Chubb Stock Soars to New Peak. Here's Why I'm Doubling Down

If you're looking for a stock that can protect your portfolio during a downturn but still beat the market in the long term, look no further than Chubb (NYSE: CB). The more you dig into this company, the more there is to love. Few businesses can match Chubb's multi-decade stability. And there's a famous investor who just bet billions on its stock.

It's wise to pay close attention to which stocks Warren Buffett is buying. Last last year, the Securities and Exchange Commission (SEC) granted Buffett an exemption to its disclosure rules, allowing his holding company to acquire a large stake in a financial company without tipping the market off to the specific company in question. A few months ago, it was revealed that the business was none other than Chubb, the largest publicly traded property and casualty insurance provider in the world. Right now, Buffett's stake is worth around $7 billion.

It's easy to see why Buffett likes this company so much. Berkshire Hathaway, Buffett's holding company, owns several large insurance operations. These insurers write a bunch of policies, earning policy premiums in return. Because premiums are paid up front, with this capital only paid out later in the event of a claim, the insurance business essentially gets to keep the capital for months or years at zero interest.

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Source Fool.com