Final answer:
Warren Buffett bought 5% of American Express stock in the 1960s, not long before the company launched its iconic gold card in 1966. This move exemplified Buffett's investment strategy focusing on companies with strong brand value and growth potential. American Express became more prestigious following the introduction of the gold card.
Step-by-step explanation:
The question pertains to Warren Buffett, one of the world's most successful investors, and his decision to acquire a 5% holding in a company just before it released the gold card. The correct answer is c) American Express. Buffett's investment conglomerate, Berkshire Hathaway, bought a significant amount of shares in American Express in the 1960s. A few years later, in 1966, American Express introduced the gold card, which became a symbol of financial prestige and a key product in the company's offering.
Buffett's investment strategy often includes purchasing sizeable stakes in companies with strong brand recognition and customer loyalty, which American Express had. His philosophy of value investing—where the focus is on buying securities that appear underpriced by some form of fundamental analysis—has been a hallmark of his success. The introduction of the gold card by American Express bolstered the company's premium image and offerings, adding to its brand value, which is a characteristic Buffett likely found appealing in his investment rationale.
The acquisition of American Express stocks by Buffett and the subsequent introduction of the gold card is a testament to his forethought and business acumen, as American Express has continued to grow and maintain a significant position in the financial services industry.