Other[Music][Music][Music][Music] huge huge thank you for all of you for huge huge thank you for all of you for huge huge thank you for all of you for coming today's event join event with the coming today's event join event with the coming today's event join event with the Val domestic society as well for those Val domestic society as well for those Val domestic society as well for those who don't know I'm my name is AR that's who don't know I'm my name is AR that's who don't know I'm my name is AR that's tedris and Charles unfortunately for you tedris and Charles unfortunately for you tedris and Charles unfortunately for you guys we run those societies um today's guys we run those societies um today's guys we run those societies um today's event will be quite similar to those of event will be quite similar to those of event will be quite similar to those of last week we'll have approximately 20 30 last week we'll have approximately 20 30 last week we'll have approximately 20 30 minutes of questions plan for my minutes of questions plan for my minutes of questions plan for my citation to Charles before we then open citation to Charles before we then open citation to Charles before we then open up the floor to you guys so you can up the floor to you guys so you can up the floor to you guys so you can hopefully come up with some challenging hopefully come up with some challenging hopefully come up with some challenging questions which I'm sure M will very questions which I'm sure M will very questions which I'm sure M will very much enjoy answering I won't spend too much enjoy answering I won't spend too much enjoy answering I won't spend too much in time introducing him he is of much in time introducing him he is of much in time introducing him he is of course a man that requires little to no course a man that requires little to no course a man that requires little to no introduction however he starts his introduction however he starts his introduction however he starts his investment career focused on buying high investment career focused on buying high investment career focused on buying high quality growing businesses for he then quality growing businesses for he then quality growing businesses for he then started R funds in 1999 ra switch to a started R funds in 1999 ra switch to a started R funds in 1999 ra switch to a more GS deep value style of investing more GS deep value style of investing more GS deep value style of investing remain managing partner of the
Otherremain managing partner of the firms which has provided staggering 781 per n of fees compared to 30 378 per in the S&P in the last 22 years so an exceptional track record um in the era where so many investors have been woed by flashy tech stocks High growing companies he's remained committed to his classical value investing style which has come from Deep inspiration with Warren Buffett who famously had launched with and paid $650,000 for back in 2018 perhaps how many of us became acquainted with Manish as well he also investor an absolutely fantastic read which high absolutely fantastic read which i' highly recommend giving a look if you haven't already which brings concepts of his heads I win Tails I don't lose much investment philosophy I won't waste too much of your guys time so let's give it up for a huge round of pause from Manish
Questionerup for a huge round of pause from Manish for Brian so I guess first question wefor Brian so I guess first question wefor Brian so I guess first question we have for you bit bit of an intro bit ofhave for you bit bit of an intro bit ofhave for you bit bit of an intro bit of a warm-up question perhaps best knowna warm-up question perhaps best knowna warm-up question perhaps best known for your book The Dand investor wouldfor your book The Dand investor wouldfor your book The Dand investor would you like to start up by giving a quickyou like to start up by giving a quickyou like to start up by giving a quick overview of the book and youroverview of the book and youroverview of the book and your inspiration you had for writing it asinspiration you had for writing it asinspiration you had for writing it as well
Otheroh sure so first of all thanks forwell oh sure so first of all thanks forwell oh sure so first of all thanks for inviting me it's uh great to be back andinviting me it's uh great to be back andinviting me it's uh great to be back and good to be in such August company sogood to be in such August company sogood to be in such August company so that's wonderful I actually wrote thethat's wonderful I actually wrote thethat's wonderful I actually wrote the book to crystallize some Concepts in mybook to crystallize some Concepts in mybook to crystallize some Concepts in my own mind you know I think they say thatown mind you know I think they say thatown mind you know I think they say that the best way to learn is to teach so Ithe best way to learn is to teach so Ithe best way to learn is to teach so I actually wanted to just put down onactually wanted to just put down onactually wanted to just put down on paper things I had Frameworks I had inpaper things I had Frameworks I had inpaper things I had Frameworks I had in my head Etc just kind of more uhmy head Etc just kind of more uhmy head Etc just kind of more uh structured formalized format basicallystructured formalized format basicallystructured formalized format basically you know it ended up being a book and Iyou know it ended up being a book and Iyou know it ended up being a book and I used to basically just have a goal everyused to basically just have a goal everyused to basically just have a goal every day of just uh writing one page i' justday of just uh writing one page i' justday of just uh writing one page i' just sit down in the morning and you know
Questionersit down in the morning and you know spend about an hour and then I'd go off do other things and in about 6 months the book was done which was great and uh one thing I would say is that some of you might be fans of Seinfeld and Seinfeld wrote a book it's a very good book it's called is that something and his approach in life has been every day to sit down for a couple of hours with a yellow notepad and basically write down things he observed about humans or The Human Experience and you know eventually these things so you know he would noodle on something I don't know if you guys remember there was an episode of Seinfeld where they go to pick up a rental car and person of the rental car company tells them that um we have your reservation but you we don't have a car so you know Seinfeld and you know says well you know if you have have the
Otherwell you know if you have have the reservation it means you have the car Ireservation it means you have the car Ireservation it means you have the car I mean that's the whole point of amean that's the whole point of amean that's the whole point of a reservation right and so again it wasreservation right and so again it wasreservation right and so again it was these types of kind of daily kind ofthese types of kind of daily kind ofthese types of kind of daily kind of interactions that we have and he wouldinteractions that we have and he wouldinteractions that we have and he would write down whatever he observed then hewrite down whatever he observed then hewrite down whatever he observed then he would come back the next day and againwould come back the next day and againwould come back the next day and again look at what he had written down and youlook at what he had written down and youlook at what he had written down and you know try to develop it and most thingsknow try to develop it and most thingsknow try to develop it and most things would fall by the wayside and a fewwould fall by the wayside and a fewwould fall by the wayside and a few things would end up having enough meatthings would end up having enough meatthings would end up having enough meat on the bone that it could become part ofon the bone that it could become part ofon the bone that it could become part of a comedy routine or maybe even part of aa comedy routine or maybe even part of aa comedy routine or maybe even part of a SciFi episode and so on so thatSciFi episode and so on so thatSciFi episode and so on so that discipline of you know sitting downdiscipline of you know sitting downdiscipline of you know sitting down every day and going about it in a veryevery day and going about it in a veryevery day and going about it in a very kind of scientific way really kind ofkind of scientific way really kind ofkind of scientific way really kind of set them apart from other Comedians andset them apart from other Comedians andset them apart from other Comedians and and such because uh others may have beenand such because uh others may have beenand such because uh others may have been funnier or may have had better deliveryfunnier or may have had better deliveryfunnier or may have had better delivery or other things but they didn't have theor other things but they didn't have theor other things but they didn't have the discipline so this kind of set him apart
