Long-Term Investing

Markel (MKL)

Just posted that stock watchlist, but I feel like I’m lying to myself. I’ve been wanting to buy MKL for almost a year now. I started watching them since around $450.

This is the company that is supposedly the next Berkshire Hathaway, according to the Motley Fool. The similarities are:
– MKL is in the insurance business (in highly specialized area of it, where they command a higher premium)
– they’ve never split the stock, that’s why it’s now at around $500/share
– they pay no dividend (I wonder why Yahoo lists a dividend? They don’t pay one)
– apparently MKL is run by a guru-type of investor similar to Buffett, and they even played chess together (don’t quote me on this one)

Like Berkshire and any other insurance company, they make money by collecting premiums and investing these funds, in the hope to get a return that will be higher than the amount of claims that’s made down the road.

Their investments are pretty diversified, so buying their stock is almost like buying a mutual fund, but without the management fees. A sample of the companies they invest in: GE, MAR, MMM, AIG, SCHW.

The stock has a very low beta which is really attractive to me right now. I’ve been morally hurt by juniors ๐Ÿ™‚ . Also I’d like to have an investment where I can buy-and-forget it until it makes me very rich some day ๐Ÿ™‚ . The mental block I have is the fact that I can only buy a few shares, very few.

On the other hand, because the stock went up 11-12% since I started watching it, this reminds me of when people had a chance to buy BRK.B around $2,500-3,000 but thought it was too expensive. All they have now is the tale of the missed opportunity.

So this is the decision I have to make – buy around 40 shares of ING or MCD, or 4 shares of MKL.