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Warrenyeah it's a it's a pleasure to be with all of you I think we've got a we've got a very smart audience at lse so I'm looking forward to the session and thank you for having me
Questionerabsolutely our introduction wasn't too long-winded number 12.
Questionerwe're going to ask the funniest questions you can find as much as the student so hopefully those use some excellent answers which I'm sure they will and then 40 minutes in we'll open it up for uh for questions from the rest of the audience as well so Manish our first question
Questionerum so of course you used to be more of a let's say a deep value kind of guy and then you evolved and became more of a clothes kind of guy and this of course very very broad but we'd like to focus on the most part and ask of course not all modes are made equal right so what's the best source of sustainable competitive Advantage for our government
Questionercompetitive Advantage for our government I.E what is the best mode that anI.E what is the best mode that anI.E what is the best mode that an investment experience yeah well uh justinvestment experience yeah well uh justinvestment experience yeah well uh just just a little bit of a correction when Ijust a little bit of a correction when Ijust a little bit of a correction when I actually started my journey as anactually started my journey as anactually started my journey as an investor which is now about 28 years agoinvestor which is now about 28 years agoinvestor which is now about 28 years ago I was actually a buyer of great growingI was actually a buyer of great growingI was actually a buyer of great growing businesses because you always do thebusinesses because you always do thebusinesses because you always do the best if if you can buy into a businessbest if if you can buy into a businessbest if if you can buy into a business that's going to grow intrinsic valuethat's going to grow intrinsic valuethat's going to grow intrinsic value significantly over time usually that'ssignificantly over time usually that'ssignificantly over time usually that's better than buying discounted dollarbetter than buying discounted dollarbetter than buying discounted dollar bills and such but then but then as webills and such but then but then as webills and such but then but then as we got to 99 2000 and this great.com bubblegot to 99 2000 and this great.com bubblegot to 99 2000 and this great.com bubble was brewing I was probably able to seewas brewing I was probably able to seewas brewing I was probably able to see it not very much in advance but maybeit not very much in advance but maybeit not very much in advance but maybe probably two or three months ahead ofprobably two or three months ahead ofprobably two or three months ahead of where everybody else was or most peoplewhere everybody else was or most peoplewhere everybody else was or most people werewerewere and thankfully I was able to sidestepand thankfully I was able to sidestepand thankfully I was able to sidestep the bubble things went really well fromthe bubble things went really well fromthe bubble things went really well from 95 to 2000 I think I had a million95 to 2000 I think I had a million95 to 2000 I think I had a million dollars and it was up to about 13dollars and it was up to about 13dollars and it was up to about 13 million in that period
Questionermillion in that period and and then started in 99 and at that point I actually switched 99 2000 I switched to gram deep value because the interesting thing was in on March 9th 2000 which is the day the NASDAQ peaked at about 5 000 was the day that Berkshire Hathaway actually hit a multi-year low so there were lots of undervalued Assets in non-sexy businesses and there was a lot of froth in Euphoria in the whole Tech and.com space and of course the NASDAQ over the next three years went down from five thousand to about I think 1200 or so like a 75 decline and I was buying funeral homes and steel companies and so on and those did extremely well over that period so in gen to answer your question capitalism is brutal it's in businesses are aberrations so the nature of capitalism is such that if someone builds a better mousetrap which you know grows
Questionera better mousetrap which you know grows a company and generates High returns and equity and very profitable and so on they have a Target on their back and in general that will attract a lot more competitors to enter your space and they'll try to Chip Away at whatever Advantage is there and mostly they will succeed and moats are really more the exception to the rule let's say you have some some small city in in England and it has no Thai city in in England and it has no Thai restaurant for example and someone looks at and say I think my restaurant do really well here and they open a Thai restaurant and they do really well and they're full all the time and they can charge premiums versus London and other cities that is going to attract more people and more entrepreneurs to open Thai restaurants until eventually the economics of the Thai restaurants in that small City may
WarrenThai restaurants in that small City may be no different from other parts of England now sometimes what happens in capitalism is we get aberrations and when the this pharmacist started the Coca-Cola Company he had no idea what he was on to and no one could have imagined that coke would end up being the brand it is today and and actually quite frankly there's nothing particularly magical about Coke in the sense that they say they have the formula locked up in some Bank Walt in Atlanta but it's really easy to clone cope and several companies have done that and when Pepsi introduced the Pepsi challenge in the 1980s they basically gave people two callers to drink with no brands on them and they said tell us which one is better and most people prefer Pepsi because it was a little sweeter and then after they took the test they would tell them oh by the way you preferred Pepsi but if they
Questionerthe way you preferred Pepsi but if they presented the two drinks to most people with the brands Coke and Pepsi most people would prefer to take Coke and so Coke's vote is if you look at it kind of objectively it really doesn't make any sense they have a product that can be very easily cloned they they have competitors in many cases who have better products but a brand got built and a brand got built and people have preferences and they don't have a full lock-on Monopoly in the sense that when you go to the supermarket if Pepsi is 20 cheaper a lot of people will switch so the brand loyalty is not that extreme in something like Coke the same applies to Visa or Mastercard American Express if you just look at the different businesses that we see as having great modes we can tell in hindsight that a business has a great mode now even a business that has a great mode
