After a Solid 2012, What’s Next for Markel Corporation (MKL)?

Unfortunately, since Markel is still actively working on integrating Alterra’s business, we didn’t receive confirmation of such a shift during this week’s earnings conference call.  Gayner did hint, however, that given today’s low interest rates and flat yield curve, they’re “tactically building [their] balances of cash” with the expectation of “redeploying this cash when opportunities are on.”  Furthermore, he also stated:

We’re incorporating this thinking into our anticipated actions once the Alterra deal closes and I want to assure all of our shareholders that the mantra for fixed income as well as our equity activity is safety first. I believe that we will be presented with interesting and attractive investment opportunities over the next several years and we have relatively unique structural and tactical advantages, which should create good outcomes for Markel.

While Gayner has certainly proven himself to be a patient, rational, long-term investor, something tells me he’ll resemble a well-funded, market-thrashing kid in a candy store when that day arrives. When the rubber hits the road, investors should keep their eyes peeled for any hint that Markel is able to put more money into the able hands of its chief investment officer.

Bottom line
Despite recent apprehension revolving around the massive acquisition, I’m still convinced that exciting things are in store for Markel in 2013.  To be sure, Markel’s strong 2012 results show the company remains dedicated and capable as ever to building up its great business and will undoubtedly continue to create substantial value for shareholders going forward.

The article After a Solid 2012, What’s Next for Markel? originally appeared on Fool.com and is written by Steve Symington.

Fool contributor Steve Symington owns shares of Markel. The Motley Fool recommends and owns shares of Berkshire Hathaway and Markel.

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