# QBE - QBE Insurance Group



## markrmau (12 November 2004)

Do your own research, but qbe may be in for a run next week.

However yesterday/today someone is unloading a lot of stock. It may finish in low 60's today. I'm in for $34k.


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## tech/a (12 November 2004)

*Re: qbe ready for a run next week?*

That'd be nice.
Had it since $7.85 myself.
Nothing indicates a move either way to me currently.
Crystals in my ball must be flat.


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## markrmau (12 November 2004)

*Re: qbe ready for a run next week?*

Assuming yahoo's feed was ok (not always), about 250k shares uptick on close. 

http://au.finance.yahoo.com/q?s=QBE.AX&d=c&k=c1&a=v&p=s&t=1d&l=off&z=m&q=b


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## Lucstar (12 November 2004)

*Re: qbe ready for a run next week?*

"Had it since $7.85 myself." - tech

Wow. Thats a $5.88 earnings per share. I'm guessing u bought in some time in 2002. Nice pocketing


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## still_in_school (12 November 2004)

*Re: qbe ready for a run next week?*

Hi Markmau,

im not quite sure yet if QBE is set for a run quite yet... still a little to early for me to enter... but i was going to short this stock the other day (yet... another opportunity came up...) though if i was shorting this stock, i would have exited out today...

though still a little to early for me to enter, but QBE is a stock on my radar for shorting, though, if there is good news coming out and the technical changes.. i might join you and go long on the stock... 

... though still to early for me to enter... 

Cheers,
sis


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## tech/a (12 November 2004)

*Re: qbe ready for a run next week?*

Lucstar

You can see how the Techtrader portfolio is running on a weekly basis here if interested.
Been trading this for the last 2 and a bit yrs,click on link at top of thread to go back to past weeks/months results.
http://www.reefcap.com/ubb/Forum8/HTML/000390.html

Got a few like that actually sold CTX today after many months.

tech


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## Lucstar (12 November 2004)

*Re: qbe ready for a run next week?*

Thanks for the link tech. 

"but i was going to short this stock" SIS

What's the meaning of *Short Stocking* ?? It sounds interesting.


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## tech/a (13 November 2004)

*Re: qbe ready for a run next week?*

Shorting is simply selling the stock at a price and hopefully buying it back at a lower price.
Normally this is done buyborrowing someone elses stock and selling it.
If this goes well you buy it back at a lower price and you pocket the difference,after returning the stock to its owner.
If the stock continues to rise you have to pay the owner the profit he looses and if the stock being borrowed goes EX dividend you also have to pay the owner the dividend,plus the broker his fees.

Tricom can arrange shorts on a good range of stocks.

tech


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## still_in_school (14 November 2004)

*Re: qbe ready for a run next week?*

Hi Lucstar,

Short Stocking - exactly like, how Tech/a describle...  
its just another from of trading from the usual of:

Buy Low - Sell High *instead its* Sell High - Buy Low (going short on the market, is much faster too, than the buy and hold, and sell when high...

Cheers,
sis

... though, some people who i talk to, have a story or 2 to tell, and the usual story is, everything i touch goes down... anyway... lol, my joke is, if everything you touch that goes down, short the stock instead...


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## positivecashflow (14 November 2004)

*Re: qbe ready for a run next week?*



			
				still_in_school said:
			
		

> if everything you touch that goes down, short the stock instead...



Or buy the Put :  

Cheers,

J.


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## still_in_school (14 November 2004)

*Re: qbe ready for a run next week?*

Hi PositiveCashFlow,

lol... honestly i was gonna buy puts on QBE, though there isnt enough open interest in the stock... only other option unfortunatly is was short selling... the only problem, with short selling is the potential unlimited loss there is viable...

oh well...

Cheers,
sis


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## tech/a (15 November 2004)

*Re: qbe ready for a run next week?*



			
				still_in_school said:
			
		

> Hi PositiveCashFlow,
> 
> the only problem, with short selling is the potential unlimited loss there is viable...
> 
> ...




Ke!
How so SIS.
Going long you can have your stock delisted,so to with a short.
You getting confused with options?

tech


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## stefan (15 November 2004)

*Re: qbe ready for a run next week?*



> Ke!
> How so SIS.
> Going long you can have your stock delisted,so to with a short.
> You getting confused with options?




I assume he was referring to the fact that shorting a stock has unlimited risk because the stock can (in theory) run to the moon while you're short. 

If you're long, then the stock can only go to 0. The risk as such is not "unlimited". So if I buy 100 shares long of a $10 stock and it happens to be delisted, then the loss is 100x10 = $1000. If I short the stock at $10 and it happens to run to $55, then my loss is 100x45 with an unlimited potential to increase further. (Yes, it may never reach the moon, but in theory it just might  )

Happy trading

Stefan


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## tech/a (15 November 2004)

*Re: qbe ready for a run next week?*

Oh IC.

Anyone that held a position that continued to move against them infinitum deserves to be whiped out!

Theoretically correct,in practice stupidity!

Still chances are anyone that thick could average up to average down!!

The mind boggles.

tech


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## stefan (15 November 2004)

*Re: qbe ready for a run next week?*



> Theoretically correct,in practice stupidity!



Then again you should never underestimate the endless power of stupidity. How else can you explain people sending thousands of dollars to complete strangers just because they received an email asking them to do so? The human brain is capable of things beyond believe if you manage to link greed and stupidity. The possibilities of such a powerful combination are endless.

Excuse my excursion into the deep, dark places of the human brain. I shall now return to more serious trading for the rest of the week. 

Happy trading

Stefan


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## markrmau (3 December 2004)

*What spooked QBE holders?*

I'm not currently holding qbe, but does anyone know what spooked holders at end of day? 1 person offloading about $2M.


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## markrmau (3 December 2004)

*Re: What spooked qbe holders?*

Perhaps qbe was the insurer of santos?

http://www.smh.com.au/news/Breaking...nsurance-payout/2004/12/03/1101923312824.html


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## GreatPig (7 November 2006)

My 20-minute-delayed opening match prices currently show QBE about to open up more than 8%. Can't see any announcements, but this is unusual for this stock.

Will see what it really opens at in another 10 minutes or so.

Edit: down to 6.7% now, but still 20 minutes behind.

Edit again: Back to less than 1%, so pretty ordinary after all.

Cheers,
GP


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## JAK (13 November 2006)

Hi all,  Is there a specific reason QBE is climbing so fast ? ... extremely curious !

.... I'm certainly not complaining   

Thanks,  JAK


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## Sean K (14 December 2006)

Up 10%!

Not many blue chips do that in a few minutes.


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## Julia (14 December 2006)

In FNArena's Broker Call today several analysts (6 or 7) have come out with a Buy on QBE and a substantially increased target price.  There may be some other reason for this increase but I haven't been able to discover it.

Likewise, a similar number of brokers put a Buy on CSL today.  I don't hold this but checked it out from curiosity - and it was also up over $3 at time of looking. It's a much more expensive stock though.

Hard to say that what brokers say doesn't matter!

Julia


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## Sean K (14 December 2006)

Julia said:
			
		

> In FNArena's Broker Call today several analysts (6 or 7) have come out with a Buy on QBE and a substantially increased target price.  There may be some other reason for this increase but I haven't been able to discover it.
> 
> Likewise, a similar number of brokers put a Buy on CSL today.  I don't hold this but checked it out from curiosity - and it was also up over $3 at time of looking. It's a much more expensive stock though.
> 
> ...



Just saw some news that they had paid $1b for an insurer in the US, a place they are underexposed. Must be a good use of a billion dollars!


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## swingstar (14 December 2006)

You could nearly draw a straight line in the trend since 2001.


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## theasxgorilla (14 December 2006)

http://news.google.com.au/news?hl=en&ned=au&ie=UTF-8&q="qbe"+location:australia

QBE buying into the US market, a la IAG doing similar in the UK...


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## Julia (14 December 2006)

Yes, sorry.  I neglected to say that the broker upgrades were as a result of the announcement about the US venture.

Julia


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## Sean K (3 March 2007)

Has anyone seen a better chart than this?   

If you had have leveraged into this after 9/11 you'd be.....retired.   

Questions were raised about best picks after the correction. You would have to think this has some legs, on any pullback. It's hard to see where it's going to go wrong, except maybe expanding too much. Acquisition after acquisition.....has some risk....

Of course, if they're insuring the next major terrorist target, it'll be in trouble......hurricanes are an issue too.....

(sold in Jan - waiting for dust to settle before I perhaps buy in again)


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## Halba (4 March 2007)

I think QBE has had a bit of good luck in 2006, what happens if weather turns bad? (with global warming etc I wouldn't want to be in insurance!!)


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## robert toms (4 March 2007)

If you judge QBE on its record it has had one bad year in over 100.As you people say there are risks...but they are in the business of making a profit from risk management.When their risk management failed them with the twin towers disaster,they were very contrite and vowed to take measures to improve their management .So far so good...I got some of the $5.50 shares that they offered to holders at the time...not many, but they have been very successful....little fish are sweet


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## BradK (1 June 2007)

*QBE - QBE Insurance*

Some interesting action on this today. 11,000 shares kept jumping between the buy and sell column. 

Managed to pick some up at these prices and feel quite privileged to have done so. Probably the safest stock on the market IMO 

Surprised there is not a thread on this one

Cheers
Brad


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## BradK (8 July 2007)

Not a popular stock to discuss, is it? 

I think that sub-$31 is good buying, and bought some more at this price... 

What do others think? Or is it a concern that it has broken $31 short term support? 

Brad


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## Julia (8 July 2007)

BradK said:


> Not a popular stock to discuss, is it?
> 
> I think that sub-$31 is good buying, and bought some more at this price...
> 
> ...




No, not popular for discussion at all.  I guess this is due to its being a stable blue chip with little speculative activity.

It's one of Australia's best managed companies.  Completely agree that sub $31 is good buying at this stage.

Btw, Brad, how is the dog?  Recovered from the operation???

Regards
Julia


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## BradK (9 July 2007)

Hi Julia, 

Pepper is doing very well. He has had his knee-cap 'popped' back into place' and the big lug is jumping all over our friends kids again  

He was walking pretty gingerly after the op for about a week, but is definitely better for it now. 

Cheers
Brad


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## Muschu (13 February 2008)

*QBE -- whare are they at?*

Hi
I've been watching the intraday volatility within QBE with interest.  [No they're not alone].
Kohler's Eureka Report a few days ago referred to their outstanding performance over a significant number of years and made a comment [I can't recall the exact wording] that their forthcoming results announcements [late this month I think] should once again be very positive.
I'm reluctant to dive in at this stage but wondered what other views might be out there?
Comments welcome.


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## robert toms (13 February 2008)

I have held this one for nearly ten years...it is the share in my portfolio that I do not worry about.They have diversified globally to reduce their risk.The only hiccup that they have had in many decades was on Sep 11th,Twin Towers...since then they tightened up their risk management considerably....if there is any insurance company that is blue chip...I consider QBE is it.....with my hand shaking...HA HA
When insurance companies strike a little trouble they just increase their premiums!


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## BradK (15 February 2008)

Must be about time to renew my love affair with this one - anything I have missed??? 

I think that its a great stock

Brad


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## Sean K (15 February 2008)

BradK said:


> Must be about time to renew my love affair with this one - anything I have missed???
> 
> I think that its a great stock
> 
> Brad



I was just looking at it too Brad. Why the 5% sell off? Unusual. Is it about to produce a record result?


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## BradK (18 February 2008)

kennas said:


> I was just looking at it too Brad. Why the 5% sell off? Unusual. Is it about to produce a record result?




yes indeed... why the sell off? Its not exposed to that wild weather in Australia is it? more of an exposure to us and uk (although the weather here in the uk has been quite pleasant thank you very much) 

Im gonna put in a buy order a few % below the close and see if I can go fishing. 

Cheers
Brad


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## gfresh (18 February 2008)

All insurers seem to have suffered.. Is this because they rely on backing their policies from the world bond market? I'm not sure, just wondering if this is why..


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## dhukka (18 February 2008)

The reason Buffet likes insurance companies so much is that you get that 'float' ie people pay premiums but you don't need to pay anything out until someone makes a claim. Thus you have this enormous cashflow or float that you can invest. Insurers earn a lot of their profits from investment income as well as premiums, especially when stockmarkets are doing well.  The investment part of their profits probably has fared too well over the last 6 months.


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## BradK (19 February 2008)

Hmmm... getting closer to $27 - why why why????? 

Represents excellent value ... 

Brad

Dis: I dont hold


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## 3 veiws of a secret (19 February 2008)

gfresh said:


> All insurers seem to have suffered.. Is this because they rely on backing their policies from the world bond market? I'm not sure, just wondering if this is why..




Once the premiums come in there are several instuments you can use to reinvest your net premium incomes. Primarily you make sure (unlike HIH) you set up your reinsurances for your risks that your exposed too,then it fragments to  ,xs loss, treaties and so on...Whether you spread your risks like the bookie does is entirely up to the risk management teams. To expose your portfolio into the bond market is a matter for each individual company.....but QBE is a very conservative insurance company from my dealings with them in the past .My long time friend is on a box at Lloyd's Corp-say  lime street.....and it appears things have not changed from their conservative strategies.

I personally think,that premiums coming in from USA is the negative feature here .US $ is a poor investment currency ,and the couple this to the US stock market inflation ,then you can begin to understand the nervousness with QBE share price. Not to mention any catastrophies world wide and big insurances get the kosh treatment.
Fortunately "Insurance" is a necessary evil......but then again I hold QBE at least a few times a week!.........IAG? as Borat would say "Ino like"


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## rostov (19 February 2008)

(sigh. Some of you posters hold really better waters/thoughts/IQ that where I've been hanging around lately)

I too am wondering what's up with QBE. Note : I shorted from 2858 after a little deliberation, with initial (but cancelled 2 days back) target 2660, and today's target put in at 2640 was hit. Try as I might, modelling a 10year hold at 15% RR (rates of return) for QBE with expected EPS for 2007 at 237.1 (to achieve a constant delta EPS for the past 10 years) produces a max price over $34.

For 3 days, it's been supported by 2006 support, and after running a few reverse-value modelling, the only clue I have is that at current price assumed as max, the sellers are assuming that the EPS is -60(c), after having a 1/2-year close-to-100 EPS. Note that all EPS and div considerations and NTA were derived from data posted by Aspect huntley. We assume the assets declared by the company are true.

Doesn't. make. any. sense. Reason I shorted was due to psychology after the FGIC incident, adding more fears (no facts yet) that any possible bond assets covered by QBE were overrated/overstated (hence NTA goes down, etc). I also toyed around the speculation surrounding the withdrawal of shares from UBS (they sold, rated QBE upwards to pump, then sold)

Money's in the bank, and I'm not complaining. However, I've run out of valuation-reasons to go long or short, and though happy with the 2% portfolio increase, I don't know WHY <-- this bugs me lots.

Fundamentally I'm running out of clues as well.

Technically the past 3 trading days confirmed my tech entry reasons to short.

Question : What's going on with QBE and what's fore-running it at current levels?

____

Thereafter lies my posts from another forum. Appreciate any criticisms (very welcomed, in fact)



> (14th Feb 2008 12:44hrs)
> Order to open:
> GTC Sell QBE LMT 2858 STP 2951. Target 2660.
> 
> ...






> Cripes. Order was already triggered within last 30 minutes of yesterday's close, and closing was positive to my favour. Right now we have a USA red day bigger than yesterday's green day, and just 6 minutes before the bell starts, we have gap downs for QBE.
> 
> According to my view of the buy/sell queue for 12 prices, there is a pre-open dump of QFE. Very interesting because despite last night's downgrade of FGIC and comment that ABK and MBI were better than FGIC (causing ABK +12.3%, MBI+8.42%), the market was still red. This will be interesting for QBE.
> 
> I'm removing my limit. There's one more trading day for the USA, and if it's red, it's 2 days of red risk for Asia because Monday USA time is holiday. And OpEx was last night (no more push of prices up by hedge funds -- they cover today or tomorrow)






> 2660 limit was easily reached in the opening frenzies of retail dumping (my limit was removed). For the whole day, it faded up better than the ASX200. Because this is a play and directionally unconfirmed short, I move my stops forward to breakeven plus a little more to cover any commissions.
> 
> Technically there are a few problems. Besides those that I have stated before, the 100dma has just crossed the newly formed (since Oct 2007) 200dma, and all 13+22ema and their channels and all other dmas are sloping down. ElderRay bull power is 0 while bear power is -135, and this gap DOWN is a bearish breakout from the triangular wedge formed since 16th January entered from the top (means it usually breaks downwards), with target as the widest channel from the beginning at around 405 points and therefore a reasonable target would be 2400+. Note : not within a single day, and we're talking probabilities here (that's why we trade), and NOT certainties.
> 
> ...





Despite today's action on the financials and the futes (USA) ramping up until 5am Sydney time, QBE still traded down, and the pattern was similar to 3 days ago : volume sell right at the open, and fade up later in the day till close. Each time it seems to push the 2006 support more.

Sorry if I sound a little paranoid trying to chase a reason/answer to my question. Don't like it when technicals have enough reason to win without fundamental ones.


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## BradK (21 February 2008)

Could today be the day for cue bee eee? I have a fish in at $26, but ironically if it breaks $26, not sure when the next stop will be 

Brad


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## Muschu (26 February 2008)

I'm lost [and a bit of a novice!!!].
Why the 10-11% drop on what appears to be a good report?
Can anyone ease my confusion?


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## Sean K (26 February 2008)

Muschu said:


> I'm lost [and a bit of a novice!!!].
> Why the 10-11% drop on what appears to be a good report?
> Can anyone ease my confusion?



Up is down and down is up.

If they had have come out with a crap report, they'd be flying.

Musn't have been as good as hoped, or the CEO said next year will be 'difficult' or something equally as scarey.


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## 3 veiws of a secret (26 February 2008)

Like a queen-bee I'm in again....interesting days trading .....Hey you could have been holding ABS today and felt like ?????!


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## doctorj (26 February 2008)

On first glance, the report looks very good considering the stage of the insurance cycle we're in.

Underwriting result looks good despite cost pressures on claim costs (raw materials, labour etc), investment result looks solid and they're reinsurance exp has fallen slightly relative to GWP but reinsurance recoveries is pretty consistent (meaning it doesn't appear they've significantly changed their risk retention).

So where are the skeletons?  Exposure to the USD and the US economy in general I'm guessing, coupled with continued pressure on premiums as the cycle continues to tighten.

What were analysis expectations?  It all looks pretty solid to me.
rick, I wouldn't look to attribute fundamental reasons to short term price movements, it is often just noise.


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## 3 veiws of a secret (26 February 2008)

As I have stated in a previous post ...US$ premiums are having adverse future reactions to profits ,its the r/ex that dulls the reading for me .Talk of Aus$ possibly reaching 94 cents....and try to exchange Aus $ in Africa ,or South America then you understand how the market feels today. I for one jumped in at todays prices ...QBE is a heavyweight in Insurance terms for me.


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## Muschu (26 February 2008)

Thanks guys [or gals].  QBE has such a good track record there must be doubts about US exposure surely.....????
Seems to me that anytime that word [US] is mentioned then everyone ducks no matter whatever else is going on.
[I did check ABS.... ouch!!]
I already have QBE and was wondering whether to top-up for the long-term?


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## Julia (26 February 2008)

This is one of my long term holds.  The market reaction today over the longer term will be a hardly noticeable blip.


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## 3 veiws of a secret (26 February 2008)

Ricky! What Julia states is crystal clear! I have bought and sold  today and trying to re-enter .....please somebody spare me a dime!
BTW dont forget the divi helps at these low red hot special prices!


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## Muschu (26 February 2008)

Did it!  Thanks all.  There's a lot more experience around here than I have but QBE has been very kind to me these past years and I have been reluctant to give up cash recently....
Rick"y"


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## 3 veiws of a secret (26 February 2008)

Muschu said:


> Did it!  Thanks all.  There's a lot more experience around here than I have but QBE has been very kind to me these past years and I have been reluctant to give up cash recently....
> Rick"y"




Hmmmm,Unfortunately I don't know nothing about shares ,but Insurance I can say I know something about. Alas if you think I had the experience in shares I would not have attended my bee duties to come back to the screen and see QBE @ $26.01 when my order was to sell @$25.60 today,even though I bought in at $25.45, it was meagre takings. Anyway back in through the side door @$25.71
As I said  down on the day (-10.81%),and you gain a divi..... 
Now did I have a good day with ABS!!!!!! oooooweee


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## Muschu (26 February 2008)

Ouch! Actually I didn't "do it"!  I placed the order with my advisor by email late in the day and was too slack to follow it up with a phone call.  [I trade some shares on-line myself] but my super fund shares I trade through my advisor.  It's even cheaper but has its downsides. Anyway, he wasn't in - unusually. 
So -- I will wait and see where QBE is tomorrow I guess.....
R


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## M34N (26 February 2008)

This is a fantastic company that's been unfairly hit again, like most financials. Look at the trend its had since mid-2002, it traded from $6-7 and its just been uphill since with the occasional hiccup. Even September 11 was just a "blip".

Anyone willing to suggest where support for this is at? Looks to be around $25, then around $20 for the next level. Hard to say with financials in these times!

Wouldn't count on QBE going down though, this has surprised time and time again, and I would actually expect it to rebound like it did after 9/11.


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## 3 veiws of a secret (26 February 2008)

Muschu said:


> Ouch! Actually I didn't "do it"!  I placed the order with my advisor by email late in the day and was too slack to follow it up with a phone call.  [I trade some shares on-line myself] but my super fund shares I trade through my advisor.  It's even cheaper but has its downsides. Anyway, he wasn't in - unusually.
> So -- I will wait and see where QBE is tomorrow I guess.....
> R




I personally would'nt get too emotional about what you bought today or sold....plenty of opportunities with this one ,if it goes down tomorrow then feel that warmth when you buy cheaper...if it goes up...well wait for the following day .....emotions and logic Mr Spock!

M34N.....I  missed all the turmoil on the markets during Nov 2007>early Feb 2008 ( on hoilday for 3 months) ,but with all the neurosis out in the market ,everybody is like in "cold turkey mode". But I agree with you QBE's figs where not bad ,just greed has got the better of some jittery sellers.


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## Muschu (27 February 2008)

3 veiws of a secret said:


> I personally would'nt get too emotional about what you bought today or sold....plenty of opportunities with this one ,if it goes down tomorrow then feel that warmth when you buy cheaper...if it goes up...well wait for the following day .....emotions and logic Mr Spock!
> 
> M34N.....I  missed all the turmoil on the markets during Nov 2007>early Feb 2008 ( on hoilday for 3 months) ,but with all the neurosis out in the market ,everybody is like in "cold turkey mode". But I agree with you QBE's figs where not bad ,just greed has got the better of some jittery sellers.




M34N?  OK, interpretation needed....
Got up during the evening for a cup of tea and see the Dow, for now, is retreating on opening - so maybe the "warmth" will be felt.  It's no big deal anyway as I'm in for the long haul.  And there's a lot more to life than shares and dollars is there not?


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## BradK (27 February 2008)

Round two??? 

But WHY??? Such a strong company with astute management - I will have some more of those thank you

Brad


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## 3 veiws of a secret (27 February 2008)

BradK said:


> Round two???
> 
> But WHY??? Such a strong company with astute management - I will have some more of those thank you
> 
> Brad




Brad does it really matter ....I bought in again today....as I say the dividend is interesting at these prices....


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## robert toms (27 February 2008)

Yes the divident if just over 5%...never seen it like this for QBE before.And I hope that it is subtantially franked as well !


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## Julia (27 February 2008)

robert toms said:


> Yes the divident if just over 5%...never seen it like this for QBE before.And I hope that it is subtantially franked as well !




The dividend is 65c and is only 50% franked.
That is all I wanted to say so am adding these extra words to pad this post out and allow it to be accepted for posting.


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## Birdster (27 February 2008)

Julia said:


> The dividend is 65c and is only 50% franked.
> That is all I wanted to say so am adding these extra words to pad this post out and allow it to be accepted for posting.




Can someone help me with understanding the terminology in the QBE presentation report? In regards to dividends, the report says ex-dividend date is 29/2. "Record" date is 6/3, and payment date is 26/3. What is record date?    It is my understanding selling shares on ex-div day still entitles you to the dividend.

Thanks in advance


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## ice (27 February 2008)

Birdster the ex-dividend date is the critical one in terms of buying/selling.

The record date (4 trading days after the ex date) is simply to allow time for   transactions to be recorded by the share registry, otherwise the process would degenerate into a shambles.

If you sell on the ex-dividend date you retain the dividend as you are indeed selling your shares ex the dividend.

ice


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## Muschu (27 February 2008)

This is really interesting.  Just watching the last half hour of trade.  I bought at $25.15 and thought I'd done OK. Late rally from $24.45 I wonder.....


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## Birdster (27 February 2008)

Muschu said:


> This is really interesting.  Just watching the last half hour of trade.  I bought at $25.15 and thought I'd done OK. Late rally from $24.45 I wonder.....




I could of posted the exact same post as you. Except for the "This is really intersesting" part would be swapped for %^%#!


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## BradK (27 February 2008)

OK... so 10% yesterday and 5% today -just shy of analysts expectations, and strong aussie dollar. 

Is the battering this is taking justified? 

Brad


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## M34N (27 February 2008)

BradK said:


> OK... so 10% yesterday and 5% today -just shy of analysts expectations, and strong aussie dollar.
> 
> Is the battering this is taking justified?
> 
> Brad



Brad,

If you look at that chart over the past few years, I didn't hear many people complaining as QBE went from $7 to over $30 in that time. So honestly, a drop back to $25 or so isn't that bad. In comparison, this stock is performing better than AFG, ABS, CNP...

I give it a few more days to settle down, and it will come back slowly, just look at BNB, that has been a shining example of how a stock can rebound rapidly (15-20%) within the matter of days even.

Long term, fundamentally, nothing was/is wrong with QBE. I am actually looking at buying in if it drops much further so I'm not phased. Soon I am sure we will be posting in here about how it performed so well!


----------



## Birdster (27 February 2008)

M34N said:


> Brad,
> 
> If you look at that chart over the past few years, I didn't hear many people complaining as QBE went from $7 to over $30 in that time. So honestly, a drop back to $25 or so isn't that bad. In comparison, this stock is performing better than AFG, ABS, CNP...
> 
> ...




When was it $7 and go to over $30? it must be years ago...and for no people complaining on that rise is like saying shorters shut up when they lose.

As how reassurring you want to sound with "I'm not phased", it doesn't give any input to what is happing to the SP. 

No intended offence. My stats do not show $7-30 in a short time. 

Just to note, regarding QBE, I'm in and down...but above ground!


----------



## M34N (27 February 2008)

Birdster said:


> When was it $7 and go to over $30? it must be years ago...and for no people complaining on that rise is like saying shorters shut up when they lose.
> 
> As how reassurring you want to sound with "I'm not phased", it doesn't give any input to what is happing to the SP.
> 
> ...



No, more the point that its had a fantastic run over the past 4 years, up some 300%, and when there's a 10% fall, especially in what some argue is a bear market (moreso for financials), then I don't see the problem.

People have to start looking at the long-term picture instead of the day-by-day movements. That was more the point I was making.

Short term? That's a whole different issue, and as far as I'm concerned, if you're buying into financials for the short term, then I think you would be well aware of the kind of trouble you can get yourself into.

In regards to "I'm not phased"; look at what happened to QBE from its low after September 11, it hit $5, and now we're talking about it being $25, what part of not phased is unclear?  When it drops in the same fashion as others like ABS, CNP etc have, then I will understand the complaining, but BNB, MQG and other financials have suffered steep falls like this in the past year, so again, it's not contained to this stock alone and spread across the market. That's why I'm not phased.

Shares are not for the faint hearted, especially day-trading/short term trading.


----------



## tronic72 (27 February 2008)

M34N said:


> Brad,
> 
> If you look at that chart over the past few years, I didn't hear many people complaining as QBE went from $7 to over $30 in that time. So honestly, a drop back to $25 or so isn't that bad. In comparison, this stock is performing better than AFG, ABS, CNP...
> 
> ...




Strange to conpare a company like QBE with the likes of AFG, ABS & CNP.

The market punished the likes of AFG, CNP & ABS for their high levels of debt. Then a company like QBE gets punished for reducing their debt and risk levels at the expense of a small amount of profit.

You CANNOT have consistant HIGH returns without a HIGH level of risk.

BNB exceeded their profit forcasts. QBE failed to reach theirs, hence the Markets "hissy fit". I agree that things will turn around soon. 

Given 75% of their income comes from the US, which is in the grip of a recession their profit result was outstanding.

Give it a few weeks.


----------



## qr2007 (29 February 2008)

Hi Friends,

Any idead why SP dropped much more than Div.? Any news? I thought QBE is a very good Company?
Thanks.


----------



## Julia (29 February 2008)

qr2007 said:


> Hi Friends,
> 
> Any idead why SP dropped much more than Div.? Any news? I thought QBE is a very good Company?
> Thanks.



Sadly, there's no rule which says the SP may only drop as much as the value of the dividend!
There are dozens of good companies whose SP's are being similarly affected.
I doubt any bad fairy especially has it in for QBE.
Read Tronic's comments above.


