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His GEICO investment was about more than just him believing in GEICO. It was much more brilliant than that. Insurance companies are wonderful to own because yo
by tyre 11y ago
His GEICO investment was about more than just him believing in GEICO. It was much more brilliant than that.
Insurance companies are wonderful to own because you get access to their capital. They have tons of floating capital that's held in reserves, from premiums, until it needs to be paid out for claims.
GEICO was a perfect investment for a young Buffet because he exchanged cash (liquidity) for even more liquidity.
- dripton 11y agoYoung Buffett didn't buy GEICO, the company. He just bought some of its stock. So he didn't get any extra liquidity. Older Buffett bought the company.