Warreneven a business that has a great mode the nature of capitalism is that more the nature of capitalism is that more the nature of capitalism is that more is very likely eventually to get filled is very likely eventually to get filled is very likely eventually to get filled in in in so if we go back in history so if we go back in history so if we go back in history and we look at businesses that have and we look at businesses that have and we look at businesses that have survived and thrived for a long time survived and thrived for a long time survived and thrived for a long time very few businesses that are founded very few businesses that are founded very few businesses that are founded make it past their first year make it past their first year make it past their first year a few will make it past their fifth year a few will make it past their fifth year a few will make it past their fifth year and even fewer will make it past their and even fewer will make it past their and even fewer will make it past their 10th year 20th year 30th year it just 10th year 20th year 30th year it just 10th year 20th year 30th year it just keeps going down keeps going down keeps going down if we start looking at businesses there if we start looking at businesses there if we start looking at businesses there are more than 100 years old for example are more than 100 years old for example are more than 100 years old for example that we would recognize like the that we would recognize like the that we would recognize like the Coca-Cola Company American Express and Coca-Cola Company American Express and Coca-Cola Company American Express and so on so on so on Wells Fargo bank and so on it's a very Wells Fargo bank and so on it's a very Wells Fargo bank and so on it's a very small number small number small number and if we go to let's say 200 years old and if we go to let's say 200 years old and if we go to let's say 200 years old might get some liquor companies might get some liquor companies might get some liquor companies few things here and there the oldest few things here and there the oldest few things here and there the oldest business business business the known oldest business on the planet the known oldest business on the planet the known oldest business on the planet is a very small boutique hotel in Japan is a very small boutique hotel in Japan is a very small boutique hotel in Japan 30 odd rooms that has been running for
Questioner30 odd rooms that has been running for about 700 years in the same family I think it's like in the 35th generation or something and they've survived world wars and they've survived all kinds of things Japan's gone through a lot of change in 700 years but basically if you start looking at businesses that are 200 years old 300 years old 500 years old you're not going to find very many and we're not going to find very many that are even 50 years old so if you look at a business today let's say for example we'll take a look at a business like apple today is Apple going to be with us in 10 years I'd say that's a pretty good bet that yeah they'll be around in 10 years will they be around in 20 years I think the odds are high that they'd be around in 20 years but I don't know whether I could make a statement that the apple of 20 years from now
Warren20 years from now will be a more valuable company than the apple of 2023. it very well maybe or it may be may not be and then if we let's say ask the question 50 years from now or 100 years from now so do we expect Apple to be a more valuable company a hundred years from now and if I were a betting man which I'm known to be I would take the other side of the argument and say that I don't think it's going to be more valuable I was I was having a conversation with Charlie Munger a few weeks ago and I told him Charlie the the one thing that's going to survive in the Berkshire portfolio for more than 200 years is going to be the railroad so Berkshire horns owns Burlington Northern Railway now 200 years from now the technology of rails may change maybe or Freight it might be maglev or something else but the point is that they own the
Warrenbut the point is that they own the rights of way and they own that land and they know they own the connection to the ports and all of that and humans need some way to transport Goods in large land masses so I think the Burlington Northern Railway is likely to be around and thriving 200 years from now and then Charlie said to me he says I think our utilities will be there as well they have a big business with a lot of power companies that Berkshire owns and he's probably right about that but he didn't mention he did not mention to me that Coke would be there for example and I think Coke will be there I think that's a pretty decent shot but they may very well may not be we don't know 200 years is a long time look at the world 200 years back so the difficulty with capitalism is that when we look at businesses that may look dominant today our job as investors
Questionerlook dominant today our job as investors is to project is to project is to project what these businesses may look like what these businesses may look like what these businesses may look like 5 10 20 years from now 5 10 20 years from now 5 10 20 years from now and that is a very difficult exercise and that is a very difficult exercise and that is a very difficult exercise because you have all these because you have all these because you have all these marauding in Intruders who want to take marauding in Intruders who want to take marauding in Intruders who want to take away your Mort who want to take away away your Mort who want to take away away your Mort who want to take away those profits and they're continuously those profits and they're continuously those profits and they're continuously coming at you that's what makes this a coming at you that's what makes this a coming at you that's what makes this a fun and exciting Endeavor for my point fun and exciting Endeavor for my point fun and exciting Endeavor for my point of view because trying to figure those of view because trying to figure those of view because trying to figure those things out is not that straightforward things out is not that straightforward things out is not that straightforward but motor should talk a lot about the but motor should talk a lot about the but motor should talk a lot about the time there and I and I think time there and I and I think time there and I and I think particularly given that the market particularly given that the market particularly given that the market typically runs on 12-month Cycles do you typically runs on 12-month Cycles do you typically runs on 12-month Cycles do you think that think that think that investors as a whole structurally investors as a whole structurally investors as a whole structurally undervalue these quality fantastic undervalue these quality fantastic undervalue these quality fantastic compounding businesses it's just a compounding businesses it's just a compounding businesses it's just a matter of course because matter of course because matter of course because how is it really possible to value a how is it really possible to value a how is it really possible to value a business that you know is going to be business that you know is going to be business that you know is going to be producing cash for the next 100 to 200 producing cash for the next 100 to 200
Questionerproducing cash for the next 100 to 200 years and do you think that therefore the opportunity for retailer versus a obviously in the time but B also to spend almost all of your time looking at the quality of the business rather than anything else
Questioneryeah so one of the one of the arrows in our quiver as value investors is patience so in general we don't really have for the most part in information Edge so if I'm looking at a business there's not much I'm going to be able to come up with about that business that a lot of other people haven't figured out or are capable of figuring out so the information Edge for the most part doesn't exist then there can be another Edge which is an analytics Edge which is two individuals have the same information but one person is able to look at that data and come to conclusions that are different from the other person and so
