A journey of a thousand miles begins with a single step

1. Do something "New" 2. Collaborate with best people 3. Don't give up. Try not to give up. 4. Hope some good luck James Simons - Mathematics, Common Sense, and Good Luck: My Life and Careers

GEICO: 94% (avg in 2012 and 2013) Markel: 97.6% (avg between 2010 to 2014) The combined ratio of a P&C company I am interested in is 87% in 2014. Amazing!!!! Even though, the number is achieved in UK, not US. But with their complete focus on insurance business and light-asset model, they shall be able to replicate the same excellent result in US. Now, I become more confident about its expansion in US market. Here are some articles about Markel/Berkshire/Alleghany shared by Brooklyn Investor http://brooklyninvestor.blogspot.tw/2015/03/markel-2014-annual-report.html http://brooklyninvestor.blogspot.tw/2015/03/alleghany-annual-report-2014.html http://brooklyninvestor.blogspot.tw/2015/03/berkshire-hathaway-annual-report-2014.html There are some respectful competitors in North America, such as FairFax and Alleghany. 2015.3.28 Just read annual report of FairFax. The aggregate combined ratio is 90.8%. Detail information is listed below(Company name, combined ratio, profi...

資料來源 http://www.hsbc.com/investor-relations/investing-in-hsbc/latest-financial-information?WT.ac=HGHQ_Ir_h1.1_IMS_On 閱讀感想 1. 香港/英國的業務量占了44%. 78%的pre tax profix來自亞洲; 9.8%來自北美; 3.2%來自歐洲. 亞洲沒顧好, 就糟糕了. 2. 跨國企業宣稱的好處是, 某個地方好, 某個地方差, 平均而言, 獲利不會上下大幅波動. 但是為了要做到跨國監管, 所付出的成本也是很驚人的. 總體而言, 這樣的business model會比深耕單一國家好嗎? 08金融危機以來, 似乎美國 or 中國本土的bank的表現是比較好的. 這樣與其買進HSBC, 不如直接挑選各區域表現最好的銀行, 得到的投資收益是否會更好? 3. 業務龐雜, 不容易監管, 明顯的訴訟很多. 這樣賺錢的年, 還是要扣掉未來可能會被控訴的成本後, 剩下的才是真的收到口袋的 4. regulation要求越來越多, 導致成本上升(某種藉口?). ROE mid-term的目標調整為10%, 而非原本訂定的12~15%. 但這些年的成果來看, 10%好像都是很困難的...... 5. annual meeting transcript有放到網路上, 減少資訊不對稱, 對於一般投資人是友善的. 不過這可能也是法令法規的規範, 但相較之下, 台灣就.....唉

1. combined ratio 2. reserving adequacy 3. investment returns 4. competitive advantage & business model 5. management, incentive and capital allocation 6. financial strengthen: solvency II 7. valuation Take one or two P&C insurance companies in TW as analysis examples. 　 A company B company 　 combined ratio investment return combined ratio investment return 2013 94.59% 3.40% 92.54% 2.96% 2012 100.91% 4.44% 98.30% 1.04% 2011 97.40% -0.69% 96.31% 0.94% 2010 100.82% 5.85% 99.23% 7.12% 2009 90.94% 10.21% 　 　 2008 89.47% -5.89% 　 　 hard to compile data for reserving adequacy from annual reports => assume conservative management style. at least, the government will bail out when something goes wrong. similar business model, similar market condition, similar strategy => commodity business, no competitive advantage, lo...