When I was writing at RealMoney.com, I would often do little posts in the Columnists Conversation, and title them “Notes and Comments,” or something like that.  I don’t normally do that here, but I would like to tie up some loose ends.

1) I received the following e-mail six weeks ago, and I feel it is worthy to be shared with readers:

Hi David,

I follow the Aleph blog from time to time. I run value and special situations oriented hedge fund whose goal is to purchase businesses that sell for at least 50 cents on the dollar. It seems that we are like minded in investment terms. I have an extensive investment checklist which that I believe can add value to investors. It took me a few years and I derived it by reading stacks of annual reports from Buffett, Klarman, etc…

If it adds value to your readers, more than happy to share the 90+item investment checklist.

http://www.brarifunds.com/wp-content/uploads/BIF-Checklist.pdf

Regards,

Pope

Pope Brar, Managing Partner/Founder

Brar Investment Funds

I’ve read through the checklist and it is a good one.  It has all of the elements of my processes (though I am not as rigorous) and much more.  His checklist is worth a read.  Have a look at it.

2) From last night’s post, a reader asked:

Lots of insurers here.  Given your expertise in that area, I’d be curious to know if you think this screen is turning up names that are on the riskier end of the spectrum.

I wrote a seven part series on this, and here are the summary ideas, and the links:

  1. Shrinking the share count
  2. Growing Fully Convertible Book Value per Share
  3. Price Momentum and Mean-Reversion
  4. On Conservative Management & Reserving
  5. Some Things Can’t Be Underwritten
  6. Analyzing Insurance Sub-Industries and the PB-ROE model
  7. Insurance Accounting and Miscellaneous Insurance Insights 

I’ve been decreasing my insurance shareholdings lately because:

  • Pricing is weak for most P&C coverages, and
  • I don’t trust the reserving for secondary guarantees in life and annuity policies.

Here’s the insurance companies from last might’s article in decreasing order of earnings yield:

CompanyTickerIndustryCountryB/PE/PROE
Imperial Holdings, Inc.IFT0709 – Insurance (Life)United States 1.38 37.03 26.83
Greenlight Capital Re, Ltd.GLRE0715 – Insurance (P&C)Cayman Islands 0.90 19.45 21.61
Assured Guaranty Ltd.AGO0715 – Insurance (P&C)Bermuda 1.18 18.59 15.75
American Equity Investment LifAEL0709 – Insurance (Life)United States 0.86 16.77 19.50
Everest Re Group LtdRE0715 – Insurance (P&C)Bermuda 0.88 15.35 17.44
Validus Holdings, Ltd.VR0715 – Insurance (P&C)Bermuda 1.00 13.30 13.30
Axis Capital Holdings LimitedAXS0715 – Insurance (P&C)Bermuda 1.01 13.20 13.07
Endurance Specialty Holdings LENH0715 – Insurance (P&C)Bermuda 1.31 12.55 9.58
CNO Financial Group IncCNO0709 – Insurance (Life)United States 1.29 12.39 9.60
American International Group IAIG0715 – Insurance (P&C)United States 1.34 12.00 8.96
Montpelier Re Holdings Ltd.MRH0715 – Insurance (P&C)Bermuda 0.99 11.83 11.95
Allied World Assurance Co HoldAWH0715 – Insurance (P&C)Switzerland 1.00 11.73 11.73
XL Group plcXL0715 – Insurance (P&C)Ireland 1.12 11.72 10.46
Argo Group International HoldiAGII0715 – Insurance (P&C)Bermuda 1.27 11.55 9.09
Platinum Underwriters HoldingsPTP0715 – Insurance (P&C)Bermuda 1.02 11.25 11.03
Allianz SE (ADR)AZSEY0715 – Insurance (P&C)Germany 0.92 11.08 12.04
ACE LimitedACE0715 – Insurance (P&C)Switzerland 0.84 10.92 13.00
ProAssurance CorporationPRA0715 – Insurance (P&C)United States 0.87 10.86 12.48
MBIA Inc.MBI0715 – Insurance (P&C)United States 1.45 10.86 7.49
National Western Life InsurancNWLI0709 – Insurance (Life)United States 1.63 10.85 6.66
Partnerre LtdPRE0715 – Insurance (P&C)Bermuda 1.23 10.75 8.74
Old Republic International CorORI0715 – Insurance (P&C)United States 0.88 10.53 11.97
Employers Holdings, Inc.EIG0706 – Insurance (A&H)United States 0.93 10.46 11.25
United Fire Group, Inc.UFCS0715 – Insurance (P&C)United States 1.05 10.30 9.81
Maiden Holdings, Ltd.MHLD0715 – Insurance (P&C)Bermuda 0.93 10.11 10.87
EMC Insurance Group Inc.EMCI0715 – Insurance (P&C)United States 1.02 9.88 9.69
Investors Title CompanyITIC0715 – Insurance (P&C)United States 0.86 9.85 11.45
Protective Life Corp.PL0709 – Insurance (Life)United States 0.92 9.76 10.61
Lincoln National CorporationLNC0709 – Insurance (Life)United States 1.07 9.76 9.12
FBL Financial GroupFFG0709 – Insurance (Life)United States 0.96 9.73 10.14
Assurant, Inc.AIZ0709 – Insurance (Life)United States 1.00
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