Questionerdifferent from the other person and so an analytic Edge can be a real Edge butan analytic Edge can be a real Edge butan analytic Edge can be a real Edge but even that is difficult because there's aeven that is difficult because there's aeven that is difficult because there's a lot of smart people looking at a lot oflot of smart people looking at a lot oflot of smart people looking at a lot of companies the one Edge that is probablycompanies the one Edge that is probablycompanies the one Edge that is probably the strongestthe strongestthe strongest is is the time Horizonis is the time Horizonis is the time Horizon and even Jeff Bezos says that a lot ofand even Jeff Bezos says that a lot ofand even Jeff Bezos says that a lot of his competitorshis competitorshis competitors are focused on the next one two or threeare focused on the next one two or threeare focused on the next one two or three years and he said that Amazon alwaysyears and he said that Amazon alwaysyears and he said that Amazon always took the approachtook the approachtook the approach of looking out longer looking out fiveof looking out longer looking out fiveof looking out longer looking out five or seven or ten yearsor seven or ten yearsor seven or ten years and he said that when they looked outand he said that when they looked outand he said that when they looked out longer and they invested with theirlonger and they invested with theirlonger and they invested with their longer time Horizonlonger time Horizonlonger time Horizon they got an edge and they were willingthey got an edge and they were willingthey got an edge and they were willing to make investments where they knewto make investments where they knewto make investments where they knew that the payoff is not going to come inthat the payoff is not going to come inthat the payoff is not going to come in three years so I think yes a the abilitythree years so I think yes a the abilitythree years so I think yes a the ability of an investor to think longer term andof an investor to think longer term andof an investor to think longer term and this is one of the reasons why the indexthis is one of the reasons why the indexthis is one of the reasons why the index does so well the index is too dumb todoes so well the index is too dumb todoes so well the index is too dumb to know that it owns Microsoft it's tooknow that it owns Microsoft it's too
Questionerknow that it owns Microsoft it's too dumb to know that it owns alphabet anddumb to know that it owns alphabet anddumb to know that it owns alphabet and it's too dumb to sell these thingsit's too dumb to sell these thingsit's too dumb to sell these things and it keeps these things endlesslyand it keeps these things endlesslyand it keeps these things endlessly forever so we look at the S P 500 indexforever so we look at the S P 500 indexforever so we look at the S P 500 index for example which is 500 for the mostfor example which is 500 for the mostfor example which is 500 for the most part great businessespart great businessespart great businesses and every year they might take one orand every year they might take one orand every year they might take one or two businesses out and replace them withtwo businesses out and replace them withtwo businesses out and replace them with one or two new ones but usually the onesone or two new ones but usually the onesone or two new ones but usually the ones they take outthey take outthey take out are not the ones that are climbing likeare not the ones that are climbing likeare not the ones that are climbing like recently they removed General Electricrecently they removed General Electricrecently they removed General Electric from the Dow Industrial Average and iffrom the Dow Industrial Average and iffrom the Dow Industrial Average and if you look at the Dow Jones Industrialyou look at the Dow Jones Industrialyou look at the Dow Jones Industrial Average over time in general you getAverage over time in general you getAverage over time in general you get rising stars going in and you get kindrising stars going in and you get kindrising stars going in and you get kind of peop companies that are kind of longof peop companies that are kind of longof peop companies that are kind of long in the two that have passed their Primein the two that have passed their Primein the two that have passed their Prime being taken out the S P 500 would holdbeing taken out the S P 500 would holdbeing taken out the S P 500 would hold an apple or a Microsoft or Amazon oran apple or a Microsoft or Amazon oran apple or a Microsoft or Amazon or alphabet for 20 years 30 years and thatalphabet for 20 years 30 years and thatalphabet for 20 years 30 years and that that type of holding periodthat type of holding periodthat type of holding period on these great businesses can be a great
Questioneron these great businesses can be a great Edge and these edges of course uh in a lot of ways so when we talk about modes we're obviously talking about uh competitive advantages which is an overused tournament business for the room as well um and mo really is a sustainable competitive advantage that you can maintain over time right um and of course these are and the old ad ages the you need a business that can survive an idiot running it because one day an idiot will um and I think a lot about moats is that it provides that kind of downside protection but when you talk about like 10 and 100 languages particularly like that requires at that level serious competent and impeccable management execution and I think personally at least that finding good good content management mentality is probably the hard single hardest thing in because
Questionerhard single hardest thing in because anyone can look at code and say right anyone can look at code and say right anyone can look at code and say right this is what makes the business better this is what makes the business better this is what makes the business better than Pepsi but to really look at a than Pepsi but to really look at a than Pepsi but to really look at a person and say this person it has not only got a good track record but it has only got a good track record but it has only got a good track record but it has the ability to tackle like the issues of the ability to tackle like the issues of the ability to tackle like the issues of tomorrow in a way that no one else can tomorrow in a way that no one else can tomorrow in a way that no one else can seems to me to be almost impossible what seems to me to be almost impossible what seems to me to be almost impossible what do you know when you're looking for your do you know when you're looking for your do you know when you're looking for your 100 Baggers or your 10 bags how do you 100 Baggers or your 10 bags how do you 100 Baggers or your 10 bags how do you go about that kind of that go about that kind of that go about that kind of that that issue
Otheryeah there are two different Frameworks that one can employ so a simple way a simple way a simple way to get a hundred bagger one could get a to get a hundred bagger one could get a to get a hundred bagger one could get a hundred bagger on a company hundred bagger on a company hundred bagger on a company that is never gonna grow that is never gonna grow that is never gonna grow by buying it at one percent of by buying it at one percent of by buying it at one percent of liquidation value liquidation value liquidation value right so if something is worth right so if something is worth right so if something is worth a billion and you were able to buy it a billion and you were able to buy it a billion and you were able to buy it for 10 million for 10 million for 10 million and you were pretty confident that a and you were pretty confident that a and you were pretty confident that a billion value would not go down you billion value would not go down you billion value would not go down you might have yourself a hundred bagger and
Questionermight have yourself a hundred bagger and I'm not trying to be facetious but I just want to point out that Charlie Munger says that the greatest investing mistake of his life was a friendly broker called him in 77 1977. and offered him 300 shares often obscure pink sheets company called Bell Ridge oil which had a very large oil field in Bakersfield California and Charlie was familiar with this company it was very thinly traded there wasn't much disclosure but he knew that at the price he was being offered those shares at that time I think the market cap of the company was something like 120 million dollars or something and the dividend yield was like 15 it was very cheap and Charlie said that without even doing much of an analysis you knew there you were buying it for one-fifth or one tenth or less of what the actual