Questionerdiscipline so this kind of set him apart and of course made him very wealthy hi Manish I just want to really ask another question about the book that you wrote at the dando investor um you have that now published 17 years ago which is a statistic you may not like to be reminded of but it indeed came out in a time where many of us in this room were just mere infants um so if you were to now write a revised Edition for a new generation of investors what was really the the main message that you would like to convey across
OtherI don't have any plans to do a second edition or anything like that but if I were to do something I would emphasize more the notion of the hundred Baggers and the notion of you know the relent lless hunt for great long-term Compounders at the end of the day basically in an investing lifetime if you were to were able to find even
Questionerif you were to were able to find even if you were to were able to find even you know two or three of those even a you know two or three of those even a you know two or three of those even a couple of those with some reasonable couple of those with some reasonable couple of those with some reasonable portion of your portfolio allocated to portion of your portfolio allocated to portion of your portfolio allocated to them you'd be done pretty much I mean them you'd be done pretty much I mean them you'd be done pretty much I mean you could have a 95% error rate and you you could have a 95% error rate and you you could have a 95% error rate and you still hit the ball out of the park for a still hit the ball out of the park for a still hit the ball out of the park for a six I might add and so I would kind of six I might add and so I would kind of six I might add and so I would kind of Explore More that end of the wealth Explore More that end of the wealth Explore More that end of the wealth creation that is possible if one is creation that is possible if one is creation that is possible if one is hored on that hey Mo so recently we've hored on that hey Mo so recently we've hored on that hey Mo so recently we've seen a lot of traditional vanual seen a lot of traditional vanual seen a lot of traditional vanual ministers gradually shifting towards a ministers gradually shifting towards a ministers gradually shifting towards a more quality oriented philosophy like more quality oriented philosophy like more quality oriented philosophy like just spoke up so for example gu Spar has just spoke up so for example gu Spar has just spoke up so for example gu Spar has an investment in Ferrari at 50 times an investment in Ferrari at 50 times an investment in Ferrari at 50 times earnings but you still follow a very earnings but you still follow a very earnings but you still follow a very value oriented approach what is the value oriented approach what is the value oriented approach what is the reason for that and how come you stuck reason for that and how come you stuck reason for that and how come you stuck with it
WarrenI used to own more than 1% of Ferrari it's a deep regret I have that you know we're old too soon and wise too late basically I didn't fully appreciate
Otherlate basically I didn't fully appreciate the quality of that business with and depth of that boat so so yeah I mean I think if you find yourself in the fortunate position of and you know I got Ferrari as part of my purchase of Fiat Chrysler about 12 years ago and at the time effectively Ferrari was being valued at less than 2 billion for the entire company and it's more than like I don't know 20 30 times that maybe 25 times that today and in not that many years yeah I mean I think that I'm still always going to be trying to buy assets well below what they're worth but one of the kind of Evolutions I've gone through is to appreciate that some assets need to be held when they're fully priced and even held when they appear to be overpriced and just to follow up on that I think a core ten your investment philosophy is taking bets with outside
Questionerphilosophy is taking bets with outside return profiles and betting heavily on return profiles and betting heavily on return profiles and betting heavily on them so finding businesses with the them so finding businesses with the them so finding businesses with the exceptionally large margin of safety exceptionally large margin of safety exceptionally large margin of safety which allows us to place such large which allows us to place such large which allows us to place such large positions of your portfolio into positions of your portfolio into positions of your portfolio into singular companies but given that you singular companies but given that you singular companies but given that you take such a deep value perspective where take such a deep value perspective where take such a deep value perspective where you are looking for such fundamentally you are looking for such fundamentally you are looking for such fundamentally valued assets whatever emphasis do you valued assets whatever emphasis do you valued assets whatever emphasis do you place on evaluating the quality of place on evaluating the quality of place on evaluating the quality of management and how do you go about management and how do you go about management and how do you go about assessing management and the primary assessing management and the primary assessing management and the primary motivation I have been behind asking motivation I have been behind asking motivation I have been behind asking that is I think for new investors I that is I think for new investors I that is I think for new investors I think determining quality of management think determining quality of management think determining quality of management and whether they're you know truly and whether they're you know truly and whether they're you know truly aligned longterm interest of a business aligned longterm interest of a business aligned longterm interest of a business can be exceptionally hard especially can be exceptionally hard especially can be exceptionally hard especially given that they're all trained by the given that they're all trained by the given that they're all trained by the same PR departments and they all sort of same PR departments and they all sort of same PR departments and they all sort of post the same sort of dribble on their post the same sort of dribble on their post the same sort of dribble on their annual report so yeah I think obviously
Questionerannual report so yeah I think obviously figuring out the nature of management and the competence and capabilities and how how engaged they are and likely to be engaged there in the future is of fundamental importance the prescription that Buffett and Munger have for that which I have followed is not to focus on what they're saying will happen in the future but to focus on what they've said in the past and what's actually transpired in the past so one of the things unfortunately most managements now don't write the annual letter or the annual report you know that's going of relegated to some PR firm or the IR part of the company but what I find useful is to go look at the earnings and other transcripts over the last several decades so if a management team has been or CEO has been running a particular company for 10 15 20 years that's uh
Questionercompany for 10 15 20 years that's uh tremendous because then we have a a long history of they've been holding quarterly calls and so on and a lot of that is unscripted because they don't really know what questions are going to get asked so when they're kind of you know answering different questions you know giving their perspectives it's not the messaging as far less controlled and of course you also have you can overlay that with the actual performance of the business you know then basically you can apply other nuances to come up with what Munger would call a Lis work a metal models and using all of that in some situations you may have a really good grasp of the nature of management and in a even smaller number of cases you may end up with finding some management teams that are truly exceptional and maybe the world doesn't see it or recognize it because they haven't gone
Questionerrecognize it because they haven't gone through that process like you so basically I think in the area of security analysis digging deep so first of all I think there's a big decision to be made on which rabbit holes you decide to go down so it's important to try to go down rabbit holes that you think may have some promise but when you go down rabbit holes which you know show some promise and you go deep into those rabbit holes that's likely to end up giving you a very significant Competitive Edge because you have a very deep understanding uh of that business so for example in 2012 I mentioned I made an investment in Fiat Chrysler they had brought in a person from outside the Auto industry to lead Fiat Chrysler I think he joined in at that time it was Fiat he joined in 2004 he was the fifth CEO the they had hired in 2 years and the company was really in very bad
