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Markel Gayner Asset Management is the investment subsidiary of Markel Corporation (NYSE:MKL), a company that markets and underwrites specialty insurance products and programs. Tom Gayner has been the head of Markel Gayner Asset Management since 1990. He has also been the CIO of Markel since 2004.

Markel is investing its float in the stock market just like Warren Buffett’s Berkshire Hathaway. In an interview with Morningstar, Gayner stated that the businesses he seeks should have: a demonstrated record of profitability and good returns on total capital, high measures of talent and integrity in management, favorable reinvestment dynamics over time, and a purchase price that is fair or better. Under Gayner’s management, Markel’s equity portfolio returned 11.1% annually between 2000 and 2009.

Below we compiled a list of top 20 positions in the 13F portfolio of Markel Gayner Asset Management as of September 30, 2011.

Company Name

Ticker

Value

Activity

CARMAX INC

KMX

124000

0%

BERKSHIRE HATHAWAY

[[BRK-B]]

112023

0%

FAIRFAX FINANCIAL

OTCQB:FRFHF

107503

0%

BERKSHIRE HATHAWAY

BRK.A

102314

2%

DIAGEO PLC

DEO

94774

0%

BROOKFIELD ASSET MAN

BAM

85046

0%

WAL-MART STORES INC

WMT

55631

2%

EXXON MOBIL CORP

XOM

55015

5%

UNITED PARCEL SERVICE

UPS

46887

3%

WALT DISNEY CO

DIS

46470

4%

R L I CORP

RLI

39108

0%

MARRIOTT INTL

MAR

38396

-1%

UNION FIRST BANKSHARES

UBSH

37573

0%

GENERAL ELECTRIC CO

GE

37298

0%

JOHNSON & JOHNSON

JNJ

36073

0%

W P CAREY & CO LLC

WPC

35005

0%

HOME DEPOT INC

HD

31772

0%

FIDELITY NATIONAL FINL

FNF

25820

0%

AUTOMATIC DATA PROCESSING

ADP

23004

4%

NOVO NORDISK A S

NVO

22835

0%

During the third quarter, the total value of Gayner’s 13F portfolio went down from $1.88 billion $1.63 billion. Gayner also reduced the number of different positions in the portfolio to 92. Gayner sold out a few positions over the third quarter. The largest position he sold out was White Mountains Industries Group Inc (NYSE:WTM). At the end of June, Markel had $32 million invested in WTM. It did not report owning any shares of the stock at the end of September. The stock returned 11.57% so far in the fourth quarter, versus 12.50% for SPY in the same period. Gayner also sold out all his stakes in Clorox Co (NYSE:CLX) and Kimberly Clark Corp (NYSE:KMB).

One of the mega-cap stocks in Markel’s latest 13F portfolio is Walmart Stores Inc (NYSE:WMT). During the third quarter, Markel boosted its position in WMT by 2%. At the end of September, the fund reported to own $56 million worth of WMT stock. The stock returned 16.30% since the end of the third quarter, beating the market by nearly 4 percentage points. Buffett also had more than $2 billion invested in WMT. Boykin Curry’s Eagle Capital Management invested $480 million in WMT as well.

The biggest position in Markel’s portfolio at the end of September is Carmax Inc (NYSE:KMX). The fund had $124 million invested in KMX, which returned 26.62% since the end of the third quarter, more than doubling the return of the market. John Thaler’s JAT Capital Management initiated a brand new $92 million position in KMX over the third quarter. Markel also invested a large portion of its portfolio in Buffett’s Berkshire Hathaway Inc (NYSE:BRK.A). At the end of September, it had $112 million invested in BRK.B and another $102 million invested in BRK.A. BRK.A returned 8.58% and BRK.B gained 8.71% so far in the fourth quarter.

Other large-cap stocks that Gayner is bullish about include Exxon Mobil Corp (NYSE:XOM), United Parcel Services Inc (NYSE:UPS), Walt Disney Co (NYSE:DIS), General Electric Co (NYSE:GE), Johnson & Johnson (NYSE:JNJ), and Home Depot Inc (NYSE:HD). We like Gayner. Thirteen out of his top 20 positions outperformed the market since the end of the third quarter. Our research has shown that investors are more likely to outperform the market by imitating the top stock picks of successful investors, such as Gayner.

Source: Tom Gayner's Top Stock Picks