First Shares Purchased: 1970?s
Date Sold: Still Owned
Amount Made: $2.35 billion (Unrealized)
Percentage Gain: roughly 5000% (Unrealized)
GEICO is one of Buffett’s first major investments and the position may have ties to his hero and mentor Benjamin Graham. Buffett began buying GEICO in the 1970?s and continued acquiring shares through 1981 with a carrying cost of $45.7 million for a 30 percent stake. Because of buybacks, his stake grew to some 51 percent. Team Buffett decided to acquire the rest of the company for $2.3 billion in 1995 and the deal closed in the first hours of 1996. That valued the company at closing at $4.7 billion for GEICO as a whole, placing Buffett’s implied cost basis around $2.35 billion. Buffett proudly noted in Berkshire’s 2009 report that GEICO’s market share has increased from 2.5 percent to 8.1 percent since the deal and he noted that “its float has grown from $2.7 billion to $9.6 billion.” What GEICO would sell for today would likely be up for debate. What would be extremely hard to debate is that Buffett added billions of dollars in value to GEICO under the Berkshire umbrella.
(AP Photo/Brian Branch-Price)