-William Wirt
Quick one tonight.
I was curious about recent positions taken by Berkshire/Fairfax, more specifically the one's in the pharmaceutical area. It actually drove me nuts, because we have heard numerous times about Sir Buffett's lack of understanding of the pharmaceutical industry. Now we know he is being humble. And we don't know for sure whether if the Glaxo/Sanofi purchase was Mr. Simpsons, but we can at least assume the JNJ purchase could have been Sir Buffet's. It really doesn't matter who purchased it and for a man (Lou Simpson) who never receives any credit, well he is a genius in his own right.
Fairfax of course also has made some recent purchases in pharmaceuticals, namely Pfizer and Abbott Labs.
Doing what little reading I could do this weekend considering my younger brother was in and out of the hospital, I had a chance to look over the W.R. Berkley Corp. conference call. In it, there is a nugget that had somewhat of a "hmmm, I sorta 'get' it if indeed it is true."
The quote:
"In general medical costs overall in the whole industry have been the real risk for cost inflation...medical inflation has been 6%, 8%, 10% depending on where and what."
Take it for what it's worth, because for clarification purposes, Mr. Berkley was talking about California workers compensation medical trends. However, I figured that for most liability lines, especially in auto for PIP (personal injury protection), the medical inflation wouldn't necessarily just apply to WC, it would apply to almost every other line.
Later on, Joshua Shanker of Citi stated in a wordy question, "You [Mr. Berkley] made an assumption on claim inflation but clearly one goes back one, two or three years on the liability side and the claims inflation has been much more modest than what you talked about."
It's indeed claim inflation as a whole that's increasing, and what the "Genius" at the head of Fairfax and Berkshire are doing is hedging claim inflation. Again, I don't know if this is their true intention and I'm very curious about these purchases in the pharmaceuticals. What do you think?
Until next time,
Take care,
S.K.
I was curious about recent positions taken by Berkshire/Fairfax, more specifically the one's in the pharmaceutical area. It actually drove me nuts, because we have heard numerous times about Sir Buffett's lack of understanding of the pharmaceutical industry. Now we know he is being humble. And we don't know for sure whether if the Glaxo/Sanofi purchase was Mr. Simpsons, but we can at least assume the JNJ purchase could have been Sir Buffet's. It really doesn't matter who purchased it and for a man (Lou Simpson) who never receives any credit, well he is a genius in his own right.
Fairfax of course also has made some recent purchases in pharmaceuticals, namely Pfizer and Abbott Labs.
Doing what little reading I could do this weekend considering my younger brother was in and out of the hospital, I had a chance to look over the W.R. Berkley Corp. conference call. In it, there is a nugget that had somewhat of a "hmmm, I sorta 'get' it if indeed it is true."
The quote:
"In general medical costs overall in the whole industry have been the real risk for cost inflation...medical inflation has been 6%, 8%, 10% depending on where and what."
Take it for what it's worth, because for clarification purposes, Mr. Berkley was talking about California workers compensation medical trends. However, I figured that for most liability lines, especially in auto for PIP (personal injury protection), the medical inflation wouldn't necessarily just apply to WC, it would apply to almost every other line.
Later on, Joshua Shanker of Citi stated in a wordy question, "You [Mr. Berkley] made an assumption on claim inflation but clearly one goes back one, two or three years on the liability side and the claims inflation has been much more modest than what you talked about."
It's indeed claim inflation as a whole that's increasing, and what the "Genius" at the head of Fairfax and Berkshire are doing is hedging claim inflation. Again, I don't know if this is their true intention and I'm very curious about these purchases in the pharmaceuticals. What do you think?
Until next time,
Take care,
S.K.
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