Guy Spier: "The Education of a Value Investor" | Talks at Google



MALE SPEAKER: Hello
and welcome, everyone, to another talk in our
Google authors series. Today we have a special speaker. Guy Spier is going to
talk about his book, "The Education of
a Value Investor." I know at least a couple
people in this audience who read this book in one night. And unlike most memoirs where
the person who's writing is the hero, this
is a strange book. This is a book where
the person who's writing is highlighting his shortcomings
and putting a magnifying glass to amplify the good
points in other people that he's come across in his
journey of investing in life. And there is much more than
just investing in the book. And for those of us who
met Guy over lunch shortly before this talk, it was
just privilege and honor to share his company. He's a very lively, very
enthusiastic person, and I'm sure you're going to
get the same sense of candor in the talk. So without further ado,
ladies and gentleman, let's welcome Guy Spier. GUY SPIER: Thank you everyone. I should tell you that I've done
TV appearances for this book. I'm much more nervous
to come and speak to you than I am to
speak on any television. And I had the
hardest time putting this– I put some slides
together– I had the hardest time doing it, partly
because I've never, ever given a talk to what
is primarily– I mean, I met some guys from
finance, that does exist– but I've never given
the talk to engineers. And I feel like, especially on
the Google campus, you, I feel, know a lot more than
I do about the world. In fact, I'd like to sit
down and interview you, but I guess that's
not how it goes. I need to talk about me. So I'm really
pleased to be here. I would also tell
you that if you would have taken
me eight years ago and told– asked me if I would
believe some of the things that happened in my life happened, I
would've been quite surprised. And I was after
success in my life, but I didn't really
know how to go about it. And I feel like over
the last few years, partly by stumbling across some
things and staying with them, partly through a tremendous,
very difficult beginning to my career where I worked at
a terrible place, you will see, I started figuring
out– and I don't know. I'm with a bunch of
scientists and engineers, and I studied sciences
at high school, but I feel like I
started figuring out the ways in which
the universe works, maybe the laws of
attraction, and I'm just blown away that
I'm standing here. Sarab meets me at
the airport yesterday and he's so excited to meet
me, and he's treating me like I'm some kind
of special person. I'm thinking, I'm just like you. I know as little as you do. So with that, I'm going to talk. I'm going to try and keep
it to under half an hour. I'm just going to blast
through some things, just to give those of
you haven't read the book a sense of who I am, and
what I want to talk about, and what I think
I can talk about, and then we can try
and make it attractive. So, what do we have here? I really think I don't
understand– well, I do understand,
and it's got nothing to do with all the things that I
thought success had to do with. So I really I'm blown
away that I'm here, because I feel like
I'm quite normal. Or I'm like everyone else. I'm not– I'm not
special in any way. And I never thought
I could write a book, and there are some
incredible things that came together for
me to write a book. I'm not a natural author
and I'm not a great writer. But that was the
guy that I wanted– When I graduated
business school, I would never have said, if
one of you would have asked me, what do you want to be, I would
have given you some mumbo jumbo about, I want to get
into the capital markets. And I find it really
interesting to be at the nexus between where
savings meets investment, and it's really fascinating,
and maybe fund some companies. But basically I had
an image of this guy– and I see that now, I
didn't see that then– I had an image of this Gordon
Gekko guy in my head, and I kind of fancy
that lifestyle. I wanted to be a
master of the universe. I'd read about people
like George Soros and I thought that
was pretty cool. And I wanted to be rich. I wanted to control companies. I wanted to control people. And I had an
educational experience that I think that
many of us have had. I know how to take exams. I'm quite good at studying. If you put me under
pressure I do well. And so I blasted
through my education and I thought the
world owed me living. And don't ask me how– well,
I guess you can ask me, because I'm here
for you to ask me. So I graduate business
school and I end up working at a place. So, I don't know, I'm sure some
of us have seen this movie. So the firm that this
was modeled after is called Stratton Oakmont. And the firm that I worked
at, where the large part of it is being shut down, is called,
or was called, D.H. Blair. And there were people who
came from Stratton Oakmont to D.H. Blair and vice versa. So I was an investment
banker looking for deals, and I watched that movie
and I thought, wow, that is really– it's
exaggerated, but accurate. So they take it– they take
exactly the same things that were happening at the
firm that I worked at and they turned the volume up. And I ask myself today why on
earth I went to work there, but then even having
gone to work there– I spent 18 months there. And so within 18
months of graduating from Harvard Business School
with this great education, and I was unemployable,
because once I left that place, and I did finally
leave that place, people either said,
either this guy who's willing to play close to
the line the way people from Stratton Oakmont
and D.H. Blair did play, or he's just stupid, either
way, we don't want to hire him. And I also, when I go
back and look at it, and I see people like this guy
[? Mark ?] Martoma, who's just been given nine years in
prison, I would like to say, and I think many people
would say, oh no, well I'm completely different to him. And I'd like to stand
here in front of you and say, oh, I was. I think there's a
lot of me in him. There's lot of him in me. I was a greedy guy willing
to make compromises and some– the head
of the firm two years prior had promised
me the opportunity to make a lot of money very
fast and I went for it. And I was in the place where
in order to make a lot of money very fast, I would have
to push the boundaries. That's the way it was set up. [? Mark ?] Martoma,
the same thing. He was put in a position where
in order to make a lot of money he would push the boundaries. The senior people
at his firm, just as the senior people at
my firm, knew exactly what situation they'd put me In. And I actually, to this day,
I think that if I had not discovered this savior, Warren
Buffett, who I started reading about while I was
working at this firm, I don't know exactly what
would have happened to me, and it kind of scary
to think about. And I see [? Mark ?]
Martoma and I think, maybe I would have gone
in that direction. And it also bothers
me terribly to know that I'm really well-educated,
I studied moral philosophy, I was at Oxford, I had all
these philosophers around me. That's what we do. We study right and wrong. And how is it possible that
I am then finding myself in the place that is
morally compromised and I don't actually get
the hell out of there, or I don't blow the whistle,
or I don't do something? I think that's a really
important question for American society,
global capitalism to answer. I don't think it's
been fully answered. I think that there are people
like me, the version of me 20 years ago, who
will always go back. There will always be young
guys who want to get rich fast. And so the [? Mark ?]
Martoma's or the rogue traders will always exist. And so what do
you do about that? Well, one thing you can
do is write about it. Try and write about it
honestly, and then maybe you generate a debate,
and maybe the world sees a few things differently. So I was at an absolute
low, and there I am, a highly educated
guy, and I couldn't find the– I couldn't
find a job out of there. And so something happens to me
which is absolutely wonderful. I discover Anthony Robbins. So I don't know who's been to
an Anthony Robbins seminar, but the amazing thing
is I was so arrogant. And I thought that
I knew everything, and that everything to learn
was to be learned from Harvard Business School and from
Oxford and similar places, that I didn't believe that
a guy like Anthony Robbins could teach me anything. But at around that time I came
and did an Anthony Robbins seminar, actually not
far away from here. It was somewhere
in the Bay Area. And it kind of opened