Questionerthe company was really in very bad financial shape bleeding millions of Euros every day and the banks were ready to kind of you know put the news around them Etc so he had a really tough hand dealt to him and he executed brilliantly so by the time I made the investment in fat Chrysler in 2012 there was eight years of history of Sergio Maron to look back on at Fiat with a lot of transcripts and presentations and reports financials available to kind of look at kind of what had transpired one could also look at the whole acquisition of Chrysler and basically I spent about I think about four months digging deep there was a book on the agelli and there was some Harvard case studies on Sergio so I realized that this was a business it was a tough business but this was a business run by a truly once in a generation manager which most of the
Todd Combsgeneration manager which most of the other markets participants didn't didn'tother markets participants didn't didn'tother markets participants didn't didn't appreciate apprciate and the secondappreciate apprciate and the secondappreciate apprciate and the second thing was it was a business which wasthing was it was a business which wasthing was it was a business which was doing about 130 or 140 billion in salesdoing about 130 or 140 billion in salesdoing about 130 or 140 billion in sales with A5 or6 billion market cap they hadwith A5 or6 billion market cap they hadwith A5 or6 billion market cap they had some products and brands that were alonesome products and brands that were alonesome products and brands that were alone capable of producing five six billion acapable of producing five six billion acapable of producing five six billion a year like the Jeep franchise couldyear like the Jeep franchise couldyear like the Jeep franchise could easily produce that the ram franchiseeasily produce that the ram franchiseeasily produce that the ram franchise which doesn't exist in the UK couldwhich doesn't exist in the UK couldwhich doesn't exist in the UK could easily produce that and so one had toeasily produce that and so one had toeasily produce that and so one had to just get rid of some of thejust get rid of some of thejust get rid of some of the non-performing pieces and you would havenon-performing pieces and you would havenon-performing pieces and you would have a company making about 10 billion a yeara company making about 10 billion a yeara company making about 10 billion a year so basically that came about after youso basically that came about after youso basically that came about after you know into Sergio and digging into theknow into Sergio and digging into theknow into Sergio and digging into the business and so on so I think like Ibusiness and so on so I think like Ibusiness and so on so I think like I said the data set is too large goingsaid the data set is too large goingsaid the data set is too large going down promising rabbit holes is importantdown promising rabbit holes is importantdown promising rabbit holes is important if you go down a rabbit hole that youif you go down a rabbit hole that youif you go down a rabbit hole that you think is promising and then appears tothink is promising and then appears tothink is promising and then appears to be not so promising you need to back out
Questionerbe not so promising you need to back out and go into the next Rabbit Hole yeah I and go into the next Rabbit Hole yeah I and go into the next Rabbit Hole yeah I just thought it' be worth perhaps just thought it' be worth perhaps just thought it' be worth perhaps following up on the point you just made following up on the point you just made following up on the point you just made then um you spoke at quite long length then um you spoke at quite long length then um you spoke at quite long length about Fiat obviously now Fiat has been about Fiat obviously now Fiat has been about Fiat obviously now Fiat has been packaged up in a new business now packaged up in a new business now packaged up in a new business now stantis which is trading at three times stantis which is trading at three times stantis which is trading at three times forward earnings um I'm curious do you forward earnings um I'm curious do you forward earnings um I'm curious do you have a view on the business do you think have a view on the business do you think have a view on the business do you think it would be quite a good value it would be quite a good value it would be quite a good value opportunity if you were to try to uh opportunity if you were to try to uh opportunity if you were to try to uh take back a similar thesis that you take back a similar thesis that you take back a similar thesis that you previously made I don't want this to be previously made I don't want this to be previously made I don't want this to be about stock tipes but I'll give you some about stock tipes but I'll give you some about stock tipes but I'll give you some perspectives
OtherI don't have any ownership in stanes it is being run by A Gifted in stanes it is being run by A Gifted in stanes it is being run by A Gifted manager Carlos Tavarez is a great manager Carlos Tavarez is a great manager Carlos Tavarez is a great manager he can squeeze blood out of a manager he can squeeze blood out of a manager he can squeeze blood out of a rock he buys $200 suits and he's happy rock he buys $200 suits and he's happy rock he buys $200 suits and he's happy when he's visiting the different Fiat when he's visiting the different Fiat when he's visiting the different Fiat plants Etc to have a you know $3 a plants Etc to have a you know $3 a plants Etc to have a you know $3 a sandwich for
Todd Combssandwich for lunch and he's a pretty non-nonsense guy so if the game is about squeezing efficiencies Carlos is your man he's truly exceptional at it on the weekends he's a race car driver you know he's on the track so he loves the auto business in general I think the difference now versus when I was looking in 2012 is that we have the looming transition to EVS electric vehicles that transition is a very expensive transition for the Legacy auto manufacturers like stellantis tens of billions in capex and you got to go toe-to-toe with two Mavericks you got to go Toe to toe with Elon and you got to go toe-to-toe with Chung Fu Wang at byd in China and my perspective is that if you find yourself in the unhappy situation of having to compete with Elon just go find something else to do just take your ball and leave the arena do not try to compete with
Otherthe arena do not try to compete with Elon do not pass go and do not collect 200 it's bad for your health and definitely bad for your wealth and there's only one guy Elon is afraid of and that's Chung Fu Wang in China and Chung Fu Wang runs byd and you know the Indian guy who's talking to you had the good pleasure of meeting Jung fuang a few times and byd is a company in China which bua haway has a maybe a 78% interest in and when Charlie Munger was in 2008 trying to get Warren Buffett interested in investing in byd Warren had no interest in investing in some Chinese company he' never heard of and you know didn't want to do the work so he just told Charlie I'm not interested so Charlie told Warren Warren this guy is the second coming of Henry Ford and Warren said Charlie I'm still not interested so then Charlie told Warren he is Henry Ford W and Bill Gates in the
Otherhe is Henry Ford W and Bill Gates in thehe is Henry Ford W and Bill Gates in the same person and Warren said well that'ssame person and Warren said well that'ssame person and Warren said well that's good Charlie but I'm still notgood Charlie but I'm still notgood Charlie but I'm still not interested so then Charley told himinterested so then Charley told himinterested so then Charley told him Warren he's Henry Ford and Bill GatesWarren he's Henry Ford and Bill GatesWarren he's Henry Ford and Bill Gates and Thomas Edison in the same person andand Thomas Edison in the same person andand Thomas Edison in the same person and then what Warren did is he owned 80% ofthen what Warren did is he owned 80% ofthen what Warren did is he owned 80% of a company called mid- American Energya company called mid- American Energya company called mid- American Energy which was you know majority controlledwhich was you know majority controlledwhich was you know majority controlled by Burkshire and he asked them to putby Burkshire and he asked them to putby Burkshire and he asked them to put 250 million into byd getting about 8 or250 million into byd getting about 8 or250 million into byd getting about 8 or 9% stake which has gone up I don't know9% stake which has gone up I don't know9% stake which has gone up I don't know 20 25 fold at this point so the only20 25 fold at this point so the only20 25 fold at this point so the only person who gives Elon pause is Chang Fuperson who gives Elon pause is Chang Fuperson who gives Elon pause is Chang Fu Wang and even if you're Carlos TavarisWang and even if you're Carlos TavarisWang and even if you're Carlos Tavaris and when you have to go Toe to Toe notand when you have to go Toe to Toe notand when you have to go Toe to Toe not just with Elon but with Elon and Elonjust with Elon but with Elon and Elonjust with Elon but with Elon and Elon squared you know when you have Elon plussquared you know when you have Elon plussquared you know when you have Elon plus Elon squared just definitely don't be inElon squared just definitely don't be inElon squared just definitely don't be in the same Arena it's not going to workthe same Arena it's not going to workthe same Arena it's not going to work even if it's just El so tantis is veryeven if it's just El so tantis is veryeven if it's just El so tantis is very cheap it's very well-run if there was no