Questionertenth or less of what the actual underlying assets were worth and it was quite a remarkable field and they owned the land it wasn't the least and they owned everything under the underground and so he bought the 300 shares at 115 all of the share that were offered and then two days later the broker called him back and offered him another 1500 shares of Belgrade oil again at the same price This Time Charlie didn't have the cash handy and he would have had to sell something to buy belridge and he should have sold because whatever else he owned in his portfolio was not a 20 cent dollar or something it was not that cheap but it required him to sell something and then raise the money and then buy and he called the broker back and declined and he said that so two years later this 100 million market cap company was bought by Shell oil for three and a
Questionerwas bought by Shell oil for three and a half billion and it was like 30X or something 120 million or something so it was a 30 x in two years and at that time in 79 Berkshire Hathaway was trading at about 300 a share or something which is now approaching half a million dollars a share so if you think about Charlie's 30 odd thousand he put in it became a million dollars in two years and then from it was another probably more than a thousand X more 1500 or 2000 X from there was a journey from Berkshire so that million became something like a billion and a half today so the thirty thousand in effect became one and a half billion thirty five thousand the 1500 shares that he took a pass on would be worth something like seven and a half billion today which I think exceeds his total net worth today and so now so Bell this is you know like a I would say what would I call it I would say it's
Questionerwhat would I call it I would say it's the cross connect the cross connect the cross connect where you take a first the first company where you take a first the first company where you take a first the first company and and you get a 30X and and you get a 30X and and you get a 30X and then you take the second company and and then you take the second company and and then you take the second company and in his case he got a 1500x so you end up in his case he got a 1500x so you end up in his case he got a 1500x so you end up with 45 000 X some crazy number like with 45 000 X some crazy number like with 45 000 X some crazy number like that that that and when well past 100x we're not in and when well past 100x we're not in and when well past 100x we're not in Kansas anymore Kansas anymore Kansas anymore and and that was now the second company and and that was now the second company and and that was now the second company that he invested in Berkshire Hathaway that he invested in Berkshire Hathaway that he invested in Berkshire Hathaway was a great growing business was a great growing business was a great growing business and that generated a lot of the returns and that generated a lot of the returns and that generated a lot of the returns because of the growth recently in 2019 because of the growth recently in 2019 because of the growth recently in 2019 I I I found my Bell Ridge oil which I thought found my Bell Ridge oil which I thought found my Bell Ridge oil which I thought would never happen to me but I know God would never happen to me but I know God would never happen to me but I know God loves me and so in in 2019 I loves me and so in in 2019 I loves me and so in in 2019 I found this company in Turkey which was found this company in Turkey which was found this company in Turkey which was basically trading at three percent of basically trading at three percent of basically trading at three percent of liquidation value liquidation value liquidation value very similar to belridge very similar to belridge very similar to belridge and and unlike Bell Ridge or maybe not and and unlike Bell Ridge or maybe not and and unlike Bell Ridge or maybe not quite unlike because belridge eventually quite unlike because belridge eventually quite unlike because belridge eventually I think shell pulled out something like I think shell pulled out something like I think shell pulled out something like 40 50 billion of oil from that oil field
Charlie40 50 billion of oil from that oil field and it's still flowing today but this company in Turkey not only is it was it a three cent dollar bill it's growing its value and in fact in the last three years it may have doubled its value I was buying something with a market cap of 20 million that was probably worth at least 600 or 700 million it's probably worth something like at least a billion and a half today and it's going to keep going so I may not need to do a cross connect all I may need to do which is very difficult to do is do nothing for a very long period of time like Rip Van Winkle just go to sleep so I could either go to sleep for 20 years or I could spend 20 years talking to the wonderful students at lse so I hope you will invite me back because I need something to do for 20 years because I do I've literally got nothing to do now I just have to twiddle
Othernothing to do now I just have to twiddle my thumbs and make sure there's no sell orders placed and so one way you can get the 100 X's is and to take a step back there's 50 000 or so publicly traded companies around the planet all their prices are set in a auction driven format like horse racing the perimutual system so the way prices are set on the New York Stock Exchange the way the odds are determined on the race course are identical basically it's the buyers and sellers that set the price and because of the auction driven nature of the market so if we have a private company we have a gas station they want to sell the other station they want to sell that petrol station you're generally going to have intelligent buyers facing an intelligent seller and you'll come up with some price that will be close to the actual value of the gas
Questionerclose to the actual value of the gas stationstationstation but when you have auction driven Marketbut when you have auction driven Marketbut when you have auction driven Market you have a lot of undershooting andyou have a lot of undershooting andyou have a lot of undershooting and overshooting that happens all the timeovershooting that happens all the timeovershooting that happens all the time in 2022in 2022in 2022 we saw a lot of overshootingwe saw a lot of overshootingwe saw a lot of overshooting right a lot of High Flyers a lot ofright a lot of High Flyers a lot ofright a lot of High Flyers a lot of great businessesgreat businessesgreat businesses got really a year agogot really a year agogot really a year ago for whatever reason these auctionfor whatever reason these auctionfor whatever reason these auction participantsparticipantsparticipants gavegavegave facebook slash meta Labs a certainfacebook slash meta Labs a certainfacebook slash meta Labs a certain valuationvaluationvaluation and then by the end of the year they hadand then by the end of the year they hadand then by the end of the year they had taken it out back and shot it the sametaken it out back and shot it the sametaken it out back and shot it the same business not much has changed but in inbusiness not much has changed but in inbusiness not much has changed but in in the course of a year there was athe course of a year there was athe course of a year there was a dramatic change in valuationdramatic change in valuationdramatic change in valuation and if meta had been a private companyand if meta had been a private companyand if meta had been a private company and they tried to sell themselves a yearand they tried to sell themselves a yearand they tried to sell themselves a year agoagoago and they were trying to sell themselvesand they were trying to sell themselvesand they were trying to sell themselves todaytodaytoday the Delta may not be anywhere near thethe Delta may not be anywhere near thethe Delta may not be anywhere near the way it is in the equity market so whenway it is in the equity market so whenway it is in the equity market so when we see the undershooting of ofwe see the undershooting of ofwe see the undershooting of of Securities that gives us someSecurities that gives us someSecurities that gives us some possibilitiespossibilitiespossibilities and then you might say that this is so
