GEICO: Growth vs. Value: A Lesson from the Insurer

“In 1948, we made our GEICO investment and from then on, we seemed to be very brilliant people.” – Benjamin Graham, 1976

GEICO: Growth vs. Value: A Lesson from the Insurer

What can GEICO teach us about “value” versus “growth” investing? Plenty. Just ask David Rolfe, Chief Investment Officer at Wedgewood Partners. In fact, David has recently shared with us many great insights from his study of GEICO, the “growth company” that – surprisingly – made the “value investing” careers of both Benjamin Graham and Warren Buffett. As David explains, both Benjamin Graham and Warren Buffett owe a substantial part of their wealth and public reputations – and deserved accolades – to a singular great “growth company,” the Government Employees Insurance Company (GEICO).

My conversation with David Rolfe touched on many aspects important to investors in growing, wide-moat companies, on some of which I have written here. I’m pleased to share below David’s very instructive insights on GEICO. The full video of my conversation with David Rolfe, as well as David’s 21-page paper on GEICO, is available in The Manual of Ideas Members Area.

David Rolfe on What Investors Can Learn from GEICO

Says David Rolfe:

“It’s a story that we’ve liked to tell when we’ve met with clients and prospective clients over the years because the long history of GEICO is ripe with examples for growth investors and value investors. The company was started in 1937 with about $100,000 in seed capital. Interestingly enough, in 1948 Benjamin Graham, again to coin a phrase, coin of the realm of late, he broke bad and he broke his rules, and he put 25% of his investment partnership in a privately held company.

Fate would have it that the SEC ultimately ruled to allow that purchase because he was an advisor buying an insurance company and there’s some regulations, and rules, and limitations. It allowed for the first publicly traded shares of GEICO, and GEICO soared, and it soared.

Full Article beyondproxy

LEAVE A COMMENT


Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Congrats! Are you a smart person?

We have an exclusive targeted & limited time offer for being a sophisticated and loyal reader.

ValueWalkPremium is a website and newsletter on the latest industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today and get our exclusive content for 40% off. This is our second biggest discount ever!!

Use coupon code VIP20 or click on the button below

Limited time offer only ENDS 3/31/2020 or after the next 45 subscribers take advantage whichever comes first – please do not share this discount with others

 

0