Thomas Gayner is not a name that many would have heard of. But that does not make his investing track record any less impressive. Mr Gayner is the chief investment officer of Markel Corporation, a financial holding company. As mentioned in an article in the Wall Street Journal, over the past 15 years, Mr Gayner's stocks have returned an average of 11.3% annually. In contrast, the S&P 500 index of big US stocks has returned 4.2%, counting dividends. This is indeed something to sit up and take notice of.
And how was his track record when the stock markets were in a meltdown? Still good. When the 2008 global crisis unraveled, the S&P 500 racked up losses to the tune of 37%. Mr Gayner's portfolio lost ground too. But at a 34% loss, his portfolio outperformed the S&P 500 index.
These are the statistics. So the next big question really is what has made Mr Gayner a successful investor?
For starters, he is a patient and humble investor and knows his limitations. This is what he has to say, "I tell investors, 'You're smarter than I am, but I'm managing your money. If you see me doing something I shouldn't be, tell me.'"
The other point to take note of is how he has gone about picking his stocks. And in this regard, we agree wholeheartedly with his approach to investing.
Indeed, these are the five things that Mr Gayner focuses on when choosing companies:
During such times, reading up on the success stories of investors such as Mr Gayner, only highlight how important it is to be very patient when investing in equities. For the value investor, there will be long periods of time when there is hardly anything that he can invest in. It is a scenario that my ValuePro team and I are certainly facing. But opportunities do come up, and when they do, they become the springboards from which to generate healthy profits.
By radhika pandit
And how was his track record when the stock markets were in a meltdown? Still good. When the 2008 global crisis unraveled, the S&P 500 racked up losses to the tune of 37%. Mr Gayner's portfolio lost ground too. But at a 34% loss, his portfolio outperformed the S&P 500 index.
These are the statistics. So the next big question really is what has made Mr Gayner a successful investor?
For starters, he is a patient and humble investor and knows his limitations. This is what he has to say, "I tell investors, 'You're smarter than I am, but I'm managing your money. If you see me doing something I shouldn't be, tell me.'"
The other point to take note of is how he has gone about picking his stocks. And in this regard, we agree wholeheartedly with his approach to investing.
Indeed, these are the five things that Mr Gayner focuses on when choosing companies:
- Profitable operations
- Little or no debt
- Good management
- Plenty of growth opportunities to reinvest profits, and
- Available at reasonable valuations
During such times, reading up on the success stories of investors such as Mr Gayner, only highlight how important it is to be very patient when investing in equities. For the value investor, there will be long periods of time when there is hardly anything that he can invest in. It is a scenario that my ValuePro team and I are certainly facing. But opportunities do come up, and when they do, they become the springboards from which to generate healthy profits.
By radhika pandit
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