Professor Glen Arnold

We’ve reached the end of a fairly volatile quarter, so I thought I’d review where the shares I’ve written about in my Newsletters have got to.  On the whole I’m quite pleased. Overall portfolio performances have been helped by a rocketing Caledonian Trust which has doubled in recent months as Mr Market starts to recognise […]

GEICO’s current CEO, Tony Nicely, started there in 1961 as an 18-year old in the underwriting department. At the time of the 1975-76 crisis he was an assistant vice president, and he recalls a stormy time, but was grateful that Jack Byrne was at the helm to steer the ship to safety. He said in […]

The day after Warren Buffett met Jack Byrne Berkshire Hathaway bought over $1m shares in GEICO and Buffett left instructions for the purchase of many more – soon a total of $4.116m was spent on 1,294,308 shares, an average of $3.18. This purchase must have been a real boost for Byrne – at least someone […]

At its April 1976 annual general meeting hundreds of irate GEICO shareholders made their displeasure felt.   They really didn’t want the current executive directors to carry on. Piling on the pressure, insurance commissioners from many states came knocking, wanting to know if GEICO was sufficiently strong to avoid bankruptcy and thus meet obligations to policyholders. […]

GEICO lost its way terribly in the early 1970s.  It was dreadfully unprofitable because its managers had pushed revenue without paying sufficient attention to likely future claims.  As was the case in so many insurance firms, the leader’s minds were set on volume of deals, neglecting to think much about long-term profits. It was all […]

Summary of the deal Deal   GEICO, Government Employees Insurance Company Time 1976 – present Price paid $45.7m for 51%, paid 1976-1980. $2.3bn for the remainder in 1996. Quantity Initially 1.99m convertible preferred shares ($19.42m) and 1.29m common stock ($4.12m) Sale price Still part of Berkshire Hathaway Profit Tens of billions, and counting Berkshire Hathaway […]

Before moving on to discuss the investments Buffett made in the second half of the 1970s and beyond we need to remember the cards he had to play at that time.  We’ll start by looking at the extent of the empire the forty-something Buffett controlled. After closing the Buffett Partnership in 1970 he and his […]

The 11-year old Buffett managed to scrape together $114.75 to buy his first shares in Capital Cities in 1941. They did not perform very well, but the experience stimulated both thought and the desire to search for an understanding of what are good and bad approaches to share selection. In his teenage years he did […]

In an earlier series of newsletters I told the story of how Warren Buffett went from an investor with only $130 to a net worth of $100m through a series of astute deals. Now, in a new series of newsletters, I’ll describe the deals that took him from a 46-year old with $100m to a […]

A couple of days ago I bought a few Berkshire Hathaway “B” shares (NYSE:BRK.B).  This is not because I’ve conducted a detailed analysis and discovered it is a deep value share – so I’m not recommending that others do likewise. It’s merely because I have been invited over to Omaha and need to be a […]