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Stock Strategist

Six 5-Star Stock Ideas from Master Investors

We dig for treasure in the portfolios of Alleghany and Leucadia.

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Investment companies can themselves make great investments. These businesses often benefit from significant managerial ownership and much longer investment horizons than mutual funds subject to quarterly evaluation by "consultants" dare pursue. Two of the more prominent investment companies we follow,  Berkshire Hathaway (BRK.A) (BRK.B) and  Markel (MKL), also benefit from the low-cost "float"--funds they can temporarily invest due to the lag between receipt of insurance premiums and claim payments--that their primary insurance businesses generate, which helps leverage their investments.

While we've previously profiled both Berkshire and Markel's investments, we think many investors will also benefit from an introduction to  Alleghany (Y) and Leucadia National (LUK). Note that at the time of writing, we were in the final stages of adding research coverage on Leucadia, and we expect that our Analyst Report will be available within a few weeks. In the interim, we highly recommend Leucadia's shareholder letters; and note that much useful information on Alleghany is available on its Web site.

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

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