I recently created an article explaining the rationals behind a purchase of HomeOwners Choice (HCII). While my analysis would be great to back off prefered shares, it was missing important information in analysing an insurance company. I made the #1 mistake in investment : invest in what you know. I did not understood insurance industry back then and I’m barely better now.
I still think Homeowners is not a bad choice of investment, but it is a lot riskier than I originally thought.
You may read Frank’s article here.
Disclosure : Author has a position in HCII but may liquidate in the next 72 hours.