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Far Horizon  

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  • Bill Gross: March Madness [View article]
    Blank....no worries mate.
    Will think about an article on TRV, I am not writing much at the moment as my day job is keeping me pretty busy right now!
    UW Reserve analysis is a pretty rich topic. You could probably Google some decent papers on the topic from the Casualty Actuarial Society, but those guys get complex quickly. In a nutshell, Insurers disclose reserve triangles in their financial statements. These show the history of each accident year as it matures over time, and you can see the pattern of "incurred claims" which are those paid out already plus those lodged by clients but not yet paid out, and " incurred but not reported" claims which they know must be out there, but haven't been lodged yet. Watching how consistently these numbers move over the years can tell a lot about the quality of the business and also how management is behaving - but only to the informed eye. Anything inconsistent, or " lumpy" in the triangles is a hint to look deeper.
    Sorry if this is too high level......its a tough thing to explain without examples etc.
    Apr 18, 2015. 04:05 PM | 2 Likes Like |Link to Comment
  • Bill Gross: March Madness [View article]
    Blank blank, good to see a fellow Aussie on SA. I am not sure if there's a book on how to evaluate insurance companies. You might find this article a useful place to start your thought process. http://seekingalpha.co...
    TRV is a nice stock, and more of an underwriting than investment driven model. With insurance stocks, please be careful!
    Apr 18, 2015. 12:51 AM | Likes Like |Link to Comment
  • 4% Dividend Yield Portfolio: Take Advantage Of The Volatility [View article]
    Thanks Ron. The other impact of volatility that I like is that it makes writing options a more compelling strategy. As an example the May 80 puts on VNQ are trading at .50, on a positive day for the ETF. This generates an annualised yield of 5.2% if not assigned, or an entry point of 79.5 on the ETF. I like to wait for a day when the price is down to maximise the option price. In this environment there is a good chance of assignment, and with short duration puts the risk of overpaying for the stock is somewhat mitigated. With a series of overlapping puts at my target entry point, find I can I usually develop a meaningful position over a few months more efficiently than by buying the dips. For a position I am really keen on, a put closer to the money or mixing in straight purchases has also proved effective.
    Apr 2, 2015. 06:01 PM | 1 Like Like |Link to Comment
  • Oil Peaks And Valleys: Why Big Oil Is A Bargain [View article]
    Totally agree - if investing vs trading, averaging in to the majors over 12-18 months seems a compelling strategy. I am also watching the alternatives - ESP solar carefully for entry points.
    Mar 30, 2015. 09:25 AM | Likes Like |Link to Comment
  • The Earnings Recession Of 2015: Stock Market In Danger? [View article]
    It's always worth reading press from the other side of the pond. Headline from today's FT...." US corporate profits heading for second consecutive quarterly decline". I usually find good analysis at FT.com......
    Mar 6, 2015. 11:47 PM | 1 Like Like |Link to Comment
  • The Earnings Recession Of 2015: Stock Market In Danger? [View article]
    So there are prettier blocks?!
    Mar 6, 2015. 02:24 PM | Likes Like |Link to Comment
  • Emerging Markets Scorecard 2014 - Which Will Outperform In 2015? [View article]
    Thanks for picking up that error! Luckily it doesn't detract too much from the article.
    Jan 20, 2015. 08:45 PM | Likes Like |Link to Comment
  • Emerging Markets Scorecard 2014 - Which Will Outperform In 2015? [View article]
    Kimbo, I agree that many great developed market stocks have emerging market exposure, and this is one of the things I consider when evaluating candidates. A couple of things make direct EM exposure attractive to me for an allocation of my portfolio; diversification from the performance of major indices, lower comparative valuations, but most important, focussed exposures on the fastest growing economies in the world.
    A strategy of targeting established stocks with global footprints is a lower risk way to get EM exposure, but for me is only part of the puzzle.
    Jan 5, 2015. 05:37 PM | 1 Like Like |Link to Comment
  • Emerging Markets Scorecard 2014 - Which Will Outperform In 2015? [View article]
    Yes....long greenback was a gimme in 2014. One of my better calls was short AUD/USD. Looking like all 1 way traffic this year too unless China pulls a rabbit out of the hat and commodity demand picks up.
    Jan 5, 2015. 04:59 AM | Likes Like |Link to Comment
  • Emerging Markets Scorecard 2014 - Which Will Outperform In 2015? [View article]
    SC - I couldn't agree more on currency. For many EMs that's a debt problem, so I highlight that element in my article. With Russia, an economy built around a single commodity which devalues fast and hard has proven to take the currency with it.....currency hedged plays are helpful.....but costly!
    Jan 5, 2015. 04:36 AM | Likes Like |Link to Comment
  • Emerging Markets Scorecard 2014 - Which Will Outperform In 2015? [View article]
    Pof, congrats on some great picks! I see India is a big contributor for you. My own guess is that the next 12 months will see harder yards for that part. Best of luck with your ADR basket for 2105.
    Jan 5, 2015. 04:32 AM | Likes Like |Link to Comment
  • Why The Canadian Dollar Is Under Pressure [View article]
    Andrew, interested to see this and your article on the Aussie. Both face downward pressure from similar factors. I see the Loonie/ Aussie parity having slipped in favour of the Loonie last 12 months.....what's your view on the future outlook for the pair?
    Jan 5, 2015. 03:44 AM | Likes Like |Link to Comment
  • Emerging Markets Scorecard 2014 - Which Will Outperform In 2015? [View article]
    Thanks for the comment BB. I visit Vietnam and many other countries in the region on multiple Asian trips every year, and completely agree with you. It has a different feel to other Asian markets.....a long way to go to reach developed status, but it feels like a good time to get in on the development curve.
    Jan 5, 2015. 02:31 AM | 1 Like Like |Link to Comment
  • Emerging Markets Scorecard 2014 - Which Will Outperform In 2015? [View article]
    Thanks for the question, and the interpretation! Yes, I see Latam overall as facing a tough year next year. Mexico should do well if US does well, but on a valuation basis, looks stretched, and there are better risk/return plays in my point of view.
    Jan 5, 2015. 02:25 AM | Likes Like |Link to Comment
  • My 2015 Value Stock Picks [View article]
    Robert, I would caution you around the differences between Reinsurance and direct Insurance. RE is a great company, and past results have been stellar, but the Reinsurance space is under assault right now from disrupters from other sectors......Reinsurance is in danger of becoming truly commoditised, and margins are under pressure. He who owns the client is king. Allstate have a great franchise, and I would back their ability to capitalise on that over a reinsurance play. Good luck out there!
    Jan 3, 2015. 02:52 AM | 1 Like Like |Link to Comment
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