Is Markel Group the New Berkshire Hathaway Now That Warren Buffett Is Retiring?

Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is one of the most successful companies in modern history. Its CEO, Warren Buffett, is a Wall Street legend who has been given the nickname "the Oracle of Omaha." If you are an investor, it's highly likely that you know all about Buffett and the company he runs. But do you know about Markel Group (NYSE: MKL)?

What does Berkshire Hathaway do?

Because of its large insurance operations, Berkshire Hathaway usually gets placed in the finance sector. That's not a bad classification for the company, but it doesn't do justice to the business at all. That's because Berkshire Hathaway is actually a widely diversified conglomerate. The collection of businesses under the Berkshire Hathaway umbrella ranges from auto sales to retail to specialty parts manufacturing. And it has a whole lot in between -- its list of subsidiaries includes over 180 companies.

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Even the insurance operations are used in a slightly different manner than they are at most other insurers. The float, which arises because insurance premiums get paid up front while claims get paid in the future, is used to buy stocks like Coca-Cola, American Express, and Chevron. The diversity in the list of stock investments is just as wide as the diversity in Berkshire Hathaway's owned businesses.

Investors buying Berkshire Hathaway are really investing alongside Warren Buffett. But at the end of 2025, Buffett is retiring from the $1 trillion market cap company he basically created via his unique investment approach. His hand-picked successor, Greg Abel, will likely continue to use a similar approach to that of his mentor Buffett, buying well-run companies while they are attractively priced and then holding on for the long term to benefit from the business' growth over time. But there's no question that Berkshire Hathaway won't be exactly the same in the future as it has been in the past.

What does Markel Group do?

Markel Group, with a market cap of around $25 billion, is a much smaller business than Berkshire Hathaway. But it doesn't pull any punches when it describes its business, making frequent references to Berkshire Hathaway. It also uses the same exact model, of an insurance company that directly owns companies and invests in publicly traded stocks (including Home Depot, Visa, and Deere).

Interestingly, the stock performance of Markel Group hasn't been as strong as that of Berkshire Hathaway or the S&P 500 index (SNPINDEX: ^GSPC) since the 2020 bear market. But Markel's management has been working to shake things up so it can get back to its historical performance, which was actually better than that of Berkshire Hathaway for many years.

This is where the really interesting comparison comes up. Berkshire Hathaway is at the start of a management shake-up. Markel Group is nearer the end of such a shake-up. Berkshire Hathaway's new leader is taking over a company so large that it requires very large changes to affect performance. Markel Group is still small enough that improving the business won't require massive changes. In some ways, and from a big-picture perspective, it sounds like Markel Group is in a better position as a business right now.

Trade down, but perhaps only in size

The world will never see another Warren Buffett because he is a unique individual. But his broad investment approach can be roughly mimicked. Mimicking Buffett is basically what Wall Street wants Greg Abel's job to be when he takes over as CEO of Berkshire Hathaway at the end of 2025. Only he's going to have to do it within the confines of a gigantic company, which means it will be a massive task.

Markel Group has been mimicking Buffett for years. While the company seemingly lost its way to some extent over the last five years, it is working to get back on track. Given the relatively small size of the business, that shouldn't be nearly as large a job as what Greg Abel is dealing with. If you like Berkshire Hathaway, now could be a good time to start looking at Markel Group, where imitation has long been a high form of flattery to Warren Buffett.

Should you invest $1,000 in Markel Group right now?

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Chevron, Deere & Company, Home Depot, Markel Group, and Visa. The Motley Fool has a disclosure policy.