Warren Buffett’s Top Plays: #9 National Indemnity Company
Lesson summary:
Berkshire Hathaway, led by Warren Buffett, purchased National Indemnity Insurance and its companion company, National Fire & Marine, from Jack Ringwalt in 1967 for $8.6 million. The investment marked the first major diversification away from Berkshire’s core textile manufacturing business. The initial purchase was 9% of Buffett’s net worth but as he increased his holding in Berkshire, his indirect purchases in the company brought it to 27%. National Indemnity had underwriting profits, Jack Ringwalt and float, and was the start of Buffett’s insurance journey, earning billions for Berkshire and its shareholders. A key takeaway from this investment is the importance of trusting one’s own skills and intuition when a good opportunity arises, as it may not come back again.