Mr. Rogers Edition- Mr. Rogers demonstrates that multitasking should not be part of live direct human conversation. When we are talking face to face with each other, when we talk to people that we love, we put our phones down and give the other person 100% of our attention! ❤🧸👔

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Sep 27, 2021Liked by Liberty

I wrote a long thing that touched on Graham's GEICO investment:


The GEICO investment didn't happen until the end of his career - it happened around the time he published The Intelligent Investor, 1947 or 1948, right before he wound up his firm (remember, the SEC forces him to distribute it to his partners and that is how a very young Buffett ends up buying it for himself and his brokerage clients). He does write about it in the postscript to later editions, without naming the company or even saying that he is the one who made the investment - perhaps it is assumed that anyone buying the book would know about it. However almost everything he wrote was long before GEICO bore fruit.

Anyway, when I read Graham, I feel he talks more about the qualitative side of investing than others of that era. I remember he leads with an anecdote about when he starts his career in the 1910s and he recommends IBM (or its predecessor) to his boss and his boss rejects it on quantitative grounds.

The other I'd make is that Buffett made a huge IRR with some of his cigar butts and workouts, they were just painful and didn't scale.

I think given the opportunity set at the time, it makes sense that Graham would write a bit more about cigar butts - they are easier for people to apply. He managed to get GEICO at less than book value and a low multiple of earnings, so you could argue that GEICO was more of a cigar butt with a lot of upside.

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Thanks for the extra context! I'm no Graham scholar, so I thought the timeline was more overlapping than that. Cheers!

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