----------



## qr2007 (29 February 2008)

Julia said:


> Sadly, there's no rule which says the SP may only drop as much as the value of the dividend!
> There are dozens of good companies whose SP's are being similarly affected.
> I doubt any bad fairy especially has it in for QBE.
> Read Tronic's comments above.




Hi Julia,

Don't put me wrong, I have strong belief in QBE and its performance, I am sure it will do much better in the next few weeks, but just surprised me whats happening today? Even IAG wans't that bad today? SUN is catching up??

I think once Ambac announced the package, QBE will fly up ...

Regards,


----------



## Carol (29 February 2008)

Barclays Group have been selling QBE shares and ceased to become a substantial holder (see QBE ASX announcements past couple of days). Despite Barclay's selling the volume on QBE since Wednesday has been way above its normal daily trading volume. The recent drop is share price is incongruent given QBE's excellent fundaments and a PE Ratio of less than 11.0I have emailed the ASX asking them to look into QBE's unusual rise in trading volume on Wed 27th Feb. I will let you know what their response is when it is received.


----------



## waz (29 February 2008)

Hi Carol,

Who did you email at the ASX?

I never knew it was possible for just anyone to send the ASX a queery.
What sort of increases in volume were you seeing?

If it was significant to warrant a an ASX queery/please explain to the company, the ASX systems should automatically catch it, there should not be a need for the public to alert the ASX.


----------



## waz (29 February 2008)

By the way, I wouldn't consider trading volumes around QBE in the last few days to be unusual. Its expected given it missed many forcasts and it just released its results.
If it were to drop 6% the day before the results were released, that would have been considered unusual. But being unusual does not neccessarily mean that it requires a please explain.


----------



## qr2007 (29 February 2008)

waz said:


> By the way, I wouldn't consider trading volumes around QBE in the last few days to be unusual. Its expected given it missed many forcasts and it just released its results.
> If it were to drop 6% the day before the results were released, that would have been considered unusual. But being unusual does not neccessarily mean that it requires a please explain.




If you looked back in the last 5 years, QBE had never had the volumes > 10mils, the highest was back in Nov/2003 which was about less than 10mils. But on 26,27,28 it was 21, 18, 13 million shares change hand????

It is unusual ....


----------



## Garpal Gumnut (1 March 2008)

Carol said:


> Barclays Group have been selling QBE shares and ceased to become a substantial holder (see QBE ASX announcements past couple of days). Despite Barclay's selling the volume on QBE since Wednesday has been way above its normal daily trading volume. The recent drop is share price is incongruent given QBE's excellent fundaments and a PE Ratio of less than 11.0I have emailed the ASX asking them to look into QBE's unusual rise in trading volume on Wed 27th Feb. I will let you know what their response is when it is received.




Well done Carol, its time someone shook the regulators. 

On the charts this is extremely unusual trading/selling, in a down trend and it may be about to do an AFG chartwise. 

Next support/resistance is $20, then $12, then $8.

Beware all.

gg


----------



## BradK (1 March 2008)

Garpal Gumnut said:


> Well done Carol, its time someone shook the regulators.
> 
> On the charts this is extremely unusual trading/selling, in a down trend and it may be about to do an AFG chartwise.
> 
> ...




Despite being accompanied by a chart to give it a veneer of legitimacy, this is just down ramping. Mods??? 

brad


----------



## prawn_86 (1 March 2008)

BradK said:


> Despite being accompanied by a chart to give it a veneer of legitimacy, this is just down ramping. Mods???
> 
> brad




Looks fine to me Brad.

GG was just stating where the major support points are in his eyes. He wasnt saying it is definetly heading there.

Any problems feel free to PM


----------



## Garpal Gumnut (1 March 2008)

BradK said:


> Despite being accompanied by a chart to give it a veneer of legitimacy, this is just down ramping. Mods???
> 
> brad




Wow,

Paranoia rules.

I repeat on the charts QBE is in a downtrend.

See my posts on AFG and MQG and BNB.

Now there were some shares on the way down when I posted on them. 

I'd be more concerned if I were you re 

1.  directors with Margin loans
2.   short sellers 
and 3. share loans by funds to short sellers 

One can sit by a creek and watch the weeds go past.

One is not responsible for the weeds.

I'm happy for any of my posts to be reviewed for ramping. 

The charts can't be ignored.

gg


----------



## BradK (1 March 2008)

Why would you be concerned if you were a short seller? 

I just think that the PE ratio of less than 10 will be attractive, and can't understand the irrationality of the market last week when nearly $2bn in profit was posted and it got heavily punished for it. 

brad


----------



## Garpal Gumnut (1 March 2008)

BradK said:


> Why would you be concerned if you were a short seller?
> 
> I just think that the PE ratio of less than 10 will be attractive, and can't understand the irrationality of the market last week when nearly $2bn in profit was posted and it got heavily punished for it.
> 
> brad




Mate I've been through 2 big crashes on ASX and believe me there is a reason for stocks to fall like this, you or I may not know what it is, but there is a reason.

I can't tell the future but I can tell when a stock is likely to be in a downtrend. Have a look at the AFG thread and also the AFG chart. See the price fall a week or two before announcements. 

In this climate I would not believe anything that is "publically available". 

I am positive on some stocks, just not QBE

gg


----------



## BradK (1 March 2008)

Well, then those hedge fund f*&^wits are just robbing blind mum and dad investors, and they should all be put in jail. 

No wonder the Soc Gen guy has gained so much grassroots support. 

Brad


----------



## vishalt (2 March 2008)

Oh my gosh... the POOR MUMS AND DADS. 

Hey, guess who's money it is in hedge funds?

POOR MUM AND DADS LOL


----------



## sardines (2 March 2008)

Personally I think the market and QBE is getting oversold. However, the news flow for the insurance industry certainly hasn't been much good either, especially with disappointing results from competitors such as SUN & IAG. 

As QBE is quite diversified, I think Buffet's comments are more or less applicable to QBE

Buffett says profit party's over for insurance industry


----------



## jet328 (2 March 2008)

BradK said:


> I just think that the PE ratio of less than 10 will be attractive, and can't understand the irrationality of the market last week when nearly $2bn in profit was posted and it got heavily punished for it.




Just remember, the market is 'forward looking'. Its the outlook that the market is concerned with, not last years figures. Buffett's recent comments wouldn't have helped either. 

In regards to hedge funds, as a long only investor I think they are great. They create volatility & fear, which can lead to great opportunities for the LT investor. eg QBE- if there were no hedge funds/short-termers would you get opportunities to buy the same companies at 30%+ discounts to previous prices? (It's funny how no one minded the hedge funds running up the prices last year...)

On QBE, I agree its cheap & a great business, but it doesn't mean it won't be cheaper in the future. The USA currently looks terrible to me on a short, medium & long term basis. Still can't believe the DOW has a 12 in front it. Something will eventually snap IMO.......


----------



## BradK (3 March 2008)

Guys GREAT news....

The price of this is going to ROCKET tommorrow, because I am going to sell today. 

Awesome. 

Brad


----------



## BradK (6 March 2008)

Didnt sell - but the directors have been buying up shares in the past few days, which is great news. 

Shows they have confidence in the company - it will turn around. 

Brad


----------



## PhoenixXx (6 March 2008)

only small quantity............I wish it will help.....................
btw, is QBE still a blue chip stock???????........


----------



## ROE (6 March 2008)

BradK said:


> Didnt sell - but the directors have been buying up shares in the past few days, which is great news.
> 
> Shows they have confidence in the company - it will turn around.
> 
> Brad




Insurance going through a rough time right now not just QBE, SUN, IAG and Warren Buffett insurance business but hopefully they will increase premium soon that has been discount for a few years else someone will goes belly up and that will drive up premium anyway


----------



## qr2007 (6 March 2008)

QBE has a nice run today? any idea? no news? but up 1.70+. The financial sector in the US does not look that promise but here we have a good run? wonder why?

Anyway, congratulation to QBE holders.

Cheers


----------



## Gekko (6 March 2008)

Wow, up 6-10% today. If ever a textbook was written on "short covering", this is it. 

QBE has been hammered from pillar to post and finally a bottom has been established. 

Result was obviously poor, so i doubt this recovery will go on too long, but the selling has been that relentless it was always going to bounce.


----------



## qr2007 (6 March 2008)

The highest was about 22.13 but only for a short while then dropped back to 21.50+. If the financial sector doing well tonight in the US then it will continue its ride, otherwise, big selloff would happen tomorrow????

Hoping Ambac would come out with good news or ....???

SUN is going opposite way??? so it is a concern?


----------



## BradK (6 March 2008)

It was always going to bounce... just the extent of it that matters. It has a few gaps to fill on the way up, and the shorters will have to cover their positons soon. 

Also, because the directors bought up so much, it might have helped a fair bit for confidence  although that is only a small point. 

I was going to sell - but I have more confidence in this stock than just about any. Have been coming and going on this for about 8 years now. 

Brad


----------



## PhoenixXx (7 March 2008)

BradK said:


> Guys GREAT news....
> 
> The price of this is going to ROCKET tommorrow, because I am going to sell today.
> 
> ...




So Brad, did you end up selling? Because if not, the rocket might come back to earth. j/k. ANyway, so far did not break $20, and bounced real quick. Hopefully it's not just a dead cat's.


----------



## BradK (7 March 2008)

Notwithstanding the heading for the hills today, this is up and down like a new brides nighty. 

And no, I didnt sell... Im sure it will bounce too far if I do. My short trade has become a LONG term investment.


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## Gekko (9 March 2008)

QBE noted a buy by Shadforths in Herald Sun today. Citing oversold, conservative balance sheet and high portion of (current) short term invetments, and strong cash position. Still looks oversold at current levels, but futures down from friday night


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## qr2007 (10 March 2008)

What is wrong with QBE today??? SUN is riding up the hill nicely but QBE is heading south??? it has been up and down last few days??? very directionless for QBE??

I found this 

"North Pointe Holdings Corporation Announces Special Meeting of Shareholders to Approve Acquisition by QBE Holdings, Inc. on April 10, 2008"

http://www.earthtimes.org/articles/...ecial-meeting-of-shareholders-to,307069.shtml

Any news  pls???

Thank you.


----------



## BradK (10 March 2008)

I think it is doing very well considering all of the doom and gloom about. Im afraid the party is over for 2008, and just kick back on the way down.... and wait until she turns, mate. 

Cheers
Brad


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## BradK (20 March 2008)

QBE indicative open price, Im sure, will have no bearing on the real price... but can someone explained how it is calculated. 

Someone wanting to dump nearly 3 million at 19.45, and another wanting to buy nearly 2 million at 24.96. 

Is that a shorter trying to have a crack? Who dares wins stuff? 

Please explain. 

cheers
Brad


----------



## oldblue (20 March 2008)

Prices in pre-open are shown " in reverse", ie bids are actually offers and vice-versa.
Have a look at some other stocks - they'll all be the same format.


----------



## BradK (20 March 2008)

Thanks for that... Hmmm... I dont quite get it though... 

You are saying the 'seller' at 

19.450	2,631,328	1 

is actually wanting to 'buy'? 

Brad


----------



## BradK (20 March 2008)

Oh of course it is options expiry day today... lot of happy and angry and shocked punters out there with their puts/calls today I bet. What a difference a month makes! 

brad


----------



## ozambersand (20 March 2008)

There is a good thread in the beginner's forum that explains the pre-open price and auction.
https://www.aussiestockforums.com/forums/showthread.php?p=273194#post273194
I needed to get my head around fact that the prices quoted were really just ways to position yourself in the queue rather than what was actually expected to be paid/sold at.


----------



## oldblue (20 March 2008)

Sorry, Brad.
I've put it wrong and have only confused things.
What I meant to say is that bids and offers are listed in reverse order, ie, lowest bid up to highest bid, highest offer down to lowest offer. The opposite to how they will appear after opening

Whew   !


----------



## Trembling Hand (20 March 2008)

The open match prices today is effected by the Expiry of Futures contract on the opening price of all asx200 stocks. Its a huge volume open today because of that. Basically 3 months of arbitrage trading will be unwound on the open. Nothing to get your nickers in a knot about.


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## ozambersand (20 March 2008)

They got a speeding ticket today but denied knowledge of anything that would make their price go up 5% while everyone else's went down. 
They said that Dow buying them out was just a rumour.
However I did notice a couple of other new items in red (ie not available to be looked at) and one of these was a trading halt during the day. So something is in the wind.


----------



## bigdog (21 March 2008)

My prediction was that Insurance Australia Group would be a takeover target!!!!

http://www.news.com.au/heraldsun/story/0,21985,23410053-664,00.html

The news took the market by surprise, partly because the successful insurer (QBE) is frequently speculated as a predator.

It has long been rumoured to be considering a tilt at struggling local rival Insurance Australia Group.


----------



## ROE (21 March 2008)

I think Uncle Warren maybe looking at QBE 
That's my theory knowing uncle always want to buy things when everyone see doom and gloom


----------



## BradK (22 March 2008)

Lets play a game of speculatoin... and make it clear that Buffet has NOT approached the company for an offer... but, how much per share do you think it is worth? 

I know Buffet like to get himself a good deal

$35? 

Brad


----------



## Sean K (3 April 2008)

$35 looks like a pluck Brad. Right now, it's worth $23.88. 

But, have we seen the bottom? May be about to have a clear higher high and low. Has the worst of the credit skeletons been revealed? 

This is definately on my long term blue chip recovery story list.


----------



## Boggo (9 April 2008)

It came up in my scans last night, its playing the game so far.

Lets see if it can break below the $24 level.

Mike


----------



## cbacamden (24 June 2008)

*QBE - Thoughts on when this will come good?*

Ive been reviewing QBE for some time now and think it may be getting close to bottoming out

Any thoughts on the future for QBE?


----------



## Dutchy3 (20 July 2008)

IMO QBE may not have found its bottom as yet. This shot from my watchlist. I'm ready to sell this down on the CLOSE Monday if it drops below 2000 ...


----------



## Dutchy3 (20 July 2008)

Chart that I didn't attach to the above post and more word to make 100 plus some cause I'm still not there


----------



## michael_selway (21 July 2008)

Dutchy3 said:


> IMO QBE may not have found its bottom as yet. This shot from my watchlist. I'm ready to sell this down on the CLOSE Monday if it drops below 2000 ...




Hm are numbers are not to bad

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 217.0 214.9 224.8 232.1 
DPS 122.0 129.0 137.0 141.5 *






thx

MS



> Date: 10/7/2008
> Author: Marsha Jacobs; Madeleine Koo
> Source: The Australian Financial Review --- Page: 3
> Investors in failed property development financing group Westpoint in Australiahave suffered a legal setback. They had brought an action in the New South WalesSupreme Court against financial planning firm Qantum Securities over itsrecommendation of Westpoint. However, due to the fact that Westpoint did notactually appear on the list of Qantum's approved products, there will be noinsurance cover available from QBE Insurance to compensate the claimants fortheir investment losses. Law firm Slater & Gordon warns that this loopholestill exists despite recent reforms and that more unwary consumers may be caughtout


----------



## Dutchy3 (21 July 2008)

michael_selway said:


> Hm are numbers are not to bad
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




Yep and the Price action precludes opening a short against this one too ... perhaps this has now put in its low?


----------



## Logique (23 July 2008)

I agree with the two latest posts. 

I first mentioned this in the falling knifes thread a little while back. I added to my holding back then, and haven't regretted it.  Traders looking for a turnaround are hard to please if they don't like this technical setup.  I'd like a break above the 50EMA, but that is in sight now. 

For all stocks in the market, we know that future earnings are subject to revision, but at the moment QBE is listed on Commsec at 5.6% dividend with 50% franking.


----------



## bearmarket (23 July 2008)

Is QBE an USD/AUSD play in anyones opinion? I read somewhere last year that it was. Is this true? 

bearmarket


----------



## rossw (30 July 2008)

love the fat finger trades just then 

pushed the futures down and back 10 points in a few seconds too


----------



## Euler (30 July 2008)

It appears someone put in sell order of 500000 for 2c

Wonder if they'll still be there by day's end?


----------



## Euler (30 July 2008)

Euler said:


> It appears someone put in sell order of 500000 for 2c
> 
> Wonder if they'll still be there by day's end?




lol ... and in addition ... 22 went through at .001 ... haven't see that on the depth in a long while.

 ..... all trades reversed off course!!

_*The buyers thought it was really Christmas in July*_


----------



## michael_selway (30 July 2008)

Euler said:


> lol ... and in addition ... 22 went through at .001 ... haven't see that on the depth in a long while.
> 
> ..... all trades reversed off course!!
> 
> _*The buyers thought it was really Christmas in July*_




hehe stupid TA traders! just j/k...

http://business.smh.com.au/business/error-wipes-qbe-out-20080730-3n7p.html



> Error wipes QBE out
> Email Print Normal font Large font AdvertisementMark Hawthorne, Chris Zappone
> July 30, 2008 - 4:15PM
> 
> ...




thx

MS


----------



## Logique (12 August 2008)

Phew, a narrow escape, for a moment I thought the stock was trading at .02 during the fat finger trade a week or two back  

Financials are having a better time of it with domestic growth seeming to slow, and interest rate cuts up for discussion at the Reserve Bank. So for QBE, roll on $25 and then $26. He says hopefully.


----------



## matt1987 (7 October 2008)

hi im just looking for some advice on the qbe dividend election plan. i am currently on this plan and when looking to do my 2008 tax return, i noticed that under qbe's div plan, you actually "forgo" your div's and instead are issued bonus shares at the value of the div you have forgone - this differs to a div reincetment plan, where you actually receive div's but the company issues new shares in consideration for the div.

the div election plan booklet says that the shares received are not subject to australian imputation (dividend) taxes. therefore, i am unsure of how this plan works from a tax perspective. it couldn't just be you're receiving new shares and you increase your cost base by the value of the new shares because in this circumstance you would still be receiving some form of "consideration" which would be tax free.

would greatly appreciate any advice in relation to this.


----------



## pjthin (8 October 2008)

matt1987 said:


> hi im just looking for some advice on the qbe dividend election plan. i am currently on this plan and when looking to do my 2008 tax return, i noticed that under qbe's div plan, you actually "forgo" your div's and instead are issued bonus shares at the value of the div you have forgone - this differs to a div reincetment plan, where you actually receive div's but the company issues new shares in consideration for the div.
> 
> the div election plan booklet says that the shares received are not subject to australian imputation (dividend) taxes. therefore, i am unsure of how this plan works from a tax perspective. it couldn't just be you're receiving new shares and you increase your cost base by the value of the new shares because in this circumstance you would still be receiving some form of "consideration" which would be tax free.
> 
> would greatly appreciate any advice in relation to this.





hi,


The bonus shares are not dividends however they have a cost base of $nil so when you sell them you will have a capital gain for the market selling price. i.e. you can never make a capital loss on the sale of the bonus shares.

In some situations its actually better to use the DRP due to the franking credits. For example hypothetically:

if you have $45k salary no deductions etc. as your only taxable income, then at current income tax rates your marginal rate is 30%. You want to choose between a DRP or BSP:

DRP: assume dividend is 100% franked, then you essentially pay no tax as your marginal tax @ 30% is offset exactly by the franking credits received. No future tax liability re: dividends

BSP: you receives bonus shares instead. No taxable income for the year you receive it, but when you sell these bonus shares in the future you actually make a capital gain and are potentially liable for CGT

So in the above scenario you're better off with the DRP. Given that QBE's franking is generally around 20-60% you have to take that into consideration.

Hope that helps


----------



## matt1987 (8 October 2008)

pjthin said:


> hi,
> 
> 
> The bonus shares are not dividends however they have a cost base of $nil so when you sell them you will have a capital gain for the market selling price. i.e. you can never make a capital loss on the sale of the bonus shares.
> ...





great, thanks very much for your help with that. was just what i was after 

good point re the div election plan vs div reinvestment plan. qbe's drp is currently suspended so i suppose the dep is my only plan for non monetary dividends anyway.

cheers

matt


----------



## Lachlan6 (10 November 2008)

QBE is grinding its way higher against the general market trend. At least that is one good sign, however I would expect this move higher to fail soon. It looks clearly part of a larger correction and certainly not a new impulse higher. It may be a good 'get out of jail free' card for those who bought in at higher levels, but one to watch for a possible entry once the wave (C) is complete for either a medium term trade or possibly longer term hold.


----------



## Sean K (24 November 2008)

Lachlan6 said:


> QBE is grinding its way higher against the general market trend. At least that is one good sign, however I would expect this move higher to fail soon.



Well picked Lachlan.

Fell over at $28 resistance.

$20 ish zone look pretty solid for now though.


----------



## Bin57again (26 November 2008)

QBE's trading halt due to acquisitions - will the stock open higher or lower? Is there a general rule (e.g. the acquisitions show strong balance sheet)? I bought near 22 but this has caught me off guard...I've set a stop just below 21...any ideas/comments?


----------



## TheAbyss (27 November 2008)

Bin57again said:


> QBE's trading halt due to acquisitions - will the stock open higher or lower? Is there a general rule (e.g. the acquisitions show strong balance sheet)? I bought near 22 but this has caught me off guard...I've set a stop just below 21...any ideas/comments?




the instos got it at $20.50 so thats where this will go IMO. In the short  term it might go a bit below that but will bounce back to $20.50 then some evaluation will take place for a while. Longer term my opinion is that it will work for QBE but i have no real data to work with. Most of the insurers appear to have come out of the credit issues pretty well. The issue for them is where will they show growth in the future? QBE are acting on this buy buying up some business and it is a good thing IMO.


The last company that did a placement was IPL at $2.50 a few weeks ago which sold units at a discount to current SP and the SP retreated to the $2.50 in a week or so after that, then retreated further, circa $2.25 ish before rebounding and hovering at the $2.50-$2.60 range where it is now give or take  some cents.


----------



## hotbmw (10 January 2009)

if the US$ severely depreciates in the coming year or so, how much of QBE's income is derived from the US?

Is it significant? 10%? 20%?

I remember a month or so back they invested into the US market again.

Any concerns here by current shareholders?


----------



## johenmo (11 January 2009)

hotbmw said:


> if the US$ severely depreciates in the coming year or so, how much of QBE's income is derived from the US?
> 
> Is it significant? 10%? 20%?
> 
> ...




Nett Earned Premium for HY 6/08 is $5108m, of which "Americas" = 34% ($1469), Oz=26%, AP = 5% and Europe = 36%.  Report states "stronger" Aus Dollar impacted on this.  I don't have any info of recent times.  I hold small parcel.  Bought into recent raising but will watch closely as original purchase is green (only one).


----------



## S73417H (17 January 2009)

What are peoples expectations for QBE shares after the $225m share allocation takes place on the 20th?


----------



## S73417H (19 January 2009)

S73417H said:


> What are peoples expectations for QBE shares after the $225m share allocation takes place on the 20th?




So given today's QBE share prices, I'm gathering peoples' expectations were not good!!  

Fingers crossed they will rise soon.


----------



## cutz (19 January 2009)

S73417H said:


> So given today's QBE share prices, I'm gathering peoples' expectations were not good!!
> 
> Fingers crossed they will rise soon.




Hi S73417H,

There hasn't really been anything negative come out if QBE lately, it's run up quite a bit off its lows so I’m assuming it may be traders banking profits.

Personally I’m waiting for my allocation to come through so I can sell it off as I can’t stand odd lots. As for the main lot I’m still comfortable hanging on for the ride.


----------



## S73417H (5 February 2009)

I must admit, over the past month or so I have been very disappointed with QBE's performance. I was hoping for a small recovery by now after the shares were diluted by the recent release.


----------



## tge oracle (26 February 2009)

*Re: QBE - Very impressive*

Although having been a very long term shareholder in QBE I haven't posted on this company in the past but tonights results have compelled me to congartulate the management of this company for delivering once again at a time when almost everybody was expecting dissapointment during the most difficult periods in my investing lifetime. I only wish all of my investments will achieve the same consistency with results and possess the same quality management as QBE. It is my ideal investment i.e. one that I will never sell!


----------



## S73417H (26 February 2009)

*Re: QBE - Very impressive*



tge oracle said:


> Although having been a very long term shareholder in QBE I haven't posted on this company in the past but tonights results have compelled me to congartulate the management of this company for delivering once again at a time when almost everybody was expecting dissapointment during the most difficult periods in my investing lifetime. I only wish all of my investments will achieve the same consistency with results and possess the same quality management as QBE. It is my ideal investment i.e. one that I will never sell!




I second that. The 2008 financial report was excellent. I am very happy that I bought my second lot at 19.80. Looking forward to the future.


----------



## TheAbyss (2 March 2009)

Looks like even the good ones get a smacking in this climate. Down 10% today on no real news.

Any opinions on why the slide other than flood, bushfires and a financial winter across the broader spectrum?


----------



## Junior (2 March 2009)

Anyone have any insight into QBE's share price performance today?  Maybe there was something hidden in their annual report which was uncovered over the weekend!


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## Logique (2 March 2009)

> flood, bushfires and a financial winter



Not aware of anything apart from this to explain an 11% fall this morning. Big payouts expected after recent natural disasters, and don't forget insurance companies are leveraged to performance of equity markets and in the case of QBE, strongly to the US market which has boken lower. Caught in a payout-earnings squeeze.


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## basilio (2 March 2009)

QBE just came out with another solid  consistent result (as distinct from almost every other financial institution ) Obviously must be a Ponzi scheme ala Stanford  or so the market seems to be saying..

Also watching Oil Search getting hammered - again some excellent results with a very solid LNG project.  I just don't think the market is discriminating at the moment. Everything is been thrown out. In theory a great time for discriminating buyers with deep pockets and strong nerve...


----------



## jonojpsg (2 March 2009)

basilio said:


> QBE just came out with another solid  consistent result (as distinct from almost every other financial institution ) Obviously must be a Ponzi scheme ala Stanford  or so the market seems to be saying..
> 
> Also watching Oil Search getting hammered - again some excellent results with a very solid LNG project.  I just don't think the market is discriminating at the moment. Everything is been thrown out. In theory a great time for discriminating buyers with deep pockets and strong nerve...




Would have to agree with you there bas, with profit results like QBE, WOW and OSH leading to big hits on their SP.  If I had $15000 to spend right now, I'd be banging $5k on each


----------



## dmagnus (2 March 2009)

Profit downgrades from Credit Suisse, UBS and Merrill Lynch = todays lows

Yeah I got in at $17, feeling ok about it


----------



## suri (9 March 2009)

Anyone have any insight into QBE's share price performance today? low of 0.04cent its kind of weird ??


----------



## dmagnus (9 March 2009)

that was a computer malfunction....

I think the market thinks QBE is going to take over Suncorp, hence the drop


----------



## wabbit (9 March 2009)

ASX have "cancelled" all trades on QBE < $15

http://www.news.com.au/business/story/0,27753,25160144-31037,00.html



> TRADES in QBE Insurance Group shares at $15 and below were cancelled on Monday, after the stock registered an aberrant price under one cent low in afternoon trading.
> 
> According to Iress data, some QBE shares traded at a low of 0.4 cents between 1426 AEDT and 1428 AEDT, amid overall quiet dealing in the stock market.
> 
> ...





Hope this helps.

wabbit


----------



## tommymac (12 March 2009)

Nick Radge said:


> I don't wish to place to much emphasis and exact targets until patterns complete, but $16.00 would be a conservative estimate at this juncture.




Well, $16.00 has been reached. I've started researching this share and I like what I see.

While there are obviously risks (forex, declining margins, falling invest income etc.) and the share price may have been following the US markets, its 2008 results remained strong. It's yield is now approx. 8% and its investment portfolio is defensive with mainly short term cash and fixed interest with no deterioration in quality.

What do you think will be the effect when the ban on shorting is finally lifted? Does anyone know what has happened in the US and UK?


----------



## Nick Radge (12 March 2009)

Wave-(iii) has extended to the initial target, which as stated was a "conservative estimate". Wave-(iv) and -(v) are yet to come. We'd need to see a move back above $21.00 to move from bearish back to neutral.

_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


----------



## tommymac (12 March 2009)

Nick Radge said:


> Wave-(iii) has extended to the initial target, which as stated was a "conservative estimate". Wave-(iv) and -(v) are yet to come. We'd need to see a move back above $21.00 to move from bearish back to neutral.




Thanks for the update Nick,

If the price continues to fall, what is the next level of support we can expect?


----------



## gohawks (13 March 2009)

tommymac said:


> Thanks for the update Nick,
> 
> If the price continues to fall, what is the next level of support we can expect?




I'm no expert but i believe the share has support at around $15. Looks like it's going up today anyway though!


----------



## tommymac (17 March 2009)

I just bought in today at $17.77. After all my research I determined its a quality business, diversified by product and region.

While it's main growth is from acquisition it seems to have done this well in the past.


----------



## goldchopper (17 March 2009)

tommymac said:


> I just bought in today at $17.77. After all my research I determined its a quality business, diversified by product and region.
> 
> While it's main growth is from acquisition it seems to have done this well in the past.




Tommy, agree. They do need a target to takeover though. In a recession, whats the first bills that are not paid...INSURANCE. but excellent company nonetheless..


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## gohawks (18 March 2009)

tommymac said:


> I just bought in today at $17.77. After all my research I determined its a quality business, diversified by product and region.
> 
> While it's main growth is from acquisition it seems to have done this well in the past.




Good buy. Still kicking myself I didn't get in at under $16 when i was soooo confident it was a great buy. Obviously not confident enough. 

I'm expecting another small drop in the market next week so might try to get in then.


