3 Stocks That Could Be Like Buying Berkshire Hathaway In the 1980s

The article identifies Markel (MKL), Howard Hughes Holdings (HHH), and Kinsale Capital Group (KNSL) as companies that, to varying degrees, emulate Berkshire Hathaway's (BRK.A, BRK.B) conglomerate-building approach. Markel, a specialty insurance company, mirrors Berkshire's structure with its insurance business, Markel Ventures, and publicly traded stock portfolio; Howard Hughes, led by Bill Ackman, aims to become a modern-day Berkshire by acquiring entire businesses, potentially including an insurance component; and Kinsale Capital Group, a specialty insurance company with high underwriting profit margins, may adopt a more Buffett-style investment strategy as it scales, though it is the least similar to Berkshire.

Analysis

The article identifies Markel (MKL), Howard Hughes Holdings (HHH), and Kinsale Capital Group (KNSL) as companies with strategies mirroring aspects of Berkshire Hathaway's conglomerate model, presenting potential for significant value creation due to their smaller relative size. Markel, at roughly 2% of Berkshire's market cap, utilizes a similar tripartite structure of specialty insurance, private company acquisitions via Markel Ventures, and a public equity portfolio; its intrinsic value has reportedly surged by nearly 130% over five years, notably outpacing its stock appreciation, while a strategic review is underway. Howard Hughes Holdings is embarking on a conglomerate-building path under new Executive Chairman Bill Ackman, who injected $900 million to acquire operating businesses, supplementing its core master-planned community operations, with shares currently available at an approximate 35% discount to Ackman's recent investment price. Kinsale Capital, while not yet a diversified conglomerate, exhibits exceptional underwriting profitability in specialty insurance, evidenced by a 76.4% combined ratio in 2024 (implying a c. 24% underwriting profit), which could facilitate a shift towards a more equity-heavy investment strategy as it scales. The analysis contrasts these opportunities with Berkshire Hathaway itself, whose $1 trillion valuation suggests its era of consistently generating outsized returns may be tempered by its sheer scale.

Key Decisions for Investors

• Consider Markel (MKL) for its alignment with the Berkshire model, a reported disparity between its nearly 130% intrinsic value growth over five years and its stock performance, and the potential catalyst of an ongoing strategic review.
• Evaluate Howard Hughes Holdings (HHH) based on the transformative potential of Bill Ackman's $900 million investment and strategic shift towards a conglomerate, noting the current share price is approximately 35% below Ackman's entry point.
• Assess Kinsale Capital (KNSL) for its superior underwriting results, highlighted by a 76.4% combined ratio in 2024, which provides a strong capital base for potential future adoption of a broader, equity-focused investment strategy.
• Investors should weigh the higher growth potential of these smaller, Berkshire-inspired companies against the execution risks inherent in their evolving strategies, contrasting this with Berkshire Hathaway's more mature, albeit potentially lower-growth, profile due to its significant market capitalization.