me up to a whole new way of looking at the world. And again, I think that
I started figuring out rules for how to improve
my life from that point. And then fast
forward 10 years, I got some modicum of success and
people start misattributing it. They start saying,
oh yeah, you have– you went to this elite
educational, you're very smart. Or you have the right friends. Or you have– there's
a family business that invested with you. And I felt like they were
misattributing any success that I had to the wrong
things and I found myself time and time telling people,
no, it's not like that. There are other
things that happened. There are other things that
actually– this sort of sounds strange to say There's
a technology of success. There's a top technology of
going about succeeding in life that I didn't– I learned it
because I had this terrible fall straight out
of business school. So if there's three ideas that I
would love for you to take away from this talk, I'll feel
like I've achieved something. So you thought you're coming
to hear a talk about investing. Everybody understands compound
interest and the key thing is– and humans evolved
to be hunter gatherers. That's how our brains are wired. A whole bunch of things
we don't do very well, we don't evaluate
probabilities very well. And we cannot conceive
of compound interest. We cannot conceive of something
gradually increasing and then the linear slope of
that keeps going up. We just think in terms
of linear slopes. And I feel like
once I understood that I saw that all the time. So there's this idea
that compound interest is the eighth miracle of– is
the eighth wonder of the world. And it's quite extraordinary
that if you just compound– and you can do the numbers,
I show them to my investors every year– if
you just compound any rate for a long
period of time, then the amounts get very,
very large very, very quickly. But the point that
I want to put to you is that you can compound
goodwill over time. And so, as part of
my journey, I started in– I ended up
starting to invest and I fell in love with Warren
Buffett and Charlie Munger. Anything Warren Buffett and
Charlie Munger I'd consume it. Charlie Munger gave
a talk where he talks about the 24 standard
causes of human misjudgements. Anybody who hasn't listen
to that talk, believe me: it's better time spent
listening to that talk than listening to me. It's really an amazing set of
24 things that once I heard it I started seeing those
patterns again and again. So [INAUDIBLE]
talks in the book– talks in his book,
"The Psychology of Human Misjudgement," about
the power of reciprocation. And he talks about these
Hare Krishna people in airports, where they
handing out flowers. They're giving out free
flowers and you say, well, why are you giving
me a free flower? They say, this is just
to a gift from us. 10 yards later there's a place
where you can make a donation and it's just
incredibly effective. So I started conducting
my own version of that and I started just– and it's
partly born out of desperation, because the standard
routes to career success were now closed to me–
I was handing out gifts to the doorman, the person
I met in the street. I was writing thank
you notes to people. And I was determined, because
he describes also in the book the salesman who was the most
successful car salesman who sold I don't know how
many cars in a year, but he sent out
thousands of notes that basically said, I like you. And so all of my friends
are looking at that and they're saying,
that's ridiculous. That's not a strategy
for success in life. I mean, what is that
going to get you? It wasn't going to get
me anything short term, but I'm slightly crazy in that
way and when something grabs me I just do it. Sometimes if it fascinates me
I do it with a great intensity. So I set myself the
goal of, I think it was five notes, three
notes a day, five days a week, and just kept sending
out notes and sending out notes and sending out notes. And if I sum up the number
of pieces of direct mail that I've sent out to the
planet, it's more than 10,000, it's probably more than 20,000
of 30,000 over the last eight or nine years. But I just think
that so much of what is good has happened in
my life, including meeting some key people, is the direct
result of just compounding human goodwill. Simple as that. Just to take that
third idea, and I'm excited to talk to a group
of engineers about this, is– I don't know if anybody's
played around in bathtubs, but take a rubber duck or
something in a bathtub, and if you start making
some waves in the bathtub, and if you start figuring
out, even with just a rubber duck, if you start figuring
out the resonant frequency of the bathtub, even with
the relatively small, not a very strong impetus,
you can eventually get the whole bathtub
moving in one single wave. And I can't explain this
and I can't give you scientific backup, but I think
that every person, or many of the people that I see have
achieved success in life, is what they've actually
done is that they found a way to interface to the
world in a frequency, and I don't know what
that frequency means, but it's a frequency
that resonates. And once you start feeling
that resonation happen things reinforce themselves
and crazy things happen. Like Sarab calls out
of the blue and says, do you want to come and
give a talk at Google, which just blows me away. Or, in the book, some people
who came out of the woodworks to help me to– I'm
not a great writer. I finished in December
with a so-so manuscript, and then a friend came
out of the woodworks who helped me to turn it into
a really good manuscript. So that idea of finding
what is the frequency with which I can
resonate in the world that the world resonates back
for me is a really fluffy idea, but I found it really powerful. And if we just go back to
this idea of authenticity– there was a sudden
period in New York, I call it my New
York vortex, where I was trying to be a big,
swinging appendage hedge fund manager. And I was trying to resonate
with the world in that way, and I'm a smart
enough guy that I could do a pretty
good job of it. And so the world
started resonating back. And in a certain way I
got money into my fund. I got all sorts of– some
good things were happening, but it didn't reflect
who I was on the inside. And so I couldn't really
be authentic about it. And I think that the people who
achieve extraordinary things in the world are the
people who manage to get the world
resonating on the outside. And they also–
that's the same sort of resonance on the inside. And you have that amazing
statement by Mahatma Gandhi, "Be the change that you
want to see in the world." And it's just amazing to see. I mean, he had that, so what he
felt the whole nation of India was focused on. What he felt about
violence, for example, and he'd go on a hunger strike. And people like that can become
extraordinarily effective. And it's just an interesting
idea and I bring it up later. So whenever I was not succeeding
in the world, what I eventually found out was that if
I looked inside myself and looked to reorder, or
to do work inside myself, the outside world
took care of itself. So I hope I get that across. And I don't have a watch,
because basically at around 30 minutes I am just gonna stop. So you know that I'm not
an engineer, but– yeah, but I want to make
it interactive, so– and I want to, at
the half-hour, you just got to shut me off,
because I could– and I just think it's more
fun to be interactive. And I had a hard time
putting this talk together as well, because I could
either tell a life story, but I didn't just want
to tell a life story, and I think all of these
things feed into each other. So the inner
journey idea, or I'm an investor– I was talking
to some of the people at lunch– the idea of
optimizing something is not just an engineering
idea or an idea from physics. It's an idea that's– it's
just deeply elegant to us. The idea– you know,
I was thinking, oh my god, I'm going to
be meeting with engineers. I was trying out some of the
maths I learned 30 years ago. So the biggest–
one of the things that I regret the most about not
continuing on a science track is, I just remember that the
first day, about 14 years old, we studied calculus. And I had this idea
of at the limit. At the limit the slope of this
curve becomes dot dot dot, dx/dy, I remember. And I was just like, this
is kind of magical to me. But the real world
is not like that. The real world is not
like that, because it's unbelievably complex. There's complexity that's taking
place that we just can't model. There's discontinuities
that take place. There's crashes in the market. There's avalanches. There's all sorts of things that