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## S73417H (19 March 2009)

Well, it's been a great few weeks for QBE. Hitting that $20 level again now. What are people's thoughts on where it's going next? Push through to $24-$25 area? Or bounce back lower to the $15 mark perhaps? Thoughts?


----------



## dmagnus (19 March 2009)

all in at 16.70 =)                    


only gotta have a few more of those to make up for babcock ;P


----------



## venno (27 May 2009)

*QBE*

Anyone know of any news related to why QBE dropped today, I thought they were looking quite after their bust/boom a few months ago?


----------



## johannlo (27 May 2009)

Short selling I'm guessing. Also probably people getting out of such a relatively 'defensive' stock and getting into the cyclicals. 

Feeling very annoyed at the shorters right now lol (not being one myself), playing havoc with 'investors' and not creating a single ounce of value other than profit to oneself. 

Sentiment aside I wouldn't worry about medium -long term


----------



## venno (27 May 2009)

johannlo said:


> Feeling very annoyed at the shorters right now lol (not being one myself), playing havoc with 'investors' and not creating a single ounce of value other than profit to oneself.




Amen to that, it was good while it lasted with no shorts around.

I previously purchased QBE when they dropped down to ~16 and sold when they went over 20, so I got my monies worth out of em. Looks like the karma god is going to take a slice out of me this time around though. 

If they can throw on 50c at open I'll be home and hosed though


----------



## venno (3 June 2009)

Still holding the baby with this one, looks like the stock is on the nose with investors. Still can't find any direct news/announcements that would account for this sentiment. 

I guess shorters could be having some fun with it, or maybe the recent weather in eastern states (thus insurance claims) could be pushing sentiment negative. The analysis by Huntleys has the stock rated as a buy, the Financial Times companies anaylsis has the 12 mth median SP at 23 with a high of 29.

Its disconcerting at the moment to see the markets and most stocks on the rise and a supposed premium stock with great prospects trending down.

Will stick it out this week and make a decision on Friday I think.


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## Real1ty (3 June 2009)

I think the bearish sentiment could also be related to the AU$ as a lot of the earnings occur OS.

It's always difficult to know unless the company has advised of its hedging positions, i haven't looked to know if they have or haven't, but most if not all brokers would be aware of them.

I don't hold and it's just my


----------



## S73417H (3 June 2009)

My opinion... At this price, QBE is a fantastic buy. Can't go wrong at this level. Holders will be rewarded in the next 6 months.


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## Julia (3 June 2009)

S73417H said:


> My opinion... At this price, QBE is a fantastic buy. Can't go wrong at this level. Holders will be rewarded in the next 6 months.



Can you explain how and why holders will be rewarded in the next six months?

That's a very positive assertion to make without providing some justification.


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## kam75 (3 June 2009)

QBE is being sold off and volume is increasingso expect a decline at least in the short term.  There's a gap to fill to 18.11 so would not suprise me at all to see it fall to that level.

regards


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## venno (3 June 2009)

kam75 said:


> QBE is being sold off and volume is increasingso expect a decline at least in the short term.  There's a gap to fill to 18.11 so would not suprise me at all to see it fall to that level.
> 
> regards




Ouch, that would sting 

I seriously hope your wrong. I should have bailed yesterday when I was in the black at open.


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## S73417H (3 June 2009)

kam75 said:


> QBE is being sold off and volume is increasingso expect a decline at least in the short term.  There's a gap to fill to 18.11 so would not suprise me at all to see it fall to that level.
> 
> regards




I agree. From a technical standpoint, QBE is set to hit the $18 resistance level. From a fundamental standpoint, the company is still in a very strong position within the market. Acquisitions will most likely be made and QBE should see growth in the medium term. The company is positioned well, with low risk investments. It would be amazing if it managed to break through 18 and hit 15 again (obviously not impossible however).

The only thing that I see hurting QBE short term would be another drop in the cash rate. Given the recent news regarding the Aussie economy, this is becoming more unlikely. My personal opinion is that investing now is relatively safe and $18-$19 represents a good entry point. 

If things pan out, and this stock bounces off the 18 mark like I suspect it will, making it back to $25 mark in 6months is not far fetched at all.

That being said, if anyone can suggest anything to the contrary, I would very much appreciate hearing about it.


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## johannlo (4 June 2009)

Not worried about the medium-long term either with my entry price just a smidgin over 20. I'm nowhere as good with technicals as many of the posters here but I felt that 20 would be in the ballpark for an entry point so here I am. Having said that had I waited another week the shorting ban would have been lifted and I would have gotten in after that sudden drop to 19 a few days ago. 

I only get into bluechips for long term defensive (trading the juniors is so much more volatile and fun lol)  and with QBE's conservative approach, fundamentals and solid P/E ratio I don't think there's much to fear if you're willing to hang in there for a low risk 20-30% gain over a year or two.


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## gerg (11 June 2009)

Hi guys
read somewhere that a broker had downrated its earnings by ~5%.
Also it seems that the high AUD might also effect its earnings given its investments in the US.

The fundamentals still seem to be there for the longer term.


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## venno (15 June 2009)

Woot....Go QBE.

Looks like I won't be singing for my supper after all :

Seriously though, I had 2 good 'day' trades on STO and WBC only QBE that dragged the chain but its coming good so all is forgiven.

Interesting stocks commentary in Saturdays West Australian, the columist compared global equity markets to a house of cards and said its all due to fall down (and then ressurect into something bigger. sounds like a phoenix complex).

Ordinarily not a paper I would place much stock in (pardon the pun) when it comes to financial opinion, but things must be shaky when mainstream and traditionaly cautious print media are echoing the sentiment on this (and many other) forums.


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## S73417H (15 June 2009)

Good result today but maybe just a tad early to be jumping for joy  If we close strong above $20 I'll join you venno 

As a point of interest, the recent moves by the Commonwealth to start raising interest rates signals to me that we can rest assure the cash rate will not be lowered any further. After all, it only has an effect if the banks pass it on and they are doing an about face now.

This is a shimmer of good news for QBE.


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## sidious (16 June 2009)

I've entered QBE when it dropped to $15 and sold off on the $21 mark. Plus dividends off course  Looking at the charts of the SP, I'm thinking of a possible repeat of that. . 
At current prices, I find it very hard to enter.


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## S73417H (17 June 2009)

sidious said:


> I've entered QBE when it dropped to $15 and sold off on the $21 mark. Plus dividends off course  Looking at the charts of the SP, I'm thinking of a possible repeat of that. .
> At current prices, I find it very hard to enter.




Hope you are wrong  I don't think 15 will be hit again. There is a move to defensive stocks right now and QBE is obviously on of those stocks. This might help support QBE over the next few weeks.

Is anyone following the Suncorp / Bank of Queensland merger speculation recently? If it were to go ahead, it would require Suncorp to separate out its insurance business. This might be a good opportunity for QBE to roll in and snap it up?


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## venno (22 June 2009)

Looks like QBE is back in favour, hope this means a good week of gains is ahead of us 

Is QBE really classed as a traditional defensive stock though ?


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## S73417H (23 June 2009)

http://www.ft.com/cms/s/0/cb9e18b4-5f7a-11de-93d1-00144feabdc0.html

About time QBE started to get a bit more information out there.


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## S73417H (29 June 2009)

Just going to throw up a few charts for QBE. Some interesting things to note. Firstly, there looks to be a head and shoulders pattern formed in the first chart. In the second chart QBE looks to be trading pretty spot-on to the fib retracement I have drawn. Also worth noting, it also looks like that head and shoulders circled is part of a bigger head and shoulders pattern.

Interpret as you will.

Happy trading.


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## S73417H (9 July 2009)

Some decent news from QBE today with a credit rating raise. Should we break above $20.5, i think there could have a bit of a run up to $25.


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## thierry (4 August 2009)

How come QBE is still hovering around $20? The rest of the market, and the banks have all been rising.. any thoughts on this?


----------



## GumbyLearner (5 August 2009)

thierry said:


> How come QBE is still hovering around $20? The rest of the market, and the banks have all been rising.. any thoughts on this?




Thanks for the *HEADS UP* Thierry

I will look more closely on this thread before I choose to part with the "hard-earned"so to speak.

Cheers
Gumby


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## Sean K (5 August 2009)

Insurers and funds managers were slapped down along with the other financials. Difference has been the spring back in the banks while these have bounced a little then just tracked sideways. There's not much faith in a sustained recovery, or they just weren't sold off as much? Dunno.

RBS has raised them to a buy for some reason. 

Brokers haven't got much right recently though.


*QBE - RBS Australia rates the stock as Buy*
BY BROKER NEWS - 03/08/2009

The group has acquired Elders Insurance and the broker estimates the deal will be slightly EPS accretive by 2010.

In its view the current environment will mean further opportunities for the company and so the broker retains its Buy rating, supported by a modest increase in price target. Sector: Insurance.

Target price is $25.12.Current Price is $19.50. Difference: $5.62 - (brackets indicate current price is over target). If QBE meets the RBS Australia target it will return approximately 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).


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## rcm617 (5 August 2009)

thierry said:


> How come QBE is still hovering around $20? The rest of the market, and the banks have all been rising.. any thoughts on this?




Could be the rising $A. QBE earns the greater part of its business from overseas so any rise in the $A will decrease its earnings.


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## doctorj (5 August 2009)

QBE is quite interesting, particularly over the long term.  I like their strategy of not rolling out their brand across their acquisitions and instead look to bring expertise, systems and support to existing strong brands.

Apparently they're looking at potential acquisitions across central and eastern europe at the moment to drive a significant increase the GWP from this region - it could be a decent play on recovery from the GFC over the next few years [strong aud to fund acquisitions, currencies in CEE expected to strengthen in future, increasing insurance penetration in these markets, return of bancassurance etc]


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## thierry (5 August 2009)

Thanks for the thoughts/comments... its up 30c (1.5%) in early trade.. while the rest of the ASX200 is relatively flat.. 

I missed the banks run up.. so i'm looking at lower-risk alternatives.


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## thierry (21 August 2009)

great results, and given the poor results of IAG, is the reason I think it is up again today. 

Any thoughts on if this is now in breakout territory? And I would like some advice as to how to position my stops as the SP changes? 

I bought in at 19.95, and i'm up 15%. I'm aiming for a profit of 10%+ but would like to ride it as long as possible.


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## airpoe (22 August 2009)

thierry said:


> great results, and given the poor results of IAG, is the reason I think it is up again today.
> 
> Any thoughts on if this is now in breakout territory? And I would like some advice as to how to position my stops as the SP changes?
> 
> I bought in at 19.95, and i'm up 15%. I'm aiming for a profit of 10%+ but would like to ride it as long as possible.



I got in @ $19, will probably hold as its a quality stock that would unlike see this price, unless anything major happens.

Its paying 62c dividend & increased it profit by 20% this year, just hold nothing to worry about.


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## thierry (25 August 2009)

yes the dividend is good..so will prob hold it.  i'm curious to know what the long term price target is on the stock though. Will be interesting to see what happens to it ex div 2morrow.


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## mrluva (26 August 2009)

*Can anyone pls help me with QBE latest announcement. I dont understand if I need to do anything to participate??and what was that closed on 19August?I didn't even know about any of that.
I own 200 shares. Bought this monday. Had old shares before which i mistakenly sold last friday. QBE price is dropping today for whatever reason.*
Here's a copy of announcement:

2009 Interim Dividend – Closing Date for participation in the Dividend Reinvestment Plan
I refer to our letter dated 21 August 2009.
As with the 2008 final dividend, the closing date for participation in the Dividend Reinvestment
Plan in relation to the 2009 interim dividend is Tuesday, 1 September 2009. Shareholders who
wish to participate should lodge their applications by 5.00pm (Sydney time) that day.
This date is also the record date for calculating entitlements under the 2009 interim dividend.
I confirm participation in the Bonus Share Plan closed on 19 August 2009 for the 2009
interim dividend.


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## thierry (28 August 2009)

sorry missed participating in the Bonus Share Scheme, so haven't looked into it much. I take my div's as cash to make tax time easier.


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## johannlo (28 August 2009)

Mate it dropped because it went ex div LOL

Definitely one to keep in the bottom drawer. If you're a trader I'd go elsewhere but solid company, great results and will continue to do so (look at their margins, they're insane). 

Disappointing to have lagged in the recent rally but I doubt we'll be complaining in a couple of years time (who invests in blue chips anyway to get rich quick)


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## mrluva (29 August 2009)

QBE regained its grounds again. Looking strong. keeping it for long term. Thanx for reply guys but I still don't understand when was this bonus share plan open and do I need to apply to participate now for dividend?If you take cash, dont you have to pay maximum tax on it?


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## Julia (29 August 2009)

airpoe said:


> , just hold nothing to worry about.



What's your basis for such a assured statement?


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## alter1217 (16 September 2009)

I sold some resource stocks to buy QBE in early august at $19.8, in anticipation of a correction which still hasn't come. 

Thought I screwed up this time. Anyways, I held on to QBE as it rose almost 20% over the period (excluding the dividend)...  Today it's past $23.5. Sure, not as good as the banks, but I'm still rather happy about it.

I might just keep QBE in my bottom drawer. It's still got a (really) good P/E of ~12.


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## thierry (8 October 2009)

QBE seems to be consolidating in the 23-24 mark.. however with the USD losing value against the AUD it could affect QBE earnings. A previous post said QBE dervives a lot of its earnings from OS.. Have there any more recent broker reports on QBE?


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## White_Knight (9 October 2009)

I believe QBE is a good medium-long term yield stock to hold - effectively youre hedging against AUD weakness (i.e commodity strength) since they earn so much offshore. Good way of balancing your portfolio holding of resource stocks.


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## johenmo (18 November 2009)

Is QBE looking at IAG again?  Just read a comment on this elsewhere but haven't seen it anywhere else.  Disc - I hold QBE.


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## ers_6 (1 July 2010)

recent profit downgrades, solid company! historically low price!
Clearly 2010 tough year, will they be back.

buy? I am!....


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## Chief Wigam (18 July 2010)

Yep - we bought some at 18.65 a couple of weeks ago.

i reckon it'll hold out pretty well next week with the market getting in the US dropping on Friday as I reckon it's near a short term low


----------



## brty (18 July 2010)

> i reckon it'll hold out pretty well next week with the market getting in the US dropping on Friday as I reckon it's near a short term low




You reckon...

Any possibility of sharing why??

Is it because you bought it therefore it should go up??

brty


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## oldblue (18 July 2010)

There's a few good reasons why it *might* go up.

- Well managed company. Pick of the insurers.

- SP in a (very) short term uptrend. Good chance that it has bottomed.

- Relative Strength indicator is positive.

Enough for me to be keeping a close eye on QBE.

Disc: Not holding.


----------



## Unnamed User (18 July 2010)

oldblue said:


> There's a few good reasons why it *might* go up.
> 
> - Well managed company. Pick of the insurers.




The only thing with that is that it was also a well managed company and the pick of the insurers while it has been dropping in price.


----------



## Julia (18 July 2010)

Unnamed User said:


> The only thing with that is that it was also a well managed company and the pick of the insurers while it has been dropping in price.



Exactly.  It's now worth about half what it was three years ago, yet all during this time it has been widely recommended as a core p/f stock.
It may be a well managed company but it sure as hell isn't reflected in the SP.


----------



## Frenzy3 (18 July 2010)

This is one I am watching to see how much it goes up .. It fits the bill for me at a p/e bellow 10. I think the price may hit 20.. That is my guess.


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## oldblue (19 July 2010)

Julia said:


> Exactly.  It's now worth about half what it was three years ago, yet all during this time it has been widely recommended as a core p/f stock.
> It may be a well managed company but it sure as hell isn't reflected in the SP.




A bit of an exaggeration, I think.

QBE's SP three years ago was around $31. But the important issue for me isn't what's been but what might be.

Not one to buy yet, but certainly one to watch, IMO.


----------



## Julia (19 July 2010)

oldblue said:


> A bit of an exaggeration, I think.
> 
> QBE's SP three years ago was around $31. But the important issue for me isn't what's been but what might be.



Not much of an exaggeration at all.  At the end of July/start August 3 years ago the SP went to $35.  Today it's a few cents over $18.  Near enough to half.



> Not one to buy yet, but certainly one to watch, IMO.



Maybe.  But if you compare QBE with many other major industrials it hasn't performed nearly as well so I'd be interested to know why you think it would in the future?

I've held QBE in the past but it just wasn't showing the growth that was easily available from other stocks.


----------



## BrightGreenGlow (26 July 2010)

Earnings downgrades and now a new 52 week low today. I hear so many people includes you guys here say QBE is a top stock to hold. Apart from a so-called well managed company why else is it a top stock to hold?

For me QBE has only gone backwards since I bought in around the $20 mark and it's dividends are terrible. Should I get out now or hold it longer? or buy more today to lower my draw even price and hope it kicks up?

I guess you guys cant tell me what to do here but where do you think QBE will go from here?


----------



## Boggo (26 July 2010)

I like my ABC etc corrections, in the case of QBE C = A at around 16.54.

To me that is a potential support area (16.25 to 16.75) of interest.
.


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## Julia (26 July 2010)

BrightGreenGlow said:


> Earnings downgrades and now a new 52 week low today. I hear so many people includes you guys here say QBE is a top stock to hold. Apart from a so-called well managed company why else is it a top stock to hold?



Something I've often also asked.



> For me QBE has only gone backwards since I bought in around the $20 mark and it's dividends are terrible. Should I get out now or hold it longer? or buy more today to lower my draw even price and hope it kicks up?



John, on what basis would it make sense to you to buy more on the averaging down process, and *hope* it picks up?
Do you really think hope is the appropriate emotion to attach to buying decisions?


----------



## BrightGreenGlow (26 July 2010)

On the basis that the market seems to move for pretty much no reason most of the time. Therefore, there is a good chance QBE will push up a bit tomorrow and level out there for a while.

I remember MQG dive and surge $1-$2 a day for most of 2008-09.


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## buysellmestuffed (26 July 2010)

With a 62 cent dividend payable 26 th august 2010 shouldnt the share price at least run up to near $18 in the next month . so it should regather lost ground from today . Wait a month and regather that 5.8 % from today  .

Or am i wishfull thinking . 

The main reason the share dropped was from there investment income not reaching past performances not from there insurance business they actually wrote 20 % more business , they just didnt get the returns on the money invested , with a few bad storms etc thrown in .

Or is it time to bail .

The company says its had a 20 per cent growth in premiums, and a 7 per cent increase in insurance profit to $US820 million, but that has been offset by heavy investment losses.
However, the company says it is likely to maintain its dividend at 62 cents per share.

It has also offered an upbeat medium term outlook, with the company expecting new acquisitions and initiatives this year to add around $US400 million of net profit after tax annually by 2013





http://www.abc.net.au/news/stories/2010/07/26/2964219.htm?section=business


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## skc (26 July 2010)

BrightGreenGlow said:


> On the basis that the market seems* to move for pretty much no reason* most of the time. Therefore, there is a good chance QBE will push up a bit tomorrow and level out there for a while.
> 
> I remember MQG dive and surge $1-$2 a day for most of 2008-09.




Move for no reason? 40pc fall in profit seems a pretty good reason for the stock to fall from $25 to $17 in this calendar year.

Having said that, the down move might be closed to the end, and a bounce back might ensure over the next week or two.


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## mr. jeff (26 July 2010)

BrightGreenGlow said:


> Earnings downgrades and now a new 52 week low today. I hear so many people includes you guys here say QBE is a top stock to hold. Apart from a so-called well managed company why else is it a top stock to hold?
> 
> For me QBE has only gone backwards since I bought in around the $20 mark and it's dividends are terrible. Should I get out now or hold it longer? or buy more today to lower my draw even price and hope it kicks up?
> 
> I guess you guys cant tell me what to do here but where do you think QBE will go from here?




john, I am not an expert but I agree with Julia, don't go catching a falling knife, it's an act of emotion. 
You can of course look at that juicy dividend, buy in for that and hold onto the shares for their "optimistic mid term" outlook, but don't buy them because they have fallen so much this year! I own them at the same $20 and thought they were a great buy then, a solid yield and really excellent margin on their written premiums. has that changed?


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## BrightGreenGlow (26 July 2010)

Skc, sorry I meant that in regards to MQG last year. Well the Dividend is due Ex around the end of next month so now might be a good chance to buy in get the dividend and maybe a lil SP growth in the lead up.


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## FXanyone (26 July 2010)

Personally dont like to hold stocks where they provide profit warnings a month after year end. 

Yes I know technically you can do that but doesnt sit well.


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## Julia (26 July 2010)

BrightGreenGlow said:


> On the basis that the market seems to move for pretty much no reason most of the time.



If you really think that, you're pretty much destined to lose money.



> Therefore, there is a good chance QBE will push up a bit tomorrow and level out there for a while.



Why do you think it will push up tomorrow when it fell 5.5% today in contrast to the generally rising market?



FXanyone said:


> Personally dont like to hold stocks where they provide profit warnings a month after year end.




Agree.


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## noirua (26 July 2010)

I don't hold QBE but nearly bought on certain brokers and others recommendations. If this happened in the States then QBE would be open to Class A actions and some directors would be for the chop. Totally unsatisfactory, incompetance, in fact, a class of 14 year-olds could have done better.


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## BrightGreenGlow (27 July 2010)

Julia said:


> If you really think that, you're pretty much destined to lose money.




Well fundamentally it does. BHP has not announced anything today yet it was up to $40. Now only $39.86. For no reason.


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## Julia (27 July 2010)

OK, John, I give up on trying to get you to think about why markets move.

I see QBE is down another 3% today.  Not pushing up too well, huh?


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## Boggo (27 July 2010)

Julia said:


> If you really think that, you're pretty much destined to lose money.




I'm with you on that subject Julia.

If the current price levels don't hold around the +$16 area we could be heading towards $14 for the next area.


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## It's Snake Pliskin (27 July 2010)

Where is the background commitment, if for any reason it is going to go up? And has that been depleted in recent days?


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## Poppypop (27 July 2010)

Well it still has a really good broker rating after yesterdays announcement so I think it will rise substancially next month for the dividend payment of 62cents. I'm banking on the fact it will bounce off 16 but could be 15 (unlikely). I couldn't imagine it going under 15 unless there is really bad news. I have bought a substancial amount of this stock today.


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## buysellmestuffed (27 July 2010)

I've finally listened to some good advice ,  out today at the close of trade . 


Waiting for the support level to form and hopefully get on the rise back for the dividend . should get a nice rise up  if i time the buy right . But i'm not watching it fall any longer . 

Seems i think a whole lot better while i'm not in the market .


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## jonojpsg (30 July 2010)

After a low low open this morning has bounced nicely.  IMO this is an excellent point to jump in, which I have, as their latest release, apart from the equity losses, has only good news, and it seems like a major overreaction given that dividend has been maintained, they still have $2.7bn in spare capital to continue acquisitions, profit addons to come online over the next 2-3 years, etc.

Pity I didn't get on first thing, bought in at 16.75, expecting a bounce to 18+ over the next few weeks as reality kicks back in


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## buysellmestuffed (30 July 2010)

Best time to buy is in the morning as they seem to get  sold off , i sold at $16.75  was expecting a pull back to near $16.60  to re-enter but have decided to wait and see what happens over the weekend , i don't really want to hold stock as the market seems a little fragile again , the neikki is down 1.78 % and am expecting the dow to drop tonight again as futures are down 40 points .Thats just my opinion . But they are very well supported around the 16.75  area . 

If the Dow drops over the weekend i'm hoping to rebuy at around $16.30 monday .


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## Poppypop (31 July 2010)

I think the 16 dollar days are numbered. We are now into August, dividends moving closer. it's going to have to rise soon. I'm reluctant to sell any of my shares under the 1730 mark with a target buy back of 1700 - 1708.


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## pixel (31 July 2010)

For many months, one of my favourite "investor commentators" has kept saying how "we like QBE"; sadly, each time I looked at QBE's chart, it had dropped another level. On the attached chart, each time a promised recovery hits resistance, my program starts to draw a new orange horizontal line.
(The orange text is my own addition, to make the message stand out.)
Put less theatrically, one could point out that a succession of lower Lows and lower Highs constitutes a *falling trend.*
Remember: *A trend remains a trend till the bend at its end.*


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## DOC (1 August 2010)

i've been watching this one for many years now, and investing in it since 2008.
what i have seen is how remarkably when ever its price has fallen significantly(since 2001) due to negative sentiment in the sector, it has always bounced back strong after reality kicks in. An excellent management team is always a key indicator for me.
do your own research. this ones a keeper.


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## Poppypop (1 August 2010)

DOC said:


> i've been watching this one for many years now, and investing in it since 2008.
> what i have seen is how remarkably when ever its price has fallen significantly(since 2001) due to negative sentiment in the sector, it has always bounced back strong after reality kicks in. An excellent management team is always a key indicator for me.
> do your own research. this ones a keeper.




Yup, I concur with you. You must remember QBE only hit $15 last year because of a computer error. It actually went all the way down to $10 in a day but they opened it back up at $15 and it boomed straight up to $16 and higher. It was back at $19 within a month. There's more upside than downside to this stock so I don't see reason for it to keep falling.

I found Pixel's graph very humorous and his line A trend remains a trend till the bend at its end.
 reminds me of something out of a Seinfeld episode.


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## Boggo (1 August 2010)

DOC said:


> i've been watching this one for many years now, and *investing* in it since 2008.
> what i have seen is how remarkably when ever its price has fallen significantly(since 2001) due to negative sentiment in the sector, it has always bounced back strong after reality kicks in. An excellent management team is always a key indicator for me.
> do your own research. this ones a keeper.




With all due respect, you guys have got to be kidding. This thing has dropped from over $35 in Sept 2007 and from just over $32 in 2008 and is now just hanging on above $16, how can that be a profitable investment. 
A 62 cent (not fully franked) dividend is not going to save it from that reality.
A 50% loss requires a 100% gain to restore it, apply time to that scenario and it puts large downtrends in perspective.

It is a good *trading* stock in both directions if you catch the turns and apply basic capital protection rules.

That's just my my  worth from a "the trend is your friend til the bend at the end" approach.

A potential *trade* scenario below.
.


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## Wysiwyg (1 August 2010)

Boggo said:


> It is a good *trading* stock in both directions if you catch the turns and apply basic capital protection rules.




And noticeably gradually increasing volume rose above average 4 of 5 days last week. Possible 'reprieve' from the relentless downward drive for pivot pickers is the way I see it while a rising index could save the day as with all boats and tides further down the track.


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## jonojpsg (1 August 2010)

Definitely in a serious downtrend agreed, but a downtrend that has just been exacerbated by a one-off writedown that has overshadowed otherwise very good results.  These results IMO would have been enough to turn the downtrend, indeed will turn it, however the equity loss spooked holders to sell down which IMO has provided an OUTSTANDING opportunity to get in well below where the turning point would otherwise have been.

Of course this is all IMO and we will have to wait and see whether the trade is proved valid over the course of the next month


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## Boggo (1 August 2010)

Wysiwyg said:


> And noticeably gradually increasing volume rose above average 4 of 5 days last week. Possible 'reprieve' from the relentless downward drive for pivot pickers is the way I see it while a rising index could save the day as with all boats and tides further down the track.




It is playing by the rules that the software predicted on the 23rd so it is potentially worth a look for a $400 risk especially when combined with the current levels of enthusiasm associated with the upcoming dividend.

Note that my comments are based on my procedures and are not a recommendation.

https://www.aussiestockforums.com/forums/showpost.php?p=569559&postcount=207


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## mr. jeff (1 August 2010)

jonojpsg said:


> Definitely in a serious downtrend agreed, but a downtrend that has just been exacerbated by a one-off writedown that has overshadowed otherwise very good results.  These results IMO would have been enough to turn the downtrend, indeed will turn it, however the equity loss spooked holders to sell down which IMO has provided an OUTSTANDING opportunity to get in well below where the turning point would otherwise have been.
> 
> Of course this is all IMO and we will have to wait and see whether the trade is proved valid over the course of the next month




with you there jonojpsg, but whats the go - the traders think it's a good trading stock atm, the investors think its a good investment at the moment and with a dividend, everyone is happy. All the broker coverage reported has been saying "BUY" which makes me worry. I hear traders screaming sell, probably sensibly, although I agree with others that the div yield will support the sp, particularly with a very solid history behind it. Buffet would be greedy right now.
the trend is great, anyone interested in throwing a floor out there?

Have a look at reported shorts just out of interest:

QBE     QBE INSURANCE GROUP LIMITED       FPO              6,323,051           953,403            15.07           -.83       1,035,071,131         .09

15% of shares traded as shorts, Friday...
In contrast, Navitas had just over 50% shorts.

I know that you should never attempt to pick the bottom. but anonymously it is something of a novelty. Good luck with QBE this week I'm sure we'll all be watching closely.


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## Julia (1 August 2010)

Boggo said:


> With all due respect, you guys have got to be kidding. This thing has dropped from over $35 in Sept 2007 and from just over $32 in 2008 and is now just hanging on above $16, how can that be a profitable investment.
> A 62 cent (not fully franked) dividend is not going to save it from that reality.
> A 50% loss requires a 100% gain to restore it, apply time to that scenario and it puts large downtrends in perspective.
> 
> ...



