The Indicator from Planet Money The spite acquisition that launched Warren Buffett
Dec 22, 2025
Explore the fascinating journey of Warren Buffett, from his childhood hustles to his pivotal acquisition of Berkshire Hathaway. Discover how a visit to GEICO changed his investing strategy and his collaboration with Benjamin Graham shaped his value approach. Learn about the spite behind the Berkshire purchase, which turned a failing textile mill into an empire. The transformation of Berkshire Hathaway into a diverse holding company is a testament to Buffett's genius and resilience, marking a legendary career in investing.
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Train Ride That Taught Insurance Float
- Young Warren Buffett once rode a train to DC and pounded on GEICO's door to learn how insurance works.
- That curiosity led him to value insurance float as a business advantage he later used repeatedly.
Insurance Float Is A Hidden Superpower
- Buffett learned insurance companies collect cash up front and often delay payouts, giving owners 'free money' temporarily.
- He applied that cash-collection idea across many businesses to gain an economic edge.
Information Edge Fueled Value Investing
- In the 1950s–60s information was scarce, so Buffett's habit of collecting company data gave him an advantage.
- He used that private knowledge to buy undervalued 'cigar butt' companies before others noticed.