Say No To Trading
Public Markets Investor, Opportunistic Buying & Cost-Basis Management
Progressive is winning share by avoiding unprofitable, hostile states. Its marketing budget over the last couple of years has focused on non-hostile states, hurting Geico and State Farm. State Farm's apparent balance-sheet strength deserves scrutiny, including how it allocates reserves among subsidiaries and its property exposure such as California homeowners. This answers a post the author replies to, which said State Farm's net worth far exceeds Progressive's. x.comÂ
Progressive has quietly become the largest US auto insurer, a shift many missed while AI overshadowed boring businesses, and it remains a favorite stock. It dethroned State Farm this year after 84 years; State Farm's weak balance sheet cannot compete with Progressive and Geico. Progressive trades near 10x earnings versus a 30-year median above 15, and its one-time annual dividends, paid often but not every year, equal about 6% today. Self-driving is no new threat; complex cars cost more to fix. x.com x.comÂ
AI agents pushing more drivers to shop their auto insurance favor Progressive and hurt Allstate, so the two should not trade as one consumer-inertia package. Per JD Power/TransUnion, 12.6% of drivers shopped in Q2 and 4.5% switched; the roughly 87% who never shop fund a loyalty tax of renewals priced above new-customer rates. JD Power found shoppers using AI tools over 1.3x likelier to switch. Progressive's direct book, built for price shoppers, grew 14% to 16.0M policies in 2025. x.comÂ
Progressive's durable AI-era edges would be proprietary data for pricing risk and underwriting discipline, since AI also brings real risks to insurers. Autonomous vehicles could cut accidents and policy prices; widely available AI could intensify competition and, at pricing-accuracy parity, spark a race to the bottom. More accurate pricing shrinks premiums and float, cutting investment income, and agentic shopping eases price comparison. Progressive trades at about 10x GAAP net income. x.comÂ
Self-driving cars give Root and Lemonade no edge, because if accidents fall, everyone benefits and insurers charge less, so the whole auto insurance industry shrinks. On the surface the risk looks like self-driving's threat to Uber, but the mechanics are completely different, and insurance companies are not attractive to own in general. The view is offered tentatively, as a non-expert. x.com x.comÂ
Berkshire Hathaway is worth accumulating because its insurance float and $324.9B Treasury bill pile pay it to wait for an opportunity, so higher rates bring income and leverage over whoever runs out of cash first. It passes the Second Paycheck Test at unmatched scale, with $177.5B of float. Rate gains alone are small, about $642M after tax per quarter point, and GEICO's underwriting profit fell 45%. Management bought about $4.5B of stock near 1.4x book; at 1.48x, accumulate, don't chase. x.com … Show more
These 12 stocks are quality compounders sharing pricing power, recurring demand, strong returns on capital and disciplined management. Domino's earns royalties, AutoZone serves an aging fleet, Progressive underwrites with data, Waste Management owns routes and landfills, Grainger is embedded in operations, S&P Global and FICO are mission-critical, Rollins has recurring pest control, Copart an auction network, Visa a fee network, HEICO niche aerospace parts, Costco loyal members. x.com x.com … Show more
