National Indemnity purchase in 15 minutes
Warren Buffett is known to make a decision to buy a business in very short period of time. The following is his story of how he bought his first insurance business in less than 15 minutes.
Jack Ringwalt, who ran National Indemnity, for every 15 minutes every year would want to sell the company. A friend of mine and I discussed this phenomenon of Jack being in heat once a year for 15 minutes. I asked my friend if he ever caught Jack in this particular phase to let me know. He called and said “Jack is ready.” I asked him to tell Jack to come over. We made a deal in that 15 minutes zone.
It’s a fascinating story because Jack having made the deal really didn’t want to do it. But he wouldn’t have backed out of a deal.
He said to me after we’d shaken hands: “I suppose you will want audited financial statements.” If I’d say “Yes”, he would have said “Well, that’s too bad then. We can’t have a deal.” So I said “I wouldn’t dream of looking at audited financial statements. They are the worst kind.” Then Jack said “I suppose you will want me to sell my agencies to you as well.” I said “Jack, I wouldn’t buy those agencies under any circumstances.”
If I’d said yes, he would have said “Well, I wouldn’t be able to do it. We must have misunderstood each other.” So we went through about three or four of these.
Finally, Jack gave up and sold me the business.Jack was an honorable guy. When he came to pick up his money, he was about 10 minutes late because he was looking for a parking meter with a few minutes left on it.
About me and why this series:
I got a life-changing experience studying Warren Buffett’s annual letters in 2013 after 10 years of speculating, market timing, charting, and forecasting. I started investing in the Vietnamese stock market in 2015 with what I saved from my engineering job. In 2018, I decided to study Warren Buffett’s investing again by going through all of available Berkshire Hathaway’s annual meeting videos. It has been another life-changing experience. Warren Buffett’s teaching is a real germ and yet not many people replicate. Hence, I am committed to share what I learned.
You can subscribe to my blog to follow the series of what Warren Buffett has been teaching in his annual meetings. I attempted to modify but keep as much as possible what he spoke.