At 13, he borrowed money to buy one share of Berkshire Hathaway
The price had fallen after the October crash, and the paper certificate had to be mailed to him. Then came years of reading by mail.
David Senra · Lessons From Backing The Best Founders In Fintech | Micky MalkaIn November 1987, Micky Malka, the fintech investor behind Ribbit Capital, was 13 years old and living in Venezuela, waiting for the mail.
Inside an envelope was a single share of Berkshire Hathaway, Warren Buffett's investment company. Malka had just celebrated his Bar Mitzvah that month, a month after the stock market crash of October 1987. The share price had fallen sharply, but he still had not saved enough to buy even one share.
What he had was an idea picked up from a few articles in Fortune magazine about Buffett's holdings in American Express and Coca-Cola. Malka loved the brands in the portfolio, though he later said he knew nothing then about subjects like float or insurance. Buffett had advised shareholders to have the certificate mailed to them in physical form and not leave it with a broker, where it could be lent against. So Malka asked his grandfather for a loan, which his grandfather granted with interest as a lesson, and ordered the certificate to be shipped to Venezuela.
This is the story of how one share became an education. From that year on, Buffett's annual letters arrived for Malka by mail. He read them, highlighted them, and looked up what he did not understand. When asked if those letters influenced the long investment essays he now writes at Ribbit, he answered, "Completely."
The method was simple and slow. When a term in a letter confused him, the teenager bought the Wall Street Journal booklet “Understanding Money and Markets” and worked through the definitions himself. He said he was lucky he never lost that first paper certificate after its long trip.
Decades later, Malka still traces his self-learning to that routine, which began when he was 13. He has said he wonders what a 13-year-old today could do with the same letters and an artificial intelligence assistant to help explain them.
Questions people ask
What was the October 1987 crash?
On Oct. 19, 1987, now called Black Monday, the Dow Jones Industrial Average fell about 22% in one day, the largest one-day percentage drop in its history. Markets around the world fell too, though the U.S. economy did not enter a recession. Prices recovered over the next two years.
How much did one Berkshire share cost then?
Berkshire Hathaway's Class A shares have never split, so one share has grown from hundreds of dollars in the 1980s to hundreds of thousands of dollars today. In November 1987, one share cost roughly $3,000 to $4,000, which is why a 13-year-old could not afford it on his own. Buffett later created a much cheaper Class B share for smaller investors.
What is the insurance float Malka said he did not understand at 13?
Float is money an insurer collects in premiums before it pays claims, and it can be invested in the meantime. Buffett has long used that pool of money to buy stocks and businesses for Berkshire. It is a central reason insurance has been so important to his company.