Warren Buffett’s Top Plays: #10 Wesco Financial

Wesco Financial was a savings and loan subsidiary which mainly earned income from interest received on loans and investments, with some additional service charges. Most of its business was centered around mortgages. Berkshire Hathaway, owned by Warren Buffett, purchased 80% of the company for $31m between 1972 and 1976 and the remaining 20% for $550m in 2011. This investment proved to be extremely profitable, with a return of 7,000% on the initial investment. The savings and loan business had depositors and a float, but the insurance business was not important. Louis Vincenti, who joined Wesco in 1955 and became its CEO, was admired by Buffett and referred to as one of his “up-and-comers” in a 1979 letter to Berkshire shareholders.