Anonymous bloggers are often discredited because they hide behind a veil of secrecy. As such, they don’t have to suffer the consequences of their actions/comments. However, we at Stone Street Advisors have argued that anonymity is not always “bad.” Many of my followers know who I am and what I do for a “living.” I prefer to “labor in shadows” in an effort to keep my writing uncompromised from corporate edicts. I digress. This is a short note to take stock of my posts over the past two years. Continue reading
Presented without graphics. I have been watching BJ’s Restaurants for several months to see if the stock would fall from its Icarus like heights. The short story is that during that time it has yet to come back to a level that seem more “attractive” to my somewhat trained investment eye. For my first post of 2012, I present to you my top 12 reasons why you would be better served to buy one of the menu items before buying the stock.
In a downbeat article about AIG this weekend, Barron’s stated that “Chartis [AIG’s international property and casualty operation – and largest unit made] additions to its reserves…in nine out of 10 years. This means, of course, that claims overwhelmed the premiums they had collected…” Emphasis mine. As a loyal reader of the weekly magazine, I was a little disappointed at their characterization of reserving. Hopefully, this post will provide a little more clarity on the practice of reserving. While AIG may have taken writedowns, Barron’s incorrectly concludes that claims overwhelmed premiums. This gives the reader the false impression that any time an insurance company adds to reserves they are taking a loss. This is not the case. Continue reading
This will be brief. For those of you who follow the insurance industry, this will not come as a surprise. However, for the casual reader, this may be a shock. Atlantic Mutual – founded in 1838, once the largest marine and general insurance company in the US, was put into receivership (shut down by the insurance department due to insolvency). The once storied firm was one of the carriers who insured the Titanic – yes, that Titanic. Despite the loss, it survived. It even made it through the Great Depression. So what happened?
After being a loyal lessee for six years, I turned in the keys to one of my few luxuries after the lease of my second car expired. As a resident of Manhattan, I paid the “bargain” rate of $400 per month to park the vehicle which, after 39 months, had all of 21,000 miles. When you add up my lease payment, parking and insurance, I was paying $1,500 a month before I even put the key in the ignition. Why did I effectively “put” the car back to the company? One word: Zipcar Inc. (NASDAQ: ZIP).
So you weren’t part of “friends and family” and you didn’t get allocated shares in the Zipcar IPO. Is now th time to jump in? Continue reading for the answer. Continue reading
During the Great Recession plenty of money was made betting against the consumer. John Paulson, David Einhorn and other short sellers were vilified for profiting from the demise of the economy. They were ultimately vindicated as their analysis proved correct and consumers defaulted on a record amount of debt. In 2010, the number of non-business bankruptcy filings grew by 8.8% to 1.5 million. While this number may seem high, it is significantly lower than the 31.5% jump in 2009. Further, it is worth noting that last year’s filings are 32.7% below the 2.0 million filings in 2005. You may recall changes to the Bankruptcy Code went into effect in October 2005.
Bankruptcies are not a cure all for individuals’ unwanted debt. In fact, they don’t necessarily go away – but they do get smaller. In the shadow of these bankruptcy lead defaults lies Portfolio Recovery Associates, Inc. (NASDAQ: PRAA). With a market cap of $1.4 billion, PRAA is the leading receivables management company. They proudly proclaim: “We’re giving debt collection a good name.®” Continue reading