Tom Gayner on the Indispensable Drivers of Long-Term Compounding

Renowned value investor Tom Gayner, co-chief executive officer of Markel Corporation, joined the MOI Global community at the Latticework 2017 summit held at the Yale Club of New York City in September. We are pleased to share an edited transcript of Tom’s remarks and Q&A.

Here is acclaimed author William Green’s introduction of Tom Gayner:

I’ve spent the last few years interviewing extraordinary investors and trying to figure out what makes them special and what we can learn from them, both about investing and how to think better and how to live. I first met Tom three years ago in the Yale Club where we had lunch and I ended up writing a profile of him in a book called The Great Minds of Investing.

I’m working on another book and so I was trying to think, “Who do I want to go long on? Who do I want to spend a lot of time with?”

Recently, I went to Virginia and spent about a day-and-a-half quizzing Tom, which is a measure of how much I admire him and how much there is to learn from him. Tom graduated from the University of Virginia in 1983, spent a bit of time working as an accountant, then became a stock analyst. One of the companies he covered as an analyst was Markel. He ended up getting invited by Steve Markel to join the company and manage the investment portfolio, which at the time was tiny. He joined the company in 1990. The first stock he bought was Berkshire Hathaway; he has owned it for 27 years, which gives you a sense of his good judgment and his patience.

Markel has been an extraordinary success story of our time. When it went public in December 1986, the stock was around $8.33 [per share]. Today it’s about $1,020. [The company] has about 11,000 employees, and it’s in twenty countries. Tom has played a key role as both initially being in charge of the investment portfolio and now also as a manager of the company. I’ll leave you with a quote I got from Tom the first time we met three years ago, which says a great deal about him. Tom said,

“Sometimes people can build great careers and enjoy great successes for a period of time through bluster and bullying and intimidation and slipperiness, but that always comes unraveled. Always. Sometimes it takes a while, but it does. The people you find who keep being successful year after year after year, you find these are people of deep integrity.”

What struck me about Tom, which is one of the reasons I wanted to spend time interviewing him for my next book, is he not only represents really good judgment in terms of investing, but he has done the right thing over many years with deep integrity. There’s this question as to how successful you can be while also doing the right thing — Tom, inspired by Buffett and Munger, represents that mentality.

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