Followers | 241 |
Posts | 12150 |
Boards Moderated | 3 |
Alias Born | 04/05/2009 |
Thursday, July 02, 2015 4:03:47 PM
Earlier this month, a crowd filled an auditorium to attend a corporate annual meeting at which a folksy investor spoke about his company and the secrets of success. But they weren’t in Omaha to hear Warren Buffett talking about Berkshire Hathaway; this crowd came to the Altria Theater in Richmond, Va., for the annual meeting of Markel Corp.
One of the speakers, Thomas Gayner, co-president and chief investment officer of the financial-holding company, has an outstanding record as a portfolio manager. He works only for Markel and doesn’t take outside clients, but every investor can learn from him.
Over the past 15 years, Mr. Gayner’s stocks have returned an average of 11.3% annually, while the S&P 500 index of big U.S. stocks has returned 4.2%, counting dividends. Last year, when winning portfolio managers were scarcer than vegetarians at a pig roast, Mr. Gayner outperformed the S&P 500 by 4.9 percentage points. His portfolio fell 34% in the market rout of 2008, but that was better than the S&P 500’s 37% loss.
You never would know any of this from listening to Mr. Gayner. After a good year, most portfolio managers beat their chests even harder than they beat the market; Mr. Gayner’s 2014 report merely said, “our overall equity portfolio earned 18.6%,” without even mentioning that the S&P 500 was up 13.7%.
Several of Mr. Gayner’s peers describe him as a good investor who has become great by knowing he is just good. He is no Warren Buffett, and he is keenly aware of his limitations. “I tell investors, ’You’re smarter than I am, but I’m managing your money,’” Mr. Gayner says. “‘If you see me doing something I shouldn’t be, tell me.’”
But he also makes the most of his strengths.
Markel’s costs are so low that he can manage its $4.5 billion stock portfolio for less than 0.01% in annual expenses, about one-70th the cost of the average U.S. stock mutual fund.
Mr. Gayner, 53 years old, worked as an accountant, a stockbroker and an equity analyst before joining Markel in 1990. He looks for profitable businesses with low debt, good management, plenty of opportunities to reinvest future profits and reasonably cheap stock.
He says, “I think as hard as I can about what I would do if this was my own money and even if it was all the money I ever will have.” Adds Mr. Gayner: “Sometimes that means hanging on even longer than you might otherwise.”
According to Mr. Gayner, Markel’s insurance operations are so consistently profitable that cash has flowed into his portfolio every single month since he joined the company in 1990. Unlike most mutual-fund or hedge-fund managers, he has been able to add to his favorite holdings whenever he wishes; any individual investor who is a net saver, Mr. Gayner says, shares the same advantage.
Markel doesn’t hold “analyst days” or provide “guidance” on future earnings. So the company attracts investors who tend to hold the stock for years at a time, which, in turn, frees Mr. Gayner from the pressure to beat the market over the short run or to shadow the S&P 500.
So he can bet big. His 10 largest stockholdings total 45% of the portfolio; at the average U.S. stock fund, according to Morningstar, the 10 biggest positions account for just under 30%.
He lets his winners run. At Markel’s full 35% tax rate, “if I sell, I have to invest the proceeds, and I’m reinvesting 65-cent dollars,” Mr. Gayner points out. “That makes the hurdle for switching a lot higher.”
He has owned Berkshire Hathaway, now approximately 11% of Markel’s stock portfolio, for a quarter-century and CarMax (9% of the portfolio), Brookfield Asset Management (4%), Walt Disney Co.(4%) and Marriott International (3%) for at least 15 years apiece.
“If you stumble on something that really compounds in value for decades, it can make all the difference,” he says. “The things you were right about become more and more important as time goes by, while the things you were wrong about become less and less important.”
The economist Paul Samuelson once said that there is “only one place to make money in the mutual-fund business—as there is only one place for a temperate man in a saloon—behind the bar and not in front of it…so I invested in a [fund] management company.” Mr. Gayner also likes to invest in such companies. He owns, among others, BlackRock, Federated Investors, Oaktree Capital Group and T. Rowe Price Group.