Questionercheap it's very well-run if there was no EV transitions things would be fine now the other problem is that if Elon and Elon squared make a 10% margin on the EVS that they sell stellantis and Ford and GM are going to lose money because their cost Advantage is more than 10% and if you have a business so we let's fast forward to a world where there's no combustion engine cars being sold as new cars they only Electric vehicle sold maybe 15 years from now or 20 years from now and you have a negative margin and Elon and Elon squared are making 10% well at a negative margin the business has no value so it to me falls into what Charlie Munger and Warren Buffett would call the two hard pile so I just put it into the two hard pile and move on you mentioned in previous interviews that you had the pleasure of having dinner with Charlie many times
Questionerhaving dinner with Charlie many times and even playing bridge occasionallyand even playing bridge occasionallyand even playing bridge occasionally with himwith himwith him in meeting and talking to him what didin meeting and talking to him what didin meeting and talking to him what did you learn from him and what did youyou learn from him and what did youyou learn from him and what did you learn about him that think made him suchlearn about him that think made him suchlearn about him that think made him such a great investor
Otherwell Warren and Charlea great investor well Warren and Charlea great investor well Warren and Charle have been such open books over theirhave been such open books over theirhave been such open books over their lives that pretty much anything you wantlives that pretty much anything you wantlives that pretty much anything you want to learn from them know about them is into learn from them know about them is into learn from them know about them is in the public domain they've been they'vethe public domain they've been they'vethe public domain they've been they've both been very generous and exceptionalboth been very generous and exceptionalboth been very generous and exceptional teachers so if you wanted to learn fromteachers so if you wanted to learn fromteachers so if you wanted to learn from Charly Monger which I think is a veryCharly Monger which I think is a veryCharly Monger which I think is a very good exercise it's really simple firstgood exercise it's really simple firstgood exercise it's really simple first there's a great book called a Charliethere's a great book called a Charliethere's a great book called a Charlie Almanac if you bought that book it mightAlmanac if you bought that book it mightAlmanac if you bought that book it might cost you 50 or $75 and if you read thatcost you 50 or $75 and if you read thatcost you 50 or $75 and if you read that book carefully you would unfortunatelybook carefully you would unfortunatelybook carefully you would unfortunately get more out of that book and be wiserget more out of that book and be wiserget more out of that book and be wiser than the years at LS and lssethan the years at LS and lssethan the years at LS and lsse unfortunately for the years that you'reunfortunately for the years that you'reunfortunately for the years that you're spending here is charging you slightlyspending here is charging you slightly
Questionerspending here is charging you slightly more than more than more than $75 maybe you can educate me how much $75 maybe you can educate me how much $75 maybe you can educate me how much more than $75 is costing you to be there more than $75 is costing you to be there more than $75 is costing you to be there but but poor Charlie Almanac would run but but poor Charlie Almanac would run but but poor Charlie Almanac would run circles around what the esteemed circles around what the esteemed circles around what the esteemed professor at LSC have to teach then you professor at LSC have to teach then you professor at LSC have to teach then you could overlay that with the Burkshire could overlay that with the Burkshire could overlay that with the Burkshire meetings buffett. CNP cnbc.com is where meetings buffett. CNP cnbc.com is where meetings buffett. CNP cnbc.com is where the last 28 years or so of annual the last 28 years or so of annual the last 28 years or so of annual meetings or 29 years of annual meetings meetings or 29 years of annual meetings meetings or 29 years of annual meetings are archived 6 hours each and in this are archived 6 hours each and in this are archived 6 hours each and in this case you don't have to spend the $75 case you don't have to spend the $75 case you don't have to spend the $75 it's zero so it's even a better deal it's zero so it's even a better deal it's zero so it's even a better deal than poor Charlie Almanac and so you get than poor Charlie Almanac and so you get than poor Charlie Almanac and so you get like 150 hours of Buffett and Munger like 150 hours of Buffett and Munger like 150 hours of Buffett and Munger talking to you and charging you nothing talking to you and charging you nothing talking to you and charging you nothing and again slightly better economics than and again slightly better economics than and again slightly better economics than lsse so in my interactions with Charlie lsse so in my interactions with Charlie lsse so in my interactions with Charlie I think what I some of the things I kind I think what I some of the things I kind I think what I some of the things I kind of gleaned from him which maybe were not of gleaned from him which maybe were not of gleaned from him which maybe were not you know directly in the public domain you know directly in the public domain you know directly in the public domain was his focus on the problem at hand so was his focus on the problem at hand so was his focus on the problem at hand so
Warrenwas his focus on the problem at hand so I used to repeatedly remind Charlie about the huge body of work of great work he had produced in his lifetime and the huge impact he had had on humanity and capitalism and so on and he just brushed it off he never wanted to spend time uh thinking about that or talking about that or any of that all his energies were focused on issue in front of him so he would repeatedly tell him tell me that you know Burkshire has all this cash we can't find a good place to put it to work and he would mourn and grown up about and I'd always tell him Charlie you guys always find a way so don't worry it's going to happen and then one time he was you know looking for a CEO at Daily Journal one of the public companies he was a chairman of and he was totally focused on that so he didn't really care about so many of the things that he had accomplished I
Questionerthings that he had accomplished I realized a lot of us humans you know we go to Elite institutions we work at some great places we might start a business we might do well we look back and we say oh you know Well Done Mish that's been a good good job well done and you know that takes away from the focus so I learned that you know keep your nose to the grindstone focus on the problem at hand do not be satisfied by what has transpired in the past and continue to move the ball down the field so those are some of the lessons I took from Charlie more most of what I learned from him was not so much the direct words he spoke to me was just observing him you know just observing him in close quarters with in his home with his daughter-in-law or with his grandkids and that sort of thing just observing him with his kids and grandkids partners
Questionerhim with his kids and grandkids partners and different people he was interacting with I think one of the greatest things about the value investing Community is we have access to so many great teachers like yourself who publish so much literature for us to read yet despite all of that you know cloning investment strategies is exceptionally difficult what what are it what is it about cloning strategies do you think that makes it so difficult and what do you think we can do better obviously you describe yourself as a Shameless clone and someone who's taken so much inspiration from Buffett so what sort of things did you do to be able to you know gain the sort of thought processes that Buffet uses so what do you think that we can do better to be able to clone the investment strategies of many of the investment grades that they teach us