Questionerand then you might say that this is so hard 50 000 stocks and if you ask Warren that he would say start with the A's and then Buffett actually went through in the 1950s he went through something known the Moody's manual which listed all these companies their four companies on a page very thin Pages big thick big big thick books and I bought a couple of movies manual on eBay a few years back just for nostalgia's sake and but he would go through each company and there were thousands of companies and they just had basic balance sheet and income statement data and he ran some classes with MBA students a few years back and he would find a company where the earnings were 15 million dollars a year and the market cap was 25 million things like that this things that made no sense and when he found these things that made no sense then he would dig into those
Otherno sense then he would dig into those and he did really well to take a step back going back to horse racing you know who we are as humans at the age of five and who we are at the age of 95. there is no change basically our personality template our traits our likes and dislikes who we are it's pretty much hard-coded at the age of five and between your genetics and your experiences in the first five years of life that die is cast and after that there's not going to be any change Buffett when he was a young teenager in Omaha he used to go to the local race track aksarban which is Nebraska spelled backwards and what he'd do is after all the races had been run he'd collect all the tickets that people had discarded and thrown on the ground and he'd collect them all he'd bring them home and he'd go through each one carefully to see if some drunk guy had
Othercarefully to see if some drunk guy had thrown away a winning ticket and lo and behold he would actually find a few tickets which actually were winners but people had thrown them away and then because he was underage he couldn't go to the window to cash it so he would send his Aunt Alice with these tickets to cash them in and so the kid who was doing that at the age of 12 was the same kid who at the age of 26 or something was thumbing to the Moody's menu in 1956 or 57. and one time my friend guy Spear and I visited his office in in Omaha I think this must have been like 2000 10 or 2011 we used to go have lunch once a year with Buffett's assistant Debbie bozanic and we paid a good amount of money to have lunch at Buffett but quite frankly the lunches were Debbie were a lot more fun and I learned a lot from Debbie and one one year I think 2010 or 2011 or
Ted Weschlerone year I think 2010 or 2011 or thereabouts we had gone to have lunch with Debbie and when I went to the 14th floor of Kiewit Plaza with guy spear Warren was standing right at the elevator like to receive us we didn't really have a we didn't have an appointment with him or anything and he says to us would you like a tour of headquarters I said Warren if you want to hang out with a couple of yo-yos it's perfectly fine with us we've got nothing to do twiddling your thumbs and so he gave us a great tour of the headquarters showing us all the mementos and different things and then he took us to his office his private office and there I saw on his desk the Japan company handbook which is basically just like the Moody's menu it's like value line for Japan and they have two companies on one page lists every Japanese company and he was thumbing to it now
Ted Weschlerand he was thumbing to it now berkshire's managing tens or hundreds of billions at that point and you can't be playing these Mickey Mouse games with sarban tickets and stuff so I had actually been going through the Moody's manual just coincident and the Japan company handbook just coincidentally before I actually went to the office so I I took his copy of the Japan company handbook and I said Warren I'm gonna like dog ear some pages that I found interesting that you might find interesting now I don't know whether he was horrified that I was taking his the pan company handbook and mutilating it but I just went ahead and did that and and a lot of the companies that I thought were these super cheap companies statistically were towards the back of the book
Warrenhe said yeah what I found is the good stuff is always at the back and so the
Warrenstuff is always at the back and so the kid at 12 the kid at 26kid at 12 the kid at 26kid at 12 the kid at 26 the kid at 81 or 82the kid at 81 or 82the kid at 81 or 82 it was the same kidit was the same kidit was the same kid no change no change at all because andno change no change at all because andno change no change at all because and the kid today is the same too so Mongerthe kid today is the same too so Mongerthe kid today is the same too so Monger would say when you say oh this is sowould say when you say oh this is sowould say when you say oh this is so much work and this and that manga themuch work and this and that manga themuch work and this and that manga the answer would be why should we it'd beanswer would be why should we it'd beanswer would be why should we it'd be easy to get rich why should it be soeasy to get rich why should it be soeasy to get rich why should it be so easy for you to find the three centeasy for you to find the three centeasy for you to find the three cent dollar bill but what I am here to telldollar bill but what I am here to telldollar bill but what I am here to tell youyouyou is the three cent or two cent or oneis the three cent or two cent or oneis the three cent or two cent or one cent dollar bill is sitting therecent dollar bill is sitting therecent dollar bill is sitting there it's there today it's there tomorrowit's there today it's there tomorrowit's there today it's there tomorrow it's there five years from nowit's there five years from nowit's there five years from now the only question isthe only question isthe only question is how determined are youhow determined are youhow determined are you to find itto find itto find it and how many pages are you willing toand how many pages are you willing toand how many pages are you willing to flipflipflip how many rocks are you willing to turnhow many rocks are you willing to turnhow many rocks are you willing to turn overoverover and like this company in Turkey it'sand like this company in Turkey it'sand like this company in Turkey it's like one and done I don't think Godlike one and done I don't think Godlike one and done I don't think God loves me so much that I'm gonna findloves me so much that I'm gonna findloves me so much that I'm gonna find another oneanother oneanother one but I still keep looking I'm stillbut I still keep looking I'm stillbut I still keep looking I'm still hunting one and done is perfectly fine
Questionerhunting one and done is perfectly fine with me it's better than zero and done
