CNC compared to Near Bankrupt GEICO /Warren Buffett:
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CNC/GEICO comparision
by: John_Woodruff 8/3/00
Msg: 63545 of 66204
In reply to 8/3, 2:06AM post, so that is why Buffett is the world's greatest investor?
He finds companies that just need to raise prices, sell one product, and then invests.
Try again.
From Robert Hagstrom's book on Buffet "rather the company,
because of operating and financial troubles, became sidetracked.
Even with no net worth, GEICO was still worth a lot of money
because its franchises were intact." Similar to Wendt's comments "
very good insurance company, very good financing company,
not so good holding company".
Hagstrom writes "when Buffet started buying GEICO,
the company was close to bankruptcy.
But he says GEICO was worth a substantial sum,
even with a negative net worth,
because of its insurance franchise. "
In 1976 the company had no earnings....in 1975 several shareholders
filed class-action suits......at a time when the company was underestimating its
insured losses, it simultaneously was increasing fixed expenses.....executives at
GEICO blamed inflation and outrageous legal and medical costs for the
company's woes... it was no longer checking corporate expenses"
I think the comparison of GEICO in the 70's to CNC in the late 90's,
2000 is more valid than buffetpuppet allows.
by: John_Woodruff 8/3/00 |