I agree.  But then I simply never buy into a downtrend.



jonojpsg said:


> Definitely in a serious downtrend agreed, but a downtrend that has just been exacerbated by a one-off writedown that has overshadowed otherwise very good results.



jono, how do you know this 'one-off' event will not be followed by further 'one-off' events?  What makes you sure that the SP is going to shortly reverse its downtrend?


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## noirua (1 August 2010)

At least QBE are picking up a few new assets at depressed prices. Will probably do well over the next few years and turn themselves round like conglomerate Wesfarmers - yield will remain a bullish factor, especially when dividends eventually rise.


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## jonojpsg (2 August 2010)

Julia said:


> I agree.  But then I simply never buy into a downtrend.
> 
> 
> jono, how do you know this 'one-off' event will not be followed by further 'one-off' events?  What makes you sure that the SP is going to shortly reverse its downtrend?




Good point Julia - I don't know that there are not more "one-offs" to come, hopefully given QBE's situation the only write-downs that are likely to prove significant would be equity-related, especially now they have shown the numbers on premium income are all good.

Also don't *know * the trend is about to turn, but as I said, the numbers they just released look pretty darn good to me, and if I was looking for a blue-chip to buy into, this would be close to top of my list, which probably means, given that I tend to be a speccy trader, that there must be a lot of other more conservative types out there who would be thinking the same thing.

Anyways, nice jump today, we'll see whether it is the turn of the tide or just a small wave


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## Poppypop (4 August 2010)

Poppypop said:


> I think the 16 dollar days are numbered. We are now into August, dividends moving closer. it's going to have to rise soon. I'm reluctant to sell any of my shares under the 1730 mark with a target buy back of 1700 - 1708.




My prediction was right on the money. Sold on the open at 1730, I bought back at 1706 later in the day. Looking at buying more back tomorrow if it drops down to 1670 - 75. I highly doubt it will get below 1650 this time around. I'm expecting it to hit 1800 next week and 1900 the week after.


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## Chief Wigam (19 August 2010)

This is one of the most recommended stocks by Brokers in the market. Also one of the worst performing. Don't you love those brokers...


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## Boggo (19 August 2010)

Its still hanging in there as a valid long trade based on a previous assessment.
https://www.aussiestockforums.com/forums/showpost.php?p=571123&postcount=229

Why would anyone want to mess with the likes of QBE, TLS and a list of other broker feel good stocks while there are stocks such as PRU, IAU and AVO etc making money for holders.


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## ROE (20 August 2010)

I dont usually take brokers and analyst opinion but you got to give it a bit of time ...you don't expect to buy stock and next week it goes up, if you are a trader you probably do 

one of the reason I'm staying out because of LMI ... QBE is one of them
and Australian housing look a bit shaky to me could be an event
that could trigger a bit of un-happy time


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## mr. jeff (7 September 2010)

Just for an update, yesterday UBS noted QBE had "turned the corner"  whatever this means, and now up 3.5% today. Whether this is the start of a return to some strength in the SP remains to be seen.


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## noirua (9 September 2010)

mr. jeff said:


> Just for an update, yesterday UBS noted QBE had "turned the corner"  whatever this means, and now up 3.5% today. Whether this is the start of a return to some strength in the SP remains to be seen.




No doubt a lot of cost cutting is going on and I feel things will improve a lot more in the sector, going forward. That big dividend, good yield at the present price, is good reason enough to hold the stock and let dividends roll in whilst waiting for a recovery.


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## Poppypop (17 September 2010)

noirua said:


> No doubt a lot of cost cutting is going on and I feel things will improve a lot more in the sector, going forward. That big dividend, good yield at the present price, is good reason enough to hold the stock and let dividends roll in whilst waiting for a recovery.




Yep, I concur. I sold 1000 of my 2500 shares at 1825 which i bought for 1716 about a month ago and put it into Telstra @ 278. Looking forward to the nice dividends getting paid into my account next week  I will consider buying the 1000 shares back tomorrow if Telstra goes up and QBE goes down.


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## Ken (9 November 2010)

any chartist on QBE at the moment.

looks like it could be heading further south....... ugly ugly for qbe at the moment


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## noirua (10 November 2010)

Ken said:


> any chartist on QBE at the moment.
> 
> looks like it could be heading further south....... ugly ugly for qbe at the moment




I'm a basic chartist and the trend all of this year has been downward and that doesn't matter how many analysts make the stock a hold or a buy.
Yield at $16.71 (was $25.50+ in January last) is 7.7% but the earnings yield is just 8.6% - OK for a growth stock but QBE are but a harpooned tank.
Stocks of late that go on down, OST is another, are hard put to drag themselves out of the trend. Both QBE and OST will like WES, so choose your moment well when the falling knife strikes a log, not a passing bird.


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## jonojpsg (10 November 2010)

noirua said:


> I'm a basic chartist and the trend all of this year has been downward and that doesn't matter how many analysts make the stock a hold or a buy.
> Yield at $16.71 (was $25.50+ in January last) is 7.7% but the earnings yield is just 8.6% - OK for a growth stock but QBE are but a harpooned tank.
> Stocks of late that go on down, OST is another, are hard put to drag themselves out of the trend. Both QBE and OST will like WES, so choose your moment well when the falling knife strikes a log, not a passing bird.




I was looking at this yesterday thinking I might jump in for a small bounce - yield does look good, and has been sitting around 17-17.50 for a while so...will I, won't I?

Really though, apart from spike low in March 09 this has been trading above 16.30ish, since 04/05 so unless there is grim news on the horizon this looks like a value buy...any other comments from more informed analysts??


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## johenmo (11 November 2010)

Have a very small parcel which I continue to foolishly hold!!!  Divs are ok but I think it may be time to flick it - the majority of my money is doing well in other stocks.

But jono the AUD is high and a fair chunk of QBEs money is in US dollars so surely as the dollar remains high QBE will continue to suffer?  Looking at the chart it's slowing making it's way south and what make you think it will reverse any time soon?  I see more sideways meandering for somtime.  Currency issues, insurance payouts staying high as the weather continues to play havoc on mankind, etc

Thinking of selling out, using the money in other stuff and maybe (that is maybe) buy back later when it starts to show it's moving on up.


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## jonojpsg (14 November 2010)

johenmo said:


> Have a very small parcel which I continue to foolishly hold!!!  Divs are ok but I think it may be time to flick it - the majority of my money is doing well in other stocks.
> 
> But jono the AUD is high and a fair chunk of QBEs money is in US dollars so surely as the dollar remains high QBE will continue to suffer?  Looking at the chart it's slowing making it's way south and what make you think it will reverse any time soon?  I see more sideways meandering for somtime.  Currency issues, insurance payouts staying high as the weather continues to play havoc on mankind, etc
> 
> Thinking of selling out, using the money in other stuff and maybe (that is maybe) buy back later when it starts to show it's moving on up.




Sorry johenmo, I should make my position clear...I would be trading in using CFDs to make a quick profit on a presumed bounce from mid 16s back to 17ish, with a deposit of around $1500 can buy 2000 CFDs and make a quick $1k from a 50c bounce, which looks like it may play out, although I must say the gap down on Thursday with an open at 16.40 and low of 16.30 would have been a VERY nice but in point rather than my entry the previous day at 16.64!!!  Wait and see where it goes Monday


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## ROE (30 November 2010)

johenmo said:


> Have a very small parcel which I continue to foolishly hold!!!  Divs are ok but I think it may be time to flick it - the majority of my money is doing well in other stocks.
> 
> But jono the AUD is high and a fair chunk of QBEs money is in US dollars so surely as the dollar remains high QBE will continue to suffer?  Looking at the chart it's slowing making it's way south and what make you think it will reverse any time soon?  I see more sideways meandering for somtime.  Currency issues, insurance payouts staying high as the weather continues to play havoc on mankind, etc
> 
> Thinking of selling out, using the money in other stuff and maybe (that is maybe) buy back later when it starts to show it's moving on up.




It is always darkest before dawn   looking at tickers every day can be bad for you.

I can tell you that QBE is a very good business and insurance business you got to think longer than the market. 

Shall I plug a few chapters on insurance business and how they work and why now is probably the best time to buy QBE.

other may disagree including yourself but it food for thought


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## ROE (4 December 2010)

As promise here is a chapter on insurance business 

apologies to those already knowing this business in details, for those less well known about this business, they may find some comfort owning insurance security  in time of disaster

I only buy insurance company in time of disaster and turmoil,  
Insurance business is unlike other business, it has advantages other over look
Insurance collect premium from you and I in a form of premium you pay each year think of your car insurance or landlord insurance etc...

This is a business where you collect before you provide a service, and the service you provide will be in a form of claims.

Until claims are made this money, they called float are kept in the business invest in bonds and stock to generate even more return.

That why it is important to have good management running insurance business. They can skillfully allocate this capital and generate above market return.

Warren Bufett make his Billion because of this insurance float..his insurance division provide him
interest free float where he can compound 15% return a year until a claim is paid out...

the more float you rack in the higher return you going to generate.....Most insurance companies Warren Buffett
acquire, from day one he will work on generate more float from this business for him to then invest in
the market for exceptional return...

I wont bore you too much but this is the example

GEICO in 1998 it has revenue of around 4 Billion, 10 years later in 2008 it has revenue
of 12 Billion and you can tell much more money Warren has in this period 

Float on insurance balance sheet are liability but unlike other business liability in a form of debt
it cost other business to have debt in a form of interest..

insurance float are interest FREE, there is no requirement for insurance company to pay interest on 
premium its customers pay until the day of claim...

Good insurance company with good management will know how to use these float efficiently and generate
awesome return from their share holders...you can look at QBE charts for the last decade to see what
it has done...

QBE has demonstrated that it can do this nicely over the past decades....QBE prove to you
that it can take this float and invest wisely and get very decent return...

Another day I tell you why when disaster struck, nothing but bad news throw at insurance way, 
It is probably the best time to buy insurance company...it has a very nice silver lining once you
understand the business.

Just like Uncle Warren said when he under-write insurance policy when massive disaster struck.

"We are willing to look foolish as long as we don't feel we have acted foolishly"

Learn to ignore the noises and think independently, buy for your own reasons not someone else.. I find most people covering more than 15 stocks they are expert at selling but has very little details knowledge of the business.

Remember if you are an expert and can generate compound annual return at around 15% or more there is no need for you to do sell anything but
invest in the market


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## Intrinsic Value (6 December 2010)

I had QBE and sold it. 

Mad a nice loss on it too

Paid 21 and sold out at 17.50.

Reinvested the money in FGE and MCE 5 months ago and have made up the loss.

Yes It might come good but how long do you want to wait and are there better places to put your money?

With the high Aussie dollar against the US dollar I don't think it is going to change very quickly.


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## Intrinsic Value (6 December 2010)

ROE said:


> As promise here is a chapter on insurance business
> 
> apologies to those already knowing this business in details, for those less well known about this business, they may find some comfort owning insurance security  in time of disaster
> 
> ...




The problem is that QBE gets very small returns on that money it invests.

If it had a more aggressive investment strategy I would be prepared to agree with you.


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## doctorj (6 December 2010)

Just to round out ROE's commentary - Two factors influence the investment returns of an insurer - the first being their investment strategy and the second being the length of time they have the money. The first is obvious, so I'll leave it there. The second is less so - there are two primary factors that drive this, the type of product they sell and their combined ratio.

On the type of product - if the insurer is writing predominately property lines (motor, home and contents etc), they are at risk for a year more or less. This is called short tail business. The impact is that the insurer only has the money for a short time to earn a return. Products with a longer tail (liability, etc) will mean the company has the money for longer.

The second is their combined ratio - the proportion of every dollar of premium spent on claims and policy administration (and other costs). The higher it is, the less time the company will have to invest each dollar of premium earned.
So, if you're a motor insurer with a combined ratio of 97-100%, you could have the best investment strategy in the world and it's not going to help your shareholders that much. This isn't all that uncommon at all. In fact, in some markets, it's common for an insurer to have a combined ratio above 100% and scrape a small profit on their investment return alone...


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## ROE (9 December 2010)

Intrinsic Value said:


> The problem is that QBE gets very small returns on that money it invests.
> 
> If it had a more aggressive investment strategy I would be prepared to agree with you.




Dependent on time frame I always buy good business when it get knocked off
the planet. 

When yield are high and return on investment are good and stock price gone gangbuster it doesnt attract me ..so I come in when things
are dire and everyone thing it's a **** business.

did this with CCP, FLT and CAB 
doing the same for QBE...

and I always do my homework to make sure I understand enough to make
an informed decision...

people can play with the numbers and predict its future price or how much it worth I understand the business then all I have to do is take a ball park figure

and the rest is history....

I found QBE be among the best of the best in insurance


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## robusta (9 December 2010)

ROE said:


> Dependent on time frame I always buy good business when it get knocked off
> the planet.
> 
> When yield are high and return on investment are good and stock price gone gangbuster it doesnt attract me ..so I come in when things
> ...




Have to agree with you there ROE, the best time to buy a good business is in the middle of bad news.


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## Intrinsic Value (9 December 2010)

robusta said:


> Have to agree with you there ROE, the best time to buy a good business is in the middle of bad news.




That is okay in theory but there may be better businesses to invest in than QBE at the moment and that is my contention.

QBE return on equity had been declining for some years now so that has also to be a concern.


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## robusta (9 December 2010)

Intrinsic Value said:


> That is okay in theory but there may be better businesses to invest in than QBE at the moment and that is my contention.
> 
> QBE return on equity had been declining for some years now so that has also to be a concern.




No arguement from me. QBE is one I keep on my watch list but have never bought.


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## ROE (9 December 2010)

Intrinsic Value said:


> That is okay in theory but there may be better businesses to invest in than QBE at the moment and that is my contention.
> 
> QBE return on equity had been declining for some years now so that has also to be a concern.




Good thinking but what I am saying isn't in no way make judgement on your investment philosophy but Return on Equity isn't everything in my world.

Small business tend to generate high return on equity but as you get bigger and bigger it harder to generate similar high return..... 

what I look for is adequate return on equity but not necessary absolutely the best... but then a whole raft of other factors come into play one of them is 

Business model I'm more concern about than return on equity...as you can have high return on equity business but it could be here one day gone the next because there is no moat and when competition hit the scene you could be in trouble adding to that the dynamic of technology, business without a decent moat can get in trouble fast...

You can learn a lot from American business where they have a much bigger market and much more listed stock, lot of them come and go.

Good example Circuit City, then come Best Buy..Circuit City gone bankrupt 
our darling TRS, I reckon its model is under threat from multiple players
eating into its profit .. you can read it on hotcopper thread I post it there sometimes...


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## Julia (9 December 2010)

Intrinsic Value said:


> That is okay in theory but there may be better businesses to invest in than QBE at the moment and that is my contention.
> 
> QBE return on equity had been declining for some years now so that has also to be a concern.



Exactly right.  Can't see the point in committing funds to a business whose SP is not increasing, when there are plenty of companies which are producing good capital growth.


----------



## alphaman (9 December 2010)

ROE said:


> Business model I'm more concern about than return on equity...as you can have high return on equity business but it could be here one day gone the next because there is no moat and when competition hit the scene you could be in trouble adding to that the dynamic of technology, business without a decent moat can get in trouble fast...



What's QBE's moat? QBE's management is obviously more competent than its peers, but its business model is similar to other insurance companies isn't it?


----------



## ROE (10 December 2010)

alphaman said:


> What's QBE's moat? QBE's management is obviously more competent than its peers, but its business model is similar to other insurance companies isn't it?




Insurance is a competitive game and QBE probably doesn't command much moat but I play a text book copy of how Warren Buffet Buy insurance 

1. For its people
2. For its disciplines
3. Lowest cost and reputation  

QBE command all three with the exception for Cost, I don't think it's the cheapest but it is competitive with other players...with the underlying disciplines 

it make no sense writing policy where you don't make much money out of it and QBE has that discipline ....it let its rival has it,  instead of getting into hot water policy

Warren Buffett do exact same thing....he do not write policy just for the sake of writing one it has to make business sense.

at $16.50 the price I paid I calculate that it provide me enough margin of safety to invest in this wonderful business ..let see how it fare in 5-10 years time frame....


----------



## ROE (10 December 2010)

Julia said:


> Exactly right.  Can't see the point in committing funds to a business whose SP is not increasing, when there are plenty of companies which are producing good capital growth.




Insurance works on the law of average and probablity and cycles
In bad years you will see its return will be low but over the 
cycle its business will make you adequate return.

would you buy QBE seeing the number around  9/11 
cycle? probably not for an itchy and short term person...

but for someone who has an understanding of the insurance business
and its cycle it doesnt look so bad ... straight after 9/11
premium rise, probability of another disaster like 9/11 struck again?

hmm your guess is as good as anyone else but the law of probability tell
you it is pretty damn low .... so lower risk higher premium wouldnt you want to 
buy the business in that cycle?

that is my view and other may disagree and that is probably it from me 
and good luck to those who hold and those who doesnt hope you find something better


----------



## doctorj (11 December 2010)

Insurance is one of the biggest under performing sectors globally - from memory only pharma comes close.  Reason being?  I don't know... I guess very few people really understand it and therefore negative events tend to cause it to over shoot to the downside?

Any way, on to QBE.  The excess of liquidity globally (QE) is pushing rates right down - not good for revenue.  Also, profitability of liability classes have been squeezed by high rates of medical inflation, hurting loss ratios on those lines. The upside is that it's been a pretty good year for catastrophies.  Oh, and for QBE, the strong AUD really doesn't help given the large proportion of revenues it gets from o/s.


----------



## slickline (19 December 2010)

*QBE abandoned baby candlestick*

The abandoned baby pattern. 
Some momentum in the market/ASX. QBE to be moderately bullish over the coming week. According to chart formation on Friday 17th, estimates suggest we will see some good market action come Monday 20th Dec, with QBE showing potential rise. The last 4 candlesticks indicate that we have an abandoned baby looming. 

Let’s see what happens over the next 5 days. QBE closed on Friday @ $ 18.31 with trade volume at 3.2 million shares exchanged over the course of the day. If we see volume over 5 million on Tuesday 21st then we will know that the abandoned baby candlestick pattern is a sure thing. May see QBE go as high as $ 19.74 or even higher by the 25th Dec. 
market indicators tell me that we may even see $21 by end of 2010.


----------



## Greedy_Kev (21 January 2011)

Wow this one hasn't gotten any inputs for a while, seems like no one is talking about this major insurer during this flood crisis


----------



## RandR (21 January 2011)

Greedy_Kev said:


> Wow this one hasn't gotten any inputs for a while, seems like no one is talking about this major insurer during this flood crisis




Because the majority of QBE earnings are derived from overseas. Think about only 20% in Australia.

I bought in at 17.850. What i believe will hurt it if the AUSD stays high. But if the Euro or USD can gain some ground there earnings should move up quite positively.


----------



## Greedy_Kev (21 January 2011)

RandR said:


> Because the majority of QBE earnings are derived from overseas. Think about only 20% in Australia.
> 
> I bought in at 17.850. What i believe will hurt it if the AUSD stays high. But if the Euro or USD can gain some ground there earnings should move up quite positively.




I think the last time i checked it was 30%, and not alot in QLD, i bought at 17.55, but i wanted to know what everyone else things, and their sentiment towards QBE.


----------



## BrightGreenGlow (21 January 2011)

Greedy_Kev said:


> I think the last time i checked it was 30%, and not alot in QLD, i bought at 17.55, but i wanted to know what everyone else things, and their sentiment towards QBE.




I think you'll find QBE won't be spending much on the floods, other insurance mobs esp. Suncorp will, while the others will run away from any claims asap. QBE will be fine.


----------



## ROE (22 January 2011)

BrightGreenGlow said:


> I think you'll find QBE won't be spending much on the floods, other insurance mobs esp. Suncorp will, while the others will run away from any claims asap. QBE will be fine.




not only that they dont expose themselves to general insurance like Suncrop and IAG
property only make up 30% of QBE world wide and a lot of that are in Commercial.

so I say it has bugger all material impact on them ... people will come to realise soon enough that QBE is one of the best insurance business with careful risk mapped out
it will be a rewarding investment at the right price for a lot of people 

you be collecting nice dividend even increasing them over time and when disaster striker again buy more and repeat the process


----------



## Greedy_Kev (22 January 2011)

ROE said:


> not only that they dont expose themselves to general insurance like Suncrop and IAG
> property only make up 30% of QBE world wide and a lot of that are in Commercial.
> 
> so I say it has bugger all material impact on them ... people will come to realise soon enough that QBE is one of the best insurance business with careful risk mapped out
> ...




It's not the general insurance that i'm worried about, its there reinsurance, since they are such a big insurance company wouldn't they be reinsuring??


----------



## Bill M (22 January 2011)

This is exactly the type of stock that I am looking at right now as a contrarian investor, should be in that thread. I won't ramp or say anymore, DYOR. I was hoping for lower prices Monday but it probably won't happen now since the US markets performance on Friday. 

Edit: Dividend drop in the next few weeks too


----------



## ROE (22 January 2011)

Greedy_Kev said:


> It's not the general insurance that i'm worried about, its there reinsurance, since they are such a big insurance company wouldn't they be reinsuring??




Qbe has no exposure or low exposure to re insurance in Australia and Asia 
Most of this operation are in Europe and US 
Havent u seen them making reinsurance purchase lately in the US to build even more scale more profitable down the track

Qbe are companies I like best..Management  has short term and long term vision 
One for making money now and one to secure more profit down the track


----------



## RandR (3 February 2011)

QBE was placed into a trading halt this morning, will start trading again on monday.

Was halted because of an impending release on QBE's exposure to Australian disasters, Profit guidance for FY2011, aswell as info on 2010 results.

Should be interesting. Could lead to some big swings either way.


----------



## Greedy_Kev (3 February 2011)

RandR said:


> QBE was placed into a trading halt this morning, will start trading again on monday.
> 
> Was halted because of an impending release on QBE's exposure to Australian disasters, Profit guidance for FY2011, aswell as info on 2010 results.
> 
> Should be interesting. Could lead to some big swings either way.




even thou i already hold a position in this company, i'm hoping the shares plummet (unlikely) so i can buy more  i think its a good long term company


----------



## ROE (3 February 2011)

RandR said:


> QBE was placed into a trading halt this morning, will start trading again on monday.
> 
> Was halted because of an impending release on QBE's exposure to Australian disasters, Profit guidance for FY2011, aswell as info on 2010 results.
> 
> Should be interesting. Could lead to some big swings either way.




It be  good news on guidance end and dividend will be maintained
QBE go into trading halt usually for big acquisition and I smell they about
to buy another big business. 

This is QBE classic play always buy low during bad times, never buy high during good time


----------



## UMike (4 February 2011)

The fairly sharp drop prior to the trrading halt scares me.

Probably an acquision. Balboa?


----------



## cutz (4 February 2011)

UMike said:


> The fairly sharp drop prior to the trrading halt scares me.
> 
> Probably an acquision. Balboa?




What scares me more is the fact that a large line of put options all at one strike were exercised the day before the halt was announced, (they show up in the next morning couse of sales) nil exercise occured the day prior and the following day.

Anyhow I agree, aquisition is on the cards.

Post news release edit >>> Nothing to fear all is well.


----------



## ROE (4 February 2011)

UMike said:


> The fairly sharp drop prior to the trrading halt scares me.
> 
> Probably an acquision. Balboa?




When fear gripped good business you take out uncle Warren Buffett punch line

"Be fearful when other are greedy and greedy when other are fearful"


----------



## RandR (4 February 2011)

ROE said:


> When fear gripped good business you take out uncle Warren Buffett punch line
> 
> "Be fearful when other are greedy and greedy when other are fearful"




nothing could be truer ... qbe up 7.2% today ... keeerrrrr-ching kerching.

Quite happy with my buy in in january now. Now if interest rates in the states and europe start creeping back up QBE could be in a very strong position.

Going to have to do some research on balboa, I know not much about them at all, anybody fairly familiar with there operations ? 

Is the purchase of balboa good or bad in you opinion ?


----------



## jonojpsg (4 February 2011)

Bill M said:


> This is exactly the type of stock that I am looking at right now as a contrarian investor, should be in that thread. I won't ramp or say anymore, DYOR. I was hoping for lower prices Monday but it probably won't happen now since the US markets performance on Friday.
> 
> Edit: Dividend drop in the next few weeks too




Hey Bill, did you get on to more with the drop over the last week?  Nice rebound today on the back of STRONG fundamentals


----------



## oldblue (4 February 2011)

> Is the purchase of balboa good or bad in you opinion ?




Balboa is very small potatoes in the context of QBE.

$1.5b pa premiums. QBE has an M/Cap of over $19b.

The big news is in the reassurance that QBE is travelling ok.


----------



## Bill M (4 February 2011)

jonojpsg said:


> Hey Bill, did you get on to more with the drop over the last week?  Nice rebound today on the back of STRONG fundamentals



Unfortunately not, I got too greedy and wanted lower prices, bloody idiot I am.


----------



## ROE (5 February 2011)

Bill M said:


> Unfortunately not, I got too greedy and wanted lower prices, bloody idiot I am.




Dont be too hard on yourself Mr market will be back another Day and offer you lower price on other business at this price I still think it isnt bad

Dare I say more rally next week as people digest how good the result was 
They have 1.5b in the kitty for major disaster only pay out 15% of that 
Plenty left in the kitty for shareholders and the cherry pick on the newly purchase business is just too good but what else do you expect from Frank

 He made over 200 purchase all to perfection
Uncle phil taught me the important of track records do not abandon A grade student for a potential C grade students even if he being a little naughty


----------



## jonojpsg (5 February 2011)

oldblue said:


> Balboa is very small potatoes in the context of QBE.
> 
> $1.5b pa premiums. QBE has an M/Cap of over $19b.
> 
> The big news is in the reassurance that QBE is travelling ok.




Don't know about that - the profit margin on that 1.5b of premiums was 15-20% I believe, which translates to a nice $200m+ addition to the bottom line.  Given that net profit for this year is $1.28b, that's a pretty healthy addition IMO.


----------



## oldblue (5 February 2011)

Yes, fair comment, jono.

Perhaps I did overdo the "small potatoes" bit. What I was trying to emphasise was that QBE appears to be travelling pretty well in difficult times and that the acquisition, welcome as it is, is not the biggest part of the announcement. At least, IMO.


----------



## RandR (9 May 2011)

Still holding QBE, considering the series of disasterous events that have taken place, aus floods, christchurch quake, japan tsunami ... the SP has been holding up pretty well. It all seems 'steady as she goes' atm. Just seems to be counting down time until overseas interest rates begin to pick up or show any sign of life.

Any tech analysts got views on QBE atm ?


----------



## bigdog (10 May 2011)

RandR said:


> Still holding QBE, considering the series of disasterous events that have taken place, aus floods, christchurch quake, japan tsunami ... the SP has been holding up pretty well. It all seems 'steady as she goes' atm. Just seems to be counting down time until overseas interest rates begin to pick up or show any sign of life.
> 
> Any tech analysts got views on QBE atm ?




I was advised that QBE arranged their reinsurance contracts prior to the disasters of 2011 and can now put up their premiums and improve their profits

I hold QBE


----------



## Muschu (10 August 2011)

Any thoughts on why QBE seems to be suffering when most of the market is enjoying a rally?

Thanks

Rick


----------



## VSntchr (10 August 2011)

Muschu said:


> Any thoughts on why QBE seems to be suffering when most of the market is enjoying a rally?
> 
> Thanks
> 
> Rick




QBE has alot of funds invested in US fixed income securities. Overnight Bernanke said US interest rates would remain low - this is my take...


----------



## Muschu (10 August 2011)

VSntchr said:


> QBE has alot of funds invested in US fixed income securities. Overnight Bernanke said US interest rates would remain low - this is my take...




Many thanks VS.  But wouldn't a company like CSL be similarly effected?


----------



## McLovin (10 August 2011)

Muschu said:


> Many thanks VS.  But wouldn't a company like CSL be similarly effected?




Most of QBE's US investment income is from US treasuries. CSL's US income is from being the Bank of Dracula. Last time I checked, the Bernank wasn't saying the Fed would start printing blood plasma.


----------



## notting (10 August 2011)

McLovin said:


> Most of QBE's US investment income is from US treasuries. CSL's US income is from being the Bank of Dracula. Last time I checked, the Bernank wasn't saying the Fed would start printing blood plasma.




Love it McLovin.


----------



## rcm617 (10 August 2011)

Agree main reason would be lower investment income from US bonds, some might also be worried about cost of the London riots to QBE.


----------



## Bill M (14 August 2011)

ROE said:


> Dont be too hard on yourself Mr market will be back another Day and offer you lower price on other business at this price I still think it isnt bad




Hi ROE, it is 6 Months since we talked about this stock last. Just wondering do you still hold it, are you buying more and what is your present opinion on it? I am sure you know that it is at 7 year lows right now, cheers.


----------



## Spongle (14 August 2011)

A friend of mine claims the London riots were a significant factor


----------



## MartinB (14 August 2011)

I notice that the QBE shares begin trading ex-dividend on the 25th August so it will be interesting to see how the stock moves between now and then.

You reckon the 13.07 support will hold?


----------



## McLovin (14 August 2011)

Spongle said:


> A friend of mine claims the London riots were a significant factor




He's wrong.


----------



## McCoy Pauley (19 August 2011)

MartinB said:


> I notice that the QBE shares begin trading ex-dividend on the 25th August so it will be interesting to see how the stock moves between now and then.
> 
> *You reckon the 13.07 support will hold?*




Down around $12.75/share now.  Will need a reversal in the remainder of trading today to hold above that level.  QBE being smashed on its half-year report.  Down more than 7%.  I wonder what all those brokers who continuously recommend QBE think of it now?


