Everybody loves a good Warren Buffett quote. But the man can only say so much.
Lucky for us, the Berkshire Hathaway Chairman and CEO has inspired countless investors and operators to heed his advice and coin their own memorable quips.
One of those investors is the CIO at Markel (NYSE:MKL), Tom Gayner. Like Berkshire, Markel prides itself on writing profitable insurance and skillfully investing the firm's capital with a penchant for Buffett-like stock picks.
The company has been wildly successful with this approach -- growing book value per share 1,750% over the past 20 years, or 15% annually. For comparison, Berkshire has compounded book value per share at an annual rate of roughly 14% over that time period (to be fair, Berkshire's equity base was 70 times the size of Markel's 20 years ago).
Gayner hasn't been at Markel for that entire run, but his temperament and wisdom have further bolstered the firm's sterling repuation. Here's are five nuggets of truth from Gayner from a speech back in 2008.
1. On management
Make sure that the people running the company, your partners, have equal measures of both talent and integrity, one without the other is useless.
Liquidity is a little bit like oxygen. We need it for the very breath of life itself; however, if our atmosphere was nothing but oxygen. we would blow ourselves to smithereens just from... trying to light a cigarette.
The worst kind of business in the world is one that doesn't make very good returns on capital, but needs more of it all the time -- we call those airlines.
While they are all hugely important items, they're out of our control and not dependably predictable.
The way I define a fair price is one that allows me, as an outside shareholder, to earn the same sort of return that the business itself earns intrinsically.