Buffett & GEICO: 1976 Letter and 1951 Research Report

“At the time I felt that GEICO possessed an extraordinary business advantage in a very large industry that was going to continue to grow. Since that time they never have lost that advantage – the ability to give the policyholder back in losses a greater percentage of the premium dollar than any other auto insurance company in the country, while still providing a profit to the company. I always have been attracted to the low cost operator in any business and, when you can find a combination of (i) an extremely large business, (ii) a more or less homogenous product, and (iii) a very large gap in operating costs between the low cost operator and all of the other companies in the industry, you have a really attractive investment situation. That situation prevailed twenty-five years ago when I first became interested in the company, and it still prevails.”
—Warren Buffett

WB11976 GEICO Letter

“Warren Buffett recently gave the WSJ a letter he wrote in 1976 to one of Berkshire’s top executives. In the letter, Warren Buffett explained his reasoning behind the GEICO purchase.” (Source: ValueWalk.com)

See here for this letter about GEICO, written by Warren back in 1976.

1951 GEICO Research Report

Another good read, also about GEICO, is the reprinted research report The Security I Like the Best, written by Warren back in the end of 1951.

See here for this report that was included in the Berkshire Annual report from 2005 on page 24.

WB2Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company or individual mentioned in this article. This article is informational and is in my own personal opinion.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s