Warren Buffett

Warren Buffett's love affair with GEICO began in 1951, when as a 20-year-old Columbia student he visited the company's offices on a Saturday and spent four hours learning the business from future CEO Lorimer Davidson. He invested $10,282 — most of his net worth — and made a 50% return in a year. But the truly legendary trade came 25 years later. By 1976, GEICO was on the verge of bankruptcy due to poor underwriting and rapid expansion. The stock had crashed from $61 to $2. Most investors had written it off completely.

Buffett saw that GEICO's fundamental advantage — selling insurance directly to consumers at lower cost than agent-based competitors — was still intact. The problem was management, not the business model. He began buying aggressively, eventually accumulating a major stake. Over the following two decades, as GEICO recovered and thrived under better management, Berkshire's investment multiplied many times over. In 1996, Buffett purchased the remaining shares he didn't already own for $2.3 billion. Today GEICO is one of Berkshire Hathaway's most valuable subsidiaries and a core profit engine, generating billions annually.