we just cannot predict how they will go. I learned more about
the way economics works by stumbling across
this idea of complexity. So this was, I think– there's
actually an investor, Bill Miller, started off on
the complexity idea. But then the way I
identified it with the most was this– these ants. So there's a great book
by Holldobler and Wilson, "Journey to the Ants,"
where it just comes down to these ants optimizing some
pretty complex things using a very, very simple set of
rules with distributed agents. And I realize that
thinking of the world as like a rainforest,
or as like ant colonies optimizing whatever it is
that they're optimizing, is a better way to
think things then. So that's the outside. Then if we go to the
inside of ourselves, it's just a fiction to
say that we're rational. We– we're rational in very,
very limited circumstances. It's a very good
assumption to make, but there is so much evidence–
I mean Dan Ariely's book, "Predictably Irrationally." We know that we're not rational. So I think that there's this
strange thing that happens, and again it's kind
of a tool that I feel is a tool for success. At the minute I recognize
my own weaknesses, and I'm honest and open
and upfront about them, I can start doing
something about it. So I think I'm a better investor
because I just accept upfront that I'm not rational. I have to deal with it and
then I can do workarounds. I can figure out what I'm
going to do to make it better. And worth adding to that is that
how many times has any of us– or how many times have I, 'cause
I'm the guy who's speaking, I can't project it onto
you, I guess– sort of like, oh, I'd rather have
Stephen Spielberg's life, but we're not. I'm in my life. I can't have Steven
Spielberg's life, but– so everything's path dependent. And that's all
against optimization. We're just not in a situation
where– we're not with the gas, we're not in a closed container
that things are constantly developing. So I think I'm a stronger
and better person to say that I'm not rational. I think teams work
better when we're upfront about what
we're not good at. And I don't how it
works at Google, but I've had a– I used to
have a hard time with it. I'm better with a
small team that I work in being upfront about
the things that I'm not good at and having them be
upfront about the things that they're not good at. It's pretty obvious, isn't it? I spent– so I
discover Warren Buffet. I also discovered something
incredibly powerful, which Anthony Robbins calls
matching and mirroring. So I'm sitting in the office
of this "Wolf of Wall Street" type place. I've discovered Warren Buffett
and I have this feeling, I want his life. I don't want my life. And what do I do about it? And Tony Robbins teaches this. Mohnish Pabrai calls it cloning. And I just started
doing what I thought Warren Buffett would do
if he was in my shoes. And literally I sat
and I said– well, I would read my
own annual reports. So I read the Berkshire
Hathaway annual report. And then I saw we
had these investments in these various companies. I ordered up those
various companies and– I don't know how to communicate
with you this feeling of somehow– and I'm
not a religious guy, I feel like I'm a rational
guy– but somehow I was connecting up
to something that was giving me wisdom and leading
me in a better direction. And I've since learned
more about that and it's been an incredible
force for change in my life. And just going back to
that first job that I had, I ask myself, if
I had not started reading the Lowenstein
biography of Warren Buffett and his force field
was not influencing me and I was not thinking what
would Warren Buffett do in my shoes, I don't know where
my career would have gone. I don't know where my
morality would have gone. I think it may have
ended in a bad place. And the fascinating
thing for me as well is that what Warren Buffett
would have done in my shoes is he would have gotten up,
walked out of the office, and never come back. Instead, it took me 18–
well, until I figured out was going on it was maybe
six months– it took me eight months to a year to
actually do that. So I didn't even model
Warren Buffett that well, and I still– it still
improved my life dramatically. And so I just find
it fascinating that the minute we just
start trying to think, well, what would somebody
that I deeply admire do, somebody who's way
better at this than I am? And even if we do a
small fraction of that– and I've done a very,
very small fraction of, in terms of investing, of
what Warren Buffett has done, he's got much better
returns than I have, he's much smarter than
I am– but even just a fraction of that success
is extraordinarily good. So part of my
nervousness in speaking to you is that you
guys are dealing with, at least my
perception is, you're dealing with things that are
closer to physical reality. The properties of what
you're dealing with and what you're
trying to manipulate is in– somehow
is based in things that are less changeable. And I think that
when you– somebody like me who ended up going, I
was saying earlier that the two universities I attended are
not the MIT's and the IIT's, they're quite politically
oriented universities. A world in which things
are much more fluid and things change a lot:
I feel like those tools are incredibly helpful. They may be less helpful
in an environment where actually just solid
scientific knowledge is what you need,
but if at some point you guys are going out
of this environment into another environment I think
those tools are very useful. Later– so part of this book is
this lunch with Warren Buffett. So I fell in love
with Warren Buffett and then I kind of
started disliking him, because I started
realizing that I couldn't touch what he'd done. So it's like I was angry
at him in a certain way. And I was nervous to
meet him at the lunch and I had this friend, this
Indian friend, Mohnish Pabrai, who I only would have
met if I'd been– started to write
thank you notes. There's absolutely clear and
there are many other things like that that have
shown up in my life. But the benefit to me of
meeting Warren Buffett is that it forced me to give
up the idea that I could ever be like him and it freed
me up to be myself. And I think that there– in
the value investing world there are a lot of
people who really want to be the next Warren Buffett
or can't give up on this idea. So there's this
interesting thing that these models of
behavior are absolutely wonderful until you
take it to extreme and then you end up–
it's not productive. So you still have to be yourself
while modeling other people. So how long have I been
talking for, Sarab? MALE SPEAKER: You have
five more minutes. GUY SPIER: So five more minutes. I got some– I've got some
questions, if one of you take me on a question on it. I have a worked
investment example to show you how I take some of
the insights that I've learned and use them in
my investing life. I'm irrational, I'm
not Warren Buffett, I'm not as smart
as Warren Buffett, the world is path dependent,
we can't optimize. What do we do about that? And I'll just give
you– so another thing that I've learned about trying
to drive myself toward success is, rather than trying to fixate
on some goal that may or may not be attainable, is an
idea that, I don't know any other way to express it,
of finding ways to consistently tilt the playing field just
a little bit in my direction, because I think it's so hard to,
at least in the world where I exist, to say, I'm going to go
and buy an insurance company, or I'm going to go and build
the next Berkshire Hathaway, or I'm going to go and have
the best investment returns, I'm going to find
the cheapest company. All of those things
are really hard to do, but finding rules that tilt the
playing field are a lot easier. And they truly– I don't
think I've tilted the playing field by very much, but
tilting the playing field by a little bit got
me in front of you, which is pretty– I really do
think it's pretty extraordinary and an amazing testament
to the power of that. And so the thank you notes is
one way of tilting the playing field. Sending out thank you notes,
creating goodwill, leaving a little bit more on the
table in every interaction that I have leaves people with
a positive impression of me willing to help or
willing to do something and that comes in
in unexpected times. But now I'm going to go
to some very specifics. And so this comes
down to investing. Just straight– some of the
things that I write about, and I'll just talk
to some of them. And these are
directed– investors would be looking
at these and saying half of these are heresies. And I don't want to
