Markel et al. Advantages
Someone over at Kiplinger agrees with me 🙂 that Markel (MKL) is a little like a mutual fund, but better.
You can think of Berkshire, Markel and Alleghany as a little like well run mutual funds. But for people who invest in taxable accounts, these diversified financial companies offer a big advantage over funds.
Funds must distribute net realized taxable gains to shareholders. They will be distributing billions of dollars in these gains to millions of shareholders come December. Structured as holding companies, corporations like Berkshire Hathaway and Alleghany are not required to distribute capital gains.
So, this type of companies is perfect for buy-and-holding in taxable accounts. I also like that they don’t pay any dividends. Dealing with American div’s is such a pain: there’s usually not much of them but they still still have to be declared; plus a portion is withdrawn before payout in favor of Uncle Sam.