Message Font: Serif | Sans-Serif
No. of Recommendations: 4
Yours is an excellent question.
I'm not well placed to comment on the others, but certainly a good
place to start is to look at each year's book value growth % plus
dividend yield for that year, for each firm, and how that has
evolved over time. It's not that meaningful for a short interval,
but over 10-15 years you start to get a feel for what the
firm is capable of. Investment returns times leverage minus cost of
leverage (mostly avg cost of float) is what ultimately matters.
The only hard part is trying to estimate how sustainable each of those
is based on results (easy), corporate culture, and management skill.
My general rule is to avoid insurance firms entirely because management
has the means, opportunity and motive to crank leverage and
underestimate dangers and incurred liabilities.
I make a very few specific exceptions that I'm comfortable with,
so I generally don't end up in the position of trying to compare firms numerically.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.