Otheryeah so I think one of the problems in
Questioneryeah so I think one of the problems in investing is that the data set is too large we have 50,000 stocks around the planet each is a rabbit hole and each rabbit hole that you might want to go down might take a few days to a few months to really get your arms around a lot of these rabbit holes are not even in your circle of competence so even if you went down them you would not understand them so there is a need to get some shortcuts and cut that data set down dramatically one of the shortcuts you can use to cut that data set down is to be a Shameless cloner don't just be a cloner be a Shameless clone like me so basically if you have understood how some investors invest how their minds work etc they usually have to make filings in various geographies around the world disclosing what they have and they don't want to do that but they have
Questionerthey don't want to do that but they have to do that and so if you understand the investor you see what kind of position they have and you you like the way they approach things and they have a good track record well that can cut your data set down by more than 99% you might be able to to take a 50,000 stock Universe down to maybe 50 stocks or less maybe 20 stocks and then start going down those rabbit holes so cloning can be a really good way to trim the data set but you still have to do the work and you still have to figure out whether it's something that's within your circle of competence and whether you can understand the business well enough and whether there's a big Delta between price and value value once you've understood the business you made quite the controversy recently with your bet on coal with Alpha metalogical resources and console Energy do you
Questionerresources and console Energy do you think that in the in light of the onset of ESG that buying out of fashion companies will continue to yield positive returns for Value investors now
Warrenwe are getting to things which are you know current positions in the portfolio and I really prefer not to talk much about the current positions in the portfolio we might still be buying them we don't need competition but I would say in general that coal when you get all the you know ESG and ESG pressures and different things I mean a lot of like us foundations and endowments will not allow the managers that they invest in to own these stocks which is actually quite irrational because we wouldn't have a civilization if we suddenly shut down met coal mining or for that matter even thermal coal mining so the state of the world today is that if we try to
Greg Abelthe world today is that if we try to satisfy our energy needs with solar and wind and nuclear we'd have some really cold nights and we'd have some pretty dark homes and definitely all the AI computers which are massive power Hogs could be kept alive so the reality is for base loads and I'm talking about thermal core but for base loads Humanity will have a dependency on thermal coal for some time thermal coal consumption is going down in the US it's going down in Europe it's still on the rise in places like India and it's very much required for quite some time to have a civilization metallurgical C which is used to produce Iron and Steel has no practical substitute so if you want to try to have a civilization without Iron and steel it wouldn't be much of a civilization so on the metallurgical Cal side the need is is a mandatory need and there are no real substitutes for and
Otherthere are no real substitutes for and that's all I have to say about the coal business I would love to talk more about it if and when at some point we have no ownership in these names and you guys still have a deep interest in talking about it
Questioneryeah I think really just the final question from us three before we open up to the audience I'm sure there's many people very personing to ask Manish some good questions um I think just finally I I mean being as investment societies were all uh very key in Practical advice and so we wondered perhaps you could just talk about almost the process which you go through from initially coming across business through to then getting conviction
Otheryeah I mean I think the the very first question I ask myself when I run into some business uh you know let's say I see some company on the 13f of some investor I admire is the
Questionerthe 13f of some investor I admire is the first question I ask is it within my circle of competence and a lot of businesses that wiped out when I asked that question now if the business had happens to be in my circle of competence then I ask the second question is it widely mispriced I'm not really interested in something that's selling for $75 a share and is worth $100 a share that is too Mickey Mouse for me you know so what I'm looking for is it's selling for $75 a share and maybe it's worth 300 or 400 or 500 a share or more so the second question I ask myself is does there appear to be a very large gap between price and value and of course you know the world's a competitive place so in most cases for the second question the answer is going to be no but sometimes the answer might come out yes does appear to be a pretty large gap and
Questionerdoes appear to be a pretty large gap and then I say okay let's go down the rabbit hole and you know let's try to understand the business better and what it's about and what it's likely to look like in five or 10 years and you know what we might be able to make if you own it and so on and so that's the process open the floor to questions from you guys I'm sure you guys very Queen so yeah any questions
Questioneryou can you hear me
Questioneryeah hi Mish my question is as we are young and only many of us are only graduating what would be your at least one of recommended Paths of starting a job or an investing career uh um to not to be stuck in some career that won't lead us to for example being an investor but that would teach us skills that would could be utilized in the future
Warrenyeah I think if you have an interest in being a professional investor I would suggest that you should
Questionerinvestor I would suggest that you should create a you know a very separate brokerage account from where you don't write you know checks for your groceries or you know withdrawal funds through a debit card or something like that something where the track record could easily be audited in five or 10 years so you put money in you invest it and then you look at what those returns are after 5 10 15 years and if those returns are sign significantly above the index then you have some basis to think about asking other people to give you money but you would need some kind of of track record that warrants that I would get that going as early as possible size of the account is not that relevant I think having the discipline that it's you know clearly auditable and clearly demarked from everything else you're doing is important while that is going on you
Otherimportant while that is going on you would probably have a job and probablywould probably have a job and probablywould probably have a job and probably be working for someone and I think therebe working for someone and I think therebe working for someone and I think there I would just clone Warren Buffett'sI would just clone Warren Buffett'sI would just clone Warren Buffett's advice which is you go to work foradvice which is you go to work foradvice which is you go to work for people you like admire and Trust so whenpeople you like admire and Trust so whenpeople you like admire and Trust so when Warren took his first job with BenWarren took his first job with BenWarren took his first job with Ben Graham and Ben Graham told him to comeGraham and Ben Graham told him to comeGraham and Ben Graham told him to come to New York to join him he never askedto New York to join him he never askedto New York to join him he never asked Ben Graham what his salary is going toBen Graham what his salary is going toBen Graham what his salary is going to be he never asked Ben Graham what hisbe he never asked Ben Graham what hisbe he never asked Ben Graham what his title is going to be he just took thetitle is going to be he just took thetitle is going to be he just took the next train and went to New York sonext train and went to New York sonext train and went to New York so basically one of the I would saybasically one of the I would saybasically one of the I would say negative things that a lot of new gradsnegative things that a lot of new gradsnegative things that a lot of new grads do is they focus on the name brands youdo is they focus on the name brands youdo is they focus on the name brands you know it's prestigious to say that you'reknow it's prestigious to say that you'reknow it's prestigious to say that you're going to be working for Goldman Sachsgoing to be working for Goldman Sachsgoing to be working for Goldman Sachs and so on going to work for Goldmanand so on going to work for Goldmanand so on going to work for Goldman Sachs is not as important as knowing whoSachs is not as important as knowing whoSachs is not as important as knowing who is going to be your immediate boss andis going to be your immediate boss andis going to be your immediate boss and who are going to be the people you'rewho are going to be the people you'rewho are going to be the people you're going to work with and if those come
