blue chip stamp

The term "blue chip" originally comes from poker, where blue chips are the highest value chips. In the context of stocks, "blue chip" refers to companies that are known for their stability, reliability, and strong financial performance over a long period. These companies generally have a good reputation and are considered a solid investment. Examples include Apple, Microsoft, and Walmart 1 2.

Interestingly, "Blue Chip Stamps" also refers to a specific company that Warren Buffett and Charlie Munger invested in during the mid-1960s. The Blue Chip Stamp company operated an early version of a rewards program, where businesses would buy trading stamps to give to customers, who then redeemed them for merchandise. Buffett and Munger found the company attractive because of its financial structure, known as the "float," created by the time lag between selling stamps and customers redeeming them 3.