ACE call

I am still waiting for files and models to be sent to me from my prior firm.
In any case, I am going to wait to get my model before doing any valuation work but key issue on the ACE call was Evan calling the end of the soft market. This has been echoed by PRE, and Munich Re as well as Berkely. The thesis is that investment losses, the difficulties at AIG, XL, and other market participants, increased cost of capital and reduced risk tolerance should lead to prices hardening. All of the above is true. In the minus column, a severe recession will lead to reduced exposure, and ACE and others are still releasing reserves. Typically a hard market will be signalled by adverse development. The fact that companies still have favorable reserve releases makes me less enthusiastic about getting on board the hard market train.
In ACE's case the company has begun releasing reserves on casualty lines pre 2004. ACE is one of the last guys to start significant releases in the casualty lines, and the firm probably still has significant excess reserves in those lines. Moreover, a good chunk of the unrealized losses on the investment side will eventually flow back. The duration of the investment portfolio is 4 years so these securities will eventually accrete back to par. All this to say is that the printed Book value per share of $46 is low, and I think $60 is a no brainer on this stock. Now if this signals the beginning of a hard market, well we could go higher, but $60 is there even in this environment.
Still like the stock even after the move today.
One could pair it against WTM if you wanted to be defensive, but that is also pretty cheap.
Off to Costco for buying cheap booze.