discuss all of them, but I want to pick
one that I can't even see there, 'cause there are more
rules than there are up there, but that second one is
such a powerful thing, and so easy to implement, and
it resulted in such an increase in my quality of life. So I'm in New York and I'm
running about $50 million and I get into some
databases and now all manner of brokers and
other people are calling me up. And the phone's
ringing off the hook. And for some time that
feels really good, 'cause I have– I need
to feel significant and now these people are
paying attention to me. And they all have
an axe to grind. They all have a
commission to make. They all have something
that skews the environment, puts me into their
sales force field. And I will tell you that you
cannot believe how many people still operate by choosing
whatever's most available, because a salesperson
pulls them up. The minute I figured
out this rule, and this is like if you think
of ants solving complex problems about where to build their nests
and where to find food sources and where to direct
their energies by a very simple set of rules that
Holldobler and Wilson have identified, I think that is
one straight, simple rule. So I started doing it. People would call up. They'd say, oh, this
is a sales call. I'm really sorry,
but I will not be able to buy your product
because you're selling it to me. How are you going to find
out about new funds over or how are you going find
out about great tech stocks? And I'd say, well– I'd
ask one of my peers on, and this is before the
internet is really taking off, I'd ask one of my peers,
I'm not going to ask you. So the phone stops
ringing instantly and I just created a
whole area of quiet calm where there used to be noise. And so just simply– and
it's interesting thing that that doesn't
direct me to success, but it just creates
one condition. I think that doing
that consistently tilts the playing
field a little bit. Just to go specific into
the investment world, a friend of mine calls me. So, no, a deal guy
is in Zurich and he wants to talk to
me about a deal. So he calls me up he says,
hey, we've got something, it's very interesting. Can I come by to the
office and talk about it? And the answer is, no, thank
you very much, send me a PDF. No, but I'm in Zurich
today, and it's timely, and I really want
to talk you about. So then the answer
goes like this. It says, look, you
can come to the office and talk to me
about it, but then I won't be able to invest in
it, because that's my rule. And so now he's stuck,
because he really wants me to invest in it. But the simple rule
of saying, I'm not going to take a
sales call, send me the information in written
form so I can evaluate in a non salesy-heightened
environment where my mind is going
to be messed with, is just a better
way to do things. Warren Buffett says he doesn't
participate in open outcry auctions. It's exactly the same idea. And people come to
him and they say, but this is the most amazing
deal, and yes it's an auction, and he's just saying
that– he's saying over a lifetime of making
those kinds of decisions, if he doesn't show up at
any open outcry auction or when anything
is being auctioned he's going to do better. So it's a strange
thing because it's not, it's not saying, well, I'm
shooting at that target. I'm saying, well, if I
just get enough things away from that target eventually
something will hit it. It's a sort of a backward
way of creating– I guess it's just the creating
of conditions for success. And if you ask me about
it I'll come back to this. But TED Talks are 18
minutes, so I've already gone over my TED Talk
time by, you know. And so I titled this
chapter– so those rules, those kind of heuristics,
accepting that I'm– my limitations, I think,
are powerful for investing. I think that a lot
of people who invest and who sell their
investments, they want to try and convince
you that they're doing it all in a certain way. And I think that
most of them are using some kind of
heuristics, but they just don't want to talk about it. And I think the
industry that I'm in should be more honest with
the people who are not in the industry about what
they're actually doing. And many people want to
hear, oh, well, we optimize, we review the
portfolio once a month, and when a stock comes to
80% of its intrinsic value then we sell it. And I just think that
is so out of sync. For everything we
know about what humans are, why is the
financial industry not talking more honestly about it? I decided that I would rather
talk honestly about what I do, and that I'm trying to manage
my irrationality, than kind of– and when I started
doing the book, I definitely had
the agenda item. I'd like to drum up business. And I was lucky enough to have
been around some great people. And I'd read the autobiography
of Mahatma Gandhi, where he talks about, within the
first third of the book, about going with prostitutes. So here's a guy writing
his autobiography, he's a leading man of India,
he's revered as a saint, and he wants to tell the world
that he slept with prostitutes. And I thought, well, if he
can be that honest maybe I should be honest, too. But I started off
the project hoping to drum up business, or at
least having that as somewhere as an agenda item. And I was lucky
enough to realize that it was more
valuable for me, and I would live a
more meaningful life, if I was authentic and honest
than if I tried to cover up some things that I didn't like. So I think there is
a lot of stuff that gets told by the
financial industries to the American public which is
just sales talk, because that's what they expect to hear. And I think the financial
industry, especially having failed the United States
in the world in 2008, 2009, with a lot of rich people
in it, has an obligation to be more honest
about what's going on. I don't think it's
not hard to do. We just got to get
more people doing it. But what really blew me away
about– so the thank you notes led me to this guy,
Mohnish Pabrai, and I started
studying how he lived. And I just feel like this
technology of success in life that I feel like I've uncovered
is more valuable than anything I learned about investing. And I'll just run through a
few of those really quickly. So some more kind of heuristic
rules, like the ants. So I used to try and sell to
people at cocktail parties and I figured out
the various– again, it's like the don't
take sales calls. It's like, meet somebody,
do something for them, see how they respond. And there's, there's
basically– I mean, I guess the "Give and Take"
book does it very well, by Adam Grant, but there are the takers,
the matchers, and the givers. And you do– I do
something for someone, you figure out very
quickly whether there are takers or matchers. Takers or matchers we want
to deemphasize in our lives. Givers– we want to spend all
the time we possibly can around givers. And as an example
of– at first, when you start giving like that,
you get all the takers. They get drawn to–
they got drawn to me. And so there's a lot
of sorting that goes on and a lot of ways in which
you have to get them out of your life, but
then over time, and I'm talking
about 5 or 10 years, I suddenly find
myself surrounded by people who give
all around me and that sets the conditions for success. And so here's
something else that I think is– I get really
excited about this. So all of the stuff
that I did, have– having uncovered
these ideas, are ideas I could've never justified
to any marketing department, because it looks like
totally wasted money. And so we have this– it's
an incredible opportunity for any individual
or anybody who controls their
lives– so we have this incredible bias in
the world towards activity that you can show a return
in a relatively short period of time, because no manager of
any business or any marketing department is going to
be able to stick around if he's investing in, unless
It's a very unusual business, if he's doing
investments, they're going to take– He says,
well, it may never pay off. But it might take 10 years. And I feel like many of the
activities that I've done are things that I
started with no payoff. And then we have this
very, very– a slope that is a little bit better
than what it would have been, and is imperceptible. And we think in linear terms
and most people just discard it. And if you're
willing to just keep doing those things for like 10
years then suddenly that slope, because it's a growth,
it's not linear, is pulling away from the slope
that it would have been on. And when people start
noticing it it's 10 years out and then they misattribute. So these– that's
