Making Hay Monday - February 26th, 2024
High-level macro-market insights, actionable economic forecasts, and plenty of friendly candor to give you a fighting chance in the day's financial fray.
“Insurers receive premiums upfront and pay claims later. ... This collect-now, pay-later model leaves us holding large sums — money we call ‘float’ — that will eventually go to others. Meanwhile, we get to invest this float for Berkshire's benefit.” -Warren Buffett
“Predicting rain doesn’t count, building the ark does.” -Warren Buffett
“Too Big To [Not] Succeed”?
Over the years, I’ve acquired a reputation as being a perma-bull on energy. That’s despite the fact there have been times when I’ve suggested reducing exposure to that long-out-of-favor sector. A recent example of that was with midstream (pipelines) back in January.
In fact, one recent interviewer spontaneously exclaimed that our discussion brought back an old memory. “That’s right!” he almost shouted during our chat earlier this month. “You were the MLP guy.” (MLP stands for Master Limited Partnership; many midstream assets are still held in these “wrappers” which are essentially pass-through entities like REITs.)
Lately, though, I’ve become attracted to the valuations and price action by certain leading insurance companies. Another of those will be the subject of this week’s Making Hay Monday.