Query on Mutual Companies

Carrol Cox cbcox at ilstu.edu
Mon Nov 1 21:59:26 PST 1999


There is something that has puzzled me for 35+ years and perhaps someone on this list can explain it. Buffet mentions the "profits" of mutual companies such as State Farm. Now, my question is, How do indiividual persons make money out of a Mutual Company? I know that the Rusts (who run State Farm) are extremely wealthy, but I don't understand the mechanism of it. It wouldn't seem as though they could get so wealthy merely from salaries.

Carrol



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