one simple idea of getting a slightly better
crowd of people around us. I mean, Brene Brown has
talked about being vulnerable. I never understood that
empathizing to people is a business tool. And time and again I've realized
that just, rather than just– I mean, it happened
to me the other day. So I met a journalist who
writes for "The Huffington Post" called Dorie Clark. I showed up and all I wanted
to do was talk about my book. And instead I had, from some
miraculous divine inspiration, I held back and I actually,
even though it was set up in such a way that what I had
to do was download to her, here's what you need
to write about my book for "The Huffington Post"
or "Forbes" or a couple of other publications,
I held back and I just said,
tell me who you are. I spent– we spent half an
hour talking about two books that she's written that I hadn't
had the wherewithal to read up upon, which I should
have done, and she realized she had somebody who's
actually interested in her. And it wouldn't necessarily
have happened in all cases, but she ended up inviting
me to an author dinner and I found a friend. And that was a much
better relationship, and there's something
that can grow out of that. There's optionality that
can come out of that. I never understood that
that idea of empathy is actually a great
business tool. And I think if you're wrong
environment it definitely is not going to work. If you're around givers
it definitely will work. And the same with
being vulnerable. When I sat at my– stood at my
partnership meeting, they said, how do you sell? What is your sales–
what was it– what is your process
for selling stocks? And I say, I said in front
of my partners, I said, I actually have a
rare, very bad process. I don't know how to do it well. I don't believe
anybody does it well. In this world, people
are drawn to that, and over time that accumulates. So we can get back
to it, if you like. They're up there. So I touched on this and
I'm going to close on this. So– and I'll just give,
I'll give one example. So there are investors
who are more successful than I am, and I've
seen investors who– so, the classic thing is there's
a conference call the Value Investing Congress,
and some very, very persuasive and unbelievably
smart people present there. So there's a couple of people
who are big stars there, a guy called Bill Ackman and
a guy called David Einhorn. If any of us were to sit
in a presentation with Bill Ackman and David
Einhorn, we'd run out and buy whatever stock
they're talking about and– or sell short
whatever stock they're talking about selling short. And sometimes they work
out and sometimes they don't, but this idea that,
this– what we do in the world has got to resonate
for us internally. And what I realized, and
I'll just share this. So I have this relationship
with Mohnish Pabrai and people think that I say
intelligent things to him. I don't. I think that what's
going on there is, or part of what's going on,
is that he is naturally, because of the way his mind
works, less averse to loss. And I have this
family history where my family was, ancestors
of mine were kicked out of Germany in the '30s, and I
think that that ricochets down the generations and I have
a mortal fear of loss. And so I think that it's
beneficial for Mohnish Pabrai to talk to somebody about
the investing world who has a mortal fear of
loss, because it's a– you can read something
into the situation that he couldn't read himself. I think that I responded
better to the financial crisis by not denying that
history of mine, but just, again, being honest
about it, knowing that was part of who I am,
and then acting synchronous with that, or acting in
concert with that idea. And I guess the simple
idea is that whenever I've looked for answers
outside of myself I haven't found
very good answers. And the minute I looked
for answers inside myself the world changed. And here's a better example. It was really hard for
me to admit to myself that classmates of mine– Bill
Ackman's from the year above me and another guy who's
famous for being a very successful hedge fund
manager, this guy Chris Hohn– it was very hard for
me to admit to myself that I was envious of them. But for as long as I didn't
admit I was envious of them, I kept trying to live
this life in New York City of being a big
successful hedge fund manager. The minute I took the pain
and was willing to say, no, you're just envious
of them and you should stop being
envious of people. Envy– all emotions–
report call to action. The emotion of envy
is a sign that there isn't something
right in your life. And the minute I
redirected that energy– and we're talking wasting
large amounts of money renting big fancy offices with glass,
with wall-to-ceiling glass, and trading Roman
analysts and [INAUDIBLE], that cost a lot of
money all because I was unable to admit
to myself that I was, I had envy for something that
I shouldn't have envy for. And the minute I redirected
that and said, well, how would I reset up my life
given that I, either I'm not able to or I'm not
successfully getting to where these people are, I found
answers and the answer's, well, stop living that
kind of life and live a life that's more in sync. So the inner journey is
a great business tool. And with that, I'm going
to stop and take questions. If somebody asks me to go
through investment idea, just to give a sense, I
will, but only if you ask me. So the floor is yours. The question was, how do
I decide how much cash to have in my portfolio or
other kind of high level decisions like that. And so I think that that
is a classic example of false optimization. It's a classic example of trying
to find the answer to something that doesn't exist
and it's a waste of brain cells in a certain way. So another idea that
I didn't touch on is this guy Gerd Gigerenzer,
so the wonderful experiment is you take children,
you put them in a room, and then they have
to take an exam. So in one control group
you put them in a room, there's nothing on the table,
you go wait for five minutes, they go take the exam. The other room, there's
chocolates on the table, you say to the children,
don't eat the chocolates. You can't eat the chocolates. Now go to take the exam. And the children comply. They don't eat the chocolates,
but they perform much worse on the exam. And the idea is that
there is– the brain has a certain
amount of willpower. There's a limited
amount every day. And literally just
preventing themselves from eating the chocolates
is using up that willpower and it reduces their ability
to concentrate on the exam. That's why anything
important that we want to do in life,
like I've figured out that the only time
for me to workout is first thing in the morning. It's the only time I have
the willpower to do it. Even if I wait an hour
or two we're done. And so we really want to
conserve our willpower for things that
count, and I think that following the stock
tickers, having a screen open, which is constantly–
So we know that reading is more stressful if
you're on a web screen because your brain
is constantly trying to decide whether to
click on the link or not. And if you have a– and
that literally uses up, it uses our brain energy
and if you have just a page, that, all of that
question mark goes away so we can focus on the page. So it's all about
conserving energy for the things that count. And so if you're coming
from my perspective, and I really can't predict
where the market will go in the short run. And I don't even
know– I can't even be certain that the companies
that I'm investing in, I can't be 100% knowledgeable
that I know enough about them to make the investment. What I'm trying to do,
like an ant colony, is to create habits
and behaviors that improve the probability that
I will outperform the market. And that comes down to, in
the case of cash for me, I'm not trying to manage
the amount of cash. If I see something that
makes a huge amount of sense, I'm doing it, and
if I see, if I don't see something that makes
a huge amount of sense, I let the cash build up. The same way I'm not trying to
sell investments when they get to– probably if they get
ridiculously overvalued I would like to believe that I
would sell them, but– So one of my investors
asks me, do you sell at, if the value is
100, do you sell at 50, 60, at 100, 120? And I kind of try to
explain that it's not like I know the value is 100. I kind of know that it's
probably undervalued at 50 and it's probably
overvalued at 200. In the middle of that range,
that's the kind of uncertainty that I'm dealing with. In the middle of that
range, what I'm trying to do is minimize transaction
costs, because we know that transaction
