I received an extraordinary offer from a UK website, a chance to win an award as a top quality newsletter by paying a mere £4000 for the “honour”. Global-Investing.com does land a few real kudos, most recently from The Investor’s Digest of Canada (a publication of MPL Communications of Toronto) and Wall Streets Best Income Stocks (a blog from Cabot Corp. of Massachusetts). Both came as a result of stock picks doing well in 2016. We do not pay for praise. The best praise of all comes from our happy subscribers whose letters are posted under “kudos” on the www.global-investing.com website. My newsletter is a hobby for me and I just closed the accounts for 2016 showing that my company lost a few thousand dollars last year. I wouldn’t go on but for the fact that I make money with my stock picking, alongside my readers. Without them I would not have the access I need to get analysts and companies to talk to me.

Friday we had good macro-economic news in the US and Europe. US unemployment fell to 246m, nicely below forecasts. Non-agricultural production beat forecasts rising by 1.3% in Q4. These numbers came before Pres. Trump did anything. In Europe producer prices rose 0.7% in Dec, higher than expected.

And the UN, five countries (Britain, France, Germany, China, and Japan) set new sanctions on Iran for its missile test last week—under the terms of the treaty which the US now threatens to tear up. We have a company which reported after the close Thursday and news from the Dutch Antilles, Canada, Brazil, Mexico, Bermuda, Finland, Britain, Germany, and a few other places. Readers may have noticed that of late I am writing more about daily stock price movements. This results from a different presentation at E-trade, my brokerage, about which I am not altogether pleased. While it wants to generate lots of day-trading which pays off for your broker, we are really buy and hold folks.

*Validus Holdings (VR) reported a drastic drop in net income for the final quarter of 2016, $7.8 mn or 10¢/sh vs prior year’s Q4 $69 mn or 81¢/sh. Full year income came to $319.2 mn or $3.88/sh vs $409.7 mn or $4.74 the year before. It is a Bermuda reinsurance company which for a fee takes onto its own books risks from crop insurers, life, and P&C insurance companies.

Operating income dropped by a third to $105.4 m in the quarter and by nearly a quarter to $319.2 mn for the year. The quarterly return on equity was 6.9% this year compared to 11.6% last, and the annual was 9.7% compared to 10.3% for 2015. Net operating return on equity was 6.9% this Q4 and 11.6% last and for the full year 8.6% compared to 11.3%.

VR CEO Ed Noonan stated that “Validus had another strong year. Despite the global insurance market growing more competitive, we were able to deliver an 84.2% combined ratio and grow our book value per diluted share (including dividends) by 9.5%. We continue to position [VR] to weather the soft market while building the foundation to capitalize on better conditions down the road.” 

Insurance metrics being weird, I sought comment from our contributor, Harry Geisel, MBA. He wrote: “The 80¢ beat expectations and the shares hit an all-time high. For the year, the combined ratio was 84.2 vs 79.7 in 2015. Lower is better.

“Why the enthusiasm? Because the insurance business is bad right now as premiums keep falling and interest rates are low. Validus continues to do better than anyone else.” He will report more from the conference call on Monday if CEO Noonan gives away any secrets. The stock is down fractionally.