Friday File: Multiple Expansion and Contraction, Interest Rates for Insurance Companies, and a New Royalty Buy

We’ll start today with something a little bit out of left field — I saw this interesting semi-rumor on Twitter/X about Arch Capital (ACGL) maybe being bought by Chubb (CB)….

We haven’t teased a juicy jet sighting in a while. I think we got a good one coming on Monday.

Involves two very well-known figures and two planes overlapping.

Not sure this is a perfect pairing but it is in the right ballpark.

Hope it holds.

— don bilson (@dkbilson) July 11, 2025

Chubb and Arch is what we had in mind. $ACGL has been out in Bozeman. Evan’s G650 flew to Omaha last week. 10-1 he was there to run this by his 7% holder. $CB$ACGL https://t.co/2mSMZRQ3o6

— don bilson (@dkbilson) July 14, 2025

I wouldn’t give this a very high probability, but one never knows.  Berkshire Hathaway (BRK-B) and Chubb are among the largest global insurance companies, and Berkshire does own about 7% of Chubb, making them the largest non-index-fund shareholder (Vanguard and Blackrock and the gang each own 6-8%, primarily in index funds), so it would make sense for Greenberg to meet with Berkshire for lots of reasons… though it’s also true that many of the big insurance companies have large operations in Omaha, which also hosts a couple large mutual or nonprofit insurance companies (including Woodmen and Mutual of Omaha), and Chubb does also have employees in that city.  Could easily just be a little wisp of smoke, no fire, but it’s still interesting — the last time the private flight trackers got excited about goings on in Omaha (other than at annual meeting time, when dozens of private jets descent on the city), was when Vicki Holub was flying in to pitch Warren on Occidental’s (OXY) acquisition of Anadarko back in 2019.  Which was a fun tale, but not exactly a success story for Berkshire shareholders — at least so far.

I do continue to keep an eye on Arch Capital — they are drifting lower of late, and I think it’s mostly because investors are a bit worried about their large mortgage insurance business (selling PMI to folks to backstop mortgages when buyers don’t have a 20% down payment).  That’s effectively a printing press of a business when all is going well, but, as we saw back in the 2006-2008 housing collapse, it contains the …