costs are really important. I don't know if that's helpful. AUDIENCE: In your eight
rules, I was curious, number six was, "Never trade
when the market is open." I was just curious why
that's one of the rules. GUY SPIER: Yeah,
so one of the rules is, "Never trade when
the market is open." If it said never
then I should correct it, because what
I should say is, try not to trade when
the market is open, because I think there
are, in the real world, they're always exceptions
that you want it– So I try to leave myself the
freedom to break those rules. But, so, who– trade station. You get your monitor. You get your access. You can trade at any time. You can react to prices. I mean, it gives this
completely false impression, at least of what
I'm trying to do. And I think that it's, it's
selling people false hope. I think that the traders that
make money– somebody I know was a chief– he
recently left his job, but he was a chief currency
trader for Goldman Sachs, for Citigroup. Citigroup gets
huge flows and they work hard on
getting those flows. They are not making money
because they have any, any– they're make money
because they can charge a big ask spread,
and because they have temporary knowledge
of a huge order that's just come in that they can,
that they can price away from the market a
little bit, and then they can resell it
to somebody else. So maybe if you're a chief
currency trader at Citigroup that trading idea works, or that
approach to the markets work, but I think in the vast
majority of circumstances– I mean, I'm trying to buy
something today that will, that will go up ideally
3x over three years or 4x. Just very, very large
movements in price. And I am blown away
by the number of times that I, who at the time
thought he was rational, I now know better,
would be dissuaded by the price
movement on the day. So the thing is priced at
10 and we know in retrospect that it was going to go
to 50 and I didn't buy it because it was training
up by two, by two basis points or something, and
that really impacts you, and it's crazy. So there's a– I found
that it's just simpler. And it's actually,
it's not I found, I learned it directly
from Mohnish Pabrai. He showed me the rule and it
was obvious to me the minute he said it. Just don't allow yourself to
trade when the markets open. Decide the night before
what you're going to do and then put the trade in. Decide– I mean,
the debt doesn't mean you shouldn't put limit
orders in or find some way to make sure that– but think
about it in a quiet environment and then, and then
allow it to happen. And– AUDIENCE: Great, thanks. Hi. So, here at Google there
is a strong community of people who believe in
passive investing indexes. And so you said on
several occasions, don't optimize, don't
optimize, so I wonder, why not just do that, like,
invest in the S&P index? GUY SPIER: I think it's a great
idea, and John Vogel is– oh. So the question
is, why not just– AUDIENCE: I actually have a
follow-up to this as well. So yesterday– so I
believe you, actually your fund, Aquamarine Fund,
is bidding the S&P index since the beginning [INAUDIBLE]. But yesterday somebody showed
me some interesting data that was some
funds that, they're supposed to be value-investing
funds, such as, let's say, the Sequoia Fund, and
[INAUDIBLE] and know that, but even like Warren
Buffett and Berkshire, I think they're actually
lagging behind the S&P index. And just out of
probability there is always going to be someone
who is going to beat the index, right? So I wonder, how do you
know that you're not that random person and
it's bound to happen? And how do you know you're– [LAUGHTER] –how do you know you're
going to keep actually– It seems like an awful lot of
effort to do what you're doing. I mean, in the end do
you know that you're going to be above the index
after 10 years from now? GUY SPIER: I could answer that
very easily and just say, no. [LAUGHTER] Look. Indexing is a great idea. The index is a
really hard opponent to beat because it doesn't
pay transaction costs. I would say that if
you do the index, and John Vogel is a
really well-known guy. There's vanguarding indexes
and they've, they've done a service to investors. And I was telling
somebody over lunch today that to say,
to look at the index is a baseline, is a
great place to start. But what I would say is that
if you're going to index, pick the right index. So if you take the S&P during
the financial bubble of 2009, it was very skewed by some
very overvalued companies and there's this market
cap weighted index. So the more these companies
became overvalued, the more they had
to be in the index. And so you were investing
in an index that was skewed towards the opposite
of value investing, going into the
biggest companies. So I would want to
pick an index that doesn't have those skews
in it, like the Dow Jones index doesn't have those skews. So I'd want to spend
a little bit of time, and probably
everybody in this room is capable, to understand
how the index is constructed, to know that it's the
right index to use. So there's absolutely no
question that is a smart way to do things and
it's a good baseline for even people who
are doing other things. So to the second part of
your question, how do I, we all know that Nassim, it's
from Nassim Taleb's book, but you take, you take a
bunch of individuals, 1,000 individuals, have
them all flips coins, and probabilistically
after a number of rounds of somebody who's just flipped
heads all the way through and then you interview them,
and they really did believe, that they really
believe that, I knew it. I knew it. They feel like they
have a lucky hand and it's really powerful stuff. And so I don't know. I have to say that. I don't know. So there's this
amazing article written by Warren Buffett called "The
Super Investors of Graham and Doddsville." I highly recommend it. I'm sure it's on the internet. I'm sure it's sitting in your
server's multiple places, but, replicated
across the world. But he tried to
answer that question and he just said, look, what if
the monkeys flipping coins all studied at Columbia Business
School under this guy called Ben Graham and
they all talk about buying things at a discount
to intrinsic value? Then at some point
you might have to ask whether this is
not just flipping coins. And so I think that the
probability right now that Berkshire Hathaway,
fourth or fifth largest company by market cap in the
United States, is a fluke is getting pretty low, so
clearly there are some ways that some people
can act in the world to beat those indices, which
are incredibly hard to beat. I'd very much like to
be one of those people and I have some huge
handicaps, because I'm not as smart as Warren Buffett
and I don't live in Omaha. I think that I'm
much better off today because I figure out those
weaknesses and I'm working, I'm working to
compensate for them the way I think Warren
Buffett naturally did. So I actually think that
Warren Buffett, everything that I'm talking about,
I'm excited because I feel like I've uncovered
some really valuable things that the world
isn't talking about. I think Warren Buffet
understands them. He just has, he
gets more fun out of investing than talking
about these things. And if you go to the
Berkshire meeting, and I invite you all to join me
at the south door of the Omaha Convention Center at
5:30 AM on the Saturday morning of the Berkshire
meeting, I'll be there, a guy called Alex
[INAUDIBLE] will be there, Mohnish Pabrai will be there,
a whole bunch of other people and it's a great example
of just get around people who are better than
you and you can only improve. But they say every year that
if, for a long enough period of time, they don't outperform
the indices than there's questions that
have to be raised. And I think that they've hit
a five year period where they did not perform but then they
started out performing again. And I think that all
of their shareholders would not have wanted
to remove the management and have somebody else run it. And it's a question
that is something that I tell my
shareholders every time. So. AUDIENCE: Hi. Have you, you're in the value
investing space, have you thought about how to apply
your investing philosophy in a growth, venture
capital, new emerging technologies kind of investment? GUY SPIER: People of my ilk,
I think, often have tech envy and we would love to
invest in businesses that are in growth mode. So if I think about–
so I'll give you an example of why it's so hard. I had an investment in
a company called ITG. Investment Technology Group. So ITG, in an age where
the internet was just getting going, had, had created
a stock crossing network that enabled people