Many of Mr. Gayner’s roughly 90 other positions are tiny, including Rush Enterprises, an operator of truck dealerships, in which Markel holds less than a $300,000 position. “I think about something more if I own a little of it than if I own none of it,” he says. “I’m scattering seeds, seeing which become seedlings.”
Instead of trying to mimic the inimitable brilliance of Mr. Buffett, maybe more investors should emulate the common sense and patience of Mr. Gayner.
http://blogs.wsj.com/moneybeat/2015/05/22/like-buffett-another-folksy-investor-turns-patience-into-profit/
"Someone said it takes 30 years to be an instant success" - Gabriel Barbier-Mueller, CEO of Harwood International
Recent MKL News
- Markel appoints April Tam as Senior Underwriter, PFR & Cyber and Head of Financial Institutions, Asia • PR Newswire (Canada) • 09/19/2024 01:00:00 AM
- Markel appoints April Tam as Senior Underwriter, PFR & Cyber and Head of Financial Institutions, Asia • PR Newswire (US) • 09/19/2024 01:00:00 AM
- Markel appoints April Tam as Senior Underwriter, PFR & Cyber and Head of Financial Institutions, Asia • PR Newswire (US) • 09/19/2024 01:00:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/16/2024 08:33:25 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/16/2024 08:31:25 PM
- Markel launches FintechRisk+ to offer enhanced cyber coverage and support services for fintechs • PR Newswire (US) • 09/10/2024 09:32:00 AM
- Markel launches FintechRisk+ to offer enhanced cyber coverage and support services for fintechs • PR Newswire (Canada) • 09/10/2024 09:30:00 AM
- Markel launches FintechRisk+ to offer enhanced cyber coverage and support services for fintechs • PR Newswire (US) • 09/10/2024 09:30:00 AM
- Jamie Mullarkey named Markel's Global Executive Underwriting Officer for Property and First Party Lines • PR Newswire (US) • 09/04/2024 08:30:00 PM
- Jamie Mullarkey named Markel's Global Executive Underwriting Officer for Property and First Party Lines • PR Newswire (Canada) • 09/04/2024 08:30:00 PM
- Jamie Mullarkey named Markel's Global Executive Underwriting Officer for Property and First Party Lines • PR Newswire (US) • 09/04/2024 08:30:00 PM
- Markel appoints Rhys O'Neill as Senior Underwriter, Marine & Energy Liability in International Specialty • PR Newswire (Canada) • 09/03/2024 09:30:00 AM
- Markel appoints Rhys O'Neill as Senior Underwriter, Marine & Energy Liability in International Specialty • PR Newswire (US) • 09/03/2024 09:30:00 AM
- Markel appoints Rhys O'Neill as Senior Underwriter, Marine & Energy Liability in International Specialty • PR Newswire (US) • 09/03/2024 09:30:00 AM
- SageSure Collaborates with Markel to Introduce New Capacity to Expanded Markets Program • Business Wire • 08/27/2024 12:00:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/19/2024 08:44:14 PM
- Markel appoints Grant Smith to lead its Marine & Energy Liability team in International Specialty • PR Newswire (Canada) • 08/15/2024 07:00:00 AM
- Markel appoints Grant Smith to lead its Marine & Energy Liability team in International Specialty • PR Newswire (US) • 08/15/2024 07:00:00 AM
- Markel appoints Grant Smith to lead its Marine & Energy Liability team in International Specialty • PR Newswire (US) • 08/15/2024 07:00:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/06/2024 08:33:01 PM
- Markel boosts International Casualty team with key appointments • PR Newswire (US) • 08/06/2024 09:00:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/05/2024 08:36:58 PM
- Markel enhances Singapore and Hong Kong presence with strategic hires • PR Newswire (Canada) • 08/05/2024 01:00:00 AM
- Markel enhances Singapore and Hong Kong presence with strategic hires • PR Newswire (US) • 08/05/2024 01:00:00 AM
- Markel enhances Singapore and Hong Kong presence with strategic hires • PR Newswire (US) • 08/05/2024 01:00:00 AM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM