So now we know what Buffett meant when he said to invest in companies that you can understand. Fannie Mae (FNM), Freddie Mac (FRE), Enron, AIG (AIG) - these are companies that not even Ivy League MBAs understand. Let’s look at a company that is much simpler: The St. Joe Company (JOE).

St. Joe was founded in 1936 in northern Florida by the famous Alfred I. Dupont. The company owns over 635,000 acres of land. Much of this land is recorded on the books at original cost, going back decades. Some of this land is prime real estate. St. Joe has 140 miles of acreage along the Gulf of Mexico and bays. Most of this is in the Red Neck Riviera: the northern part of the state.