I am a bit surprised PT
this one has fat tails and thats exactly what the independent actuaries were reminding them about
and a lil ol kiwi company competing against European insurance giants?? What is their competitive advantage?
I am constantly surprised by the price that some people pay for shares and the amount of research they have not done on them.
Originally Posted by peat
...this one has fat tails...
So do Snow Leopards:
Originally Posted by peat
...and thats exactly what the independent actuaries were reminding them about...
and they are provisioning for, apparently taking it in one hit!
Originally Posted by peat
...and a lil ol kiwi company competing against European insurance giants?? What is their competitive advantage?
You do your research and you attempt to define the risks and the rewards and then you put a price on what you believe represents good value.
You accept that depending upon the scenario that plays out you may loose or make varying amounts of money and you hope that as the circumstances develop you reassess those risks and whether to buy, hold or sell.
You do not put too much of your total portfolio in any one sector or company.
I am content to be in at the moment, I believe that they can grow their profits over the next few years sufficiently to justify that but I have suggested on this thread that some people need to be cautious of the publicly available future estimates for CBL.
I think that the price will drop further. The reason I say this is that there have been two sharp drops with CBL previously, one in October last year and again in February this year. In both cases it was about two weeks for top to bottom.
I’m presently reading Richard Fairleigh’s book Taming the Lion – 100 Secret Strategies for Investing Success.
His strategy no 4.0 - Look for patterns and anomalies. Try to identify patterns and anomalies in the way markets behave.
Strategy no 8.5 - Trends represent the gradual dispersal of information. Information and analysis can take time to be dispersed through the market place. This delay in reactions causes prices to trend.
So I think a strong knee-jerk reaction with a down-trend for about two weeks and then the price will rise again. It did rise sharply from the bottom on 2 March this year.
Full year FY17 guidance previously indicated total revenue growth of 12% - 15% on FY16, and underlying operating profit
growth of 18% - 22% on FY16*
CBL has delivered 35% growth in 1H17
Operating profit is below expectations for the half year following prior year and current period reserve strengthening that
reduced operating profit
CBL expects 2H17 to result in continued strong growth in total revenue and maintains its guidance previously provided, but operating profit will remain below guidance by the amount of the prior period adjustments, although a resurgence is targeted for FY18
CBL expects to be highly cash flow positive in 2H17 and current liquidity levels are expected to continue to rise
Looks like markets need a bit longer to digest this amazing news, maybe they didn't highlight it enough?
Anyway ... happy to wait for markets to wake up
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
CBL seems to be a much misunderstood company.
I just hope that it is not me doing the misunderstanding.
Best Wishes
Paper Tiger
I hear what you say ... and share your feelings.
Having said that ... it is not that unusual for the market to misprice companies, and given that the number of insurance companies on the NZX is quite limited (are there more than 2?) and one of them (not CBL) not always smelling like roses ... Maybe it is understandable for the punters being ultra cautious ....
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
Originally Posted by Paper Tiger
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Ain't he cute
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