Jason Allan Scott’s Post

Seems you all loved this weeks newsletter “ 🐂 💩 like Buffet” A story on Warren Buffett, so I know you gonna love this one. 👇🏼 Most people don’t know this, but Buffett and Munger had a 3rd partner: Rick Guerin He spearheaded one of Berkshire’s greatest investments: The acquisition of Blue Chip Stamps. Blue Chip Stamps distributed stamps through grocery stores and retailers which customers would collect and exchange for merchandise. Rick noticed there was a difference between the volume of stamps purchased and redeemed. This was called the "float". But the beauty of this was only 50% of stamps ever got redeemed. After buying 60% of the company, they used the "float" of Blue Chip Stamps to buy See's Candy with $25mil. Then they bought Wesco Financial for $25mil and the Buffalo Evening Post. See's Candy alone went on to generate over $2 Billion of income for Berkshire to-date. Wesco Financial has a market cap of $7 Billion. In a 2013 interview Warren Buffett was asked: "Are you in touch with Rick Guerin? What happened to him?" Warren explained: "Charlie and I knew we were going to be rich. But we weren't in a rush. Rick Guerin was just as smart as us. But he was in a rush to get rich. He was levered with margin loans, and in the crash of 1973 he had to sell his Berkshire stock to me for $40 a share (now worth $560,000 per share)." Ouch. 😫 If he kept his shares they would have been worth $8 Billion today. The learning: ⛳️ As an investor, don't take any actions that benefit you in the short term but massively increase your risk in the long term. Don't use debt that can wipe out your portfolio if the market turns. If you do use debt, use it selectively with low leverage. If you're smart and patient, good things will happen to your investment. 🤑 #investments #investingtips #business101 #business #warrenbuffett #learninganddevelopment #learningeveryday #business101 #businessadvice