Questionerso all of you are really young you're really smart you have a lot of tools and resources to look up all of these companies start with the A's or maybe it might be better to start with disease because the stuff is the good stuff in the back and all the best the second approach is where you identify a great compounder that because of people not willing to look at the right time Horizons and you can look around the corner you could pay what would be either reasonable or even an expensive looking price and end up with a great result so if we are if we have a crystal ball that can tell us what a company might look like 50 years from now 30 years from now then you know we could buy something at a billion dollar market cap and it might become 200 billion and for me personally
Otherand for me personally that is a lot harder again to learn and play I would like to do that but so I'm open to both games I think for me personally the first game might be a tad easier and and because we have these auction driven markets and because people have escalated to interfere and greed we can get there excellent thank you so much for your answer buddy
Otherum well we've reached 40 now so we'd like to come to the audience for questions of course we've got a lot of questions still here so we're happy to continue
Questioneruh hi my name is running I studying old 16 economics here um so you mentioned that in recent times you know the companies in the US you know the companies in India when you're looking for companies to invest real estate um we're looking for companies that are you feel are on uh have a value any you feel are on uh have a value an intrinsic value besides um higher than
Questionerintrinsic value besides um higher than what they're valued on the market and I wanted to know if you had any advice on navigating um certain trade-offs associated with Ambassador Furniture markets yeah so I
Questionerthink the the most important there are two or three important things but I would say probably amongst the most important Philippines is circular competence so when we look at a business we really have to understand and if we aren't if we aren't and most humans aren't if we aren't and most humans have a limited circle of competence so there's no problem with having a small circle of competence in fact you can get extremely wealthy with an extremely narrow circle of competence that is the nature of most entrepreneurs or circular competence is very narrow they are in many cases an inch wide and a mile deep and and it works well for them so we and and it works well for them so we have to be honest with ourselves and we
Questionerhave to be honest with ourselves and we have to ask ourselves is this business within our circle of competence and it might be the case in 98 or 99 of businesses you encounter the answer is no if I encounter any biotech company I know nothing about it I can't do anything I don't like the healthcare space I just say I'll take a pass on that there's entire large like defense companies or defense contractors I just don't like business businesses that do that have one customer which is the government because I think that it gets a little shady sometimes and there could be non-market forces I just don't like those now they could be really good Investments for someone else but they're not for me so lots and lot of things I will quickly get rid of early or irrationally and it doesn't matter if you get rid of a business that eventually goes up a hundred times
Otherthat eventually goes up a hundred times or a thousand times what matters more is to avoid the ones that you don't really understand and so the first is circular competence the second is margin of safety so if you have a good understanding of a company by definition you know what it's worth you can't really have a good understanding and then basically say I don't know what this is what and if you know what it's worth and you obviously the Market's giving you a market price if you see a large enough Delta there so the third thing is be very unreasonable so if you say to yourself I want to buy things that are 50 off you will find plenty of company if you become more unreasonable and I say I want to buy something that's 75 off you will still find company if you say to yourself I want things that are 90 off you'll still find companies because the universe of
Questionercompanies because the universe of companies is so large if you are willing to dig through those 50,000 businesses you'll find them at 50, 70, 90, 95 off and they're not that common and obviously you have to overlay that with circle of competence but they're there and so this is the way it is it's a treasure hunt looking for needle in the haystack and you want seven moons to line up and the other side of this is if you made eight or ten bets like this and even half of them didn't work which is probably going to be the case error rate here might be 50 it doesn't matter and if you're right and four out of eight or five out of ten or six out of ten it's going to work out spectacularly and so it's a pretty straightforward I would say template and game plan execution is not so straightforward but if you're a dogged and
Questionerif you're a dogged and focused you can get there manage a question from online from David would you say a better spend a better use of your time to spend time looking at industry leaders or investors for young people learning how to learn to invest their own money
Warrenand I think it is unlikely that a large business that's followed by 20 analysts is widely mispriced or widely underpriced it could happen but it's unlikely I think you could have paid any multiple for Microsoft when it went public in the 80s almost any multiple for Walmart running around public in the 70s and you would have still done extremely well and and so there are some truly great businesses with very long term modes that just help them for long enough you would do really well but I think the the better framework is to take the path less travel like when Charlie bought beverage oil it was
Ted Weschlerwhen Charlie bought beverage oil it was a very obscure company when I boughta very obscure company when I boughta very obscure company when I bought resource Logistics I couldn't convinceresource Logistics I couldn't convinceresource Logistics I couldn't convince even my best friends who are really goodeven my best friends who are really goodeven my best friends who are really good investors to even spend five minutes toinvestors to even spend five minutes toinvestors to even spend five minutes to look at the businesslook at the businesslook at the business they just said turkeythey just said turkeythey just said turkey some Nano capsome Nano capsome Nano cap I'm not interestedI'm not interestedI'm not interested and I couldn't even get to the nextand I couldn't even get to the nextand I couldn't even get to the next sentence with them and so I think you'resentence with them and so I think you'resentence with them and so I think you're better off being an independent thinkerbetter off being an independent thinkerbetter off being an independent thinker and you're better off going throughand you're better off going throughand you're better off going through these some of these obscure namesthese some of these obscure namesthese some of these obscure names looking for that needle in the haystacklooking for that needle in the haystacklooking for that needle in the haystack
Otheryou manage just getting a question fromyou manage just getting a question fromyou manage just getting a question from online as well yeah hi Monash um I'monline as well yeah hi Monash um I'monline as well yeah hi Monash um I'm Jonas I'm the president of the hedgeJonas I'm the president of the hedgeJonas I'm the president of the hedge fund society and on behalf of ourfund society and on behalf of ourfund society and on behalf of our society also I really wanted to thanksociety also I really wanted to thanksociety also I really wanted to thank you for taking the time I've beenyou for taking the time I've beenyou for taking the time I've been following you for a few years and it's afollowing you for a few years and it's afollowing you for a few years and it's a great pleasure to have you home as agreat pleasure to have you home as agreat pleasure to have you home as a speaker I'm unfortunately not in Londonspeaker I'm unfortunately not in Londonspeaker I'm unfortunately not in London right now so children from online
