. Their bond portfolio, which includes CMBS, took a significant hit in Q4. I saw it coming. All you had to do was look at the hit the preferred took in late 2008. It got down to $10. It amazed me that the preferred could get crushed while the common held up. The common is finally catching up to what the preferred holders knew months ago.

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