Monday, September 1, 2008
I spent this weekend listening to CNN with my "bed" computer researching and searching Hurricanes, Insurnace companies exposed to "super cats" or catastrophic events. I am an investor in Berkshire Hathaway - I have been adding to my position ratably (sic) similar to "dollar cost averaging."
I did other things this weekend including shopping, cleaning, teaching my puppy to ride inside my truck quietly - with her own seat belt harness (more comfortable than it sounds) I also watched the Wagon Days Parade in Sun Valley, Idaho. There were many varieties of horse drawn Wagons - and of course a "hit for the day" were the Clydesdale Team of Horses drawing the Budweiser Wagon - in perfect form.
Back to Berkshire Hathaway's exposure and my exposure, etc. to Hurricane losses. I spent about 10 hours on and off reading about the history of Berkshire's involvement in "super cats." The long and short of it turned out that after prior hurricanes, Rita, specifically, leading thru Katrina - the "super cat" insurance market, because of increased premiums in the past, was attracting more companies and thereby, eventually reducing the premiums below what Warren thought was to low a premium received for the risk taken. He therefore reduced is exposure to "super cats" substantially after Rita- Berkshire should not be hurt much by this current hurricane.
Tomorrow, Tuesday the market will open and immediately sell down "what they think" insurance companies that might be exposed. BRK will probably sell off nicely, I would say 9:30 to 10am, usually the excitable time frame of daily stock markets. I may probably buy in - if BRK/B ($3900 a share) goes down by atleast $150.
The ancillary information observed while doing this research/search, related the affect of Warren's demise on the stock of Berkshire Hathaway. Again, it appears that the "boneheads," who "floor the gas peddle" when the lights turn "green" and slam on the brakes when the green goes yellow to red, will sell BRK down pretty hard at that event. This should be another opportunity to "buy in again!" - the recovery will not be as quick as after this current hurricane, but a recovery will definitely happen.
Finally, I understand the Human trauma in hurricanes and death, but while these things are happening we all go thru our daily events really unaffected, unless we have "someone special and personal to us" involved directly in a major negative event.