Reuben Gregg Brewer, The Motley Fool
5 min read
In This Article:
-
Markel Group uses an investment approach similar to Berkshire Hathaway's.
-
Markel Group is dramatically smaller than Berkshire Hathaway.
-
With Warren Buffett retiring, investors may want to take a second look at this Berkshire wannabe.
Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is one of the most successful companies in modern history. Its CEO, Warren Buffett, is a Wall Street legend who has been given the nickname "the Oracle of Omaha." If you are an investor, it's highly likely that you know all about Buffett and the company he runs. But do you know about Markel Group (NYSE: MKL)?
Because of its large insurance operations, Berkshire Hathaway usually gets placed in the finance sector. That's not a bad classification for the company, but it doesn't do justice to the business at all. That's because Berkshire Hathaway is actually a widely diversified conglomerate. The collection of businesses under the Berkshire Hathaway umbrella ranges from auto sales to retail to specialty parts manufacturing. And it has a whole lot in between -- its list of subsidiaries includes over 180 companies.
Even the insurance operations are used in a slightly different manner than they are at most other insurers. The float, which arises because insurance premiums get paid up front while claims get paid in the future, is used to buy stocks like Coca-Cola, American Express, and Chevron. The diversity in the list of stock investments is just as wide as the diversity in Berkshire Hathaway's owned businesses.
Investors buying Berkshire Hathaway are really investing alongside Warren Buffett. But at the end of 2025, Buffett is retiring from the $1 trillion market cap company he basically created via his unique investment approach. His hand-picked successor, Greg Abel, will likely continue to use a similar approach to that of his mentor Buffett, buying well-run companies while they are attractively priced and then holding on for the long term to benefit from the business' growth over time. But there's no question that Berkshire Hathaway won't be exactly the same in the future as it has been in the past.
Markel Group, with a market cap of around $25 billion, is a much smaller business than Berkshire Hathaway. But it doesn't pull any punches when it describes its business, making frequent references to Berkshire Hathaway. It also uses the same exact model, of an insurance company that directly owns companies and invests in publicly traded stocks (including Home Depot, Visa, and Deere).
