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Markel 2nd Q 2010 Conference Call


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Some Tom Gayner quotes:


All across the globe, we face persistent unemployment issues, the ongoing deleveraging of the economy, increased savings rates and new labor pools from the developing world, which are creating more in the way of global supply than demand.


All of these factors create pressure on prices and worries about deflation. These facts and worries can be seen clearly in the low levels of inflation expectations and interest rates. I don’t hear bondholders talking about things like the fact that Disney just raised the admission price and the tuition and medical bills among others continue to rise.


The popular idea of investing in bonds today strikes me as about the same as the chance of Dow 36000 a decade ago. The arguments were well-reasoned and seemed plausible at the time. A bull market can make you believe some incredible things. Today the multi-decade bull market has been in bonds, not equities and I think that similar incredible ideas are out and about in the financial markets. I don’t think that committing our capital for returns of roughly 3% is a good idea that will stand the test of time.


In 1904, the New York City subway system opened with a fare of $0.05. The fare stayed the same 44 years until 1948. Over the next 62 years, prices increased regularly and now stand at $2.15. Investing in long-term fixed income instruments at today’s interest rates makes sense if you think the coming decades will see the subway fare remain at $2.15 or thereabouts.








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Guest Bronco

Anyone own MKL?  I sold a little while ago but will revisit. 


I think deflation is a joke.  We will see massive inflation in the not to distant future.  The only way out (for the US) of this mess is to print more money.  The only way. 


Sure, we are deleveraging now, but that won't last forever.  Corporations have done it.  States should be doing it.  Individuals are doing it.  Obama, well, he isn't doing it.  But we will print and print and print and gold will probably go up, food, real estate, etc....


You homeboyz up in Canada should be sitting pretty the next decade selling your oil (which the price will go up as well) to the stupid Americans. 

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