Ben Graham Interview – March 6th, 1976

I came across this great article on the internet (not exactly sure where anymore as I saved the URL to a reading list) but figured I would share it anyway as I came across it tonight organizing my reading list. I have posted the first page below with a link to the full text.


by Hartman L. Butler, Jr., C.F.A. La Jolla, California
March 6, 1976

lIB: Mr. Graham, I do appreciate so much being able to come and visit with you this afternoon. When Bob Milne learned that Mrs. Butler and I would be in La Jolla, he suggested that I not only visit with you but also bring along my cassette tape recorder. We have much I would like to cover. First, could we start with a topical question-Government Employees Insurance Company-with GEICO being very much in the headlines.

Graham: Yes, what happened was the team came into our office and after some negotiating, we bought half the company for $720,000. It turned out later that we were worth-the whole company–over a billion dollars in the stock market. This was a very extraordinary thing. But we were forced by the SEC to distribute the stock among our stockholders because, according to a technicality in the law, an investment fund was not allowed more than 10 percent of an insurance company. Jerry Newman and I became active in the conduct

HB: Do you think GEICO will survive?

Graham: Yes, I think it will survive. There is no basic reason why it won’t survive, but naturally I ask myself whether the company did expand much too fast without taking into account the possibilities of these big losses. It makes me shudder to think of the amounts of money they were able to lose in one year. Incredible! It is surprising how many of the large companies have managed to turn in losses of $50 million or $100 million in one year, in these last few years. Something unheard of in the old days. You have to be a genius to lose that much money.

– Full and Original PDF file 


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