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Stock Strategist

Six 5-Star Stocks from the Markel Portfolio

The best ideas from this market-beating team.

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For years, savvy investors have carefully scrutinized and imitated  Berkshire Hathaway (BRK.B) CEO Warren Buffett's stock investments, figuring that if the maestro likes a stock, they should probably investigate it, too. At Morningstar, we enthusiastically review Berkshire's portfolio several times annually, drawing insights from Buffett's methodology and his stock picks.

The executives at  Markel (MKL) have also long admired Buffett's methods, and have modeled their insurance business on Berkshire. Like Buffett, and unlike most insurers, Markel also makes significant equity investments. Vice Chairman Steve Markel and Chief Investment Officer Tom Gayner lead the firm's stock-picking, and we think they have compiled an impressive track record. Over the 13 years ending in 2004, Markel's equity investments appreciated 16.1% annually, far outpacing the S&P 500's 12.1% annual gain. Markel's topnotch stock-picking is one reason the firm's equity portfolio has grown from about $100 million at the end of 1994 to more than $1.1 billion today. Few mutual funds can boast better results, and we think investors could learn from studying Markel's approach.

Dreyfus Neenan does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.