Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of reinsurer Flagstone Reinsurance (NYSE: FSR) continue to get the boot from investors, falling as much as 10% earlier in the trading session before recovering half of their daily loss.

So what: Now is a very poor time to be in the insurance and reinsurance business, and it's especially hard for Flagstone. The company pegged losses at $60 million to $90 million in the quake-ravaged region of New Zealand and it has sizable policies underwritten in Japan.

Now what: It's clearly too early to tell what the company's overall exposure and loss will be from the Japan earthquake and tsunami. What I do know is the stock market doesn't like uncertainty and Flagstone isn't large enough to have the financial flexibility to deal with a very large potential loss. Very few reinsurers will escape this disaster without a substantial loss, but if you are looking at the sector for potential values, considering passing over Flagstone in favor of Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B). Its global reinsurance unit, General Re, does have exposure to the disaster in Japan, but it may be weeks before we have a damage estimate. And Berkshire is a behemoth with more than enough business diversity and financial backing to make it through this crisis with minimal impact to its stock price.

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Fool contributor Sean Williams does not own shares in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong.

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