By and large, I'm a big advocate of the KISS rule in investing (Keep It Simple, Stupid). More often than not, if an investment idea takes a lot of explanation, it's not worth the trouble. While Tower Group (NASDAQ:TWGP) was once a relatively straightforward P&C insurance play, the company's proposed merger with Canopius makes this a much more complicated investment idea. While the reasons for the merger are sound and the potential value here is high, investors need to weigh that carefully against the risks and increasing complexity of the company.
It Used To Be So Simple...
At the time when I first bought Tower Group shares, it was a pretty simple investment idea. Tower Group operated a...
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