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First Eagle Global A Message Board

bobby2loaves 2 posts  |  Last Activity: Jul 5, 2016 3:02 PM Member since: Apr 19, 2008
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  • Reply to

    Weird price increase

    by jsqfunk Jul 2, 2016 8:03 AM
    bobby2loaves bobby2loaves Jul 5, 2016 3:02 PM Flag

    Jumbie, I have listened to every conference call and investor presentation WRB has had in the past 7 years, probably about 40 in all. Not sure #41 is going to be all that telling.

    There is certainly risk to my approach here. If someone decides to make a bid on WRB, or if a hard market takes hold, the stock may run away without me holding my former massive stake.

    But that's not how I invest. I buy good values and sell fairly valued ones.

    In case you never noticed, for the past 7 years, Bill has only been buying back shares in the 1.0-1.4x book range. Not a bad plan if you ask me.

  • Reply to

    Weird price increase

    by jsqfunk Jul 2, 2016 8:03 AM
    bobby2loaves bobby2loaves Jul 4, 2016 1:17 PM Flag

    I'm not complaining either.

    That said, the whole P&C world was up that day. Not sure why though. Whatever the reason, with WRB up at 1.55x book here, and at all-time highs, I decided to sell most of my long-held shares in the $59-$60 last week.

    I've enjoyed holding a ridiculous number of shares the past 6 years, while the stock traded in the ridiculously undervalued 1.15x-1.50x book range.

    But now that the stock is closer to what I deem the fair value range of 1.5x-2.0x book, I've scaled back from WRB being as much as 90% of portfolio (yes, you read that right) to a mere regular sized holding of 20%.

    I'm a little bummed about the whole thing, as I would have loved to have ridden an undervalued WRB for many more years like the past 6. And yet, I'm a little relieved to be back to a large cash position to avoid the next market downturn, and then take advantage.

    Such is the life of a value investor. And with WRB and the S&P at their highest valuations in 8-10 years (depends on which metric you choose for which), it's time to get more cautious.

    Thank goodness for WRB, which stayed dirt cheap for so long after the financial crisis.

    Extremely well run company.

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