For those who remember the tortoise vs. hare insuretech thesis, when did it make sense to be a hare? When your stock was overvalued and thus capital was cheap. You could raise equity as a competitive advantage to allow you to sustain large operating losses while you built out your Continue Reading
Tesla Insurance Is Still A Bad Idea For Tesla
It’s been a bad year for Tesla so far. The stock is way down and so are new car sales. But there’s another problem that has received less attention. The auto insurance business is in deep trouble. The last time I wrote about Tesla selling auto insurance, I suggested it Continue Reading
How To Make A Reserve Problem Go Away
Last week, I wrote about current aggressive accounting practices. This week, I’m going to write about future aggressive accounting that will be practiced. How can I so confidently predict the future? I’ve been doing this a long time. Some things are easy to forecast. What’s the accounting treatment I will Continue Reading
No Accounting For Taste: Reviewing Lemonade’s Revenue
I was looking at Lemonade’s 10-K the other day and noticed something startling and wondered how I had never noticed it before. Lemonade uses inappropriate accounting for its reinsurance which has the effect of inflating its revenue. Importantly, there is no impact on net income, so this effect is purely Continue Reading
Apple Destroys Value Through Stock Repurchase
Stock buybacks are one of the most misunderstood areas of corporate finance. From anti-capitalism types who rant about how evil buybacks are to CEOs who do them because they think it “helps the stock” to investors who often think they’re more important than growing the company, most common views on Continue Reading
Why Trump Sneakers Are The New Bitcoin
I’m sure most of you have seen the story of Trump selling $400 gold sneakers. Many probably rolled their eyes or took the clickbait and read the news stories or even went to the website (I won’t link it, sorry) to see if it was true. I had a different Continue Reading
Muddy Waters Attacks Fairfax With Unfair Facts
One thing I was well known for during my investing days was critiquing the sell side analysts. I’m sure many will tell you how they dreaded seeing an email response from me after they published a report. I had what I thought were fairly low expectations – the report should Continue Reading
Happy 5th Birthday to IansBNR!
I looked back the other day and realized it had been almost five years since I started writing. Hard to believe. As today marks five years, I thought I should do a brief anniversary post. Don’t worry, I’m not going to do a rehash of a bunch of old posts Continue Reading
The Era of Reserve Releases Has Ended
The Axis and Markel reserve charges over the last week weren’t the first of this cycle and, most assuredly, won’t be the last. But I do think they serve as something of a marker. We have gone through a generation of reserves nearly always being favorable. That time appears to Continue Reading
On Money, Time, and Purpose
It’s been five years since I retired from investing. I thought that would make it a good time for me to reflect on how I arrived at that decision as some of you may find the decision making process valuable. In introductory economics classes, we learn about the utility curve Continue Reading