Subject:
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Re: MOB (was Re: Fan Thank You Letter)
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Fri, 21 Jun 2002 17:24:37 GMT
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Viewed:
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1302 times
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In lugnet.off-topic.debate, Richard Marchetti writes:
> See, here is the thing: you are fearful of a loss so you buy insurance, but
> the insurance company is basically betting that the loss will not occur --
> they collect more than they pay out.
A nit. Technically this is not true. They actually typically collect LESS
than they pay out. (but only by a little)
You can read quite a bit more about this topic here:
http://www.berkshirehathaway.com/
In particular see:
http://www.berkshirehathaway.com/2001ar/2001letter.html
and in particular particular, the section headed
"The Economics of Property/Casualty Insurance"
Great reading!
Insurers are able to charge less in premium than their anticipated payout
and still make money thanks to float. BH companies are particularly
profitable because they have a good place to invest float (elsewhere in BH)
and thus can anticipate getting better than market rates...
Warren Buffett, as far as I am concerned, is a great writer who really
explains things well, and one of the most intelligent investors I know. I
just regret I've never had enough loose money at one time to buy a share of
BH class A.
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Message is in Reply To:
 | | MOB (was Re: Fan Thank You Letter)
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| MOB (was Re: Fan Thank You Letter) (...) Consider this: He doesn't BUY insurance. No one does. There is no insurance to be had. The cost is not spread. No one cares whether I ride a motorcycle with a helmet or not -- it's MY OWN BUSINESS. When did (...) (22 years ago, 21-Jun-02, to lugnet.off-topic.debate)
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