Ann: 2013 Half Year Results Presentation , page-36

Bobadah,

I think your patient buy and hold approach yielded better result for you than me because I missed the gain from $13.3 ish to $15.3 ish (captured the $11 to $13 and the $15 to $17 although I have to give back $1 today).

But here is what I think:
At $11, the market expected earning per share (EPS) of $0.90. QBE gave $0.66, which was justified by saying that it would have been $0.90 but for the write off (amortization) of some goodwill. By then the price increased to $13-$14 (I remembered a drop to $12.70 during the reporting day too when the shocking $0.66 was announced). But what they didn't mention was that the $0.66 already included $250 million of "unrealised gain"; which today turn into $30 million loss.

Today they reported $0.35 EPS ($0.70 full year); which would be okay if the share is priced at $11. But at $17, it has to be doing $1.10 this year and $1.30 next year, else I'm paying a whooping P/E of 24 for a company that is hardly a growth company.

This is on top of a very good year for insurance. which mean they can't justify another crappy result with "blame the tornados/ drought/etc".

What would happen if we got a rougher patch when the best year is only $0.70 EPS? This stock will be priced like a dot.com company P/E wise.

I think the rise has been good. Time to take profit and wait on the sidelines until they stop sucking on reporting day.