Broker Check

Class 3, Part A

In this third class, we’ll continue to focus on one of the two key questions animating this whole course: What makes a business a good business? We’ll also revisit a concept from the first class - economic moats, which is central to how Buffett thinks about whether
a business is built to last.

In this 3 section, we’ll examine a couple key acquisitions Berkshire made in 1995: Helzberg Diamonds and the large auto insurance company, GEICO.


In this third class, we’ve talked about Buffett’s purchases of Helzberg Diamonds and R.C. Willey in 1995 and whether those were good businesses. We also discussed the insurance business — underwriting and float management — and how float is the financial engine behind Berkshire (it’s what allows Berkshire to buy good businesses). Why was GEICO a good insurance business and Buffett’s long history with it

Before we move to our next module on markets, reflect again on what you now understand makes a good company. Think about the name of one company we have not discussed that you think might meet Buffett’s criteria for being a good company (economic moat, strong brand, low-cost leader, great managers, etc.).

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EMAIL: john@kraeutlerfinancial.com
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