Sep 8, 2009

-NYSE up 88.9 (1.3%) to 6,726.06.

-DJIA up 56.07 (0.6%) to 9,497.

Zeke Ashton, founder and Managing Partner of Centaur Capital, recently concluded his presentation at the Value Investing Congress. The following are our notes from the presentation, entitled Surviving the Worst Case: Risk Management and Value Investing.

LONG Investment Idea: Alleghany (Y)

Q1 2009 Earnings Call

May 01, 2009 10:00 AM ET

What a Difference a Year Makes…
Last year I highlighted Odyssey Re (ORH) as the stock I liked best. A good management team, conservative investment portfolio, good insurance underwriting, great management, and (of course) a cheap price were the main factors in my analysis.

Flash forward one year and the shares have risen about 10% (including dividends) in an 11 month stretch where virtually every single stock plummeted in value. It may be a surprise though to learn that I like Odyssey Re just as much now as I did then. The company is even cheaper now, and many of the business-specific risks I highlighted have been reduced or eliminated. While there are many interesting relative values available, Odyssey is still unquestionably a good deal in my opinion.

Last year I highlighted Odyssey Re (ORH) as the stock I liked best. A good management team, conservative investment portfolio, good insurance underwriting, great management, and, of course, a cheap price were the main factors in my analysis.

Flash forward one year and the shares have risen about 10% (including dividends) in an 11 month stretch where virtually every single stock plummeted in value. It may be a surprise though to learn that I like Odyssey Re just as much now as I did then. The company is even cheaper now, and many of the business specific risks I highlighted have been reduced or eliminated. While there are many interesting relative values available, Odyssey is still unquestionably a good deal in my opinion.

Q4 2008 Earnings Call

February 20, 2009 10:00 am ET

I want to give a hat tip to TraderMark over at Fundmymutualfund.com for assembling this list. 2008 was a chaotic year, to say the least, and with indexes down huge on the year, there weren't many rays of light in the abyss known as the 2008 stock market.

The following though, is a list of some of best performing stocks for the year of 2008:

Catastrophes both natural and man-made have been hitting reinsurance companies, but the outlook is good. Shares of all the reinsurance companies were pummeled in October, with the combination of Hurricanes Ike and Gustav hitting underwriting profits while the capital markets carved a mark-to-market chunk out of investment portfolios.

Things seemed to improve around Halloween and into November, as signs of “hardening” premium rates began to emerge. But shares have recently retested their lows as the dysfunctional capital markets – especially for mortgage- and asset-backed securities – overshadow improving fundamentals for the group. This has created opportunity for the intrepid value investor.

First up in the 3rd quarter edition of our 2008 hedge fund tracking series is T2 Partners. T2, as of the current filing, is a $132 million value fund run by Whitney Tilson. In addition to running his fund, Tilson is very active in the value investing community, releasing his Value Investor Insight newsletter and organizing the Value Investing Congress, which we covered a few weeks earlier. We also recently covered Tilson's latest thoughts on this volatile market here.

Tilson launched his investment career in 1999. Taken from his Tilson Funds website,

Q3 2008 Earnings Call Transcript

October 31, 2008, 10:00 am ET

Insurance companies have seen their share prices plummet along with those of their investment banking brethren. Fear, however, may have caused some investors to underestimate the value of some insurance companies’ balance sheets. While insurance giants have suffered the blow from subprime exposure, some analysts have begun to emphasize the value in the plain-vanilla investments at the heart of many insurance companies’ investments.

With cleaner balance sheets and more transparent structures, many insurance companies have been surprisingly resilient in the face of financial crisis. This trend has been mirrored in our Sector Momentum Rankings and the performance of the PowerShares Dynamic Insurance Portfolio (PIC). From September 3 to October 1, PIC moved from the No. 24 position in our rankings to the No. 7 position. Year to date, PIC is down less than 15%—a nearly 12% improvement over that of the S&P 500.

Q2 2008 Earnings Call

August 1, 2008 10:00 am ET

In my last post I highlighted the reasons why I own Odyssey Re (ORH), and also some of the risks in the investment.

Of the 5 risks I highlighted, one was relating to a dispute about some tax transactions in the past wrt to the Fairfax Financial (FFH) parent company:

Both the property and casualty [P&C] insurers and the reinsurers are getting cheap. 

I ran a screen of 26 P&C insurers and reinsurers.  These are the price to book and price to tangible book values of the companies.

Don't look away, it's a financial.

The insurance industry isn’t exactly viewed as a panacea for the investment woes inflicted on many of us over the past several months. While not as lowly as banking or retail, the insurance industry has certinaly seen its share of pain recently. The most notable problems are due to very soft pricing industry wide, and write downs of all sorts of products from Asset Backed bonds, CDS contracts, and other acronym-filled toxic waste that need no introductions in this format. Both of these problems are well captured by mighty AIG’s (AIG) most recent results and consequent $20B recapitalization plan.

Q1 2008 Earnings Call

May 2, 2008 10:00 am ET

Odyssey Re Holdings Corp. (ORH)

Q4 2007 Earnings Call

Benjamin Graham is widely regarded to be the founder of modern value investing. His greatest student, Warren Buffett, attributes much of his success to Graham’s teachings.

Though Graham believed that much research is necessary and that no stock screening methodology is perfect, he did give us some guidelines on how to perform initial screening techniques to limit the number of investments that should be researched further. The following is a list of the attributes he suggests investors look for first. The italics represent our changes to his methodology based on the current market:

1. Price-to-book (P/B) ratio of less than 1.2.

Odyssey Re Holdings Corp. (ORH)

Q3 2007 Earnings Call

Financial