to put their– it was well before
these, all this stuff that "Flash Boys" talked
about– but it enabled people to put their stock so
they couldn't trade, very large institutions,
like huge volumes that they wanted to
put in the market, into a blind pool where,
if two people matched opposite sides of
the trade, it worked. And you've got to
match and then they, and then ITG would
take the commission. They had spent 15
years building it. It was called Posit. I think it still exists. They'd spent 15 years building
it up and it looked beautiful and I felt like I'd discovered
a kind of a Costco, the low cost operator, the thing that
offers the clients the best value for money in
the financial markets. And then at the time,
I don't remember the name of the
network, but something came up within three months
and achieved the same volumes. And then within a
year or two later there were dozens
of competitors. And ITG is still around, but
the beautiful growths prospects than existed just weren't there. So I think that what is so
hard, and I've tripped up on this on a number
of occasions, is that you're buying the future
and the future's not certain and you'd like to
believe that the company that you've invested
in, and I'd like to believe that the company
that I've invested in, is going to be the winner. But it's just so hard to do. That said, a very famous
value investor, Bill Miller, at the time that AOL was the
dominant internet company, made a huge amount of money. This was a time when
AOL was marketing their service, their
internet service, by sending direct mail
out with these CDs. Can you even remember? Yeah. We don't even have CD drives
anymore in our computers. But he'd figured
something out, but then he lost a huge amount of
money in the tech crisis. And there are some value
investors today, there's a guy that I respect
an awful lot who has, who had a very large
position in Amazon, and so I get envious
because I look at it and he made four times his
money so far and I– believe me, there are plenty
of my investments that have not made
four times my money. And I understood, after talking
to him for a couple of days, I understood a lot more
about Amazon than I did. But I just found, I've
discovered that in my case by, in doing that, I get
it wrong more often than I get it right. So I think it's really hard. And there's an idea written
up where buying the future is not a great thing
to do because it often doesn't turn out that way. So I don't think it
actually works very well and I have a certain
amount of angst, because I think that what
everybody in this room is doing is creating a
better world for us. And what actually am I doing? I'm helping, I'm helping
some rich people get richer and maybe I'm
allocating some capital, but I think that
what's going on here is actually a lot
more meaningful. And I think that, especially
visiting the Google campus, I think in a different
version of my life I would've stayed studying
mathematics and physics and maybe gone to an
MIT and ended up– And so I'll leave
you with this idea. So all of you know the grass
on the other side of the road is always greener. So I was, I was a
classmate of Mark Pincus, so I got to know him. He's in the section, my section
at Harvard Business School. He taught me a lot
about playing chess. He was a game player then. He just loved games. That's what he loved to do. I think actually Mark Pincus is
a great example, with a zinger, of how, when you're inner
world, your love of games, is aligned with the outer
world, extraordinary things can happen. And then, when you realize
that your outer world is all about management and that's
not what your inner world is about, you need to leave and
you need to do something else. But he– so I visit
him in San Francisco a few years after
business school and I've, I've fallen in
love with Warren Buffett and I'm doing value investing
and he just looks at me, he says, look, Guy, you could
make large amounts of money, but at the end of
the world who cares? I'm here changing the world. And I think he's got
a really good point, and, and– So I have a certain
amount of angst about it, but I'm not going
to change what I do now 'cause I'm
enjoying my life. AUDIENCE: The talk you
gave today reminds me, Warren Buffet talk about
in the school system. I think that was all you
talk about today, right? Yeah. Can you tell me a little
bit more about, how do I, [INAUDIBLE] you mentioned
about envy, right? Warren Buffet also say
that it's not greedy, but it's envy that will
destroy the world, right? Yeah. Could you tell me how can you
not envy people, be humble? I have, some of my friend,
was working in, was, she was working at company
which was bought by Facebook, so he [INAUDIBLE], so
obviously people got envy, so could you please– GUY SPIER: So I asked Warren
Buffett that question and I– so I said it to him like
this, and I wasn't, I wasn't ready to
admit to the extent of my envy for certain people. So I put it in like this, and
the answer will scare you. I said, OK– so,
by this time, he's convinced me to call him Warren. Earlier on I'm saying Mr.
Buffet and he's stopping. So I say, so Warren, I want
to put you in these shoes. I'm a manager of yours
and I come to you. And I'm a manager of a
substantial business of yours and you rely on my performance
for the success of Berkshire Hathaway and I come to
you with a confession. And I say, I'm deeply envious
of a peer in my industry and it's just eating me up. And I know that
it's going to force me, get me to make
decisions that are not good for the business, but
what do I do with this envy? And I'm hoping for pearls of
wisdom to fall from heaven and I said, so what
would you say to him? And he's like, I don't know. [LAUGHTER] And I don't know where
I, I, I got this from. He did talk to us about
this inner scorecard idea at the lunch extensively. And just so that you know
it, for those of you who don't want to buy the book,
which I totally understand, he says– there are many
books out there– he says, would you rather be
considered by the world to be the best
lover in the world, but between you and
your wife to know that you really suck,
or would you rather for the world to think that
you're pretty bad at being a lover, but for
you and your wife to know that you're
the very best? And obviously that
was a distinction that I had not really
fully understood and made. And it was really hard
for me, because I realized how much of my life I'd lived
by an external scorecard and I realized in
writing the book how much of the environment that
we all operate in is so– exam results, all sorts
of evaluations. Those are all in a certain
way, in many cases, external scorecard. And I was telling Sarab that my
children are in a Montessori, Montessori school right now. I think maybe one of the big
things that the Montessori school system does is it
teaches you, and in a scorecard, it teaches you to focus on the
things that give you true joy. But I'll tell you what
really does deal with envy, and this works, is that,
a really powerful idea, emotions are a call to action. So anger is an, is an indication
that your boundaries have been violated, so you need to
protect your boundaries. For example, being
sad and being in pain means that you need to
seek nurture and security. Envy is a signal– so
the misdirection of envy is, I hate that guy I want
his life, and I don't have it. And so that's envy. And I don't know why it's
associated with the color green. The call to action is there's
something wrong in my life that I need to change. And I promise you,
example, the morning I woke up next to my wife,
totally in love with her, having had an
extraordinary night. I was not envious of anyone. My life was really good. The days that I've spent
on a windsurfer, yeah, just surfing those waves, with
a blue sky and strong wind, I was not envious of anyone. You could give me Bill
Gates, Warren Buffett, Steven Spielberg, you name it. When you're in those
moments you're not envious. So I think that, what I came
away from that lunch was, increased recognition
of my own envy, and increased recognition
of how much my life was on an external scorecard,
and the absolute desire to change it. And for me that meant
leaving New York. I realized that New York
wasn't a healthy place to me. So I think there is a
way to deal with envy. It's fixing what–
fixing– ensuring that we go to bed every
night happy with what we did during the day. And if we're not
doing that, then we need to try really
hard to get to a place where we're doing that. And once we're doing that
we won't have any envy. So thank you all for coming. I hope I, I hope I [INAUDIBLE].

