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OneBeacon Insurance Group, Ltd. Message Board

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  • hugh.jarss hugh.jarss Feb 12, 2012 8:44 PM Flag

    be careful , mtwolf


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    • Are you confused with Mitt?

      • 1 Reply to mtwolfguy
      • Like I said when OB was $16.45 before carful here mtwolf. OB has dropped about $1.35 since and WTM is up about $20 to $25. You better keep close tabs on OB....the combined ratio is not as important in that OB is paying out about 80% of their income as dividends. I do not think it sustainable. Furthermore? Watch out for Washington. Obama put in his budget that he wants to raise taxes on DIVIDENDS from 15% to 30%. I don't think he'll get a 30% tax rate on dividends....but he very well might get a good bump UP from 15%. But if it was ever raised to 30%? Then get OUT of OB! Because WTM is not stupid. They control OB. If OB is taxed at the 35% rate once....and OB pays 80% of net earnings, mostly to WTM in dividends (WTM owns 80% of OB)......WTM isn't supid enough to take that rich dividend from OB.and then THEY pay ANOTHER 30% tax on it! Right after OB already paid a 35% corporate tax rate. My prediction is that if DC raises the dividend tax rate substantially, it will be UNATTRACTIVE for WTM to get them, if the gov't takes a huge second bite. WTM will deploy that cash tax effectively. Namely? Slash the dividend in OB...... stock sinks, because people like you only own OB for the dividend. That goes away? Down OB goes.....then WTM can just have OB repurchase their own stock, MUCH CHEAPEr, with what they used to pay in double taxed dividends. Very slowly WTM could just take OB almost private again, this way...and the unusal thing is WTM uses OB's money to do it! Not a single penny of their own.

        be very careful. WTM is, and will be...a far better buy long term.

13.00+0.23(+1.80%)Feb 5 4:01 PMEST