Othergoing to work with and if those come with the name brand that's fine if they come without a name brand that's also fine but you have to go to work with people you like admire and trust and when Warren gives that criteria of like admire and Trust he's not asking you to go work for the company that gives you the highest offer in that sentence there's nothing about the salary so I think you need to think about the people and the places you admire the most and reach out to those people and places to see if you can be a part of those teams and don't worry about the comp and the rest will take care of itself and if you find yourself in a place where you are questioning the quality of the people both your boss and or your colleagues or you're questioning the ethos of the organization you cannot really stay there you need to move on so that's what
Questionerthere you need to move on so that's what I would suggest uh given such a Monumental margin of sat you've outlined so for example buying a uh a business worth about $500 per share around $75 example you've outlined how often is it that you find yourself um wrong basically in price predictions and could you possibly outline a case where you were I didn't fully get that question
Warrenare you asking that you know if we have a widely Miss security how often does that happen uh yes yeah so first of all if I'm able to find one of those in a year it's a really good year and you don't need very many of those so the interesting thing about the stock market is because there's 50,000 stocks if you set a criteria saying I'm only going to buy things that are trading at one times earnings you will find companies that meet that criteria if you say that I want to buy bu things that are trading
Otherwant to buy bu things that are trading at you know 05 PE six months earnings at you know 05 PE six months earnings at you know 05 PE six months earnings you would find those as well so whatever you would find those as well so whatever you would find those as well so whatever criteria you set if you said I don't criteria you set if you said I don't criteria you set if you said I don't want to buy anything that's more than want to buy anything that's more than want to buy anything that's more than three times earnings and I want the three times earnings and I want the three times earnings and I want the earnings to be very stable you will find earnings to be very stable you will find earnings to be very stable you will find those as well it is in the nature of those as well it is in the nature of those as well it is in the nature of auction driven markets that things are auction driven markets that things are auction driven markets that things are not always properly priced they can be not always properly priced they can be not always properly priced they can be severely underpriced and they can be severely underpriced and they can be severely underpriced and they can be severely overpriced I remember that in severely overpriced I remember that in severely overpriced I remember that in the year 2000 early 2000 the year 2000 early 2000 the year 2000 early 2000 I just started my fund about 6 months I just started my fund about 6 months I just started my fund about 6 months ago and one of the guys who had invested ago and one of the guys who had invested ago and one of the guys who had invested in my fund had very few investors at in my fund had very few investors at in my fund had very few investors at that time was one of the very early that time was one of the very early that time was one of the very early employees at Microsoft and because he employees at Microsoft and because he employees at Microsoft and because he was very early he he had gotten stock was very early he he had gotten stock was very early he he had gotten stock options and he had done really well and options and he had done really well and options and he had done really well and he had retired and he had given me some he had retired and he had given me some he had retired and he had given me some money to manage and he told me listen money to manage and he told me listen money to manage and he told me listen Mish if you ever find yourself in
OtherMish if you ever find yourself in Seattle I can take you and introduce you to a bunch of Microsoft guys who are quite wealthy and many of them may have an interest in investing with you so I told him it was a Tuesday I said as a matter of fact I'm going to be in Seattle on Thursday so he said okay then I'll meet you and I'll meet some people and I went on Thursday with him to the Microsoft campus and I he introduced me to a bunch of folks he knew well and a number of them invested with me and I told them at that time that listen you guys work for a great business but this business Microsoft is ridiculously overvalued and not only because I asked them about their situation I said not only is your livelihood coming from here something like 90% of your net worth is in Microsoft stock and options and that seems to me quite a dangerous place to
Questionerseems to me quite a dangerous place to be and they told me listen monish you know you're a value investor you really don't understand technology and you don't understand Microsoft the stock only goes up it doesn't go down and the sky is the limit for the company and Microsoft was Trading at such a nose bleed valuation I think it was 600 billion market cap at the time with single digigit billions in earnings trading at like you know 70 80 times trailing earnings and from 2000 till 2013 or so or 13 or 14 the return on the stock was Zero now the company did extremely well and it grew a lot in that period but not only were the returns zero it was a very rough ride including a drop of like more than 70% on the stock from top to bottom it have been really really hard to hold that stock for the 13 14 years so many of those insiders lived through that suffering so
Warreninsiders lived through that suffering so that was a case of a very overvalued business it was an exceptional business it still is an exceptional business but you know everything at the price so just like things can overshoot in spectacular ways things can also undershoot in spectacular ways ways and our job like you know Charlie says or used to say why should it be easy to get rich so yes there are lots of undervalued Securities why should it be easy to find them if you enjoy the treasure hunt and you're singularly focused on it you will find them these books that were written in India maybe 2 or 3 thousand years ago the openads and one worse from the upanishads which I'll just quote is as is your wish so is your will as is is your will so is your deed as is your deed so is your destiny and then it continues on to say your deepest desire
Othercontinues on to say your deepest desire is your destiny so if you're really passionate about finding 10 Baggers or 100 Baggers or 50 Baggers and that becomes your most intense singular pursuit in life it will happen your deepest desire is your destiny the only question is what is your deepest desire going to be well going back 25 years ago U when you founded provide investment funds I would like to know more about your experience of your approach to having a successful initial fundraising Road and if there were any challenges or concerns that you had that you have could have made better at this point if you can expand in that how you attracted the attention of investors it is
Questionerextremely simple Warren Buffett says if you deliver above average returns above market returns they will swim to you in shock infested waters in the middle of the Atlantic to