----------



## notting (19 August 2011)

Have been eating it this morning.


----------



## skc (19 August 2011)

Market's a bit confused with QBE. Open 13.15, low 12.25, now 13.06. So just done a big 6% turnaround...


----------



## McLovin (19 August 2011)

skc said:


> Market's a bit confused with QBE. Open 13.15, low 12.25, now 13.06. So just done a big 6% turnaround...




The insurance profit margin number was pretty bad (11.8%). But overall the result isn't that bad, and it's hardly a surprise.


----------



## RandR (19 August 2011)

McLovin said:


> The insurance profit margin number was pretty bad (11.8%). But overall the result isn't that bad, and it's hardly a surprise.




Ive only had a quick flick through the report. But a  glance at the statement of cash flows had one section glaring back at me ... Look in investment cash flows.

(Payments for purchase) proceeds from sale of other investments (2200mil)

Why the blow out ? Anyone make sense of that ?


----------



## skc (19 August 2011)

RandR said:


> Ive only had a quick flick through the report. But a  glance at the statement of cash flows had one section glaring back at me ... Look in investment cash flows.
> 
> (Payments for purchase) proceeds from sale of other investments (2200mil)
> 
> Why the blow out ? Anyone make sense of that ?




The ( ) denotes that the $2200m amount is "payment for purchase". I.e. they bought $2.2B worth of investment net. Compare that with last year they sold $700m of investments.

It's not a blow out.


----------



## RandR (19 August 2011)

skc said:


> The ( ) denotes that the $2200m amount is "payment for purchase". I.e. they bought $2.2B worth of investment net. Compare that with last year they sold $700m of investments.
> 
> It's not a blow out.




Yes, I phrased that poorly, i meant as in 'blow out' in terms of the increased expenditure, not 'blow out' in terms of lost money.

Im just trying to identify what the money was used to acquire.


----------



## Spongle (19 August 2011)

McLovin said:


> He's wrong.




yeah that's likely

Don't really know a great deal about this sort of thing


----------



## McLovin (20 August 2011)

RandR said:


> Yes, I phrased that poorly, i meant as in 'blow out' in terms of the increased expenditure, not 'blow out' in terms of lost money.
> 
> Im just trying to identify what the money was used to acquire.




The money was used as described: "Payments for purchase of other investments". This would be investments in treasuries and floating rate notes.


----------



## RandR (20 September 2011)

I actually bought a parcel of QBE today, bought in at 12.29 after watching stock hit a bit of a selling climax and hold on the support at 12.20. Was looking at this strictly as a short term trade, the plan is to take and free carry the profits tomorrow. I dont want to risk being open in the market for any longer then that, with the volatility making it hard to rely on stop losses.

**** me even the Athens Index is green tonight, so im expecting to see QBE bounce back on open in the morning and me cut and run with a small  but tidy profit. Which I will leave in and free carry, to be left forever in the bottom drawer.

At least thats the plan ...


----------



## kermit345 (21 September 2011)

QBE has me very miffed at the moment. Yeh there are some headwinds and the market is extremely volatile at the moment but the dividend yield is at 10% and the current share price is below where it got in March 09.

Is the current price factoring in more natural disasters and a major fall in EPS and therefore DPS as well?

I may have my rosey coloured glasses on but I personally can't see it happening and think QBE is just a rediculous buy at the moment. Obviously yields on their US investments will remain low for quite some time, but i'm more than happy to lock in a dividend yield of 10% for the future of my investment, dividend re-invested at these prices i deem as low, in preparation for some capital appreciation if/when the US and EU can start their path back to 'normality'.


----------



## VSntchr (21 September 2011)

kermit345 said:


> QBE has me very miffed at the moment. Yeh there are some headwinds and the market is extremely volatile at the moment but the dividend yield is at 10% and the current share price is below where it got in March 09.
> 
> Is the current price factoring in more natural disasters and a major fall in EPS and therefore DPS as well?
> 
> I may have my rosey coloured glasses on but I personally can't see it happening and think QBE is just a rediculous buy at the moment. Obviously yields on their US investments will remain low for quite some time, but i'm more than happy to lock in a dividend yield of 10% for the future of my investment, dividend re-invested at these prices i deem as low, in preparation for some capital appreciation if/when the US and EU can start their path back to 'normality'.




Keep in mind that the payout ratio was over 100% recently...


----------



## oldblue (21 September 2011)

I like QBE too but don't think we should regard the dividend yield as "locked in", despite the optimism expressed at the half year profit announcement. Another few years with virtually "nil" short term US interest rates could play havoc with earnings, regardless of underwriting results.

I'm treating QBE more as a trading prospect at present, when/if the SP trends upwards.


----------



## Mr Editor (15 October 2011)

VSntchr said:


> Keep in mind that the payout ratio was over 100% recently...




I know, the stock's dividend yield is just so attractive and the company's management is rational and competent, but that payout ratio is a major deterrent.


----------



## robfromdublin (19 October 2011)

I bought into QBE today at 13.84 (after missing buying in at close yesterday.  Damn work distracting me).  I just think it's such great value at that price and even if Europe and the US continue to struggle, they're well placed to weather the storm with low risk investments, decent underwriting profit and a quality management team.  Plus they can't keep rates at close to zero forever, just look at what is happening to the UK inflation rate. 

Granted, I'm only about 4 weeks and 2 books into this investing lark, so I admit I could well be about to learn a valuable lesson!


----------



## kid hustlr (27 October 2011)

Really interesting chart formation over the last few months for QBE looks like a head and shoulder bottom has formed and this thing could really take off.


----------



## So_Cynical (26 November 2011)

RandR said:


> (20th-September-2011) I actually bought a parcel of QBE today, bought in at *12.29* after watching stock hit a bit of a selling climax and hold on the support at 12.20. Was looking at this strictly as a short term trade, the plan is to take and free carry the profits tomorrow.






robfromdublin said:


> (19th-October-2011) I bought into QBE today at *13.84 *.  I just think it's such great value at that price and even if Europe and the US continue to struggle, they're well placed to weather the storm with low risk investments, decent underwriting profit and a quality management team.
> 
> Granted, I'm only about 4 weeks and 2 books into this investing lark, so I admit I could well be *about to learn a valuable lesson!*




Can you 2 update us on what happened with your trades?..did you learn anything rob?

----

QBE taking a double dip has attracted my interest, as i will have enough money in my super fund for a new position early next week...is the consensus view that the dividend cannot hold at the current level? what sort of dividend fall is the market factoring in? 10 > 20 > 30% :dunno: i don't actually follow QBE.

Thoughts anyone.
~


----------



## robfromdublin (28 November 2011)

Well the only article I can find on why QBE 'out-crashed' the rest of the market from Wednesday mentions 'negative broker sentiment' with no thought out reasons behind it, so the opportunity for learning has not presented itself as yet.  If the issue is Europe's debt crisis then nothing new has come to light there, except that Italy is in trouble now but you'd have to be living under a rock if you hadn't already priced that in earlier in the year. 

Clearly, the market is worried that their exposure to 'low-risk' bonds (is there any such thing atm?) will result in a dividend drop and is pricing that in.  No idea how to calculate how much of a drop is priced in though. Maybe an earnings warning is expected too. 

I still have the shares I bought in on, but they were always going to be a long-term prospect.  If more information comes to light then I'll consider changing tack but I'm not really concerned at the moment.  Maybe I'm just being naive.


----------



## notting (28 November 2011)

I heard they have some bad investment issue.  I wasn't listening that closely - it came across the news wires.  I haven't verified it, nor do I know the size of it. Not that big I imagine. With the sentiment last week it took a pounding.


----------



## Knobby22 (28 November 2011)

The dividends don't have much franking, there are more sellers than buyers and technically it has further to fall even to make a reverse head and shoulders. Long term it is probably a good buy but there is no rush. Happy to look only.


----------



## McLovin (28 November 2011)

I don't think the dividend will be cut. As knobby pointed out the dividend is almost entirely unfranked so the current dividend is about where the banks are. The hurricane season wasn't as bad as predicted and the Balboa acquisition will add about 30% to GWP this year. They've also raised reinsurance premiums this year so that should take the pressure off. Their catastrophic claims last year were ~15% of NEP v the year before being ~10%. QBE is like a casino that has had a couple of whales come in and win big (Japan, Christchurch earthquake etc). It will return to the mean.


----------



## RandR (6 December 2011)

So_Cynical said:


> Can you 2 update us on what happened with your trades?..did you learn anything rob?
> 
> ----
> 
> ...




Hey SC, my trade went really well and I was quite pleased. Once it was up 15% on my entry at 12.29 in september I decided to exit the position (given the current situation overseas), at which point I took my capital out and have left the profits in .. for .. possibly forever.

There is the possibility of a 'slight' dividend cut, but im quite optimistic it wont be, large natural disasters that occured in the previous financial year, (aus floods, christchurch, japan etc) have been avoided in the second half of this year, and we are unlikely to see a repeat of the magnitute of those. So my thoughts are QBE should bring its underwriting profits back up to a more normal level. Combined with the acquisitions made last year, which should now start to add to there revenues.

Im not too keen to enter again into qbe though until europe starts to settle, that and I think at the moment its about just fairly priced. Id rather wait for another possible plunge.


----------



## crochunt (4 January 2012)

*QBE - termination benefit of US$1871 Million?!!!!*

According to the 2010 annual report of QBE, Mr ten Hove's  termination benefit is US$1871 Million, which will be paid in 12 months.

Is it right. I can't believe it. Anyone can explain this?

Thanks


----------



## skc (4 January 2012)

*Re: QBE - termination benefit of US$1871 Million?!!!!*



crochunt said:


> According to the 2010 annual report of QBE, Mr ten Hove's  termination benefit is US$1871 Million, which will be paid in 12 months.
> 
> Is it right. I can't believe it. Anyone can explain this?
> 
> Thanks




Lol pretty sure that's just a typo.


----------



## ROE (4 January 2012)

*Re: QBE - termination benefit of US$1871 Million?!!!!*

probably 1.8m


----------



## crochunt (4 January 2012)

*Re: QBE - termination benefit of US$1871 Million?!!!!*

Thank you 
I will check with the company


----------



## crochunt (4 January 2012)

*Re: QBE - termination benefit of US$1871 Million?!!!!*

Yes. It is a typo. I found several other same numbers in the report. Those numbers end with 000 instead of millions.

thanks guys.
 :!


----------



## notting (12 January 2012)

Smashed!  High frequency of catastrophies. Earnings down by up to 60%, final dividend cut from 66 to 25c!
down %19.
Guess all those 'lunatics' who believe in climate change did very well having shorted insurance companies!!!
It's a furfie when accepting climate change looks like it will cost money.  Then suddenly it becomes real!


----------



## McLovin (12 January 2012)

McLovin said:


> I don't think the dividend will be cut.




Looks like I got that terribly wrong! 

This really should be the bottom, assuming this Balboa issue doesn't snowball.


----------



## skc (12 January 2012)

Ouch! 

So it turns out what we don't see on TV can still hurt QBE's bottom line. A 20% fall in share price thanks to 50% fall in profit and a sharp cut to dividend.

I just entered a pairs trade yesterday for long QBE and short another insurer. And I exited on open like an amateur. Can't get the timing any more wrong and there goes all my profit for the new year 



McLovin said:


> I don't think the dividend will be cut. As knobby pointed out the dividend is almost entirely unfranked so the current dividend is about where the banks are. The hurricane season wasn't as bad as predicted and the Balboa acquisition will add about 30% to GWP this year. They've also raised reinsurance premiums this year so that should take the pressure off. Their catastrophic claims last year were ~15% of NEP v the year before being ~10%. QBE is like a casino that has had a couple of whales come in and win big (Japan, Christchurch earthquake etc). It will return to the mean.




May be now it's the time for long term investors to buy the mean reversion...


----------



## notting (12 January 2012)

skc said:


> May be now it's the time for long term investors to buy the mean reversion...




It's hope from here is if the AU weekens against the US which many are thinking is on the cards, but not really any big signals of that just yet. 

I am starting to by a few US$ on further AU$ strength.




skc said:


> and there goes all my profit for the new year



Fortunatly the year is young! 

compensation - coh looking juicy


----------



## suhm (12 January 2012)

I've been looking at QBE on and off for 5-6 years as always thought that they were a well run outfit. The thing about this downgrade is that they are still profitable which is more than we can say for a lot of other insurers.

QBE's problem is that they invest their money in fixed interest and bond yields have been going south all this time and it is not just real yields that are negative now it is the headline yield which is negative. The whole world is going to become like Japan and hide money under the bed covers instead of putting it into the bank.

I would only buy QBE when I see bond yields go up in the US and EU.


----------



## McLovin (12 January 2012)

skc said:


> May be now it's the time for long term investors to buy the mean reversion...




I think you maybe right. Unfortunately I started buying at around $13.50.


----------



## robusta (12 January 2012)

Have got my order in @ $10.47, maybe I have missed the party..


----------



## dillybag (12 January 2012)

Mc Lov - you have started buying around $13, well I can trump that - I had bought at $17 when sun was shining and the world looked good. Never mind, I still believe that QBE will overcome the problems and, as far as I am concerned, it is a medium/long term buy. My opinion only, don't forget my nickname . It speaaks for itself.
.


----------



## skc (12 January 2012)

McLovin said:


> I think you maybe right. Unfortunately I started buying at around $13.50.




You can't help but get the feeling that the actuaries' work are being blown out of the water these days on much more regular occurences.

Although insurance premiums appear to be pretty inelastic to price and often customers have little choice not to accept the higher costs being passed on.

A couple of things looked interesting in the announcement.

1. For 2012 they are planning to double the margin back to 15%.
2. Yield on cash and fixed interest to be 3% in 2012 c.f. 2.1% in 2011. Where's the increase yeild coming from, and what about the increase in risk?
3. There was no mention about some US regulatory issue which was the newspaper headline this morning before the announcement.


----------



## robusta (12 January 2012)

Love the last line of this article in The Australian

an.com.au/business/companies/qbe-results-disappointing-says-ceo-as-shares-plunge-23pc/story-fn91v9q3-1226242701775

Seems there are a few investors braver than me.


----------



## suhm (12 January 2012)

Not sure about bravery, its the big boys who will decide how this goes over the next couple of days, trading range of 9.88-11.41 just shows that they aren't sure what to do either.

I'm thinking the ones who got out will prove prescient in the future because it has traded down recently to 11.89 prior to the market update. I don't see why it should be above that level given the profit downgrade which doesn't give you much cream at the current market price.


----------



## robusta (12 January 2012)

suhm said:


> Not sure about bravery, its the big boys who will decide how this goes over the next couple of days, trading range of 9.88-11.41 just shows that they aren't sure what to do either.
> 
> I'm thinking the ones who got out will prove prescient in the future because it has traded down recently to 11.89 prior to the market update. I don't see why it should be above that level given the profit downgrade which doesn't give you much cream at the current market price.




Good point bravery can easily be confused with stupidity.

Not sure what label I deserve.


----------



## suhm (12 January 2012)

Were you trying for a swing trade or long term hold? If its the former I would call that bravery and it would have paid of if its the latter I would call it the other because I wouldn't want to be holding the parcel for tomorrow, not everyone is glued to their computer screens to check for announcements and there are going to be a lot of smaller investors who were expecting their dividend cheques to be a lot fatter and the earnings to be a lot more stable.


----------



## robusta (12 January 2012)

suhm said:


> Were you trying for a swing trade or long term hold? If its the former I would call that bravery and it would have paid of if its the latter I would call it the other because I wouldn't want to be holding the parcel for tomorrow, not everyone is glued to their computer screens to check for announcements and there are going to be a lot of smaller investors who were expecting their dividend cheques to be a lot fatter and the earnings to be a lot more stable.




Long term hold I am afraid, IMO any price below $10.50 chould give a decent return when QBE numbers revert to somewhere near the long term average.

The reason my order did not get filled is because I am not glued to the computer screen, if I was I would have probably bought under $10.00


----------



## prawn_86 (12 January 2012)

robusta said:


> *when* QBE numbers revert to somewhere near the long term average.




When or if??

I have always though insurance companies are a lot more riskier than the market makes out. Increasing population and a changing climate means there is a lot of environmental risk that simply cannot be factored in imo


----------



## robusta (12 January 2012)

prawn_86 said:


> When or if??
> 
> I have always though insurance companies are a lot more riskier than the market makes out. Increasing population and a changing climate means there is a lot of environmental risk that simply cannot be factored in imo




Funny thing insurance, have you ever noticed when there are a lot of payouts the insurance companies simply raise the premiums and people pay them? Seems like a good business to be in to me.


----------



## suhm (12 January 2012)

1.1 billion shares vs 32m traded today means the big boys haven't exited yet, there is still going to be a lot of volatility.

QBE has a decent history of having a good margin from the insurance policies it writes and having good reinsurance so they don't get blown away in case a disaster strikes. Even with all the natural disasters it is still making an insurance profit. Its downfall is that it really only invests in short term fixed interest and with bond yields being negligible its investment earnings have been paltry.

Hence it should be game on for QBE if bond yields go up.


----------



## McCoy Pauley (12 January 2012)

robusta said:


> Funny thing insurance, have you ever noticed when there are a lot of payouts the insurance companies simply raise the premiums and people pay them? Seems like a good business to be in to me.




Depends on the events being insured, and whether the likelihood of those events occurring is rising or not.

Buffett made a lot of money out of his investment in GEICO, because GEICO specialised in insuring low-risk motorists, meaning that the "float" GEICO held was capable of being put to efficient, money-making use.

I do not think that either IAG, Suncorp or QBE are in the same category.  They all insure against all types of risks.  If they are insuring against loss caused by extreme weather events, if those extreme weather events will occur more frequently and cause more damage, then the insurers will need to raise greater funds to ensure they can pay out insurance claims, even accounting for reinsurance.

After the Queensland floods 12 months ago, I think there was some news articles about reinsurance companies refusing to provide reinsurance to the front-line insurers because the risks were just too great.


----------



## notting (12 January 2012)

Income from dividend investors will be running for the exits when they wake up tomorrow.
However, the price action today was not too bad from an intraday point of view.
It finished on it's high which is often bullish on a collapse day for the very short term.  
If it had gone down again toward the end it would be bad for the very short term.
I think I might have baught some of SKC 'like an amature' - it just looked to good to be true, I thought there was something wrong with my system, sorry.


----------



## McLovin (12 January 2012)

skc said:


> You can't help but get the feeling that the actuaries' work are being blown out of the water these days on much more regular occurences.
> 
> Although insurance premiums appear to be pretty inelastic to price and often customers have little choice not to accept the higher costs being passed on.




Indeed. The fact that in August they expected catastrophic claims to be 13% of NEP and 4 months later it's 15% makes me think they are running behind the curve a bit at the moment. Hopefully, the higher premiums start to kick in and maybe we can have a few less earthquakes. I had actually thought that the hurricane season in the US this year was fairly benign. 



skc said:


> A couple of things looked interesting in the announcement.
> 
> 1. For 2012 they are planning to double the margin back to 15%.
> 2. Yield on cash and fixed interest to be 3% in 2012 c.f. 2.1% in 2011. Where's the increase yeild coming from, and what about the increase in risk?
> 3. There was no mention about some US regulatory issue which was the newspaper headline this morning before the announcement.




I haven't had a chance to listen yet but you may find the answer in the conference call...

http://www.group.qbe.com/Investor-Information/Financial-Reports/Insurance.html


----------



## Knobby22 (12 January 2012)

Insurers are very hard to value.

I am still not in a rush to get in. My bet is that we will see lower lows before a turnaround occurs. I reckon maybe doewn to $7.00.

I am becoming interested though.  As notting suggested, the weather catastophes are only going to get worse. Policies will be repriced so eventually the margins will go back to normal but returns from bonds and such are still low and is there any bonds in the Eurozone? I suspect there is.


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## clinta44 (12 January 2012)

Knobby22 said:


> Insurers are very hard to value.




Bingo! Very Hard to value, how would anybody know what sort of policies they have been writting, the Bad ones don't turn up for years. I would like to know the percentage of short v long tail policies. Most lose money on the float the invest. 

I’m a bit nervous on the old mortgage insurance front. They’d want to have deep liquid pockets if the old RE market goes belly up!


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## Julia (12 January 2012)

prawn_86 said:


> When or if??
> 
> I have always though insurance companies are a lot more riskier than the market makes out. Increasing population and a changing climate means there is a lot of environmental risk that simply cannot be factored in imo



Agree.   If some of the long term buy and hold people can explain why they have QBE, I'd be interested.  Its SP has been in a steady downtrend for the last five years.
Surely even the original dividend doesn't compensate for the loss of your capital investment?


----------



## Chasero (13 January 2012)

The next big natural disaster is bound to occur - and when that happens another sell off of insurance companies will occur no?

With climate change and said "increased natural disasters" (hard to ignore considering 2010-2011 events), it's hard to value the share price and related risk of insurance companies. Especially when fear is taken into account.

I'd only ever buy QBE at 10 yr lows. i.e. $6.

Should see a small swing trade on Monday? Too risky so I'll watch next weeks sp action with interest.

Anyway, interest article from bullish "Motley Fool" investors, who are always bullish on shares they own..

http://www.smh.com.au/business/why-im-buying-qbe-shares-next-week-20120113-1pyi8.html


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## robusta (13 January 2012)

Got in today @ $10.81 in both my SMSF and personal accounts - should be interesting times to come for QBE.


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## Garpal Gumnut (13 January 2012)

Julia said:


> Agree.   If some of the long term buy and hold people can explain why they have QBE, I'd be interested.  Its SP has been in a steady downtrend for the last five years.
> Surely even the original dividend doesn't compensate for the loss of your capital investment?




Agree Julia,

gg


----------



## qldfrog (14 January 2012)

agree with the fundamental and so with you Julia/gg
so my blue chip account had a very small amount of qbe/sun: no damage done
[I was playing the AUD/USD position with qbe earnings mostly in USD so you can play the currency there or edge other position (that was my theory at least)]

; but I bought some at $10.85 in pure spec to ofload as a day trader at the nearest sign of small profit
will see how it goes


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## odds-on (15 January 2012)

Chasero said:


> I'd only ever buy QBE at 10 yr lows. i.e. $6.




I have always wondered about QBE and what value to put on the company but had never thought about it that way, but it makes perfect sense to me. 

Cheers 

Oddson


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## brianwh (15 January 2012)

I think a lot of the reason many retail investors hung on to QBE was the widespread belief in the market that management, particularly the CEO, was honest, transparent and competent. Recent events cast doubts on this but unfortunately by the time this becomes apparent to most of us the damage is done.


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## oldblue (15 January 2012)

There's no point in trying to put a value on QBE, IMO. As has been noted by several posters, insurance company accounts are notoriously difficult to follow - even by those who know something about the subject - and future earnings are at the mercy of random catastophic events, future claims experience and future interest rates/investment yields. Too many unknowns there for my liking.

I don't see any safety in valuing the company at past lows either. The only prudent course for me would be to wait for some strength to develop in the SP trend and to then catch the upturn - if it occurs.


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## notting (15 January 2012)

It's just a trader as far as I'm concerned.
Insuranc is about as apealing as airlines.


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## Huskar (16 January 2012)

Chasero said:


> The next big natural disaster is bound to occur - and when that happens another sell off of insurance companies will occur no?
> 
> With climate change and said "increased natural disasters" (hard to ignore considering 2010-2011 events), it's hard to value the share price and related risk of insurance companies. Especially when fear is taken into account.
> 
> ...




For another bullish blog posting on QBE, see http://www.iifunds.com.au/bristlemouth.


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## notting (16 January 2012)

Felt it should have kept going a little on Friday instead of reversing away from the gap.
Today I figured it's just the Monday morners coming in after their weekend catchup.  I used todays 3% to get out. 10% enough for me given the downside risk.  
Tomorrow could be telling if it's going to have a crack at the gap, otherwise yikes.


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## Chasero (17 January 2012)

Huskar said:


> For another bullish blog posting on QBE, see http://www.iifunds.com.au/bristlemouth.




Yep, a lotta people seem to agree 

Up 3.5% today.


----------



## JTLP (28 February 2012)

So QBE are doing a capital raising for $500m and apparently it's to be a placement at $10.70 to instos I believe.

So will $10.70 form a new base for QBE or will it get hammered for raising capital and a dismal profit?

Pretty woeful dividend as well ($0.25)...


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## notting (12 November 2012)

Last time the smart money came in at around 11.10.
So far history repeats.


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## McLovin (12 November 2012)

This conference call with management seems to be steadying the ship...QBE has been rising all through the call.


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## skc (12 November 2012)

McLovin said:


> This conference call with management seems to be steadying the ship...QBE has been rising all through the call.




Bought some at $11.2 and closed at $11.6. Left another 2R on the table.

Although QBE is quickly becoming a perpetual downside risk... this is the 3rd time in 12 months that it has surprised the market.


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## notting (12 November 2012)

skc said:


> Bought some at $11.2




I must say I was thinking of you!
REVENGE!!!


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## McLovin (12 November 2012)

skc said:


> Although QBE is quickly becoming a perpetual downside risk... this is the 3rd time in 12 months that it has surprised the market.




Yes, it is. I think they're a bit behind the curve, which is why they keep surprising to the downside.


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## notting (12 November 2012)

Hostage to the US Bond market low yeilds and high AU$ making things a little tight.
Should spring back when we start to get a bit of US inflation which can't be too far off.


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## skc (12 November 2012)

notting said:


> I must say I was thinking of you!
> REVENGE!!!




Not revenge. QBE owes me nothing. Just lessons learnt on what the daliy candle looked like from last time.


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## jank (12 November 2012)

notting said:


> Hostage to the US Bond market low yeilds and high AU$ making things a little tight.
> Should spring back when we start to get a bit of US inflation which can't be too far off.




Sorry I am new to this but I thought inflation would be bad for QBE as they hold so many low yeilding US bonds.


----------



## notting (12 November 2012)

skc said:


> Not revenge. QBE owes me nothing. Just lessons learnt on what the daliy candle looked like from last time.




Even better!


----------



## McLovin (12 November 2012)

jank said:


> Sorry I am new to this but I thought inflation would be bad for QBE as they hold so many low yeilding US bonds.




The duration of their portfolio is fairly low (~<1 year), as you'd expect for a general insurer. They'll be able to roll quickly into higher yield notes as rates rise.


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## skc (12 November 2012)

jank said:


> Sorry I am new to this but I thought inflation would be bad for QBE as they hold so many low yeilding US bonds.




The theory is that when inflation becomes too high, US cannot keep bond yields so low...


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## jank (12 November 2012)

McLovin said:


> The duration of their portfolio is fairly low (~<1 year), as you'd expect for a general insurer. They'll be able to roll quickly into higher yield notes as rates rise.




So their yeilds and earnings should then quickly rise there after thus improving profits... OK cheers.


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## notting (12 November 2012)

jank said:


> Sorry I am new to this but I thought inflation would be bad for QBE as they hold so many low yeilding US bonds.



Reality is that deflation has been the theme over the last 4 or 5 years in The States and bond yeilds have been at record lows. Doesn't take too much imagination to be able to posit the theory of what might be the case in the counter scenario!


----------



## herzy (13 November 2012)

Why is it being hit so hard today?


----------



## McLovin (13 November 2012)

herzy said:


> Why is it being hit so hard today?




There's a few pretty negative broker reports out today. ML, MS and Deutsche have all stucjk the boot in.


----------



## skc (13 November 2012)

McLovin said:


> There's a few pretty negative broker reports out today. ML, MS and Deutsche have all stucjk the boot in.




And rightly so... after disappointing the market 3 times, you don't deserve much benefit of the doubt anymore. Valuation should lag behind management guidance, rather than the other way round.

I find it quite amazing that, 2 years ago QBE was well loved by analyst while IAG is the problem child. It is now completely reversed.


----------



## robusta (13 November 2012)

*normally I would be taking a interest in QBE at these prices but with so much of the insurance float invested in bonds in the mids of a massive bubble in bonds, no thanks.*


----------



## craft (13 November 2012)

skc said:


> I find it quite amazing that, 2 years ago QBE was well loved by analyst while IAG is the problem child. It is now completely reversed.




Yep - about as amazing as night follows day and what will be even more amazing in the future is when day follows night. 



robusta said:


> *normally I would be taking a interest in QBE at these prices but with so much of the insurance float invested in bonds in the mids of a massive bubble in bonds, no thanks.*




I have the opposite view on this - look at the maturities, QBE stands to benefit from any increase in bond yields.

Bond bubble is also probably debatable when viewed as part of very long term history.


----------



## So_Cynical (13 November 2012)

I'm in with the superfund at $11  QBE is a superstar business with some short term difficulty's that is giving regular short/mid term trading opportunities and this time im taking that opportunity...have a look at the 2 year chart, 4 major lows all followed by substantial recovery's...i expect the same again.
~


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## robusta (13 November 2012)

craft said:


> Yep - about as amazing as night follows day and what will be even more amazing in the future is when day follows night.
> 
> 
> 
> ...




Interesting, I think I read something when I held QBE a while ago that they were moving to shorter term bonds is that your point? I guess if they get to hold until maturity without having to sell to pay out claims it could be considered to be a dollar cost averaging strategy as long as they can beat inflation. They do have a long history of maintaining margins albeit with a couple of hiccups recently.

