For people looking for similar to Berkshire Hathaway, I suggest Markel (MKL). It’s like a little baby Berkshire with a stock price in the three digit range. Actually when you purchase this stock you are purchasing Berkshire Hathaway since the fund invests heavily on good stocks. The CEO follows the value investing theories of Warren Buffett and Benjamin Graham. The price is at $353 which is close to the 5-year low. At this price, it is a definite bargain and it won’t be there for too long.
What does Markel do? They are a insurance company, but they do ‘niche’ insurance. You won’t find them providing insurance for automobiles or health care. They insure weird stuff like derby horses, commercial buildings against disasters (hurricanes, earthquakes), high-value motorcycles, personal watercraft, airplanes, and even energy-producing activities.
If you look at the stock price, you’ll notice a huge drop in 2008. There was the immediate effect of wall street that brought the price down. In addition, there was the losses from insuring the buildings covered against the Hurricane Ike and Gustav. However, it still managed to pull off a profit for 2009. The secret sauce is lots of the company is just like Berkshire. They invest in other companies.
Tom Gayner, Chief Information Officer, follows the Warren Buffet philosophy. He looks for companies that are long-term profitable, high return on equity, and a low stock price. About $1.3 billion of the company consists of a large portfolio of big name stocks – 3M Co. (MMM), Abbott Laboratories (ABT), Campbell Soup Co. (CPB), The Walt Disney Co. (DIS), General Electric Co. (GE), International Business Machines Corp. (IBM), PepsiCo Inc. (PEP), The Procter & Gamble Co. (PG), and Wal-Mart Stores Inc. (WMT). Markel’s largest holding is probably Berkshire Hathaway (898 Class A shares valued at about $91 million and 31,418 Class B shares, worth about $106 million). With a market cap is $3.46 billion, their stock portfolio makes up a huge source of their business.
For those that are looking to buy long-term stocks , Markel might be a good one to look at. You don’t need to do the research of individually picking the stocks. You got a financially savvy stock guru that holds billions of dollars to back up your investment. If you read their latest 4th quarter report, Gayner states that his company is ready to handle the rising inflation. He’s prepared for the future and I’m willing to bet some money to agree with that.