Otherwaters in the middle of the Atlantic to invest with you you can be a leper andinvest with you you can be a leper andinvest with you you can be a leper and they will invest with you you can bethey will invest with you you can bethey will invest with you you can be obnoxious and they will invest with youobnoxious and they will invest with youobnoxious and they will invest with you you can be the worst salesman in theyou can be the worst salesman in theyou can be the worst salesman in the world and they will invest with you ifworld and they will invest with you ifworld and they will invest with you if you deliver above average returns so Iyou deliver above average returns so Iyou deliver above average returns so I had read this note by Warren Buffetthad read this note by Warren Buffetthad read this note by Warren Buffett from 1999 till 2007 PAB funds did notfrom 1999 till 2007 PAB funds did notfrom 1999 till 2007 PAB funds did not have a single down year the first eighthave a single down year the first eighthave a single down year the first eight or nine years and before fees weor nine years and before fees weor nine years and before fees we delivered about 35 or 36% a year ondelivered about 35 or 36% a year ondelivered about 35 or 36% a year on average in the first eight years afteraverage in the first eight years afteraverage in the first eight years after fees it was high 20s and I started withfees it was high 20s and I started withfees it was high 20s and I started with 1 million and in 2007 it was north of1 million and in 2007 it was north of1 million and in 2007 it was north of 600 million they found me I didn't have600 million they found me I didn't have600 million they found me I didn't have to do anything they swam through sharkto do anything they swam through sharkto do anything they swam through shark infested waters to invest with me I toldinfested waters to invest with me I toldinfested waters to invest with me I told my investors and I told my potentialmy investors and I told my potentialmy investors and I told my potential investors I'm not available to talk toinvestors I'm not available to talk toinvestors I'm not available to talk to you I'm not available to have meetingsyou I'm not available to have meetingsyou I'm not available to have meetings with you if you want to invest with mewith you if you want to invest with mewith you if you want to invest with me you have our audited annual reports you
Otheryou have our audited annual reports you have my letters to Partners you have access to our website if it works for you you can invest I did not do any sales type activi meeting people and smoing them or any of that because I wanted to test the theory and I can just tell you the theory works so all you need to do is put your nose to the grindstone and beat the market and they will find you
Questionerhi Mish uh I was just wondering what your approach to risk is do you focus exclusively on the on the micro and sort of the business model I know in the past you've brought up a sort of a company that was operating near uh your airport that got uh swept up by Uber even though it had great fundamentals so I was just wondering should we even consider interest rates in the equation or is it exclusively company specific
Otheryou know I I try to run a 10 stock portfolio and when I make a
Questionera 10 stock portfolio and when I make aa 10 stock portfolio and when I make a bet I try to make a 10% bet Johnbet I try to make a 10% bet Johnbet I try to make a 10% bet John Templeton said that even the bestTempleton said that even the bestTempleton said that even the best analysts will be wrong at least one outanalysts will be wrong at least one outanalysts will be wrong at least one out of three times so if the best analyst isof three times so if the best analyst isof three times so if the best analyst is going to be wrong one out of three timesgoing to be wrong one out of three timesgoing to be wrong one out of three times probably half my portfolio is not goingprobably half my portfolio is not goingprobably half my portfolio is not going going to do what I expect it to do so ifgoing to do what I expect it to do so ifgoing to do what I expect it to do so if I had invested in that parking businessI had invested in that parking businessI had invested in that parking business near La airport Wally Park and ifnear La airport Wally Park and ifnear La airport Wally Park and if subsequently it got blown out by Ubersubsequently it got blown out by Ubersubsequently it got blown out by Uber it's a 10% bet and I've had 10% bets goit's a 10% bet and I've had 10% bets goit's a 10% bet and I've had 10% bets go to zero and like Elton said I'm stillto zero and like Elton said I'm stillto zero and like Elton said I'm still standing so it's okay I'm still standingstanding so it's okay I'm still standingstanding so it's okay I'm still standing it's a great song by the way and thatit's a great song by the way and thatit's a great song by the way and that was a great movie by the way too Rockwas a great movie by the way too Rockwas a great movie by the way too Rock man what a great actor and what a greatman what a great actor and what a greatman what a great actor and what a great movie yeah um so earlier when you weremovie yeah um so earlier when you weremovie yeah um so earlier when you were talking about your Ferrari position youtalking about your Ferrari position youtalking about your Ferrari position you mentioned that uh you've learned tomentioned that uh you've learned tomentioned that uh you've learned to appreciate holding assets when they'reappreciate holding assets when they'reappreciate holding assets when they're at fair value or maybe even above so Iat fair value or maybe even above so I
Questionerat fair value or maybe even above so I was wondering how do you rationalize that how does it fit into your you know value investing philosophy and more broadly how do you think about closing your positions
Todd Combsyeah so we want to hold great businesses certainly when they're fairly valued we also want to hold them when they're overvalued if we bought them at a much lower price and we don't want to hold them when they egregiously overvalued kind of like the Microsoft situation so there is overvalued and egregiously overvalued when things get egregious we need to do something but there's a huge gap between overvalued and egregiously overvalued so one of the reasons why we want to give the business that type of rope is that we don't really know what the real intrinsic value of a business is we may have some estimate of it and good businesses or great businesses will surprise to the
Questionergreat businesses will surprise to the upside so for example you know Amazon morphs into web services Microsoft morphs into a leader in Ai and you know Google buys YouTube you know and these are home runs and Google buys Android and that's a home run too so when you have great management teams and you have great modes they can do things which can surprise to the upside so you need to leave enough leeway on the on the other side how many times in your lifetime do you need a 100 bagger to get incredibly wealthy so if it happens early in your life then that 100 bagger may not have the impact that you need so in 1995 when I had a liquid net worth of maybe a million dollar and then I owned a business which was illiquid which was maybe worth a few million dollars at that time from that million dollar portfolio I ended up with 2100 bags one
Questionerportfolio I ended up with 2100 bags one of them was only a $10,000 bet so it wasof them was only a $10,000 bet so it wasof them was only a $10,000 bet so it was a 1% bet and it ended up becoming thea 1% bet and it ended up becoming thea 1% bet and it ended up becoming the 10,000 ended up becoming close to a10,000 ended up becoming close to a10,000 ended up becoming close to a million and a half it was almost a 150million and a half it was almost a 150million and a half it was almost a 150 bag 140 150 bag the other one was abag 140 150 bag the other one was abag 140 150 bag the other one was a $100,000 bet 10% bet and that ended up$100,000 bet 10% bet and that ended up$100,000 bet 10% bet and that ended up becoming about 10 million and the entirebecoming about 10 million and the entirebecoming about 10 million and the entire port portfolio the rest of it you knowport portfolio the rest of it you knowport portfolio the rest of it you know when I put it all together it becamewhen I put it all together it becamewhen I put it all together it became like maybe 14 million or something youlike maybe 14 million or something youlike maybe 14 million or something you know so but these two positions were 11know so but these two positions were 11know so but these two positions were 11 and a half out of that 14 million soand a half out of that 14 million soand a half out of that 14 million so they were very significant and basicallythey were very significant and basicallythey were very significant and basically at that point even if I didn't have myat that point even if I didn't have myat that point even if I didn't have my business and so on I could have hung upbusiness and so on I could have hung upbusiness and so on I could have hung up my boots and retired right so basicallymy boots and retired right so basicallymy boots and retired right so basically it was really 100 bagger on a millionit was really 100 bagger on a millionit was really 100 bagger on a million dollar base with a 100,000 investmentdollar base with a 100,000 investmentdollar base with a 100,000 investment that gave me Financial Independence sothat gave me Financial Independence sothat gave me Financial Independence so so you don't need to be right many timesso you don't need to be right many timesso you don't need to be right many times and so when you find yourself I mean soand so when you find yourself I mean so
