Warren E. Buffet,

Essay by jmepak March 2004

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Warren E. Buffet,


In August 25, 1995, Warren Buffet, COE of Berkshire Hathaway announced that his company would acquire the rest of the GEICO Corporation. In doing so, this would the GEICO shareholders a 26% premium per share market price, $55.75 per share to $70 per share. Buffet did not propose to change anything about GEICO, which astonished the observer since there wasn't any synergy between the two companies. At the end of the day, Berkshire Hathaway's shares were at 2.4%, a gain in market value of $718 million and the S&P500 Index was 0.05%. (Warren E. Buffet, 1995 (VA: Darden Business Publishing) pg 2 of case study.)

Warren Buffet

Warren Buffet is considered to be an anomaly, one of the wealthiest people in the world as well as respected and loved. Warren was born in Buffet was born in 1930 in Omaha, Nebraska, the son of a stockbroker and Congressman, and has become probably the world's most successful investor.

( Warren, 2004). By the time Warren had graduated he had parts in several part time businesses but his destiny was chartered early in the piece when, after graduating from the University of Nebraska, he studied business under the legendary Benjamin Graham who was the idol behind, "the concept of the stock market as a schizophrenic entity equally willing to sell you a commodity or buy one from you "(Warren, 2004). Warren Buffet may have the best investment record in history (a compound annual increase in wealth of 28% from 1965 to 1994); (Warren E. Buffet, 1995 (VA: Darden Business Publishing) pg 2 of case study.) Berkshire Hathaway only paid him $100,000 per year as the CEO of the company. Even though Buffet and other insiders controlled 47.9% of the company, he ran the company in the...