With so much talk about growth stocks versus values stocks, Warren Buffett notes that growth is a form of value. Using insurer GEICO as an example, he believes that you can add projected growth to a company’s assets, and in the case of an insurance company, to its float. That is provided that you know a company is going to grow.
“I think it’s quite rational to assume a significant underwriting profit at GEICO over the next decade or two decades, and I think it’s likely that it will have significant growth, Warren Buffett said at the 2012 Berkshire Hathaway Annual Meeting. “And both of those are value, items of enormous value. So that adds to the present float value. . . .”
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© 2022 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.