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No. of Recommendations: 2
I bought a stock on one of the newsletter recommendations and blindly trusted the opinion of the picker that this reinsurer was a great company, with Buffett-related management and its moat was growing. Blind faith led to thousands lost when I knew in my head this was not my type of company. I'll make my own mistakes from now on.

That company would be Montpelier Re, which I also own. Although my position in MRH is down as well, I am not sure that the verdict on the company has yet been delivered. While certainly the loss of a huge chunk of the company's equity in a single storm puts managment's approach to risk diversification in question, the nature of re-insurance will always be that even in a well run company many years of profits will be periodically interupted by a horrendous year. Thus, the owner of a re-in company stock must be willing to ride out the business cycle. What Katrina hammered home to me is that the relatively low P/B for MRH existed for a reason - the risk of the business and the risk that the company could be driven out of business.

Even after Katrina, MRH is still up from its founding in 2002.

Rog
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