The Event Changed Warren Buffett's Life When He was 20
I am sharing a story I read on CNBC last night.
Warren Buffett is a legend. He has been in the market for 76 years since he made his first trade at 11. Buffett's early passion for reading led him to read through every book the Omaha Public Library had on investing by age 11 and through the ones in his father's office.
At 19, Buffett accidentally bought "The Intelligent Investor" by investor Benjamin Graham, who would later become Buffet's hero and mentor. Buffett re-read Graham's book about half a dozen times, he says, inspiring Buffett's investment philosophy and strategy to this very day.
"My favorite investment, one that embodies this philosophy, is Geico, which I learned about when I was 20 years old," Buffett tells Forbes.
At Columbia Business School, where Buffett became a student of Graham's, he visited Columbia library on Saturday in 1951. There, he learned that Graham was chairman of Government Employees Insurance Company, or GEICO. (In 1996 Warren Buffett purchased outstanding GEICO stock, making GEICO a subsidiary of Berkshire Hathaway, Inc.)
"A week earlier, I knew nothing about the company," Buffett says. Still, he wasted no time locating Geico's headquarters. He got on a train and left New York City.
"When I arrived in Washington on that Saturday morning, I went to Geico's office and was distressed to find out that the doors were locked," Buffett says. "But I pounded on the door and finally a janitor let me in."
According to Buffett, the janitor directed him to Lorimer "Davy" Davidson — the only other person working in the office that day — who would later become CEO of Geico.
"Davy had no reason to talk to me, but when I told him I was a student of Graham's, he then spent four or so hours answering unending questions about insurance in general and Geico specifically," Buffett says.
"He answered my questions, taught me the insurance business and explained to me the competitive advantage that Geico had," Buffett says. "That afternoon changed my life."
Insurance is one big pie in Buffett's fund. Berkshire Hathaway Inc owns GEICO (from 1996), Gen Re (from 1998), NRG (2007 from ING), and Berkshire Hathaway Assurance.
Warren Buffett is a legend. He has been in the market for 76 years since he made his first trade at 11. Buffett's early passion for reading led him to read through every book the Omaha Public Library had on investing by age 11 and through the ones in his father's office.
At 19, Buffett accidentally bought "The Intelligent Investor" by investor Benjamin Graham, who would later become Buffet's hero and mentor. Buffett re-read Graham's book about half a dozen times, he says, inspiring Buffett's investment philosophy and strategy to this very day.
"My favorite investment, one that embodies this philosophy, is Geico, which I learned about when I was 20 years old," Buffett tells Forbes.
At Columbia Business School, where Buffett became a student of Graham's, he visited Columbia library on Saturday in 1951. There, he learned that Graham was chairman of Government Employees Insurance Company, or GEICO. (In 1996 Warren Buffett purchased outstanding GEICO stock, making GEICO a subsidiary of Berkshire Hathaway, Inc.)
"A week earlier, I knew nothing about the company," Buffett says. Still, he wasted no time locating Geico's headquarters. He got on a train and left New York City.
"When I arrived in Washington on that Saturday morning, I went to Geico's office and was distressed to find out that the doors were locked," Buffett says. "But I pounded on the door and finally a janitor let me in."
According to Buffett, the janitor directed him to Lorimer "Davy" Davidson — the only other person working in the office that day — who would later become CEO of Geico.
"Davy had no reason to talk to me, but when I told him I was a student of Graham's, he then spent four or so hours answering unending questions about insurance in general and Geico specifically," Buffett says.
"He answered my questions, taught me the insurance business and explained to me the competitive advantage that Geico had," Buffett says. "That afternoon changed my life."
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