GEICO

Geico is America's fourth largest car insurance company, warren buffett's Berkshire Hathaway investment company partner.Geico, namely the government employees insurance company, car insurance company is America's fourth largest private clients, about 6 million people have insurance customers.At the same time, is the largest direct selling insurance company.

The founder of GEICO is 50 years old accounting Leo, goodwin and his wife.GEICO's business model is by cutting most of the cost of sales, reduce the risk of subscription make selling cheaper car insurance.At first, the couple to work 12 hours a day, 365 days a year, but only $250 a month's salary.At night, they make policy-holder list on the table;Weekend, drive to the military base to young government staff to send low price policy.Because to avoid the agent and agent cost, cost 30% less than its competitors GEICO's policy -- 40%.

Under the hard work of the couple, the company won the rapid progress in early.Goodwin, however, only a 25% stake.Is the largest investor in the ford voss bankers cliffs, leah, accounted for 55%;A deceased relatives of a. d. leah accounted for 20%.1948, leah, who is eager to put the stock cash, struggling to find buyers in Wall Street, finally found the graham.

Leah family offer is lower than the book value of 10%.At that time, GEICO insurance annual revenue between $2 million to $3 million, 1946, earnings per share is $1.29, 1947 is $5.89.Previously, graham is not like insurance, but the great potential of GEICO and reasonable quotation attracted him.He said: "one thousand the acquisition of the result is bad, we can always clearing it.

In the end, graham was bought for $475 a share half of the shares of GEICO - 1500 shares.After the event, graham and his talent that the partnership, investment company has it is illegal to insurance company's shares more than 10%.The securities and exchange commission (SEC), asking them to cancel the deal.Leah family, however, refused to take back the stock.As a result, the SEC agreed with graham the shares to shareholders of the company.As a partner, graham was allowed to retain their own shares, to participate in the management of the GEICO.

In July 1948, distribution of the shares, GEICO, the market price is $1.0827 per share, at the end of this year is $30.

Later, the company a market capitalization of more than $1 billion.It was an accident.However, graham concludes, "- in luck, or behind a key decision, must be carefully prepared and trained as a guarantee. A person must have a power and prestige, opportunity will knock at his door. A man must have the means, judgment and determination to take advantage of these opportunities."