Reprinted trom The COMMERCIAL and FINANCIAL CHRONICLE Thursday, December 1951 The Security I Like Best Full omploymes profits rents , boomtime and record dividend pay= | tre handled "promptly throug? WARREN E, BUFFETT Buffett-Falk & Co, Omaha, Neb 2 ompey em gag sere 3 Se Babcuer tecute Sasi eerie as Bg, aoe Bt Bs Songmecinet “aie ‘approximately 500 | Throughout ‘the country. ‘The term“ has. been applt during the bast few years to cam anles whose sales increases ‘rep- Fesented little more than inflation Of ‘prices and ‘general easing of business’ competition. “GETCO qualifies, 8a Texitimate growth company based upon iow= ing record: th company” "with" abandon jan 37ae "7es0s7.26 25/514 = ybssise09 Sreo7 2 81016,970.79 143,944 Of course the investor of today oes not profit srom yesterday growth. Th GEICO’s case, there is Feuson to believe the major. por- thelr tion of growth lies ahead," Prior Inissioned officers Tist three pay. ‘of on-commis- sloned of fleers of the Armed (3) ‘Veterans ‘who were Shible whan on scive tai") edit to 1050, the company” was only Ucensed in 18, of 80 jurisdictions including 'D. C. and Hawail. “At the ‘beginning of the year there were less than 3,000 polleyholders in''Now York State. Yet 25% ‘saved on an insurance bill of $125 in‘ New Yorke should look ‘bigger to the prospect. than the 25% saved on the §50. rate in more sparsely settled regions. ‘As cost competition increases in importance during times of reces~ sion, GEICO's Tate. attraction ‘Shotild become even ‘more effec tive in ‘diverting business ‘trom the brother-in-law. With insur ance rates moving higher due to inflation, the 25% spread In rates becomes wider in terms of dollars and cents, ‘There is no pressure from gents to accent questionabte ap~ ficants or renew poor risks. “in States where the rate structure fe Inadequate, new promotion may be halted.” Probably the biggest attraction of GHGS ues prod margin advantage it’ enjoys. ‘The ratlo of underwriting profit to premi- ums "earned in 1040 was "273% for GEICO as compared to 62% for the 135" stock casualty and ‘surety ‘companies summarized by Best's. “As experience turned for the worse in 1080, Best's agure- gate’s profit’ margin dropped: to Sartteiar seri POT B0% and GEICO’: dropped to 180%." GEICO does not write all injury tnd proverty dacsge both jury and property . Important tines for GBICO, were mong the. least profitable’ lies. GEICO ‘siso docs large amount 2€ collision writing, whieh wes profitable line in 1080. During the frst half of 1951, practically’ all insurers. operated r'the red on caeualty lines with Bodily Tnjusy snd property: damn ge among the moet unprotiabie, Whereas GEICO's. profit. margin was cul to. slighOy above Sf, Massachusetts Bonding. ina lance "showed" a. 10% ‘loss, "New ‘Amsterdam, Casualty an 8% loss, Standard "Accident Tneurance "e 9p Toes, ete. epee ot the rapid EIGO, cash divigende ‘have had {SPrembin low. ‘Stack dividend ang a 25-for-1 spt incteased the ‘Sutstanding shares. from 3,600 on ‘Sine 7, 1848, to 250,000 om. Now. 10, 198i. “Valuable rights to sub: ecttbe to stock of affliated com Dantes have also: been lesued. ‘Benjamin “Graham ha” been Chairmen of the Board since ‘his finvestment”ttust sequired and distributed lenge block of ‘the sock in 1048, ‘Leo Goodwin, who hiss guided GEICO» growth’ since Inception, is the able President, At The ona of 1950. the Ie rwein~ ers ot" the ‘Board of Directors Shred “approximately “one = rowth of fn iso, but the"wave of rate should evidense themselves in 062 earnings. Investment income quearupled. between 1947 and 1960, rellecting the growth of the company’ amt © ‘At the present price of about ‘ight times the eapnings of 1080, Door year for the industsy, peas that no price is being paid for the tremendous growth poten- tial of the company.© G8 1 on, ‘he Corimeret an Financial Crone... ura. Apc 199 WE POSITION ana The Security I Like Best wee ‘A ceatinvoas forum in which, each week, « diferent of exp Ai Pedacss item snd avery Bd Fas af sa eee cui Mae Plats | Sete an pith eh na a a ee Mutneiad steers ttt "ARES, ooe tah Feo kit Se ie oa Sohn [atid moe Sena ae See ents ee om ed i ‘ BEE Sy gn atc Ses G85 | Goomal ie Wan os New York Hanseatic |) 2 Batson moro tue 1 sia ae of une" ration Seem ea et el ee snr eee, Semionov ot is be Rights & Sorip | i" oe Since 1917, “The nally acne ndey ‘partons Some * a Siete afr inde nu ae — teftned — seit Tren nee Korine Fenton | Senate ee tee ans 2 Buse Fake Iden | Senay "Sane So Sears ts gree vr | Commonwealth, see ete maha arts STRADER,TAYLORACO, ne, Zs of Spa sue corti = "i || Oil Company ileconce Ask us for quotes on ‘writing bas proven generally un \*f es Trade Bank (N.S ee, Soe a _ | Senn ae ree toca ; |) Gordon Graves & Co. J. R. Wituston, ae sean me wc BRUCE & Co. Beau ie Gea Saher 7 eat The Continued on page 83‘Volume 177 Nanber 0.7 Comms end Peni Chri am @ Sc?s Mira os metas cance commu rom pose 2 gee Beaesc EEL ES Eo The Secmity Like Bet = Sous i in mena pe, "SGT aes ay ha aa a ak Ot ei IM oy Pei ig ove mat pad Sot Ra a tal nd ile ye Sage Saree en rig ae Se oie gy etnias at eS peer Series fee aes re One Call Sale cera ee _ as Schlafly Nolan Stock eet att Felt Ne nats af ig! Pe ae, ta vaso iste To Be Offered at $4 hee ett 6 Old sae, ts mh sas feed etch & Gn ot fee ste on tora Ee tnd a hark seo fa Seg py ols eney ‘Sut or Bt por we aed Sou i "Se se Sisters ae tam “al Pe 5 5 Star i ora oa one ‘temas tee me fied Be ls al Sew ne cerca ue rete oe tes ESU'Sser"ght wenn and ex rote a el, 2 ons Eee 2 Reet aly tne ke om ae iste Rasy beer Sepia fem art, chute ae he 2 Soveete enn Reereee rae {Gi Coneany ome Oo SS ‘Walter D. Dunbar With, ‘Two With Davies n “thats the atime i pears 6 OS: ra or woe Bae i Kainer a ote its ER eter