A 100-Year-Old Business Trading for Peanuts
4x earnings. 0.37x book value. Backed by a powerhouse.
Key Metrics:
4.1x earnings
0.37x book value
Backed by an industrial giant
Buffett had one character trait that made him stand out.
A trait most people overlook when they talk about his success.
He simply worked harder than just about everyone else.
He was obsessed with investing.
By the age of 11, he had already read every book on investing in the Omaha Public Library. He memorized every case study in Ben Graham’s Security Analysis. All 800 pages of it. He could quote passages and even tell you the page number.
He took a train to Washington, knocked on GEICO’s door, and kept asking questions until they kicked him out.
He read the entire Moody’s manuals front to back. Twice.
Plain and simple: Buffett did things other people simply didn’t do. He made an absurd effort, and that’s a big part of why he became who he is.
Ben Graham was the same way. Even though he later became known for his wide range of interests, in his early years he was a learning machine. And he outworked nearly everyone else on Wall Street in the 1920s.
You can get a feeling for his drive in one of his own stories:
He was just 20 years old at the time. There was no reason to know those facts. But he did, and that probably gave him an edge no one else had.
So what’s the takeaway here?
Buffett and Graham both did two things anyone can do:
They worked an absurd amount. And they became true experts.
That’s how Buffett was able to find and buy Genesee Valley Gas at 2x earnings. Or Union Street Railway at 30% of net cash.
He also had a thick skin.
When he bought those stocks, most people looked at him like he had 2 heads.
“Of course it’s cheap,” they said. “It’s a crappy business”
Sometimes even Graham passed up on Buffett’s picks.
But Buffett didn’t care. He knew the business would survive, and he was buying at a huge discount.
And the results speak for themselves: Over 50% a year in his early days.
Today’s stock is not that different.
It’s a 100+ year-old business trading at just 4x earnings and 0.37x book value, backed by one of the largest industrial groups in its field, and showing strong recent growth.
Buffett would have liked it.
Today’s company is…