12 Comments
Member
125 June 2, 2023 4:04 pm
Hey Travis - have you changed the formatting of the RMP recently? I went to go look at your weighting of KNSL and don't see a column for that. I could have sworn you used to have it! I find it helpful in figuring out adjustments to my own accounts, but maybe I'm crazy. ;-)
Member 22354June 2, 2023 4:08 pmSorry, I deleted that column by mistake. Will fix on the next update.Kinsale is currently at about 1.65% of the live portfolio.- Member 125June 2, 2023 4:41 pmThanks Travis - good to know I'm not nuts! Well, not THAT nuts, anyway!
Member
124 June 3, 2023 4:53 am
I bought my first 5 shares of KNSL in June 2020 for $151.23 a share. Iβve been a regular purchaser over the last three years and now I find myself with 100 shares with a cost basis just over $181. Itβs been a good little investment and Iβm while struggling at the moment with more purchases for the same reasons youβve been discussing, can they keep doing it and is it too expensive, my purchase back on 5/25 at $299.99 is already up 12% thanks to todayβs 8% increase. What is the icing on the cake is this all sits inside my Roth IRA!Regarding IIPR, I am also a former investor who sold out of everything earlier this year. I am also on the board of directors of a private cannabis company whose new grow facility has finally been given the OK to begin operations by the local regulatory agency (only six months after the expected date). IIPR was nice enough to allow us to push our initial rent payments back by six months (which they have still not disclosed publicly) β now we need to get the first grow up and out the door by the fall!Thanks for another informative and insightful weekly update.
Member
44 June 3, 2023 8:28 am
With KNSL, you are buying a balance sheet-oriented insurance carrier that generates 25% ROEβs that i s currently trading at 6x book (equity) value.What sore of returns do you expect to make going forward?
- Member 22354June 3, 2023 2:13 pmIt very much depends on continuing to grow the business pretty quickly -- book value per share has grown 75% or so in the past three years, and the ROE has improved by more than 50%. There will be a ceiling on ROE, I imagine, and there's a risk that they've been over-earning with a hard market in recent years, but the valuation was similar three years ago.It does not make sense if you think of it as an insurance company, which has held me back from buying more in recent years, but it does if you think of it as a high-margin service provider that's growing dramatically.It is reasonable to worry about their growth being stunted if their balance sheet doesn't grow fast enough to really grow the capacity to underwrite risk. They may solve that with more debt, an equity raise, maybe using some partner capital, or just growing a little more slowly as retained earnings are added to the balance sheet, so the way they handle those constraints will be something to watch.And, of course, it's reasonable to worry about when they might have a bad underwriting year, if the right natural disaster or wave of lawsuits or whatever else hits their corners of the industry. But when things go well, they do grow equity quickly and post awesome earnings growth, which attracts more investors.I don't have a target price, but will be disappointed if they can't generate share price returns that average out at 20%+ over the next decade. The risk of paying this high a valuation for the shares keeps me at roughly a half-size position, but it's been an extraordinary run for them on the operating side and each year makes it more likely that they can continue to be extraordinary. And part of that is because most analysts and investors are still skeptical.
Member
1 June 3, 2023 10:02 am
Do you still own Goosehead Insurance?
- Member 22354June 3, 2023 1:50 pmYes. I overpaid, given the reset they had to go through last year with their faltering franchise plan, but I think they're on a better track now.
Member
10 June 4, 2023 5:15 pm
" itβs possible that theyβre taking on a lot more risk than it appears. " This is a very insightful comment, and definitely not a throw-away line. The projections for ocean warming and sea-level rise are quite robust, and these present obvious hurricane related risks going forward for these coastal cities (I do have background in this area as a marine biologist). It gives me some pause to see this increasing E&S exposure.
Member
2 June 5, 2023 4:08 am
You once asked if you should do more on overseas stocks like those in Poland and Sweden. As far I am concerned-yes. Particularly Poland which is likely to be the main way of benefitting from the end of the war in Ukraine when it comes and its subsequent reconstruction.
- Member 10June 5, 2023 9:41 amJust curious what platform you use to buy foreign stocks and if you have advice on tax reporting? These have been deterrents to buying foreign stocks for me in the past. Thanks
- Member 22354June 5, 2023 9:55 amPersonally, I use Interactive Brokers. They'll include your foreign taxes paid on your 1099, which would generally be withholding taxes on dividends for countries who require that, and their tax reporting is pretty thorough.