It is all academic to me at the moment as there are a couple of small caps I have my eye on at the moment and I have a very limited amount of capital to invest. I would be very interested to read about historical bond yields however, the status quo of low bond yields and cheap equity prices for the next decade or two would suit me just fine as I intend to be a net buyer of equities.


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## jank (14 November 2012)

I second the above, would be great to get some research into historical bond yields. Does anyone know the % of assets that QBE hold in bonds? The next course of action is of course seeing what a 1% rise in bonds would do to income for QBE. This would give an indication on how much QBE have to gain from any bond yield rises.


----------



## robusta (14 November 2012)

jank said:


> I second the above, would be great to get some research into historical bond yields. Does anyone know the % of assets that QBE hold in bonds? The next course of action is of course seeing what a 1% rise in bonds would do to income for QBE. This would give an indication on how much QBE have to gain from any bond yield rises.




Www.bond-bubble.com but take them with a grain of salt I would like to compare with the depression in the 1920's.


----------



## McLovin (14 November 2012)

jank said:


> I second the above, would be great to get some research into historical bond yields. Does anyone know the % of assets that QBE hold in bonds? The next course of action is of course seeing what a 1% rise in bonds would do to income for QBE. This would give an indication on how much QBE have to gain from any bond yield rises.




It's about $20b in fixed interest with a blended yield of just over 3%. There's another ~$8b in cash and short term money. Since yields on treasuries have collapsed they have been getting into commerical paper. So you'd also need to pay attention to credit spreads. In the HY report they said 25bp move in credit spreads = $80m to their investment income.


----------



## jank (14 November 2012)

Thanks for the info. Something to chew over.


----------



## craft (14 November 2012)

robusta said:


> the status quo of low bond yields and cheap equity prices.



 This is actually unusual - high probability that one will give bringing equity risk premiums back into historical norms. question is which one.

From a macro perspective QBE is positioned to benefit regardless of how the high current equity risk premium unwinds. Now if they could just get their business in order.



craft said:


> Bond bubble is also probably debatable when viewed as part of very long term history.




It looks to me that the recent history of 1980's is the blip not current rates. But could fiat have caused structural change?


----------



## robusta (14 November 2012)

Interesting times indeed, the German bonds are giving a negative real return to investors and the Yanks are printing money. I must admit I do not really understand the bond market except to know it is huge and to watch out when it moves because that is a lot of cash to find a home for.

As for the blip in the 80's the only risk I can see of a repeat is if inflation gets out of control again like in the 70's.


----------



## notting (15 November 2012)

How often would you see 3 inside bar days in a row on good volume?


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## notting (17 November 2012)

Tried to break out of the holding pattern to the downside on low volume on a negative day and failed.

It would be good if they cashed a few in when they can! - 

http://www.theage.com.au/business/world-business/fed-creating-mother-of-all-bond-bubbles-20121117-29ieu.html


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## Ves (17 November 2012)

McLovin said:


> It's about $20b in fixed interest with a blended yield of just over 3%. There's another ~$8b in cash and short term money. Since yields on treasuries have collapsed they have been getting into commerical paper. So you'd also need to pay attention to credit spreads. In the HY report they said 25bp move in credit spreads = $80m to their investment income.



Any idea what their historical cost of float has been like?  I honestly don't know enough about insurance to be able to sift through the validity of their loss provisioning etc. to be able to make a judgment call on this kind of thing.


----------



## RandR (18 November 2012)

Ves said:


> Any idea what their historical cost of float has been like?  I honestly don't know enough about insurance to be able to sift through the validity of their loss provisioning etc. to be able to make a judgment call on this kind of thing.




I'd actually like to take a nibble on QBE down at these price levels but coming up with a valuation thats justifiable to myself is proving to be tricky, given the potential for this to re-rate so quickly up or down. I love the potential upside with the massive holding of USD but theres sooo much that could yet go wrong with this business im thinking of just avoiding it and looking at easier predictions. But then cant help but feel if i ignore it for the more predictable entities i might regret.


----------



## McLovin (18 November 2012)

Ves said:


> Any idea what their historical cost of float has been like?  I honestly don't know enough about insurance to be able to sift through the validity of their loss provisioning etc. to be able to make a judgment call on this kind of thing.




I looked as far back as the mid-90s. COR was most impressive in the years leading up to the GFC, before that it had almost always been above 100, I guess not so bad when interest rates aren't at zero.

Have a look at note 22e, it's pretty interesting, during QBE's most profitable period they were actually over-reserving and adding that to profit when they adjusted their initial reserve in subsequent periods. Since the GFC, they've been doing the opposite. (that's if I'm understanding that note correctly). They're either mispricing the risk or the businesses they bought aren't as crash hot as the ones they were previously buying.


----------



## UMike (6 December 2012)

Bought in again at $10.10.

Way oversold in a nervous market imo.

No ann for the 5% odd drop yesterday. Nice to see a bit of a bounce today but it all seems a bit negative atm.


----------



## skc (6 December 2012)

UMike said:


> Bought in again at $10.10.
> 
> Way oversold in a nervous market imo.
> 
> No ann for the 5% odd drop yesterday. Nice to see a bit of a bounce today but it all seems a bit negative atm.




Capital raising rumour yesterday.

http://finance.ninemsn.com.au/newscolumnists/other/8575656/australian-stocks-what-happened-today



> QBE took a pounding today following market speculation that a capital raising may be in the wings. QBE's gearing is well above their average and lower interest rates domestically will likely mean less return on their 'float' (large swag of funds held (premiums) to payout claims as necessary). QBE closed the day down a shocking 4.72% or 50 cents to $10.10


----------



## notting (2 January 2013)

If we get past the house, BOOM!!!!
Dentistry to $12.50 easy.  
Pause then BOOM again.
Christmas volume not too much wieght in that.
Just makes it a little more hidden IMO.


----------



## Garpal Gumnut (12 January 2013)

I've been tempted to buy QBE a number of times over the past 12mo., but always pulled back.

Good on you guys who bought closer to $10.

It seems to have considerable resistance at $14, and some support at $10, more lukewarm recently though. The previous support at $12 seems to be acting as resistance atm. I'll keep it on my watchlist.






gg


----------



## notting (12 January 2013)

You got bushfires and a hurrican about to hit WA and it is rising and closing at the higher end of the trading days.
It was doing the opposite when Sandy was on the way.
Be looking to buy dips.
And thinking over the horizon a little.
This is the year the US bonds will start to show signs of easing as far as I can see from here.


----------



## So_Cynical (13 January 2013)

UMike said:


> Bought in again at $10.10.
> 
> Way oversold in a nervous market imo.
> 
> No ann for the 5% odd drop yesterday. Nice to see a bit of a bounce today but it all seems a bit negative atm.



well done UMike..350 odd posts in 5 years...and your buying the bottoms, i seem to remember you from another thread????


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## nulla nulla (13 January 2013)

So_Cynical said:


> well done UMike..350 odd posts in 5 years...and your buying the bottoms, i seem to remember you from another thread????




Maybe a recent post in CPA looking to buy in at $1.01 ?


----------



## UMike (14 January 2013)

nulla nulla said:


> Maybe a recent post in CPA looking to buy in at $1.01 ?



 And did so I am happy to write.

I'm a bit of a looker rather than a poster.

So_Cyn, You'd know me as ZZ Somwhere else.


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## sinner (14 January 2013)

skc said:


> May be now it's the time for long term investors to buy the mean reversion...




Research on mean reversion indicates the sweetspot is around 4Y. 4Y avg in this case looks like it's heading towards $16 (intersecting with heavy S/R zone), which would make a 36% gain off todays close.


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## white_goodman (22 January 2013)

sinner said:


> Research on mean reversion indicates the sweetspot is around 4Y. 4Y avg in this case looks like it's heading towards $16 (intersecting with heavy S/R zone), which would make a 36% gain off todays close.
> 
> View attachment 50427




how can you assume mean reversion on anything that doesnt statistically mean revert and doesnt have a stationary mean? Its a bad bad reason to be in a trade imo..

however im long for 3 weeks at low-mid 11's, I think this is an absolute bargain price for mid-long term and is a good proxy on playing the bond bubble trade without getting burnt by doing it directly


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## So_Cynical (13 February 2013)

So_Cynical said:


> (13th-November-2012 ) I'm in with the superfund at $11  QBE is a superstar business with some short term difficulty's that is giving regular short/mid term trading opportunities and this time im taking that opportunity...have a look at the 2 year chart,* 4 major lows all followed by substantial recovery's...i expect the same again*.
> ~




Superfund Trade #9 completed today ($12.91) with a 16.55% Profit....turned out that it was just to simple.

Lets just hope she falls to $10 again... wouldn't that be nice. 
~


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## willstor (14 February 2013)

Not really given it typically coincides with a natural disaster of some sort.


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## UMike (16 February 2013)

Hmmmm. I am still hanging out for $13.95. I was thinking of letting half go at the close but with buyers almost doubling sellers I am still hoping to reach the above mark.

This strategy didn’t exactly work for CPA but there is still hope for that one also.


----------



## So_Cynical (16 February 2013)

UMike said:


> Hmmmm. I am still hanging out for $13.95. I was thinking of letting half go at the close but with buyers almost doubling sellers I am still hoping to reach the above mark.
> 
> This strategy didn’t exactly work for CPA but there is still hope for that one also.




I didn't want to see it reverse on me, the capital raising talk of a few months ago is still relevant, and with the run up in price i imagine a discount back to $11/$12 or so would be the go.


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## qldfrog (17 February 2013)

offloaded half at 13.51 as we were approaching the meteor potential touch down...
I always remember that most usually, qbe falls after a disaster so a token profit seems quite ok.
will hang up a little more for the remaining half but probably not too much
I believe QBE should not be handled as other stocks due to its specific domain and risk
my 2c only and I still own


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## Garpal Gumnut (17 February 2013)

qldfrog said:


> offloaded half at 13.51 as we were approaching the meteor potential touch down...
> I always remember that most usually, qbe falls after a disaster so a token profit seems quite ok.
> will hang up a little more for the remaining half but probably not too much
> I believe QBE should not be handled as other stocks due to its specific domain and risk
> my 2c only and I still own




I'm not in QBE, I missed last move up.

Stand on your tongue frog, and look at recent action on chart below over 2 years, it could even be a complex head and shoulders. I will keep an eye on it.

It may break above resistance at $14, but to be really symmetrical it may retreat to $12 before doing that. 






gg


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## jank (2 August 2013)

Surprised there is nothing here about QBE. It has taken off recently, benefiting from a fall of the AUD an possible interest rate increases in the US.


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## piggybank (2 August 2013)

It's still continuing in the right direction..


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## Sharkman (2 August 2013)

jank said:


> Surprised there is nothing here about QBE. It has taken off recently, benefiting from a fall of the AUD an possible interest rate increases in the US.




i've put down my views on QBE in the context of a series of options trades i did on it here: https://www.aussiestockforums.com/forums/showthread.php?t=26867

on seeing the rally today i opted to spread off my long aug call position struck at 16 by selling the aug 18 calls for 30.5c. i have the aug 16 calls effectively for free, after factoring in the previous calendar spreads i did, so i wanted to make sure i at least came away with something from the whole exercise, in the event of a downside shock at the interim profit announcement that causes it to drop like a stone and put my 16 strike calls OTM.

in any case, to push significantly higher from here in the short run, the interim profit numbers are going to have to shoot the lights out IMHO - even on the most optimistic full year EPS analyst forecast (98.1c according to commsec) that is a P/E of nearly 18 at todays closing price. i don't know if a P/E that high is justified for an insurance company in this day and age, given the risks they face.

i agree the strengthening US economy and falling AUD/USD helps QBE, but how much of that has already been factored into the share price? they have been on a strong run for a while now. maybe someone with more technical expertise than i might like to opine on whether this rally is starting to look overcooked? with the IVs starting to become elevated due to the impending profit announcement, i felt selling premium was a good way to lock in a guaranteed profit from the whole sequence of options trades, and the 18 strike still gives decent profit potential on the top side.


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## skc (20 August 2013)

You have to say that QBE has been a consistent performer for the last 2 years... That's 4 earning surprises in a row. Today's fall is pretty mild compared to some of the previous reactions, but this is becoming a trend...


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## oldblue (20 August 2013)

Hindsight is a wonderful investment tool but, given that interest rates are where they are - and have been recently - perhaps too much was expected of QBE this time?


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## notting (20 August 2013)

A good retrace down to 13 would be nice.  Seems a bit optimistic given it will be earning at least 2x as much from bonds.  Could be even more if this week is any indication of things to come.


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## Sharkman (20 August 2013)

it rebounded quite quickly to the 16 level today and stayed close to it for much of the day though, so it may find some support again at the 16 level, which seems to have been supported fairly well from 2009 thru to mid-2011 in my opinion.

i am currently long a 16-18 aug call spread. i didn't take it off today as i opted to take a bit of a punt on a knee jerk rally tomorrow, hell, i'm long gamma, figured i've got a little room to roll the dice a bit. but regardless of whether that actually happens or not, am going to have to take the spread off tomorrow before the nasty decay kicks in on the 16 strike calls.

after that, probably wait and see for a bit. if the 16 level can hold firm until the end of the week, might consider selling aug puts at 16 if given a reasonably high IV - punt on the 16 support level holding and scoop up the final week theta.


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## ROE (20 August 2013)

Talk of US QE tapering will keep upside uncertainty for a while I reckon...

who wants to dump or short it and then the Fed stop printing money and bond yield rally


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## Covalev (22 August 2013)

QBE Insurance Group - A bit of give and take

● QBE delivered reported NPAT of US$477 mn, 7.5% below traders forecast, and insurance profit of US$790 mn, 3.5% below traders forecast. At the underlying level, the result was above traders expectations; however, this was more than offset by ‘one-off’ negatives.

● We were encouraged by a 1H13 underlying margin of 13.0%, well above previous FY13 guidance of 12%. This was driven by an improvement in the underlying loss ratio on the FY12 base.

● We have lowered our FY13 NPAT by 4.4% and FY14 by 7.8%, primarily driven by currency and reduction in GWP. In AUD, our NPAT changes are only -2.0% in FY13 and -2.9% in FY14E.

● We consider the QBE recovery story to remain on track, but caution the expectation of an immediate turnaround and significant macro uplift in earnings. We maintain our NEUTRAL rating and A$17.25 target price.


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## Country Lad (22 August 2013)

Covalev said:


> QBE Insurance Group - A bit of give and take
> 
> ● QBE delivered reported NPAT of US$477 mn, 7.5% below traders forecast, and insurance profit of US$790 mn, 3.5% below traders forecast. At the underlying level, the result was above traders expectations; however, this was more than offset by ‘one-off’ negatives.
> 
> ...




Thanks for that but you may be creating a problem for Joe with the "we" bit.  If you are quoting a broker without reference to them, you may be creating a copyright problem, particularly if it is from material not in the public domain.

Cheers
Country Lad


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## notting (21 September 2013)

Taking a hit on the au$ and bonds.
Target of 13 in view.


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## skc (6 December 2013)

QBE in trading halt pending review of the North America operations.

Probability says this can't be great news.

How many profit downgrade has QBE gone through now in the last 2 years? 

QBE has always been touted as a well managed company and its aura has lasted quite sometime, given how well it rises out of those downgrades. I wonder if this time it would be different.

Not a good week for companies beginning with Q...


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## McLovin (6 December 2013)

FFS, not again.

I think I'll be taking a leaf out of John Hempton's latest blog...



> Even tougher was that I was the bank and insurance analyst - and banks and insurance companies are black boxes for almost everyone and dimly lit rooms of mirrors for an accounting junky. There are some people who do it really well but it isn't easy. The first 150 or so posts on this blog are about financial institutions - and whilst I can look back on those and be proud I sometimes wonder why* I contributed so much intellectual effort to an area where exceptional returns are so difficult.*




My original casino analogy has been blown up.


----------



## Ves (6 December 2013)

McLovin said:


> FFS, not again.
> 
> I think I'll be taking a leaf out of John Hempton's latest blog...
> 
> ...



I've always kept an eye on QBE.... but admittedly still really don't understand how to value it in some kind of meaningful way (as much as I probably have convinced myself otherwise at certain stages).  I go through periods of thinking it looks really cheap (sub $13 to pick a somewhat arbitrary figure) and then thinking I've missed the boat (when it rises quickly).   I'm fairly sure looking back,  that despite all of the mental energy / emotional reactions,  that whether it's luck or bad timing or conscious decision making (it's probably not because I've told myself I would if it went to $X again) that I haven't bought it,  that doing nothing was and probably is the best approach. More than anything the experience I've had with not owning it shows how easy the whims of the market,  the downgrades and the whole box and dice would have too much an impact on me to be able to hold it through thick and thin, if after all and said and done any investment thesis I had even holds up.  It's too hard for me,  and I'm probably kidding myself if I said I knew enough about the industry / business to make a reliable decision!


----------



## McLovin (9 December 2013)

Ves said:


> but admittedly still really don't understand how to value it in some kind of meaningful way (as much as I probably have convinced myself otherwise at certain stages).




Don't worry, I have convinced myself of that too. Sold out this morning. My average buy price was ~$13.50, so not too much damage done, but a good lesson learnt. 

FWIW, my bunk analysis would be that QBE's old business of running niche lines and generating higher ROE was not scalable once they became a large insurer. They will probably never get back to where they were in that sweet spot back in the early 00's.


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## bigdog (9 December 2013)

*There were folk tipping QBE as a buy over the weekend!!!*

http://news.theage.com.au/breaking-news-business/qbe-shares-drop-20-20131209-2z016.html

*QBE shares drop 20%*
December 9, 2013 - 10:32AM 

Shares in insurance giant QBE have dropped almost 20 per cent after the company flagged a $250 million net loss this year.

QBE on Monday said it expected to post the $250 million loss due to weakness in its North American business.

The company also announced chairman Belinda Hutchinson would leave QBE in March.

At 1020 AEDT QBE shares were trading at $12.43, down $3.00 or nearly 20 per cent, from Friday's close.
Advertisement

QBE said the 2013 result would be affected by $600 million in goodwill writedowns, primarily relating to the North American business.

The North American business experienced an increase in prior accident claims provisions of around $300 million and the company was also exposed to higher claims due to weaker-than-expected US crop yields and prices.

It also said expected its insurance profit margin to fall from eight per cent to six per cent.

Chief executive John Neal on Monday said the writedowns came as a result of a strategic review of the North American business.

"Regrettably, these charges and provisions increase our target combined operating ratio and reduce our expected insurance profit margin and reported profit for 2013.

"As painful as these decisions are, we are confident that our business in North America will trade profitably in 2014."


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## ROE (9 December 2013)

I sold out around $16 ...back in today...

QBE now fall into I am sick of this stock and people start to bail .... Serial under performer for a while
So have to be vigilant and get in and out ...

Could go lower but I can pick up some more $11 ish and write covered call ....

I think Current CEO  doing a good job....most of this problems aren't his but he is fixing it..
Frank gone a bit crazy in the last few of his tenure at QBE and now things start to come out of the closet...

Chairman step down is the right move too .... Need clean deck to restructure...


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## skc (9 December 2013)

ROE said:


> I sold out around $16 ...back in today...
> 
> QBE now fall into I am sick of this stock and people start to bail .... Serial under performer for a while
> So have to be vigilant and get in and out ...
> ...




Fundamentally probably not a bad play, especially seeing it as a play on tapering + increasing investment returns on rising yields. 

I tried to trade this today and basically failed in every attempt. I mapped it out in the morning ok... open low, bounce up, drift lower rest of the day. But somehow managed to just get whipsawed around 12.40-12.60 levels - the ranges were much smaller than I'd expect. By the time it really starts to drift down it's already lost my attention. Oh well.

Judging by the way it closed, there's probably more immediate downside to come. There'd be some very disappointing analysts giving up on this name tomorrow, and the raft of downgrades will likely put more pressure on the stock price.


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## ROE (9 December 2013)

Yeah I figure lot of sentiment will play into the next few weeks, when people throw in the towers -
Human psychology most can't withstand pro long serial under performer and at some stage they decided
They had enough and that about the time the asset hit rock bottom ..

I do this for many stocks, most is not long termer but enough to get decent profit out of it ...
I save some ammunition left for it when I see volume driven down price and make a calculated move in
Sit and wait and write covered call


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## McLovin (9 December 2013)

skc said:


> Fundamentally probably not a bad play, especially seeing it as a play on tapering + increasing investment returns on rising yields.




Yeah this was my initially reason for entering + the few bad years they'd had. The issue I have is that there seems to be some company specific problems to, which management just hasn't got a handle on, so it's not a clean play on interest rates + fewer major catasrophes. I'd be surprised if there's more downgrades to come, but I wouldn't want to put money on it. To be honest, I've put this in the "too hard basket".

It was kind of convenient too because I need some money for a project and was wondering what to sell. Question answered for me.


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## UMike (10 December 2013)

ROE said:


> I sold out around $16 ...back in today...
> 
> QBE now fall into I am sick of this stock and people start to bail .... Serial under performer for a while
> So have to be vigilant and get in and out ...
> ...



I've been lucky to Sell at the top and buy at the bottom of this stock a couple of times.

Back in again @ $11.25. Hoping to pick the bottom again.


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## McLovin (10 December 2013)

Getting pummelled again today.


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## ricee007 (10 December 2013)

UMike said:


> I've been lucky to Sell at the top and buy at the bottom of this stock a couple of times.
> 
> Back in again @ $11.25. Hoping to pick the bottom again.




Brave person trying to catch this knife. Currently $10.69.

Just thinking about it... it got to 10.27 12 months go..... and, to me, the company is in a worse situation now than back then.

Given this, current trend, how many people are getting out of this stock... even if it got to $9.99, I'd still not consider it.


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## skc (10 December 2013)

ricee007 said:


> Brave person trying to catch this knife. Currently $10.69.
> 
> Just thinking about it... it got to 10.27 12 months go..... and, to me, *the company is in a worse situation now than back then*.
> 
> Given this, current trend, how many people are getting out of this stock... even if it got to $9.99, I'd still not consider it.




Hmm.. Not sure about that. The losses stem from past actions. There's nothing terribly bad (industry outlook wise) for QBE. You also have macro tailwinds in rising investment income and falling $Aud helping along. The question is whether there are even more skeletons in the closet.

It's a tough one to value that's for sure.


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## ROE (10 December 2013)

Wrote some naked put at $10 and got taken out pretty fast as it fall toward $10 -
Fear alive and well
For the first time in many years bond yield start to rise above dividend payment in the US, can't be bad thing for QBE


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## robusta (10 December 2013)

ricee007 said:


> Brave person trying to catch this knife. Currently $10.69.
> 
> Just thinking about it... it got to 10.27 12 months go..... and, to me, the company is in a worse situation now than back then.
> 
> Given this, current trend, how many people are getting out of this stock... even if it got to $9.99, I'd still not consider it.




Not a screaming buy in my opinion but good enough for me to pick up a small parcel @ $10.93 today. The downside is if there are more write downs to come.


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## Sharkman (10 December 2013)

ROE said:


> Wrote some naked put at $10 and got taken out pretty fast as it fall toward $10 -
> Fear alive and well
> For the first time in many years bond yield start to rise above dividend payment in the US, can't be bad thing for QBE




that's essentially my thinking too. was mulling over putting on a 3 legged structure - sell the dec 10 puts, sell the dec 11.50 calls and buy the feb 12 calls, which could be done at basically zero cost (assuming a fill one tick to their side of the spread on each leg - but i'm not really sure i'd get a fill there, the blasted MMs tend to make you cross most of the spread when the underlying is bouncing around all over the place) when it was trading around 11 today. 10 is a pretty strong support level in my opinion, so i also don't mind selling cash covered puts at that strike.

there's plenty of past evidence from previous downgrades to look at - of course you can't use the past to predict the future but i'm willing to take a punt that after being beaten down savagely it'll stabilise, potter around for a bit then slowly recover as the market gradually "forgets" about the profit warning and refocusses again on the tapering and falling AUD/USD benefits, as it has done time after time over the past 2 years. so i felt selling a front month strangle to finance the back month long OTM calls is a good way to bet on that view, if the whole thing can be put on at close to zero cost.

in the end i opted not to put the structure on today, i remember from last years profit downgrade + hurricane shock that the front month ATM IV remained elevated in the mid 40s for a few days after the news came out, even after the underlying had calmed down a bit (lower volumes and smaller daily trading range). so i'll reassess tomorrow, see if it starts to hover around the high 10s-11 level, and perhaps put the trades on then.


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## Garpal Gumnut (10 December 2013)

I guess this sad sack could very well be a buy at these levels, or at $5.

$10 or thereabouts should provide some support.

A 20 year quarterly chart shows that this has been both resistance and support in the past.

The long term RSI, however, shows a sickly descent for this uber insurer.

I agree these are good prices, but a stop loss may be advisable, should it plummet further to $5.

Anything may happen with this stock. The Directors need to look to selling cafe au laits instead of hope.







gg


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## notting (5 February 2014)

A very cold winter in the US.
A very bad drought in the US that QBE had to pay farmers for.
Images of frozen Niagara Falls.
Climate change has had a bit of a lull lately yet QBE has not benefited much from that and one has to wonder what's next!
The Ausi $ is looking stronger with RBA downramping finished.
US bonds are providing a safe haven yet again.
Downgrades galore.
The smart money came in twice before at around 10 to 11.
I don't trust it the third time.
It's not a pretty picture.
But I don't feel sure about anything as I think about it.


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## jank (7 May 2014)

Seems stuck around the $11.50 mark. Looks there are huge structural issues with the company which I hope they can put right sooner rather than later.


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## McLovin (29 July 2014)

Another shocker for QBE. This time it's in Latam.



> Embattled global insurer QBE Insurance Group has disappointed shareholders with yet another shock profit downgrade, signalling a drop in insurance profit for the six months to June due to problems in its Latin America division.
> 
> QBE, which has shaken investors’ confidence in recent years with consecutive earnings downgrades each profit season, expects to book an insurance profit margin of 7 per cent to 8 per cent for the first half, compared with consensus expectations of around 10 per cent.
> 
> The group’s net profit is now expected to be around $390 million, a significant drop from the $477 million posted in the first half of fiscal 2013.


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## skc (29 July 2014)

McLovin said:


> Another shocker for QBE. This time it's in Latam.




Don't cry for me Argentina! QBE seems to have expanded to the extent that the right thumb doesn't know what the kidney is doing. 

UBS was just talking about their crop protection business in North America facing potential headwinds, next thing you know it's Argentina. I can just imagine the face of the MD when the head of whatever department/region (that he has little handle on) emails him with the subject something like "Update from my region - sit firmly before open".

And all the talks late last year about tailwinds from currency and rising yield simply haven't eventuated.

Unfortunately still in the too hard basket for me valuation wise.


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## McLovin (29 July 2014)

skc said:


> Don't cry for me Argentina! QBE seems to have expanded to the extent that the right thumb doesn't know what the kidney is doing.
> 
> UBS was just talking about their crop protection business in North America facing potential headwinds, next thing you know it's Argentina. I can just imagine the face of the MD when the head of whatever department/region (that he has little handle on) emails him with the subject something like "Update from my region - sit firmly before open".
> 
> ...




I agree. There are too many moving parts in this business. It seems like even management don't really have any idea what the numbers will look like until they close the books. I'm glad sold this when I did, and that the damage was limited. If management can't understand the business then what hope do we have?


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## ROE (29 July 2014)

I agree Management still not 100% on top of the business but they are looking at it and I think it may takes a bit longer than they are anticipating...

They need to do a clean sweep, hunker down, sell off, chopped thing out, write down make it more compact and manageable and get each division to monitor their cost and margin with hawk eyes.

SUN went through this stage not long ago with their banking and under-performance in some area and they did exactly that and what a turn around.

QBE has heaps of room to move  they need to get on top of it and action action action.

I have no doubt they will turn the question is When?


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## coolcup (29 July 2014)

The thing that worries me is that even with such a massive reduction in the business's valuation, there is absolutely no speculation that private equity or a large US / global insurer is even thinking it is an opportunistic M&A play. Having watched the share price fall as much as it has over the past 5 years, it really makes me scratch my head as to whether the company is still overvalued given there is not so much as a bit of noise regarding M&A. I mean, even Qantas was spoken about as an MBO / takeover play not so long ago...


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## Julia (29 July 2014)

Despite the continued fall over now more than six years, all through this period various 'experts' have insisted that QBE is a Buy, that it's a 'very well managed company' etc etc.
Yeah, right.

Meantime, IAG, after falling in the GFC has moved into a decent uptrend and is almost back to its pre-GFC high.
It has a far better grossed up dividend also.  Even SUN would be a far better option than QBE.