44 thoughts on “Guy Spier: "The Education of a Value Investor" | Talks at Google”

  1. Hi Guy! I just read your book and it really impress me on the leasons you share. I wish ever reach half of what you learnt and share in it.
    So thankful to you for sharing your wisdom.

  2. Really lovely book has changed my inner world of accepting who l am and willingness to study the life's W Buffet and C Munger.

  3. Why bother getting some posh Brit, who mangles his vowels, as only the British upper class can, and has a pretty sketchy record as an investor, to speak? Try getting a proper investor like Terry Smith of Fundsmith to tell you how he does it.

    Here's his performance http://citywire.co.uk/fund/fundsmith-equity/c277395

    and he doesn't have 13% of his fund in BRK.A and has funds to invest and doesn't sit on his fat arse all year like some who appear not to have done anything. See https://fintel.io/i/aquamarine-capital-management-llc.

    There are some good talks here from proper investors like Tom Gayner, and Jim O'Shaugnessy and some poor ones by people who have written books or claim to have done.

    Can't Google do better than this, FFS?

  4. Great Talk! Its totally interesting to see someone totally honest about their shortcomings. We all have them.

  5. vangurde index has done the job. pick the right index. how they are constructed is important. S&p or dowzone index.

  6. try not to trade when the market is open . decide at night what you gonna do then put the order . decide in the quite moments.

  7. you cant know about a business 100%. sso you can say it is probably under valued at $50 or it is probably over valued at $200. and in the middle of the range i am dealing with uncertainty. so i can increase my probability of my success.

  8. i can not predict the market in the short run about the market. if see something i like i invest and if i dont see somthing which i like i build the cash.

  9. whenever i looked for an answer outside of my self i dont get a good answer. the minute i look for an answer inside myself the world change.

  10. Great investor but his mind is still full of pseudoscience bullshit. I learned a lot from his book but hated the parts where he glorifies the scammer "Tony Robbins" and when he reveals his belief in the laws of attraction "The secret".

  11. 5:10 This should have been where you stop watching. He's an unethical man. Him and Pabrai are horrible "investors". I have yet to see either one of them come up with a good, and original investment idea.

  12. Guy Spier is just a crook who is trying to capitalize on Buffett success and all that is connected to him.
    His lunch, his book (book was written by another man – Guy paid for it – it is written in the book) everything is just promotion.
    His investments mimic Berkshire portfolio but if you are investor in his fund you actually do much worse than simply investing in Berkshire stock.
    But Guy is glad for this – he collects fees.
    For the last 10 years he doesn't even beat S&P 500.

  13. There is no such thing as value investing. There is opportunity investing. Warren talks about buying companies that are excellent, have smart and moral management, have a competitive advantage, and are selling for a very good price. WHY would ANYBODY sell such a company unless they have some problems (divorce, too many greedy people in family, etc…) this is not Value investing, this is opportunity investing. I do the same, but I have info from banks which companies have problems with cashflow, so I come in and make offers. I buy companies for 4-5 ebitda cash and debt free. Once I make them free of all debts, I sell them 8-9 ebitda. Idiots can do this, you just need money, and I am lucky my family has given me 100m euro to invest of their money. They think I am smart, but I am really not, I am just a used car sales man in a fucking Kiton suit.

    there you go, i said it.

  14. I want to become a Portfolio Manager some day and my faith in the industry has just been restored. Truly wonderful talk too. If I knew his address, I would have definitely sent a 'thank you' note!

  15. you are not Warren Buffett, because you are not willing to go into the grey area of business to make that extra mile. Warren did that at one point in his career.

    I am for value investing, but the growth investing must be there too. If everything would be value investing we would never have any of the companies we have today. Jim Walton was not a value investor, nor was Henry Ford, nor was Steve Jobs. — "Value investors" use other people's success to call themselves "Value Investor" – there is something odd there. 

  16. Guy, that the risk of being original, much more happiness, truth, beauty, and wisdom will come to you that way. You even copy Warren Buffett when you talk. You need to be original. 

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