Mr
Warren Buffett's involvement in Geico stretches back to 1951, when his interest was sparked by his mentor, the business writer and investor, Benjamin Graham. Mr Graham was an investor in the insurance company, and the young Warren visited the company in Washington and began to buy a few shares.
Geico's success continued throughout the fifties and sixties, but by the mid-seventies the firm had run into trouble. In 1976 Mr Buffett stepped in, and through Berkshire Hathaway bought half a million shares in the company, only to see them quadruple in value in six months.
Twenty years later, the business cycle drooped again, offering Mr Buffett a chance to buy the company outright for $2.3 billion.
The
investment, along with Berkshire Hathaway's other insurance companies, provides a cash float that allows Mr Buffett and his partner Charlie Munger to invest without having to borrow
money. - BBC
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