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## qldfrog (29 July 2014)

my feeling is that, as all insurers, they are strongly linked to interest rates and as long as rates remain low, they will not make much profit , if any;
plus by their nature they cop it bad after every cyclone/hurricane etc so the long term view in a global warming world is not that great;
so in a nutshell, why would you want to invest in QBE: if you want to invest in USD, go forex or buy Apple
my worthless 1/2 c view on QBE, I do not own currently, and I always match my play with option when I trade it


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## coolcup (29 July 2014)

qldfrog said:


> my feeling is that, as all insurers, they are strongly linked to interest rates and as long as rates remain low, they will not make much profit , if any;
> plus by their nature they cop it bad after every cyclone/hurricane etc so the long term view in a global warming world is not that great;
> so in a nutshell, why would you want to invest in QBE: if you want to invest in USD, go forex or buy Apple
> my worthless 1/2 c view on QBE, I do not own currently, and I always match my play with option when I trade it




I agree. There underwriting business (premiums less claims) is generally eroded by competition to the point where it is low or zero margin with downside risk if major disasters occur. The upside in earnings is how they invest their free float (ie the premiums they take from customers prior to needing to fund any claims). QBE invests the free float in mainly highly rated bonds and notes which provide very low returns. Berkshire Hathaway has made a fantastic business out of investing its free float in a diverse array of businesses which keep returns reasonably high while keeping volatility low.

Until rates go up, QBE will continue to be prone to downgrades.


----------



## McLovin (29 July 2014)

coolcup said:


> Until rates go up, QBE will continue to be prone to downgrades.




This downgrade was related to inadequate claims reserving. This seems to have been a theme since 2008. In the years before they tended to overestimate claims and wind them back in subsequent periods, since then they've been doing the opposite. The interest rate story is true, but in reality, if you're running an insurance company the main game is estimating how much you take in v how much you pay out and pricing accordingly.

Note 21(e) FY13 report.


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## DeepState (30 July 2014)

Having a shot at valuing QBE:

Company's carrying value as sum of parts via 2013 report, tested for impairment as at Sept 2013 suggests AUD12.52. Roughly, this is what the company thinks it is worth.

The accounts are close to a NAV valuation.  If no further impairment to assets are assumed, beyond those just announced, the break-up value is AUD$9.  If we assume USD$2.250bn of USD$4.48bn of intangible assets are written down, the break up value is AUD$7.10. 

If the after tax underwriting profit from 2013 is used as a base and discounted at 7% (essentially assuming premiums grow a little above inflation which is well below historical), a valuation of AUD$11.52 is developed if no impairment of intangibles is encountered.

At the other end, if we assume no premium growth but just assume that it perpetuates and take the impaired balance sheet, a value of AUD$8.85 is developed.  This is a tough scenario.  It would require multiples of the latest development to achieve and makes no allowance for a buffer of goodwill not on balance sheet which has been accrued.

The figures include a risk margin built into the claims reserves.  This is pretty big and would be expected to be released as the claims run off.  This is worth AUD$1.31.

The stock is probably trading cheap by around 20% or so, probably a margin more if top line growth can be expected to exceed inflation by a greater margin than factored in here - but let's leave that for another day.  A potential deep value turnaround for some.  After the experiences with the writedowns of prior acquisitions, the buy to grow strategy might be taking a rest for a while so no adjustment is made for that.

In relation to interest rates, QBE runs a pretty well matched balance sheet which is quite insensitive to interest rate movements.   Lower rates do affect the insurance profit, but, over time, return on capital considerations balance these out as the insurance cycle moves around.


Disclosure: Holder of QBE, SUN, IAG


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## coolcup (30 July 2014)

Hi Retired Young

I must admit I am not familiar enough with insurance company valuation to fully understand your analysis, so apologies if this question is misinformed - if there is a deep underlying discount to the company's value then I would have expected that to put a floor on the price as suitors may be sniffing around to buy the business? It seems like a bite size purchase for the large global players and ripe for a break up by private equity... As long as the valuation is well higher than where it is trading. 

There seems to be plenty of buyers around $10 so maybe that is where it hits compelling value as per your post?


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## DeepState (30 July 2014)

coolcup said:


> Hi Retired Young
> 
> ...to fully understand your analysis, so apologies if this question is misinformed
> 
> ...




I don't understand my own analysis.  How could you?  

This company can be reasonably accurately valued given a set of information although surprises to the information do happen.  Given this, I would be shocked if the investment banks were not running the ruler over QBE and talking to PE or trade buyers.  Both make sense for different reasons.  QBE grew substantively by acquisition over the tenure of O'Halloran.  They don't even know how may of these things he bought because you can't get an accurate number on this.  Amazing.  Anyhow, these businesses are still not well integrated so the firm can be considered as a holding company of subsidiaries which are more independent than would be the case under a well integrated company.  The writedown of the US assets and now LatAM assets highlights that senior management and the board are not across the information. Whilst the ostensible wording from them suggests that they are committed to organic growth, I think the market would react favourably to a reduction in the complexity of the portfolio. 

$10 is a round number and price action around round numbers is weird.  If it punches through $10, it can go quite a bit further.  Personally, I don't care.  The value of the stock is likely north of $12 and this represents a margin of safety that is pretty reasonable. A break up to tangible value is outside the scope of reasonableness.  I do not know definitively what will close the gap.  Certainly, management is not helping in that endeavor although they inherited a clusterf.... The Argentina business was acquired six months prior to O'Halloran's retirement and incurred a $50m writedown into the 2013 accounts! O...M...G.  Maybe PE might narrow the gap....heck it would.  The key issue is that they would need to pay a healthy premium to holders to take it out even via Scheme.  I do not know what kind of cost-out or synergy extraction they can conjure.  It's not like QBE is running that fat.  What's left after that?  So it's probably at the border of a buy-out/take-private.


----------



## Huskar (19 August 2014)

Thoughts on cap raising?
They are IPOing their mortgage insurance business which is a step in the right direction (for me) of focusing their operations and stripping off some of the crap that Frank acquired in his final days at the helm. A bit more financial engineering would likely allow better focus for each aspect of the business and be more attractive takeover targets as well.
I don't hold and won't buy yet but some parts of the business are fantastic (Aust & NZ operations with 86.9 combined operating ratio).


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## ROE (19 August 2014)

depend what the market do do it when it open
I am likely to buy in... I see a beginning of a turn around could take a few years but I can wait 

The only insurance business unloved and abandon by the market


----------



## skc (19 August 2014)

ROE said:


> depend what the market do do it when it open
> I am likely to buy in... I see a beginning of a turn around could take a few years but I can wait
> 
> The only insurance business unloved and abandon by the market




Agree. I think the market will see the raising very positively. They have had a string of shocking results and rumour of the cap raising persisted through all this time. The fact that they are only going to the market now implies that they think the coast is cleared... finally.

QBE has done a complete 180 role reversal with IAG as per this AFR story.

http://www.afr.com/p/business/chanticleer/qbe_iag_tale_of_two_companies_H5u5ewgqdySKrRqqegCcZM

It has the set up of a perfect contrarian buy.


----------



## ROE (19 August 2014)

skc said:


> Agree. I think the market will see the raising very positively. They have had a string of shocking results and rumour of the cap raising persisted through all this time. The fact that they are only going to the market now implies that they think the coast is cleared... finally.
> 
> QBE has done a complete 180 role reversal with IAG as per this AFR story.
> 
> ...





and the sad thing is I bet you it goes up when it open, market seems wanting to push this guy higher for a while but the linger of capital raising and business structure hold them back.

with this out of the way I think they clear some air for a run ... and the de-merger of the LMI business is a great move, market will like that


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## ROE (20 August 2014)

spoke too soon next time I keep my mouth shut and pick up bargain


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## gismo (8 September 2014)

No mention here of the share purchase plan QBE are currently offering. Buy in, sell Oct 1st and pocket the profit!

http://www.group.qbe.com/sites/default/files/Default%20Media/ASX%20Announcement%20-%20QBE%20lodges%20pro%20forma%20docs%20for%20SPP%20-%20FOR%20ASX_1.pdf


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## ROE (8 September 2014)

you got to be already on the register when they announce the CR to benefit
so only benefits existing holder but why would you want to sell early if you know the 
wheel is turning? it could be $20 in a few years ... just guessing it may or may not just figure of speech.

and it is likely to be massively scale back so unless you hold several hundred of thousand worth of QBE stocks you unlikely to benefit much


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## notting (16 January 2015)

> AM Best today affirmed QBE Group’s insurer financial strength (FSR) ratings at ‘A’ in relation to key QBE operating subsidiaries and issuer credit ratings (ICR) at “bbb”. The rating outlook has been revised from “Negative” to “Stable”.




I think that's a little bit of an upgrade for debt financing.



> Macquarie shifts to an outperform stance on QBE Insurance
> Group (QBE.AU) from neutral as it raises its target to A$11.70/share from A$11.60. That




I think that sounds quite reasonable and yeh good.

Share price -5% Let me see 2+2 = -1 

OK.


----------



## VSntchr (16 January 2015)

notting said:


> I think that's a little bit of an upgrade for debt financing.
> 
> 
> 
> ...




Seems like today is the penny drop for those in QBE expecting US rate rises. Suddenly they seem a little further away....and QBE to stagnate for another few months until the hopes re-ignite.
With that said it has got decent support at current levels...


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## PinguPingu (11 February 2015)

US bond yields have risen dramatically since the very strong job report...perhaps its finally time for poor QBE, as it looks to breakout a little of its downtrend


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## notting (18 September 2015)

Thought this may have taken a bit of a beating today!
Not so, so far!


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## GPO (8 January 2016)

*QBE - strong buy vs. strong sell*

I was doing some reading up on QBE.AX today, and was stricken by differences in opinions: here https://au.finance.yahoo.com/q/ao?s=QBE.AX 15 analysts converge around buy/strong buy whereas here http://www.barchart.com/opinions/stocks/QBE.AX a dozen indicators unanimously scream SELL.

In addition to your opinions on QBE.AX, I would really love to hear your comments on how to interpret such discrepancies. Ideas?


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## Triathlete (8 January 2016)

*Re: QBE - strong buy vs. strong sell*



GPO said:


> I was doing some reading up on QBE.AX today, and was stricken by differences in opinions: here https://au.finance.yahoo.com/q/ao?s=QBE.AX 15 analysts converge around buy/strong buy whereas here http://www.barchart.com/opinions/stocks/QBE.AX a dozen indicators unanimously scream SELL.
> 
> In addition to your opinions on QBE.AX, I would really love to hear your comments on how to interpret such discrepancies. Ideas?




The stock has been in a sideways trend now for around 4 years and ranging between $10 and $15 and is just consolidating and forming a base. So at the moment technically I cannot see any move up other than between these ranges.

Looking at Fundamentals the stock is improving with ROE at 11% and EPS forecast to grow 18% and dividend yield of 6% 100%FF 2016.My view is until ROE can move above 14% and improving both ROE and EPS then I feel the stock will continue to just range in price.

Looking at Lincoln Indicators Stock doctor they have a valuation of $14.33 and a consensus target of $15.51 so based on those estimates it would seem that QBE is at good value at present but whether they can continue to improve the business for the share price to increase is another thing.

Just my view..


----------



## UMike (17 August 2016)

I thought the worst was behind QBE. (Brexit excluded)

Looks Like I am wrong. About the only Share I didn't sell down following the Brexit buying opportunity dip.


----------



## Quant (29 September 2016)

QBE on the radar as of this week for longs  4-8 week hold , US 10y of lows , QBE div/report washed of , bit of flush recently , nice yield at $9.30 , reckon funds be allover this soon enough


----------



## Quant (5 October 2016)

Quant said:


> QBE on the radar as of this week for longs  4-8 week hold , US 10y of lows , QBE div/report washed of , bit of flush recently , nice yield at $9.30 , reckon funds be allover this soon enough




QBE of the mat with US10Y yields getting a bid  , alls well


----------



## Quant (7 October 2016)

QBE loves rising TNX , which currently nudging a breakout at 4 month highs , this one chart drives QBE as much as anything else out there






Early days but its looking sweet


----------



## UMike (10 October 2016)

Gee I hope so. Picked up a large bundle in my private and super.

Just hope your chart doesn't indicate a $11.0 odd ceiling.


----------



## Quant (10 October 2016)

UMike said:


> Gee I hope so. Picked up a large bundle in my private and super.
> 
> Just hope your chart doesn't indicate a $11.0 odd ceiling.




11 dollar ceiling wouldnt bother me a lot although its likely a pause rather than ceiling , i only hold these trades up to 8 weeks and im more than happy with a 20% return in that time .


----------



## Quant (28 October 2016)

Quant said:


> QBE loves rising TNX , which currently nudging a breakout at 4 month highs , this one chart drives QBE as much as anything else out there
> 
> 
> View attachment 68354
> ...




TNX has gone on with it , very positive for QBE , a couple positive days on XJO and i think QBE will get a strong bid.


----------



## Quant (1 December 2016)

Couple months down track and QBE doing exactly what was expected TNX going mental and driving QBE hard , worth hanging on to a few of these till bend at end 





QBE chart spectacular 13 bucks very doable medium term for a potential 40% return in quicktime


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## Quant (2 December 2016)

and QBE the only green in top 20 in a bear trender day , says it all really , $13 might be closer than i though


----------



## UMike (8 December 2016)

I sold quarter of my holdings Friday - Relieved that I got as much as I did.

Just gone off from there. Was gonna aim to sell the second quarter at around the $12.75 mark but I have very much raised my expectations.

Sometimes bottom pickers do get rewards.

Go the Donald.


----------



## ukulele (21 December 2016)

Good trade there Quant, just hitting more 12 month highs today.


----------



## Quant (19 January 2017)

Quick follow up QBE , played out too perfection  ... TNX really does drive this stock


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## UMike (15 February 2017)

_Quick follow up QBE , played out too perfection ... TNX really does drive this stock_
Or talk of a take over target.


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## Quant (27 February 2017)

QBE run up well over pre any takeover rumours  , trust me TNX drives the share price of QBE substansially , anyone who thinks differently is naive or misinformed but hey whatever floats your boat , i no longer hold and im happy with my returns  , couldnt care less where it goes for now ,  the easy money is done  NEXT .... you wont find a much better correlation than that ..EDIT and to go 1 step further QBE currency adjusted is almost an exact match of tnx  . i rest my case your honour ;-)


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## galumay (28 February 2017)

Quant said:


> trust me TNX drives the share price of QBE substansially , anyone who thinks differently is naive or misinformed but hey whatever floats your boat ;-)




Its always a bit of a red flag when someone says thinking differently = naive/misinformed. Also remember correlation is not causation!


----------



## craft (28 February 2017)

galumay said:


> Its always a bit of a red flag when someone says thinking differently = naive/misinformed. Also remember correlation is not causation!



I would say massive red flag when the line is started with "trust me"

I thought I had stumbled into a religious thread in the general chat section by mistake.

I guess we are ye of little faith.


----------



## UMike (28 February 2017)

Ha Ha. I don't trust any one but I must be naïve as I am stunned at its form reversal after the initial surge in it's price, Post Results. Was in a meeting and watched it drop from 1c away from my SMSF sell order. Seriously my job costs me heap of $$$$   sometimes.

I have no doubt the TNX plays a part in QBE's fortunes.


----------



## Quant (28 February 2017)

Look i have produced a sample set of data ( and a much much larger sample set looks exactly the same ) that backs up my claims  , sorry i havent written a book to explain the sample set and the reasons the corellation is so strong but im a trader and not a university lecturer  , the information to either refute or confirm my claims is out there  . Maybe if you find out where QBE invest their cash the answer will come quickly  . I am not here to convince anyone anything , ive pointed out why QBE has run up and ive laid the foundations of an edge if anyone cares to follow through  ...   good luck to all

QBE are risk adverse in their management of cash on hand and invest in governement bonds .. US primarily  , its not a stretch of logic to see the effects of interest rate changes having a marked effect on the returns of this said money  .  It's all im saying , im not doing anyones work for them  

The fact people dont trust my conclusions is fine but the fact i say " trust me " is not proof i cant be trusted  .  Ive done the work  .... HAVE you  ....  enjoy your day

One more thing the only measure of a trader is P&L , and in this sample on a top20 its stunning given the time frame  , i post these things to give others ideas but maybe i just go back to lurking . The only reward seems to be angst and derision


----------



## Ves (28 February 2017)

craft said:


> I would say massive red flag when the line is started with "trust me"
> 
> I thought I had stumbled into a religious thread in the general chat section by mistake.
> 
> I guess we are ye of little faith.



I actually thought Quant's thoughts over the last few weeks were pretty interesting. A bit of self-congratulatory hyperbole in his post yesterday is pretty easily overlooked for me because of that. We're all human and prone to "I told you so..."  moments IMO.


----------



## Quant (28 February 2017)

Across my desk today   ""  Any normalisation of inflation and interest rates will be a big help to QBE ""


----------



## craft (1 March 2017)

Quant said:


> Look i have produced a sample set of data ( and a much much larger sample set looks exactly the same ) that backs up my claims  , sorry i havent written a book to explain the sample set and the reasons the corellation is so strong but im a trader and not a university lecturer  , the information to either refute or confirm my claims is out there  . Maybe if you find out where QBE invest their cash the answer will come quickly  . I am not here to convince anyone anything , ive pointed out why QBE has run up and ive laid the foundations of an edge if anyone cares to follow through  ...   good luck to all
> 
> QBE are risk adverse in their management of cash on hand and invest in governement bonds .. US primarily  , its not a stretch of logic to see the effects of interest rate changes having a marked effect on the returns of this said money  .  It's all im saying , im not doing anyones work for them
> 
> ...



There may be correlation there possibly along the lines that both are effected by risk on risk off. But unquestioning faith that it will continue to exist because there is an underlying causal effect would be dangerous.


If you look at the QBE’s sensitivities, they are in fact the reverse of the relationship you suggest. An increase in bond rates subtracts from QBE’s short term investment P&L as QBE’s bond investment duration is longer than a reporting period and unrealised losses on bond products must be marked to market Perhaps the market is clever enough to look through current earnings to held to maturity returns – perhaps not.


Even if people are looking at increased held to maturity investment returns, the discount rate applied to holding QBE itself for an investor should also theoretically increase to compensate for the lift in the risk-free return, largely nullifying the profit increase.


A more obscure impact of a rising bond yield is that underwriting profit is increased short term as the discount rate applied to future obligations increases. However, this is a short-term impact as presumably rising bond rates infer a rising inflation rate that eventually subtracts from profitability as obligations increase at time of paying out.   Changes in inflation adjusted bond rates should be a better causal indicator of long run profitability of QBE.


Credit spreads and changes in the steepness of the yield curve have much more impact on QBE’s investment income than straight changes in bond yield.  Investment income itself is only a portion of QBE’s profit mix the other portion is Underwriting profit. The split for Investment profit /underwriting profit for QBE is generally in the ball park of half & half.   In some ways, Credit spread, yield curve spreads and non-inflation changes to the discount rate can be thought about like commodity pricing to a resource company. The underwriting profit driven by the insurance premium cycle can be thought about like production volume.


*“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”*


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## Quant (1 March 2017)

it works till it doesnt  , we can pull the wings of this fly all day but i got better things to do . No-one said this is the " ONLY " driver of QBE but it is one of them nevertheless  . Im done with QBE thread forever now


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## craft (1 March 2017)

Quant said:


> trust me TNX drives the share price of QBE substansially , anyone who thinks differently is naive or misinformed but hey whatever floats your boat




So questioning the validity of this statement results in this.



Quant said:


> it works till it doesnt




which would also be valid for any data mined correlation(could be price of pork belly's to QBE share price or any obscure data series you can lay your hands on, so long as the historical correlation exists) *All things work until they don't*.



Quant said:


> Im done with QBE thread forever now




Not surprising  - important conversation attempted on ASF are generally exercises in futility.


----------



## Quant (1 March 2017)

just avoiding the trolls , nothing more


----------



## craft (1 March 2017)

Quant said:


> just avoiding the trolls , nothing more



Is everybody who express a different point of view to you a Troll? Naïve? Misinformed?


----------



## galumay (1 March 2017)

Its a pity this discussion ended in a hissy fit, its so important to challenge our bisases, invert our thinking and check for logical fallacies. 

Quant, a more mature response would have been to recognise that stating that failing to share your interpretation meant we were naive and misinformed was always going to get a pretty rigorous response. Opportunity for self reflection there!

Having had the issue of the risk of confusing correlation with causation raised you then chose to be very defensive about how that might possibly inform your analysis better. Sometimes we make decisons that have positive outcomes that were based on wrong reasons - the opportunity to drill down and really understand why you had a positive outcome is one of the most powerful tools you can develop.


----------



## UMike (11 May 2017)

QBE breached its 50 and 200 day moving average late April.
Been moving up steadily ever since. Hope it continues into the new financial year.


----------



## peter2 (17 August 2017)

QBE's latest results have disappointed the market yet again. There always seems to be one or more sections of their business that they don't manage very well. Are their business interests too diverse?

I put this into the never to be traded again list. Yes, one of my portfolio's did have a small parcel and sold for a loss yesterday before today's news.


----------



## Calvin27 (29 August 2017)

It's a pretty good yoyo stock to be honest. Traded it 4 times with great success.


----------



## skc (29 August 2017)

This Harvey won't be too kind for QBE...


----------



## greggles (12 December 2017)

Anyone have any thoughts on QBE at the moment? After falling from $13.50 to $10 from May to October it now appears to be recovering and is currently at $10.74.


----------



## peter2 (20 September 2018)

Oh no, help me. I'm liking the current chart of QBE. There's an imminent BO looming (>11.20). 
It's been such a disappointment over the past eleven years. Management have mishandled the corporate risk for the past decade. Why should I think they can do better in the future? The indicators on the monthly chart remind me of many of the poor reports. QBE is in my never to be traded list, but should I forgive them? Should I risk a little?


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## kid hustlr (20 September 2018)

Hi P2,

Smarter people on here than me can verify this although I wonder if this is an ok way to play rising bond yields?


----------



## Sharkman (27 September 2018)

for the last few years i've felt that QBE must always be given a really short leash, as it's just been one downside surprise after another. it's meant to correlate fairly well with rising bond yields, but you also have to deal with the risks of management disaster upon management disaster with this company.

i saw the same thing - you've gotta think the regretful buyers from last Nov and Jan looking to exit at these levels will be washed out soon and the resistance at 11.15'ish will be broken. but i'd rather trade this via options. i don't want to be stuck with max downside risk if yet another of QBE's infamous negative surprises hits the newswires in the coming weeks.

i looked at the Dec 11.50 calls and they were only trading at an IV of 15.7 today, that's really low for QBE (i haven't traded it for about a year but from memory it normally lives in the 20-25 range for the ATMs, just checked thru my trading notes and the last time i traded it in Jul '17 it was trading at a 26 IV). even the Dec 10.50 puts with the skew are only at around 17.6, still below the historical average. a sign of optimism... or complacency?

so i'm considering just buying the Dec 11.50 calls straight up, don't think there's a need to use a spread here, as vol seems cheap right now, which would've cost about 15c at the mid today (with the underlying at around $11). for 100 contracts (about 3000 deltas) that's a decay of $20 a day this far out from expiry. could alternatively do the 10.50-11.50 Dec risk reversal at roughly zero cost to express a bullish view without paying decay, getting about 5600 deltas for 100 contracts, but TBH i'd rather pay that sort of decay and limit my potential loss to 15c than wear huge downside risk in this name, given its history.


----------



## peter2 (27 September 2018)

Thanks @Sharkman It's nice to see some examples of option plays. 

Limiting downside exposure to the call premium in this company sounds prudent to me also.


----------



## kid hustlr (27 September 2018)

peter2 said:


> Thanks @Sharkman It's nice to see some examples of option plays.
> 
> Limiting downside exposure to the call premium in this company sounds prudent to me also.




P2,

Have you ever explored operating your daily momentum style via executing with options?

Might be hard in the small end of town I guess?


----------



## peter2 (27 September 2018)

Yes. 
_Comparative Performance of Cfds and Options in Swing Trading US equities_. P1, April 2008, Unpublished journal.


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## InsvestoBoy (27 September 2018)

QBE is currently one of the 12 stocks which fall in the MorningStar "Large/Value" style box, so I did buy some recently at $11.09.


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## Sharkman (11 December 2018)

yet another negative earnings surprise from QBE. probably should stop using that term i guess - once it gets to the point where you half (or even 75%) expect it to happen, can you really call it a "surprise" any more?

some pretty steep time skew in the options market today. the Dec ATMs were trading at around 34 IV, with the Jan $10 ATMs only a 24 IV. i haven't been watching the QBE options recently, at least i wasn't before today's "surprise", so i don't know whether the skew had anything to do with the update. normally you expect some sort of a skew going from Dec-Jan, since the Dec contracts normally expire before the typically low vol xmas-NY week, but that alone doesn't usually produce a whopping 10 vol skew.

the stock does seem to have been well supported at that $10 level from 2012-2016, which it routinely got hammered down to after each piece of bad news. with quick decay on offer i'm pondering a call calendar spread at 10 for around 13c, or a 10-10.50 call diagonal at roughly zero cost (assuming mids but you don't always get that when vol spikes!). it could well take a few days to wash out all the people fleeing for the exits before any recovery, and a few days is all that's needed for the near leg to expire worthless.

though that $10 level has since been breached and the new support level over the last few years seems to be around 9.40. anyone game enough to take a position in this name after this latest episode of what's been an extensive series of downgrades?


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## Ann (25 February 2019)

*QBE profit bounces back, dividend soars*

_Insurance giant QBE Group's profit recovered dramatically last year, as it faced lower claim costs and the company pushed ahead with a cost-cutting and divestment program._

_The ASX-listed insurer on Monday said net profit after tax was $US390 million ($546 million), after 2017's $US1.2 billion loss, with the profitability of its underwriting operations improving significantly. More...._

I will put up an EquiVolume chart tomorrow when it has updated, there are some volume pressure issues and a big gap to close.


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## Ann (26 February 2019)

Looking at volumes in the EquiVolume chart, it appears there is more selling pressure before it fights back up through the gap. It rose on what appeared to be pretty thin volumes yesterday, let's see if it can hold on and keep going today.


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## galumay (26 February 2019)

The thing I have found over the years with QBE is that every now and then they have a result that makes you think they have turned the business around and are on track, but within a quarter or two they disappoint to the negative again with some other bumbling stuff up!


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## bigdog (21 March 2019)

I do not own QBE shares

Motley Fool reports
https://www.fool.com.au/2019/03/21/...d-28-this-year-why-is-it-the-top-asx-insurer/

*The QBE share price has surged 28% this year – Why is it the top ASX insurer?*
Lachlan Hall | March 21, 2019 

The *QBE Insurance Group Limited * (ASX: QBE) share price has surged 28.1% in 2019 to be the top insurance stock in the *S&P/ASX200 Index * (ASX: XJO) – so why has it outperformed its peers?

*What’s happened so far this year for QBE?*
The QBE share price neared its 52-week low of $9.28 per share in mid-December 2018 as the Financial Services Royal Commission wrapped up its final hearings and the company completed the sale of its insurance operations in Puerto Rico, Indonesia and the Philippines.

The insurer released its full-year FY18 results on 25 February and recorded growth in gross written premiums (GWP) of 2.5% on the prior corresponding period to $13.66 billion.

QBE’s attritional claims ratio fell from 51.3% in 1H18 to 49.1%, while its cash return on equity (ROE) moved back into the black at 8% for the full year. The company recorded positive half-on-half pricing momentum on a global basis, up 90 basis points (bps) to 5.5%, with upwards trends in its North America, Australia & New Zealand and Asia-Pacific segments.

On the back of the strong results, QBE management announced a significant increase in its final dividend, which increased by 24 cents per share (cps) to 50 cps in FY18.

*What about QBE’s insurance peers?*
QBE has a market cap of $16.8 billion which is comparable to fellow insurers including *Insurance Australia Group Ltd * (ASX: IAG) with a $17.6 billion market cap and the $17.2 billion *Suncorp Group Ltd * (ASX: SUN).

Suncorp’s share price has climbed 6.8% this year to trail both QBE and IAG (10% year-to-date). Suncorp and IAG were both hit by extraordinary events, with IAG recording a $607 million provision for the December 2018 Sydney hailstorm and Suncorp estimating the cost of the Townsville floods to be more than $90 million.

While QBE inevitably had some exposure to such events as a large Australian insurer, its greater diversification across insurance products and geographies ultimately saw its share price largely unaffected by these events which has been a key factor in its continue share price appreciation.

*Is the QBE share price a Buy?*
Despite the strong start to the year and QBE’s strategic positioning in the insurance market, the QBE share price is trading near its 52-week high of $12.79 per share and I’d be wary of future growth given potential headwinds for insurers in the next 6-12 months.


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## Struzball (1 April 2019)

https://www.afr.com/news/policy/climate/qbe-to-abandon-thermal-coal-by-2030-20190329-p518ug

"Insurance giant QBE will stop insuring new thermal coal mines, power plants and transport networks from July 1 this year, and will shut down its thermal coal underwriting business by 2030."

"[QBE] would also withdraw all direct investment in companies that generate more than 30 per cent of their revenue from thermal coal from July 1"

"QBE is Australia's main domestic coal insurer, and is considered an expert in the area."

Globally, coal is not going anywhere any time soon.  Question is, if not QBE, which companies will continue to underwrite and invest in thermal coal?  Asking for a friend.


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## tech/a (1 April 2019)

*Pete *you mention poor corporate risk.

QBE covers our debtors insurance. I pay
a fair bit for this but am increasingly frustrated
having clients knocked back for cover not due
to any issue with them only that QBE and their risk
people deem that they are at capacity with exposed risk
to particular companies. So Im left to make the call
take the risk naked or walk away from the contract.

As for the chart it is in my opinion not looking like
moving out of this pattern. But when it does either way
would be worth hopping on. It will become clearer eventually.
The initial setup does look appealing--I agree there.


