Portfolio Change - 04/18/2023

As noted in this morning’s write-up, I’ve decided to increase my allocation to Markel (MKL). This research gave me a renewed appreciation for the quality of their businesses and their management team, while also developing a clearer line of sight to stronger results at ILS, Ventures, and Reinsurance. Simply put, I respect what Markel has accomplished and I trust this team will continue to be thoughtful and effective operators / capital allocators over time.

As an aside, it’s worth considering how rarely an idea like (deserved) trust is discussed in Wall Street analyst reports. As it relates to a metric like 2023e earnings, I don’t think trustworthiness is particularly relevant to the analysis (if anything, you could argue less reputable managers who are willing to play games with the numbers are more likely to meet / beat short-term earnings estimates). As with many things in investing, the key factors to consider are influenced by your investment philosophy, your time horizon, and so on.

As a long-term investor, I think that deserved trust in management’s abilities and integrity is hugely important (their historic track record, words / actions during difficult periods, and aligned incentives are key signals). That wasn’t the only consideration for this investment decision, but it was a major one.

This was the portfolio allocation as of Monday’s close: