Subject: Re: Diversifying away from Berkshire
From reading this board and its predecessor, the names I keep coming back to are Brookfield (BN and BAM) and Markel. Would these be as good as any for what I want to do?

The reason these names keep coming up in relation to Berkshire is a degrees-of-separation thing. Markel's co-CEO and longtime chief investment officer, Tom Gayner, is explicitly a Warren Buffett disciple. For years, they've held an annual brunch for investors in Omaha on the heels of Berkshire's annual meeting.

A number of companies used to be identified as mini-Berkshires. Leucadia was one, before it got taken out by Jefferies, an investment bank. Fairfax was another, but Prem Watsa's high-concentration bets seemed to diverge from Rule No. 1. Markel is maybe the lone survivor in the category because Gayner continues to emulate Berkshire on a much smaller scale.

The one thing that distinguishes them is the number of names in the equity portfolio. Markel holds more than 100 names consistently. Berkshire is the only holding that exceeds 10%. It is more like a mutual fund than Berkshire's equity portfolio, particularly before Ted and Todd extended the list with (relatively) minor investments. It is difficult to imagine any single Markel holding providing the enormous gains Berkshire has earned from Coke or American Express or Apple.

BAM is two degrees away with Gayner as the connector. It is Markel's second-largest holding and Gayner has often said he likes that they apply a value sensibility to a global investment operation. Once or twice a year someone will call it the Berkshire of Canada.

Brookfield is only just beginning to emulate Berkshire in one important way: It is launching an insurance operation. Unlike traditional property and casualty insurance, or Markel's specialty insurance, Brookfield envisions basically a conservative arbitrage play in which it takes on annuity and annuity-like obligations, covers them with predictable income streams from its utility-like infrastructure, renewable energy, credit and real estate portfolios, and pockets the difference.

Unlike Berkshire, it has a rapidly-growing business investing other people's money in exchange for fees, a business that has thrived during a decade of record-low interest rates. How the future treats such private equity businesses generally is apparently in some doubt, as Mr. Market's treatment of alternative asset managers generally currently suggests.

I own them both and have confidence in both management teams. They resemble Berkshire in terms of the value sensibility at the top, but they are distinct in important ways. Berkshire, as readers of this board know well, is unique.