Questionerand so when you find yourself I mean so to go back to the Ferrari exampleto go back to the Ferrari exampleto go back to the Ferrari example Ferrari is a very unusual business itFerrari is a very unusual business itFerrari is a very unusual business it took me a while to understand that buttook me a while to understand that buttook me a while to understand that but 20 or 30 years from now I would expect20 or 30 years from now I would expect20 or 30 years from now I would expect the motor Ferrari to be wider and deeperthe motor Ferrari to be wider and deeperthe motor Ferrari to be wider and deeper than it is today the rich are gettingthan it is today the rich are gettingthan it is today the rich are getting richer and rich men as opposed to richricher and rich men as opposed to richricher and rich men as opposed to rich women have very few ways in which theywomen have very few ways in which theywomen have very few ways in which they can express their weal what can a richcan express their weal what can a richcan express their weal what can a rich man do with his wealth I mean the Hermesman do with his wealth I mean the Hermesman do with his wealth I mean the Hermes ties are not going to move the needleties are not going to move the needleties are not going to move the needle but a collection of 20 Ferraris thatbut a collection of 20 Ferraris thatbut a collection of 20 Ferraris that might get some of them excited you knowmight get some of them excited you knowmight get some of them excited you know and what can a rich man do if they'reand what can a rich man do if they'reand what can a rich man do if they're the rich guy who has 100 million 200the rich guy who has 100 million 200the rich guy who has 100 million 200 million or 500 million what can he do tomillion or 500 million what can he do tomillion or 500 million what can he do to express his wealth one of the best waysexpress his wealth one of the best waysexpress his wealth one of the best ways is to buy a Ferrari so Ferrari will beis to buy a Ferrari so Ferrari will beis to buy a Ferrari so Ferrari will be able to sell cars at 90% margins thereable to sell cars at 90% margins thereable to sell cars at 90% margins there will be cars that they will producewill be cars that they will producewill be cars that they will produce which will be sold for 5 million bywhich will be sold for 5 million bywhich will be sold for 5 million by Ferrari where the cost to Ferrari to
QuestionerFerrari where the cost to Ferrari to produce the car is less than 400,000 and they might produce 200 of those and they'll be sold out 5 minutes after they announced them because rich men have no other ways to express their wealth so it's incredible Mo and so when I look at Ferrari you know at the time I made the investment it was a one and a half or two billion market cap it's like I don't know 40 50 60 billion now I haven't kept in touch it's like about a 20 30 bagger already on a significant base you know I owned when it was 1 and a half billion it was about a 520 million investment in Ferrari $20 million investment in Ferrari in 2012 if at some point it's 100 bagger is $2 billion you're not going to get that very many times so when you find yourself in the happy position of the ownership of such a great business you just stick it into
Othergreat business you just stick it into the bottom drawer and forget about
Otherthat's it there's plenty more questions
Otherbut I am worried that we are reach the end of the session would you like to say one one more question or you wrap it up
Otherwe can do another question yeah goe okay
Questionerso we're living in a time where technology is really fast and obviously the traditional areas of value you know reading through the 10ks these exper calls ear calls can be replaced by large language ERS and AI um how much do you believe that public information Gap is kind of closing and how does this kind of affect the you know the realm of Val investing and do you believe that Future track record of certain individuals B Mark averages are more largely attributed to skill or is it more luck or maybe inside information information is kind of closing that we've had a a transition
Todd Combsclosing that we've had a a transition with technology over the last several decades where information that used to take days or weeks to pull together can be pulled together in you know minutes or seconds it's speeded up a lot more the nature of investing is that it's part art part science and AI is very powerful and I think AI can maybe help a fair bit but I'm not sure it can get all the way to you know kind of understanding the mo of a Coca-Cola the mo of a Ferrari because it has a lot of subtle nuances that come into play so I think they will all the other thing about investing to keep in mind is that when someone is a really good investor and they have small amounts of capital that they're working with let's say someone is an exceptional investor they have $5 million that they have under management their universe is very large they can invest in almost anything
Questionerthey can invest in almost anything because they could make you know $500,000 bets or something as the world finds out about them and the five million under management goes to 5 billion for example they can no longer make $500,000 bills so they have to move up the food chain if you will and when they move up the food chain the bottom of the food chain gets emptied out which means that that space becomes available to new new entrance who can only make $500,000 bets so the nature of investing is that the very smart brain power that is initially at work at very small nooks and crannies of the market by definition that brain power will move away from those noops and crannies because they'll get successful and they'll move into larger greener pastures larger pastures so value investing has this kind of notion with where continuously the
Questionernotion with where continuously the bottom is being emptied out for the nextbottom is being emptied out for the nextbottom is being emptied out for the next Generation to come in so for all of youGeneration to come in so for all of youGeneration to come in so for all of you if you have small amounts of capital atif you have small amounts of capital atif you have small amounts of capital at your disposal you have a huge advantageyour disposal you have a huge advantageyour disposal you have a huge advantage and I would think that as long as you'reand I would think that as long as you'reand I would think that as long as you're maybe you can deploy AI to you know givemaybe you can deploy AI to you know givemaybe you can deploy AI to you know give you some speed but I think at the end ofyou some speed but I think at the end ofyou some speed but I think at the end of the day I don't think there is really athe day I don't think there is really athe day I don't think there is really a substitute for the Deep dive and reallysubstitute for the Deep dive and reallysubstitute for the Deep dive and really kind of understanding things because sokind of understanding things because sokind of understanding things because so much of it is nonquantitative and somuch of it is nonquantitative and somuch of it is nonquantitative and so much of it is it Chang ches so much frommuch of it is it Chang ches so much frommuch of it is it Chang ches so much from one company to the next the circle ofone company to the next the circle ofone company to the next the circle of competence comes in a big way so there'scompetence comes in a big way so there'scompetence comes in a big way so there's many factors that come in in trying tomany factors that come in in trying tomany factors that come in in trying to figure out whether you know somethingfigure out whether you know somethingfigure out whether you know something can work or not when I was last year Ican work or not when I was last year Ican work or not when I was last year I was studying the coal industry I spent 7was studying the coal industry I spent 7was studying the coal industry I spent 7 months only reading and studying Co Imonths only reading and studying Co Imonths only reading and studying Co I went underground more than 200 storieswent underground more than 200 storieswent underground more than 200 stories underground into four different coal
Otherunderground into four different coal mines I spent probably about 10 days with coal miners in the coal mines in the coal Terminals and I'm still continuing to do that and I think after 7 months I don't know the industry that well so the people with ADD who wanted on a platter in an hour or 15 minutes good luck the end huge hug coming along I know you can't see many faces but everyone seem to very much enjoy the questions thew questions hugely insightful as always and yeah iess hope you enjoy the event as well all right well thank you very much it was very enjoyable thankyou