Author Topic: MKL - Markel Corp  (Read 313581 times)

obtuse_investor

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Re: MKL - Markel Corp
« Reply #760 on: March 23, 2020, 04:54:47 PM »
insurance
[inˈSHo͝orəns]
NOUN

Business that takes your money when you are doing fine and does not pay out when you are not.

Hah! That's why it is better to take the other side of that trade-- own insurance companies.
Value Investor who manages his personal portfolio with a 25-45 year time horizon | @obtuse_investor


obtuse_investor

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Re: MKL - Markel Corp
« Reply #761 on: March 23, 2020, 05:01:57 PM »
Markel is now selling at similar valuation as Berkshire. https://twitter.com/beowulfcapital/status/1241303626670374913?s=21

If you wanted to start buying more of these two, which one would you choose?

I currently own both (about equal amounts). I am thinking to pick Markel because of longer runway and a much younger company.

There are couple issues with Markel vs BRK:
- Markel's fully owned business part is much smaller and lower quality than BRK's.
- With low/zero/negative interest rates, fixed income from (re)insurance is low and float is not worth a lot.
- (Re)insurance has had weak pricing. This may change, but overall (re)insurance returns have been weak.

Personally, I'd probably rather buy a stock portfolio via good mutual fund rather than buy MKL that's a stock portfolio + (re)insurance and fixed income.

I'm not as positive on BRK as a lot of people are either. Like you said, the size is an issue. There are other issues (Buffett's age, conservatism, portfolio composition, etc.).

I would not be surprised if BRK and MKL won't outperform the index long term coming out of the crisis.

Disclosure: I hold BRK position. I have sold most of MKL position. I don't plan to buy MKL. I may add to BRK for the conservative side of my portfolio. I may be totally wrong about everything above.

Thanks for your perspective, Jurgis.

I find that both these businesses are rather anti-fragile. That is, they get stronger when put under stress. There is no shortage of stress these days. Berkshire gets stronger in large bursts (thanks to Warren's elephant gun), while Markel gets stronger in a slow methodical manner (thanks to Ventures, new business like ILS, algorithmic investing of equity portfolio).

I ran a twitter poll for the same question: https://twitter.com/obtuse_investor/status/1241752856170037248?s=20
FWIW, BRK.B 60%; MKL 20%; Both: 20%
Value Investor who manages his personal portfolio with a 25-45 year time horizon | @obtuse_investor