For those of you interested in purchasing Berkshire Hathaway stock (BRKA) A shares and (BRKB) B shares which trade at $111500 and $3710 respectively, but do not want to pay the price, here are 3 companies that operate in the same fashion as Berkshire Hathaway hence the title. Markel (MKL), Fairfax (FFH), and Alleghany Corp. (Y) all 3 are insurance companies just like Berkshire. They take the insurance float and invest it in common stock or buy the whole company. All 3 have a portfolio of businesses ranging from railroads to pharmaceuticals with Markel having the most diversified portfolio. All have very competent management in place. All take a value approach to investing. These companies are not in the limelight like Apple(AAPL), Google(GOOG) or Research in Motion(RIMM), so you are probably not familiar but all 3 have prodded along allocating capital (insurance float) into new businesses. It has even been rumored in certain circles that Tom Gayner the Chief Investment Officer of Markel could be in line to run Berkshire. All 3 trade in the triple digits MKL $315, FFH $285, Y $275, but keep in mind folks the price does not have anything to do with the valuation of the underlying business.
I hope this article was some what informative.
STOCKMANMARC
Are any of these companies you have looked into personally?
ReplyDeleteI've heard of Fairfax but never bothered to go deeper.
Oh and I can seem to enter my name and URL in the comments.
cheers,
www.oldschoolvalue.com
Jae, (oldschoolvalue)
ReplyDeleteYes, I have done some research on them. Checkout one of my other post on Fairfax(FFH). Maybe I'll write up something later on Markel(MKL) and Alleghany(Y). Markel has a prety good stake in Berkshire and is pretty diverse in it's equity portfolio, while Alleghany has a stake in Burlington Railroad representing 25% of its holdings, however they bought BNI way before Buffet gave it his seal of approval, so they have some nice capital appreciation.