Markel - A Game of Inches
Board: IVS Markel
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I don't think you should expect an "awakening" from Markel or short term outperformance either. Markel is the sort of company that, under the guidance of Tom Gayner and Steve Markel, will beat out the market by inches per year over the long term. Those inches are seemingly irrelevant on an inch by inch basis, but through the power of compounding and over the course of time, they can add up to feet, yards and miles.
That's what you're buying Markel for.
Thanks to our own Philip Durell, I've had the chance to listen Tom and Steve speak twice. In my opinion, these two guys may as well be Warren and Charlie. They are value investors through and through, and Markel is in my opinion cut from the same cloth as Berkshire. These are people who are forthright and honest, who are approachable, who speak plainly so that everyone is able to understand what they are saying, and who care about long term returns for shareholders. They truly appreciate the significance of the partnership they share with their shareholders.
I'm not an IV analyst, but if you want to hear why this Fool isn't backing up the truck it's simply that my truck is already so jam packed with Markel that I cannot sanely justify any further allocation to it. I would absolutely buy more today if I had the room for it. As allocations in my portfolio change I expect I will be adding in the future. That's just me - again I don't speak for the newsletter.
You know, I was watching a boxing match recently between Mikey Garcia and Juan Carlos Burgos that I think really speaks to the point I make about inches.
Garcia is a master boxer. A tactician who is incredibly skilled in defense and who slowly and carefully takes advantage of his opponents' weaknesses as he learns them over the course of a fight. What often starts out looking like a competitive fight typically transforms into a total rout that Garcia ends up winning either by spectacular knockout or by a very wide margin in a decision.
The fight with Burgos of the latter form. What appeared to be a competitive fight initially was by the 6th round firmly a Mikey Garcia fight and by the 12th totally dominated by Garcia. The HBO announcers made a point of discussing how they had no idea how this came about. There was no single thing that Garcia did to turn the fight into his favor, and neither was there some mistake that Burgos made.
It was just a question of inches. Little things over the course of the fight that added up to a huge difference in the long run. Every punch thrown, every parry and every footstep over the course of every round.
That's how Markel will outperform for you. You just have to watch the whole fight.