The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Wagner: Slow-moving climate risk creates mispricings against volatile annual reinsurance swings
“Year to year, you don't have big changes in the risk of a large hurricane. Over 10 years, 20 years you do, which is kind of what we've seen, but it's a slow moving increase in risk. That's what's fascinating to us is because you can have these year to year cha…”
Wagner: Finepoint buys Asian derivatives at 80% discount due to pod shorting
“So we actually have recently found a derivative in an Asian market That we're buying for 10 to 20% of what we think it's worth, so 80 to 90% discount, and it's solely the result of the fact that there's a market in Asia that has such a large demand to be short…”
Wagner: Over 90% of the Japanese stock market is passively managed
“I'd never been able to exactly quantify this number. I think over 90% of the market is passively managed. There's very, very few fundamental bottoms up investors in Japan.”
Wagner: Finepoint Capital holds over a majority of its assets in Japan
“If you would have said to me, hey, Herb, when you started FinePoint, what's the chance that you're going to have Over a majority of your assets in Japan, I would have said you're crazy. And here we are.”
Wagner: Cheap value investing fails because tech disruption accelerates business decline
“One of the reasons that value investors have underperformed in the last 10 years is that
There's a lot of technological disruption that's taking place, and it takes place faster than it used to.
When we underwrite a mediocre business and we project out cash fl…”
Wagner: Finepoint analysts do not have individual P&Ls
“Nobody has their own P&Ls here. Everyone is really aligned to find the best investments.”
Wagner: Finepoint passed on distressed Chinese property developers
“Also take, for example, when the Chinese property developers all blew up, when Evergrande blew up back in 2023, we spent a lot of time trying to figure out, could we understand the risk? We ultimately decided we couldn't because so much of it was dependent upo…”
Wagner: Reinsurance pricing varies dramatically across structures due to market opacity
“The way that it's priced across different structures, vehicles, and different markets is dramatically different. So actually, one of the hardest parts about reinsurance is just sourcing the risk. It's an opaque market. It's a lot of bilateral contracts.”
Wagner: Finepoint avoids emerging markets due to sovereign and macro risks
“One of the areas that we have gravitated away from over the years is take emerging markets, for example. So the sovereign risk, the macro risk often are the most important risk in any asset you're looking at in a specific emerging market. We don't think we're …”
Wagner: Japanese corporates and households are net cash, offsetting sovereign debt
“So the Japan sovereign leverage is high, but net of the central bank is actually manageable. The banking system is well capitalized now. Corporates in Japan And then households, they're all net cash.”
Wagner: Finepoint shifted from buying cheap assets to requiring catalysts
“We ended up pivoting a number of years ago
We don't want to be dependent upon what the market tells us something is worth, and that's why a lot of what we do is catalyzed.
So that was one of the big huge change that I made in my investing style, probably start…”
Wagner: Finepoint hedges all non-dollar exposures back to US dollars
“Since we're fundamental investors, we hedge currency, commodity, and interest rates at the investment level. So for example, we hedge the yen. We don't have a view on the yen dollar. We think about ourselves as being dollar investors. So we hedge anything that…”