Questionerright now so children from online um but I have a question about your process so while I was following you sometimes I just wonder because you usually talk about more qualitative factors so I just want to what your investment process is like do you actually have a sophistic financial model like someone who asked would learn when they were start working at an investment bank or do you rather lose look at something more simplified like multiples or is it more of a qualitative analysis and you you want the valuation to be so obviously cheap that you don't have to really dive deep into the evaluation so good calendar for this super interesting
Questioneryeah so one of the issues we face is that the data set is too large so when you have 50 000 stocks in the world and if you were to spend a month on each one unfortunately God hasn't given us 50
Otherone unfortunately God hasn't given us 50 000 months on planet Earth to go through them all we've got probably less than ten thousand or twelve thousand we got less than probably ten thousand months total and or less than a thousand I would say those 120 months is 10 years so yeah we only have about 1500 months before we are dead and gone and if you spent your whole life looking at every business and you started when you were 20 and you went till you were 80. you could look at 66 or 7 000 businesses or something it's not much that you would actually be able to get through actually not even six or seven thousand you would get through about a hundred businesses every 10 years and you would probably get to six or seven hundred businesses in a lifetime and and that's just doing nothing else and which means that you would basically have only looked at something like one
Todd Combshave only looked at something like one percent of the full data set so we need hacks we can't do it just and so there are several hacks you can use one hack you can use is you could go and look at something like value investors club which has a rigorous membership requirement and the quality of the ideas posted is well above average and so if you limited yourself to only companies that have a write-up on value investors Club that's a much more manageable data set and you could actually drill down on a lot more businesses if you went down that route you might be able to maybe look at a few hundred businesses a year and and the good thing is the value investors Club is that you get digested data so you get both qualitative and quantitative data in a pretty digested form where someone has spent the time to write it up and is giving you the story
Otherwrite it up and is giving you the story
Otherand all that now you may agree or
Otherdisagree or not understand the story and
Otherthat's fine you can let things go they
Otherdon't make sense so that's one hack data
OtherRoma is another hack
Otherwhich is a site that lists the major
OtherHoldings of a bunch of great investors
Otherso it's already gone through one filter
Othersomeone smart that you admire already
Otherbought it that's a great list to go
Otherwindow shopping and then hopefully
Otheractually shopping in so you can do some
Otherhacks like that
Otherwhat is what is berkshire's portfolio
Otherlook like for example
Otherand take it from there so these are some
Otherof the things you can do
Otherwhere you can winner down that
Other50 000 stock Universe which is
Otherimpossible to go through
Otherinto something more manageable and then
Otheron the other end of the spectrum other
Otherside if you end up in one or two ideas
Otherthat you can find in a year that go
Todd Combsthat you can find in a year that go through all these filters that's a really good outcome so if you're able to find one good investment a year I think that's a you're well spent and so that's how I would and that's how I do go about it is I am a Shameless cloner and I want to leverage what other people have already figured out value investors Club is good data Roma is good and anything I can find out where someone else has already done some work and has some perspective I would like to understand the perspective and then take it from there
Questionergreat thank you um just a very quick follow-up in terms of you actually evaluating it yourself do you actually build a financial model or how do you assess it or do you think that's that's a waste of time and full switch of accuracy I gave a talk some years back Ten Commandments of investment management
Otherinvestment managementinvestment management and the Commandment that came down theand the Commandment that came down theand the Commandment that came down the mountain there were actually two sets ofmountain there were actually two sets ofmountain there were actually two sets of ten one was for investment managers andten one was for investment managers andten one was for investment managers and one was for Humanity the investmentone was for Humanity the investmentone was for Humanity the investment manager tablet dropped and broke and wemanager tablet dropped and broke and wemanager tablet dropped and broke and we never got that so I had to create it fornever got that so I had to create it fornever got that so I had to create it for us investment managers and one of Theus investment managers and one of Theus investment managers and one of The Commandments is Thou shalt never useCommandments is Thou shalt never useCommandments is Thou shalt never use ExcelExcelExcel and so if youand so if youand so if you find yourself reaching for excelfind yourself reaching for excelfind yourself reaching for excel then you know you don't have bellary jobthen you know you don't have bellary jobthen you know you don't have bellary job and you don't have racasand you don't have racasand you don't have racas so if it doesn't hit you over the headso if it doesn't hit you over the headso if it doesn't hit you over the head like this is a total no-brainer so Ilike this is a total no-brainer so Ilike this is a total no-brainer so I think it's a good idea to look at thingsthink it's a good idea to look at thingsthink it's a good idea to look at things and read things where things are soand read things where things are soand read things where things are so blindingly obvious just on the firstblindingly obvious just on the firstblindingly obvious just on the first read now you may need to do more work toread now you may need to do more work toread now you may need to do more work to fine-tune it but it should just hit youfine-tune it but it should just hit youfine-tune it but it should just hit you so obviously that this is worth 10 timesso obviously that this is worth 10 timesso obviously that this is worth 10 times what I'm look what I'm going to bewhat I'm look what I'm going to bewhat I'm look what I'm going to be paying for it and that's the way to gopaying for it and that's the way to go
