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Collection: Warren Buffett - #236 'Lou Simpson'


Video Link: https://youtu.be/iTtbrA3w49o


In this episode, Warren Buffett was asked what unique or superior qualities does Lou Simpson possess as an investor that has earned him this tremendous vote of confidence in GEICO?


In this episode, you’ll learn:

  • About Lou Simpson; CIO of GEICO from 1979 to 2010.

  • Not all Berkshire purchase of securities is made by Warren Buffett.

To check out all Collection: Warren Buffett <click here>

 

[Transcript]

(Source: https://buffett.cnbc.com/2001-berkshire-hathaway-annual-meeting/)

~ Please visit the site above for full video of Berkshire Hathaway Annual Meeting.

AUDIENCE MEMBER 00:00

My name is Scott Tilson (PH). I’m from Owings Mills, Maryland.


Gentlemen, you have stated many times that Lou Simpson manages the GEICO investment portfolio on an independent and autonomous basis.


What unique or superior qualities does Mr. Simpson possess as an investor that has earned him this tremendous vote of confidence?


Secondly, Berkshire invests in privately-held businesses as well as publicly-traded securities. While the skillset required to value public and private businesses may be the same, does Mr. Simpson also have the additional experience and skills necessary to negotiate a private transaction, if called upon to do so?


WARREN BUFFETT 00:38

Yeah, I think he could. But I hope he doesn’t get called on to very soon. (Laughter)


Lou is smart, and careful, and high-grade, and experienced.


So he does manage a couple billion dollars autonomously. He will buy things. I won’t know about them until I either look at a monthly sheet or sometimes read it in the paper. And that’s fine, you know? He doesn’t know what I’m doing. I don’t know what he’s doing.


Every now and then, we’re in the same security, so we try and coordinate if we’re buying or selling under those circumstances.


And incidentally, you will occasionally read a headline, not a very big headline, but in the financial press that says, “Buffett buying X, Y, Z.” Well, sometimes it should say, “Simpson buying X, Y, Z.”


They — the reports we file would not necessarily tell the reader which one of us made the decision, because even if the reports show that something was bought in GEICO, that could be bought in — by me and placed in GEICO for various reasons.


Or conceivably, Lou can buy something and place it in National Indemnity or some other Berkshire company also for perfectly good reasons. But some of what gets reported as done by Berkshire is done by Lou entirely independent of me.


And most of it, in terms of dollars, is done by me. But Lou’s record is just as good as mine, so.


And Lou would know how to evaluate businesses, whether private negotiations or public securities, and — but I’m in no hurry to turn it over. (Laughs) Seven.

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