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## peter2 (2 April 2019)

I agree the daily chart looks bullish. I have posted the quarterly chart just to remind myself that this stock has been a dog since the GFC.


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## UMike (19 January 2020)

Started offloading some of this stock.
Kept buying as it bottomed out below $10.

Surprised the Bush fires haven't dented it a bit.
Almost at 5 year highs.


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## Dona Ferentes (19 January 2020)

had a look at the (jargon riddled) latest QBE investor presentation. Couldn't make head nor tail of it.

_*"QBE is an international general insurance and reinsurance group underwriting commercial and personal lines of business through operations in 38 countries."*_

A longstanding CEO, Frank O'Halloran, built QBE to its current staus. He was thought to be a master of the numbers; and an acquisitor of no mean repute. Now we all all know a myriad of sins can be hidden in growth strategies. Harry Hindsight wrote then that the company had "poor underwriting practices, under reserving, weakness in its capital and poor risk management."

Then in 2011, John Neal was bought in. To steady the ship. Writedowns and selling off a few 'non-core' assets followed (and besides, it's almost obligatory to clean up the balance sheet and lower expectations. How else can allocated performance options end up 'in the money' at the end of the new CEO's time at the helm?).

The $254 million loss recorded in calendar 2013 was meant to mark the beginning of a "period of refocus and stabilisation". Neal managed to lift the return on equity from about 7 per cent to 8 per cent but QBE shares were trading at a price less than they were when Neal took over as CEO.

It is generally accepted that Neal transformed QBE from a disparate group of siloed businesses into an integrated global insurer. Then in Sept 2017, chief financial officer and head of Australian and New Zealand operations, Pat Regan, was appointed chief executive.

Not much happened for a year or so, probably more "refocus and stabilisation"; after which the SP started to build. No escape velocity, but the bad news became less and insto's re-found their confidence/ nerve to take or build stakes.

I mean, QBE can be attractive, given its very size. Sits in indexes, can outperform. Sometimes is a 'must hold' type company. And ability to achieve targeted rate increases, and analysts like things like "Attritional claims ratio", "reduction in peak catastrophe exposure", "premium rate adequacy measures" and the like THAT CAN BE MEASURED  .... and if these trends are positive, such that RoE and Earnings are good (and there is always a margin in everything). And there always is a lot of cash sitting within the company, on the sidelines; bolstering the balance sheet.

in Feb 2019 the AFR said 







> _Insurance giant QBE used to be seen as a black box. It's still a complex beast, but chief executive Pat Regan is making strides towards keeping things as simple as possible. The key number from the 2018 full year result is the group's combined operating ratio, which is the main measure of profitability. It improved from 103.9 per cent in 95.7 per cent in 2018, thanks to better pricing and lower costs. Regan says it will be between 94.5 per cent and 96.5 per cent in 2019; if he can hit the midpoint of 95.5 per cent, he'll eclipse market expectations._






> "Premium rate momentum has continued into 2019 with average premium rates up by around 4% (ex CTP) in the first quarter, consistent with our experience in the first quarter of 2018. We have experienced positive rate in all of our divisions due to a combination of market conditions and our disciplined approach to pricing and risk selection.”
> 
> _May 2019 - Pat Regan, CEO, QBE Insurance Group_




good luck. Not my type of stock. Don't need to hold.


----------



## galumay (19 January 2020)

Dona Ferentes said:


> good luck. Not my type of stock. Don't need to hold.




Ditto. Held it once, I bought it because in my early days as an investor I imagined I needed to diversify across sectors, so I made the terrible mistake of buying the best businesses in the sector I could find - ignoring the fact that they might well still be a **** business!!


----------



## peter2 (19 January 2020)

Dona Ferentes said:


> good luck. Not my type of stock. Don't need to hold.




Ditto x 2. I have a love / hate relationship with QBE over the past few years. Love to trade it but hated the results I was getting. Every reporting season there was always one division that went out of control and the QBE price tanked. 

Looked at it long and hard on the BO > 13.00 recently then cut my hands off before they pushed the buy button.


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## Skate (20 January 2020)

Dona Ferentes said:


> had a look at the (jargon riddled) latest QBE investor presentation. Couldn't make head nor tail of it - good luck. Not my type of stock. Don't need to hold






peter2 said:


> Ditto x 2. I have a love / hate relationship with QBE over the past few years. Love to trade it but hated the results I was getting.




*An alternative chart of QBE. *
@Dona Ferentes - I don't care about the fundamentals of a company (they the are just ASX codes to me) as I enter the trade on the technicals. The Chart below is from my CAM Strategy, (technical mechanical strategy) buying pullbacks & trend continuations

*I can understand the love hate relationship with QBE*
The CAM Strategy is my only strategy that entertains buying QBE (& it buys it on a regular basis) as my other strategies won't touch it with a 10ft pole (for the reasons @peter2 has explained)






*Just taking off again*
The CAM strategy is not perfect as it kicked me out just when another move has started (it's the reason I keep entering the position on a regular basis) - selling at the correct time (timing the exit) makes the money. Selling is easy and can be undone in the blink of an eye - I'm now waiting for the next re-entry signal.

Skate.


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## MovingAverage (20 January 2020)

Skate said:


> *An alternative chart of QBE. *
> @Dona Ferentes - I don't care about the fundamentals of a company (they the are just ASX codes to me) as I enter the trade on the technicals.
> Skate.




A big thumbs up to that


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## UMike (7 May 2020)

So Another Capital raising and is now lower than what the instos paid?

I have still never understood how QBE was affected by this pandemic? It is not like they will have to pay out on any claims for it as I imagine no one has insured for this type of catastrophe.


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## InsvestoBoy (7 May 2020)

UMike said:


> So Another Capital raising and is now lower than what the instos paid?
> 
> I have still never understood how QBE was affected by this pandemic? It is not like they will have to pay out on any claims for it as I imagine no one has insured for this type of catastrophe.




Aren't they a big Travel Insurance provider?

Also https://www.afr.com/companies/finan...or-s-coronavirus-court-action-20200505-p54ps9


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## Garpal Gumnut (7 May 2020)

UMike said:


> So Another Capital raising and is now lower than what the instos paid?
> 
> I have still never understood how QBE was affected by this pandemic? It is not like they will have to pay out on any claims for it as I imagine no one has insured for this type of catastrophe.




They have been affected because the insurance money they get is invested, often in stocks and stocks have fallen. They are similar to an index fund. They usually have re-insurance for their insurance losses. 

gg


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## Ferret (7 May 2020)

Trading at nearly 10% under the price the instos paid and the retail SPP doesn't close until end of trade Monday.  

This could get really ugly.


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## UMike (8 May 2020)

Ferret said:


> Trading at nearly 10% under the price the instos paid and the retail SPP doesn't close until end of trade Monday.
> 
> This could get really ugly.



Yea I am not partaking in it.
I'll buy online. The last parcel I bought was 7.25. Got a buy order in for that price. It is more likely to get worse before it gets better.


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## UMike (14 May 2020)

*Share Purchase Plan Results ("SPP") *

*QBE advises that the SPP announced on 14 April 2020 closed on Monday 11 May 2020 with more than 7,400 applications received. *


*QBE confirms it will accept all valid SPP applications in full and expects to issue approximately 12.2 million fully paid ordinary shares for approximately A$91.5m which will rank equally with existing shares on issue from allotment. *


*The SPP shares will be issued at A$7.51 per share (representing a 2% discount to the 5 day VWAP to 11 May 2020 of A$7.66 per share).*

Got in today with 2000 @$7.25.
Shows you don't have to partake in the SPP to benefit from it. Over 3.5% better off.


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## UMike (28 July 2020)

Looks like the time is ripe to take at least 1000 of that of the table.

Itchy fingers ATM.


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## Garpal Gumnut (2 September 2020)

UMike said:


> Looks like the time is ripe to take at least 1000 of that of the table.
> 
> Itchy fingers ATM.



Not the only one. 

A nice trend broken. 

gg


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## UMike (3 September 2020)

Garpal Gumnut said:


> Not the only one.
> A nice trend broken.
> gg



Would the trend forgive the one off incident involving the CEO Standing down.
Other than that the trend continues.
Hoping for a down day or two to top up.


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## UMike (9 September 2020)

Think the General trend is broken.
However picked up what I got rid of just now.

Lucky I got plenty other fingers to catch other falling knives.


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## So_Cynical (10 September 2020)

Another 15 year shocker, QBE a big global company not even treading water more slowly sinking.
~


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## Sharkman (10 September 2020)

yep it's a horrible stock to hold as an investment, wouldn't touch it with a barge pole for my buy & hold arm, but it's great for trading. it typically trades at close to 30 vol even during normal times (definitely on the high side for an ASX large cap), which i guess is at least partially due to all the nasty surprises that they've sprung over the years.

i've had this stock put to me at $10 or $11 numerous times over the last several years, usually it flounders around for a bit, then i manage to get it called away at the entry price or a strike higher, collecting fairly meaty premium (percentage wise - i don't take huge positions in this as one always gets the feeling that a disaster could pop up at any time - hence the high vol) along the way.


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## UMike (6 May 2021)

Probably a chartists nightmare.

Let a few go from the Person and Super collection today.

Still overweight imo as far as my portfolio is concerned but then again I have way to much cash on the side lines.

So why the sudden move?????


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## finicky (6 May 2021)

Must have been a good AGM address yesterday? I have no holding so haven't read it
Pretty awful 'quality' business, all the shares issued with declining book value and single digit ROE in the years that aren't an actual loss. 

Chart looks to me like it wants to breast the high at $11, I would guess at it eventually breaking through as a casual comment, lord knows why. People must buy a stock like this because its a big cap in the asx 50/100 and a 'brand' or something.

ROE by year : 

6.70-2.506.707.008.20-3.507.007.40-11.80

Book Value:

9.169.289.8710.5010.378.368.958.927.50


Weekly - today's rise not shown


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## dyna (6 May 2021)

Yeah,I think insto's are only on the register for the index weighting,as it's been a p*ss poor long term investment.
That said,I've made a bit of profit out of it via selling the many SPP's over the years.Still keeping a minor holding for that reason....They will get the begging bowl out again if things- insurance go bad,as they inevitably do.


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## UMike (7 May 2021)

finicky said:


> Must have been a good AGM address yesterday? I have no holding so haven't read it
> Pretty awful 'quality' business, all the shares issued with declining book value and single digit ROE in the years that aren't an actual loss.
> 
> Chart looks to me like it wants to breast the high at $11, I would guess at it eventually breaking through as a casual comment, lord knows why. People must buy a stock like this because its a big cap in the asx 50/100 and a 'brand' or something.




I just have read the Address and they are turning as WOKE as F@#$%.
Time to get out I think.


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## UMike (25 May 2021)

Another 2000 sold.

Still seems to be going strong.


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## divs4ever (15 September 2021)

dyna said:


> Yeah,I think insto's are only on the register for the index weighting,as it's been a p*ss poor long term investment.
> That said,I've made a bit of profit out of it via selling the many SPP's over the years.Still keeping a minor holding for that reason....They will get the begging bowl out again if things- insurance go bad,as they inevitably do.



 QBE  is the only stock i 'trade' successfully  and deliberately  ,
 as you have noticed QBE  is always only one ann. away from another price crash , and for me  that is a GOOD thing 

 while many members here  use complex mathematical systems  , i worked out a crude 'channel trade' and patience work nicely on this stock 

 i started out with a plan to buy ( a modest parcel ) below $11  and sell HALF the buy over $14  but participate in the DRP  and calmly accumulate via the DRP and the remaining portions of the buys 

 as dyna  had noticed frequent disappointments weigh on the share price and buying below  $11 was ridiculously easy  so over time have reduced that buying target to sub $8  and the reduction target to over $13 ( for HALF the recent buys ) and still participate in the DRP

 now true it sometimes takes up to two years for a complete buy/sell-down cycle  , but my average share price  is fairly low now , making the miserable div. yield tolerable ( 1.6% on the current closing  price which is pathetic for the risk taken ) but my average share price has been brought down to $6.95 ( sadly not enough to drop your jaws , but am working on it )

 i have tried this strategy on two other shares  ( BPT and SUN ) and while neither holding is underwater BPT is up 104% (  and 'free-carried )   while SUN is up 10%  but strongly resists hitting my price targets  but the div. yield is better than QBE or a term deposit  , so just not a successful trading vehicle ( for my strategy )

 QBE  would certainly have to improve to be considered a 'core-holding ' in my portfolio 

 cheers 

 if nothing else it MIGHT encourage other small players to develop their own cheeky strategies  , as they learn better techniques  ( just DON'T be a forced seller  have the luxury of waiting years if need be )


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## dyna (16 September 2021)

Yeah, Suncorp is more of a long -term trade for me, but others like Western Resources  and Santos can be successfully traded without needing much talent at T.A. (Technical Analysis).
Just about any dividend-payer in the ASX 200 Index, with a sawtooth share chart will give you the confidence to place a ten grand bet on it and make a good profit.


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## Sharkman (16 September 2021)

divs4ever said:


> QBE  is the only stock i 'trade' successfully  and deliberately  ,
> as you have noticed QBE  is always only one ann. away from another price crash , and for me  that is a GOOD thing
> 
> while many members here  use complex mathematical systems  , i worked out a crude 'channel trade' and patience work nicely on this stock
> ...




agree with what you've said. my strategy with QBE is wait for it to fall to the low $10 range, then sell the $9.50 or $10 strike puts (at a stock price of around $10 the $9.50s typically fetch about 2-2.5%, the $10s about 3.5-4% for one month expiry, IV is consistently high in this stock), let it get put to me, and if it does, turn around and sell covered calls at the same strike or a strike higher until it gets called away.

the latter part is where i probably need to make some adjustments - after taking assignment on the puts, i've been too hasty in the past to try and get it called away asap, instead of leaving a bit of room for a potential rally on the back of some managerial "restructure" / blue sky announcement / period of relative calm in terms of natural disasters etc., before the inevitable hurricane / bad earnings numbers / managerial misstep tanks the price again.

my last "cycle" was getting it put to me at $10 in dec last year and called away at the same $10 in may, collecting around 75c net premium along the way. not a bad return when the collateral was tied up for just 6 months, but i did miss out on the strong rally that started in may. for the next cycle i'll have to somehow find the stomach (or is "diamond hands" the fashionable term to use these days?) to retain the full delta exposure for a while, see if it can find a rally to $12-$12.50 or thereabouts before selling the covered calls, hopefully getting rid of it before the next nasty surprise comes along.


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## UMike (9 February 2022)

Hit $12.5.
Getting back to that toppy ready for the next nasty surprise time.

Eying either a 1/3 or 2/3 sell off of my holdings.

@divs4ever and @Sharkman .... You still staying true to your strategies?


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## divs4ever (9 February 2022)

yes i have some for sale @  $13.15 ( NOT the full holding )

 and  will consider a top up price AFTER it has gone below $10 .. the last parcel i bought @ $7.90 ( in April 2020 ) so is long long time between  the action , sometimes


----------



## UMike (9 February 2022)

divs4ever said:


> yes i have some for sale @  $13.15 ( NOT the full holding )
> 
> and  will consider a top up price AFTER it has gone below $10 .. the last parcel i bought @ $7.90 ( in April 2020 ) so is long long time between  the action , sometimes



Yea I bought alot in the 7s and sold alot in the low 11s.

I'd sell 1/3 (of my current holdings) straight away but the below image is throwing me. (Am I being Greedy?)


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## divs4ever (9 February 2022)

QBE is a high( er ) risk stock  i guess it is about your tolerances 

 mine are DRPed so if that parcel doesn't sell  it is just more DRP shares ( that order has been in for about 5 months  , so am NOT  sweating on it )

 i am more worried about the DOWN swings ( they can be quite sharp )   

 my 'average share price ' is less than $9.32 

 but you need a lot of patience  IMO


----------



## Sharkman (9 February 2022)

UMike said:


> Hit $12.5.
> Getting back to that toppy ready for the next nasty surprise time.
> 
> Eying either a 1/3 or 2/3 sell off of my holdings.
> ...




yep, i'm not entering QBE at these levels (no funds left in my IB account to collateralise short puts in any case, after having to scrounge up 190K to exercise those FMG calls i mentioned over in the FMG thread). just get that feeling another nasty surprise is right around the corner based on their track record. earnings report due next week i think?

though if i can get my CBA units called away after stripping next week's div, which conveniently goes ex-div right before feb expiry (have already held for 2 months) to free up some funds, might think about something like a may 12-11 1 by 2 ratio put spread (breaks even at 10) then.


----------



## Sean K (11 February 2022)

Looks like it's breaking up from the last 6 months of sideways movement. Might be a red day today though.


----------



## divs4ever (11 February 2022)

just means i delay the sell-down order longer  and MAYBE even scoop up a couple of extra DRP shares 

 but IMO  , QBE is one of those shares you should probably have a few  .. but how do you reduce your average cost price  because it is rarely  'good value '

 in a pre Hayne Royal Commission era i would have reluctantly  pointed you at AMP 

 but don't neglect SUN it will eventually have to do something ( better or disastrously )


----------



## divs4ever (18 February 2022)

QBE today announced a FY21 statutory net profit after tax of $750M, compared with a net
loss after tax of $1,517M in FY20, reflecting a material turnaround in underwriting profitability.
Adjusted net cash profit after tax was $805M equating to a return on equity of 10.3%.
Insurance trading conditions were favourable throughout 2021, supporting our focus on
driving further improvement in profitability while also achieving targeted growth.
QBE Group CEO, Andrew Horton, said: “I am pleased with the strong premium growth and
significant uplift in underwriting margin. The strong result was achieved despite the
heightened level of catastrophes during the year which remain a major issue for the industry.”
“In targeting ongoing premium growth, we will remain vigilant in pricing adequately for an
appropriate risk-adjusted return on capital, with claims inflation, catastrophe costs and overall
portfolio volatility key areas of ongoing focus.”
The Board has declared a final dividend of 19 Australian cents per share bringing the FY21
dividend to 30 Australian cents per share, up from 4 Australian cents per share in 2020, and
representing a payout of 41% of adjusted cash profit. While recognising QBE’s improving
profitability and earnings resilience, the Board has revised the Group’s dividend policy to
40-60% of annual adjusted cash profit from “up to 65% of adjusted cash profit” previously to
retain capital to support our growth ambitions and facilitate the gradual normalisation of our
investment asset risk profile.
NEW PURPOSE, VISION AND STRATEGIC PRIORITIES
In January this year, we launched a new vision, purpose and set of strategic priorities. Our
new purpose is centred around enabling a more resilient future, while our vision is to be the
most consistent and innovative risk partner.
To achieve our purpose and vision, we have laid out six strategic priorities providing
enterprise-wide clarity around our key areas of focus; portfolio optimisation, sustainable
growth, bring the enterprise together, modernise our business, our people and our culture.
More detail is provided in our 2021 Annual Report and FY21 investor presentation.
QBE Group CEO, Andrew Horton, added: “Upon joining QBE five months ago, I immediately
recognised that I had joined an organisation with great potential. My overarching ambition is
to establish QBE as a consistently high-performing enterprise that is both culturally and
operationally united, with a clear strategic direction.
“Our new purpose, vision and strategic priorities will guide our strategic plan, building on the
momentum evident in our FY21 financial result as we seek to further strengthen and grow our
business for the future. In doing so, we will drive greater consistency and collaboration,
support the integration of sustainability across all facets of our business and continually
evolve the experience we provide our people, customers and partners. 
“I look forward to working with the Group Executive Committee and our enterprise leadership
network on embedding our strategic priorities and sustainability framework into their
respective areas.”
FY21 RESULT OVERVIEW
Statutory gross written premium grew by 22% to $18,457M reflecting the strong premium rate
environment as well as improved customer retention and new business growth across all
regions. Growth in Crop was especially strong at 51% due to the significant increase in corn
and soybean prices coupled with targeted organic growth.
Excluding Crop, gross written premium increased by 18%, or 10% in excess of premium rate
increases, up from 7% in 1H21 and 4% in FY20. This included growth in excess of rate of
15%, 7% and 11% in North America, International and Australia Pacific respectively.
Premium rate increases are ongoing with Group-wide renewal rate increases averaging 9.7%
during the year consistent with 1H21 and 9.8% in FY20. While premium rate momentum
moderated slightly in International across the year, momentum accelerated in North America
and Australia Pacific during 2H21.
The Group reported a statutory FY21 combined operating ratio of 93.7% compared with
104.2% in the prior year which was significantly impacted by COVID-19 claims and adverse
prior accident year claims development.
Pleasingly, our North America Crop business reported a combined operating ratio of 92.7%,
an improvement from 95.0% reported at 1H21 and 98.2% in FY20.
For transparency and prior year comparability, our 2021 Annual Report and FY21 Investor
Presentation includes analysis of the Group’s 2021 financial performance excluding the
impact of COVID-19 and a 2021 transaction to reinsure Australian CTP liabilities which,
although not materially impacting profit, impacts year-on-year comparison of underwriting
ratios. The financial result commentary that follows is on this basis.
The Group’s improved underwriting performance reflects a 1.4% improvement in the ex-cat
claims ratio and a 2.2% reduction in the combined commission and expense ratio which more
than offset significantly increased catastrophe claims.
Catastrophe claims for the year were $905M or 6.6% of net earned premium, up materially
from $688M or 5.8% in the prior year and 0.9% above the Group’s increased allowance.
Catastrophe claims included Winter Storm Uri, Hurricane Ida, Storm Bernd, Cyclone Seroja
and widespread flooding and storm damage in Australia.
The result included underlying adverse prior accident year claims development of $192M or
1.4% of net earned premium compared with $366M or 3.1% of adverse development in FY20.
The combined commission and expense ratio improved to 28.5% from 30.7% in the prior
year, reflecting further benefits stemming from the Group’s operational efficiency program
coupled with operating leverage associated with strong premium growth, particularly in Crop.
Business mix changes, including growth in Crop, coupled with the purchasing of additional
quota share reinsurance contributed to a reduction in the commission ratio.
Net investment income was $122M compared with $226M in FY20. A modestly short tactical
duration stance coupled with healthy returns on growth assets more than offset the negative
mark-to-market impact of higher risk-free rates on our fixed income portfolio.
QBE’s indicative regulatory capital PCA multiple was 1.75x, up marginally from 1.72x at 31
December 2020 and comfortably above the mid-point of the Group’s 1.6-1.8x target range.
The benefit of strong organic capital generation on regulatory capital was largely offset by
capital strain associated with strong new business growth.
OUTLOOK
QBE Group CEO, Andrew Horton, said: “Our new strategic priorities will support further
optimisation and improvement in returns, alongside a focus on driving greater consistency in
returns.”
“Following another year of elevated natural catastrophe claims costs alongside rising
inflationary signals and continued low interest rates, the industry operating environment
remains highly uncertain. Because of this, the premium pricing environment is likely to remain
positive in 2022.”
“In light of this, we expect gross written premium growth to be in the high single digits in 2022.
Moreover, delivery against our strategic priorities should result in an improved and more
consistent return profile over time such that the Group is capable of consistently delivering a
low to mid-90’s combined operating ratio.”
“In FY22, we expect the business will achieve further steady improvement on the FY21 ‘exit’
combined operating ratio of ~94%.”
BASIS OF PRESENTATION (unless otherwise stated)
• All amounts in this release are US dollars.
• Premium growth rates are quoted on a constant currency basis.
• Premium rate changes exclude North America Crop and/or Australian compulsory third
party motor (CTP).
• Combined operating ratio and net claims ratio exclude the impact of changes in risk-free
rates used to discount net outstanding claims.
• 2021 indicative regulatory capital PCA multiple is quoted on a pro forma basis excluding
pre-funding of GBP327 million debt intended to be redeemed.
• Prior accident year claims development excludes various items for which there is a
corresponding and offsetting impact elsewhere in the profit and loss. Refer to the Annual
Report for further details.
FY21 RESULTS PRESENTATION
QBE Group CEO, Andrew Horton, and Group CFO, Inder Singh, will host a briefing for
analysts and institutional investors at 9.30am (AEDT) today.
The briefing will be available for viewing as a live webcast and conference call. All
participants need to register to access the webcast or conference call using the links below.
Pre-registration is now open.
Webinar and conference call:
Webcast (listen only): https://webcast.openbriefing.com/8457/
Teleconference (Q&A participation): https://s1.c-conf.com/diamondpass/10019512-q3duk5.html
Questions will only be open to analysts and investors who join via the teleconference.
The briefing will be recorded with a playback available using the following link after the event




__





						Annual & Half-Yearly Financial Reports | QBE Insurance Group Ltd.
					

Read about QBE Group's Annual & Half-Yearly Financial Reports and presentations online. Available for download here.




					www.qbe.com
				





=============================================================================================

DYOR

 i hold QBE 

 top up price  sub $9 ( or less  )


----------



## Sharkman (18 February 2022)

Sharkman said:


> just get that feeling another nasty surprise is right around the corner based on their track record. earnings report due next week i think?




two words - like clockwork

feels like it happens every time with this stock - big announcement = big fall

i don't follow the stock all that closely anymore now that i'm primarily a buy & hold/index guy, but TBH i didn't think the results looked all that bad on the surface. must have fallen a long way short of market expectations i guess. that's how things have gone with this stock over a number of years though, a build up of optimism/blue sky/"turning the corner" before being shocked back to reality 

another daily fall like that and i might start getting tempted by those $10 strike puts again, CBA div was stripped earlier this week so getting that position called away to take a potential put assignment could work. 1m ATM vols at a healthy 40'ish


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## divs4ever (18 February 2022)

it is the nature of QBE ,  the best i can do  is make the best of it 

 i was ( and still have the reduction order in ) looking to sell some  , BUT if the price drops low enough  i will buy some ( and reduce later  )

 hopefully the DRP will be active  , so it will be just a slight change in plan


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## Sharkman (3 March 2022)

UMike said:


> Hit $12.5.
> Getting back to that toppy ready for the next nasty surprise time.
> 
> Eying either a 1/3 or 2/3 sell off of my holdings.
> ...




don't have the cash collateral available for it at the moment (doesn't look like my CBA position is going to get called away at this point, with mar covered calls struck at $100) but i'm putting (no pun intended) those $10 puts back on my radar again, as per my strategy with this stock.

mar contracts (2 weeks) fetching around 1.4% premium at the mid, IV about 52. apr contracts (7 weeks) around 3% premium 42 IV. those are meaty vols even by QBE's standards, though obviously vols elevated across the board right now.

might even specifically free up the collateral to do it if it drops to around $10. at near ATM levels ($10.75 strike) the premiums look quite juicy, ~3.2% for the mar contracts, ~5.1% for apr. it's a high risk position for sure, but those sorts of premiums are sufficient compensation for that risk i think.


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## divs4ever (11 August 2022)

Half year 2022 result
“Despite the challenging operating backdrop, QBE demonstrated
resilience in the period, with ongoing positive momentum across the
business. We have made good early progress against our new strategic
priorities, and our outlook for the remainder of the year remains positive.”
Andrew Horton • Group CEO

QBE announced HY22 statutory net profit after tax of $151M, compared with $441M in HY21, reflecting adverse mark-to-market
impacts on our investment portfolio, the transaction to reinsure North America Excess & Surplus (E&S) lines prior accident year
liabilities, the Australian pricing promise review and an adverse risk free rate mismatch. Adjusted cash profit after tax reduced
to $169 million from $463 million in the prior period.
Despite economic uncertainty, higher inflation, geopolitical tensions and record storm and flood events in Australia, QBE’s
underwriting performance remained resilient in the first half of 2022, with the adjusted combined operating ratio of 92.9% improving
0.4% compared to the prior period. Premium growth remains strong, with Group-wide renewal rate increases of 8.1% in the first half
of 2022, which supported gross written premium growth of 18%.
QBE’s indicative regulatory capital PCA multiple was 1.77x compared to 1.75x at 31 December 2021, and toward the upper end
of the Group’s 1.6-1.8x target range. The Board has declared an interim dividend of 9 Australian cents per share, a decrease from
11 Australian cents per share in the prior period. The strong dividend payout ratio of 57% reflects the Board’s confidence around the
strength of the balance sheet and positive business momentum.
Unless otherwise stated, the Group and business commentary following excludes the impact of the transaction to reinsure legacy
North America E&S prior accident year liabilities, and the impact of the Australian pricing promise review.

DYOR

i hold QBE ( and participate in the DRP )

and currently have both a top up order ( sub $9.60 ) and a reduction order ( above $13 ) in the market

i 'channel trade' this , but how will the market take this ??

( i would have thought some of this would have been priced in , already )


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## UMike (11 August 2022)

divs4ever said:


> Half year 2022 result
> .......
> 
> DYOR
> ...



I trade with in that range also.

I thought the result was a bit disappointing and the SP would reflex that.
Can't Pick it atm.


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## divs4ever (11 August 2022)

i interpreted the report as unflattering  , but then again i had no reason to expect a 'shoot the lights out  report '

 so what was today's trading  ???  

Last Price (AUD)$12.540
Today's Change Up $0.400 (3.29%)

  was  the live investors' thinking  'yeah but we suspected this '   $12.50 isn't that bad a price ??

 since i participate in the DRP , i was hoping the SP would get pummeled   to offset the 2 cent cut in the div  . 

 BTW  .. QBE frequently wrong-foots me   .. thus the simultaneous orders in the market ( one for UP and one for DOWN )


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