Forum Archive Index - February 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

 

Peter,

 

There is some profit taking in LACO and CLH.

That is to be expected from time to time.

 

At the price of $3.50, the P/E of CLH could be about 32-33 and this ought to decline to a more respectable 24-25, next year.

Please note that it has 85 mill. shares with a present cap. of $A 300 mill!

 

Re. QBE, I have always compared this company with BCH: astute management and ability to expand in rough times!

However, insurance companies can throw out their probability projections as they are based on invalid data: The frequency and size of the disasters are now so much greater!

 

The strong competition coupled with the scale of disasters had damaged many insurance / reinsurance companies. 

The sector was subsequently recapitalized by takeovers.

 

Now we have another bad year of claims coming up -Sydney is just one frequent target- and the companies will be increasing the premiums during the next few years!

I think that they may refuse to reinsure where the frequency of disasters is just too high.

I learned some of their jargon over the years, eg. 'short tail and long tail classes' is part of it!

 

Some American companies are very exposed to investments in Dot-com and tech. companies: refer to my note of Jan. 13. Another note of Jan 8 is also interesting!

 

Their final announcement will be on March 14 and we just have to wait till then!

 

Any comments?

Gerry 

( Holds mentioned stocks )