In the previous article, we learned about the three basic investment strategies of Graham's investment theory. In this article, we will learn about the spark of learning that Buffett encountered when he met GEICO, an insurance company. 
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In the early days, while Buffett was focusing on learning Graham's investment theory, he also showed the same concern for his enterprises. GEICO, a company chaired by Graham, is a good example. In 1993, Buffett spoke to Columbia Business School students and in 1995, he sent a letter to shareholders discussing his personal experience with GEICO.
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It all started in January 1951, when Buffett was researching in the Columbia University library and stumbled upon GEICO, an insurance company located in Washington. He went on a Saturday to visit the headquarters without any prior appointment, but the door was locked. He kept knocking and a puzzled janitor opened the door. "Is there anyone else besides you that I can talk to?", "There are still people working on the sixth floor. If you want to see them, you can try going up."
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Buffett happily went upstairs and met Lorimer Davidson, GEICO's Vice President of Finance, who was working on the sixth floor. He was surprised that a 20-year-old student would visit him, but he answered Buffett's questions about the company's main business and insurance business structure. In the following four hours, they had an interesting conversation. Buffett suddenly felt that he was not just talking to an insurance industry executive, but someone who was like an excellent securities analyst. His intuition was correct, as Davidson later became GEICO's CEO.
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GEICO was founded in 1936 and it stood for “Government Employees Insurance Company". It is a car insurance company that specializes in providing low claim rates for government employees and directly solicits customers without brokers. By maintaining low operating costs and targeting customers with good quality, their advantage is not only collecting insurance premiums lower than the industry average but also achieving a higher profit margin than the industry average.
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Buffett also expressed his opinion in the "Forbes" magazine: "This company definitely has a special competitive position, and it is the company operated by my teacher Graham." Due to the long-term dialogue with the company's leadership and evaluation of all aspects, he discovered the competitiveness and potential of the company. In the 1970s, he tried to find ways to obtain GEICO's shares and finally succeeded in acquiring the company's shares in the late 1990s.
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In order to obtain more data to prove his judgment was correct, Buffett also visited several insurance experts and presented many of his own views and opinions about GEICO. Finally, he was able to conclude that GEICO's stock value is definitely higher than the stock value of other insurance companies.

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We hope you enjoyed learning about how Buffett discovered the potential of GEICO as a company. In the next article, we will continue to learn about his operations. Stay tuned!

Learning from other people’s experiences is key.  Although we might not exactly be able to tap Warren Buffett directly for mentorship, there are communities available that are willing to help out both rookie and tenured investors.
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