Markel 3Q16 Earnings Call Notes

Markel (MKL) Q3 2016 Results
Thomas S. Gayner

We’ve beaten the index for three decades and indexes aren’t that passive anyways

“As headline after headline proclaims these days, active management has a tough time outperforming passive approaches like indexing. Our three decades of outperformance stands in ongoing contrast to those headlines though. Additionally, our costs are so low that we really wouldn’t pick up any cost savings by switching the index. Also, indexes are not as passive as you think. Turnover within an index causes taxes to be incurred, while we also regularly realized gainings over the years on our equity holdings.”

It remains a sellers market out there in Markel ventures

“We continue to look for additional opportunities to grow our Markel Ventures operations, but it remains a sellers’ market out there and we remain disciplined in the prices we are willing to pay for acquisitions. Our reputation at Markel Ventures continues to grow along with our success, and we are seeing interesting opportunities that we would’ve never seen in prior years. We’re hard at work meeting people and reviewing opportunities, and I have every confidence that we will find appropriate opportunities to continue to build value as time goes by.

Been changes in the way that healthcare is delivered

” there has been tremendous change. I think, as everybody’s aware in just sort of how healthcare is being delivered, the smaller practices, the two, three, four doctors, they’ve been forming bigger practices, been joining hospital groups, so the landscape has changed.”