Fair P/E multiples as a function of Growth and ROIC

I always thought I was a bit more valuation focused than the average investor, and this likely results from my academic studies which was quite focused on methods. Sure, no science at all, but art and so forth, but some simple truths are important …

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P&C Insurance Economics 103.1: P&C Insurance, inflation and higher rates

P&C and especially Auto insurance companies’ earnings get pressured by higher combined ratios driven by claims inflation. As some central banks raise interest rates to tackle inflation forward investment returns support earnings and returns on equity. Higher investment income might increase competition and pressure underwriting margins further.  …

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We all look for quality businesses … at the same crowded places. I placed a bet on Qualitás elsewhere.

We are all looking for high quality businesses. Mostly this high quality is apparent (to everyone) only when the price has reached levels from where it is very much fun to look backwards. Many investors find high quality businesses within the ranks of well known companies and better known stocks (and ticker symbols). Maybe I have found something off the beaten path in less crowded markets …

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As investors and consumers shun Tobacco I wonder if now the time is right to buy?

At least in the developed world, more and more people either stop smoking or never begin in the first place. The (relative) number of people smoking traditional cigarettes declines as it goes against the big secular health trend. Could this current situation set the stage for profitalbe investments for many years?

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