In the latest Q3 conference call, he talks about the whims of the market and his team's continued focus on value.
I would like to add a bit of perspective that comes from a slightly longer time horizon than we have all become accustomed to in our fast paced world. At Markel, we cannot control what the stock market thinks of us, and what value or multiple the market assigns to our balance sheet and the future prospects. All we can control is our effort to do our best in building the book value per share of the Markel Corporation.
His long term perspective is comforting.
We didn't foresee $4 a gallon gasoline, the sub-prime mortgage debacle, the housing crisis, the Madoff Ponzi scheme, any of the other Ponzi schemes or any of the other hugely important macroeconomic events that subsequently occurred. We also did not know that at Markel we would restructure our insurance operations and face a government backed entity as our largest competitor.
He is talking about AIG, no doubt. He goes on...
If someone had told us that these bad things were going to happen, and we knew it with 100% certainty that their forecast was correct, we probably would've hunkered down, became very defensive and ultraconservative in our dealings and made very little money during the last five years. As it turns out, without that knowledge we instead methodically kept going to work every day, and trying to make the best of each day’s opportunities.
As a result this company through our daily activities of disciplined underwriting and investing produced $121 of book value per share. This equals comprehensive income for our shareholders of over $1 billion during that time frame. Even with a weaker dollar, that is still a lot of money.
I respectfully submit that given that all of these external factors we face, these results represent excellent stewardship of your capital through one heck of a storm. They also speak to the value of working hard on the past on front of you each day, continuing to put one foot in front of the other and not letting negative forecasts or macroeconomic factors create fearfulness and to paralyse you in inaction or negativity.
I think the last sentence says it all. It reminds me of Graham's one word response to a question about how one should live through the nasty downturn of the 1930s-- "endure".
Complete Markel Transcript for Q3 2009 is available via SeekingAlpha.
Disclosure: I own a small piece of Markel Corp. at the time of this writing.