Otherpaying for it and that's the way to go and Excel is not the way to get thereand Excel is not the way to get thereand Excel is not the way to get there all right thank you hi I'm monish I'mall right thank you hi I'm monish I'mall right thank you hi I'm monish I'm Cedric here and thank you for sharingCedric here and thank you for sharingCedric here and thank you for sharing with us and you just mentioned that wewith us and you just mentioned that wewith us and you just mentioned that we should probably not use the Excel whenshould probably not use the Excel whenshould probably not use the Excel when we it comes to value a business I justwe it comes to value a business I justwe it comes to value a business I just want to likewant to likewant to like um for example Charlie has mentionedum for example Charlie has mentionedum for example Charlie has mentioned lots of mental models for example thelots of mental models for example thelots of mental models for example the um Collective misjudgment and also theum Collective misjudgment and also theum Collective misjudgment and also the probability I just wonder if there isprobability I just wonder if there isprobability I just wonder if there is any mental models that you think is veryany mental models that you think is veryany mental models that you think is very useful to recommend it for us to studyuseful to recommend it for us to studyuseful to recommend it for us to study
Questioneryeah so first of all on Excel I knowyeah so first of all on Excel I knowyeah so first of all on Excel I know that me and your Finance professors atthat me and your Finance professors atthat me and your Finance professors at lse are completely in sync they wouldlse are completely in sync they wouldlse are completely in sync they would never ask you to use Excel for anythingnever ask you to use Excel for anythingnever ask you to use Excel for anything and neither would I so that's wonderfuland neither would I so that's wonderfuland neither would I so that's wonderful so we can just toss Excel out the windowso we can just toss Excel out the windowso we can just toss Excel out the window because no self-respecting businessbecause no self-respecting businessbecause no self-respecting business school Professor would ever ask for thatschool Professor would ever ask for thatschool Professor would ever ask for that so having said that you know what I
Warrenso having said that you know what I would say with the mental models is thewould say with the mental models is thewould say with the mental models is the following I sometimes have to pinchfollowing I sometimes have to pinchfollowing I sometimes have to pinch myself but I've had a chance to havemyself but I've had a chance to havemyself but I've had a chance to have dinner with Charlie many times in hisdinner with Charlie many times in hisdinner with Charlie many times in his home and I've laid Bridge with him forhome and I've laid Bridge with him forhome and I've laid Bridge with him for many hoursmany hoursmany hours and I think what I learned the most fromand I think what I learned the most fromand I think what I learned the most from all of that was just observing him notall of that was just observing him notall of that was just observing him not so much what he was saying but justso much what he was saying but justso much what he was saying but just watching how he functions I thinkwatching how he functions I thinkwatching how he functions I think watching him gave me more insights thanwatching him gave me more insights thanwatching him gave me more insights than anything what he was actually saying andanything what he was actually saying andanything what he was actually saying and what I realized about Charlie is that hewhat I realized about Charlie is that hewhat I realized about Charlie is that he has a very large Brain he's got veryhas a very large Brain he's got veryhas a very large Brain he's got very high horsepowerhigh horsepowerhigh horsepower and what he's also doing with that veryand what he's also doing with that veryand what he's also doing with that very large Brain is he is poundinglarge Brain is he is poundinglarge Brain is he is pounding a massive amount of information intoa massive amount of information intoa massive amount of information into that brain so I think Charlie must readthat brain so I think Charlie must readthat brain so I think Charlie must read four or five hundred books a yearfour or five hundred books a yearfour or five hundred books a year and when he's sitting in his kind ofand when he's sitting in his kind ofand when he's sitting in his kind of easy chair at home there's a pile ofeasy chair at home there's a pile ofeasy chair at home there's a pile of books on one side and another pile ofbooks on one side and another pile of
Questionerbooks on one side and another pile of books on the other side and it's like an assembly line these books are just pounding through probably more than one or two a day but neither the large Brain nor that huge amount of data going into his brain is responsible for his success in my opinion what I believe is truly responsible for his success is the mental model hacks so what Charlie has been able to do over the last 50 70 80 years is that he's been able to figure out certain mental models and when he figures out certain mental models he gets those etched in his brain and when you start putting something like 30 40 50 mental models in your brain and when you encounter some company or business that you're looking at and instantly three or four mental models come and work on that particular business you are able to get to a perspective on that company
Othercompany relatively quickly and probably relatively very accurately that most of the humans are going to have a hard time so the key to actually getting great at some of these things is to get a lot of fluency first of all you have to get the mental models into your system the second is you have to believe in those models and the third is you've got to be able to very quickly overlay three four five of these models that apply in a particular situation and especially when what Charlie says is that when multiple models are working in the same direction that's when you get lulapalooza effects so for example if you if you look on YouTube there's a talk I gave many years ago on Coca-Cola and I went through a bunch of the mental models that Warren and Charlie used when they were figuring Coke out and there's a whole bunch of different ones that go
Othera whole bunch of different ones that go in and once they saw that they were like in and once they saw that they were like in and once they saw that they were like four or five models working in the same four or five models working in the same four or five models working in the same direction they knew they had a winner direction they knew they had a winner direction they knew they had a winner because of the way that would work there because of the way that would work there because of the way that would work there are many different mental models cloning are many different mental models cloning are many different mental models cloning is a mental model the reciprocity of is a mental model the reciprocity of is a mental model the reciprocity of humans is a mental model there's many humans is a mental model there's many humans is a mental model there's many mental models so if you go to mental models so if you go to mental models so if you go to were Charlie's Almanac which is my were Charlie's Almanac which is my were Charlie's Almanac which is my favorite book there's favorite book there's favorite book there's the last chapter in the book is the the last chapter in the book is the the last chapter in the book is the psychology of human misjudgment which is psychology of human misjudgment which is psychology of human misjudgment which is a talk Charlie gave a long time ago at a talk Charlie gave a long time ago at a talk Charlie gave a long time ago at Harvard Harvard Harvard and I think it probably took him and I think it probably took him and I think it probably took him something like 40 or 50 years something like 40 or 50 years something like 40 or 50 years to prepare for that talk I don't think to prepare for that talk I don't think to prepare for that talk I don't think he could have given that talk 30 years he could have given that talk 30 years he could have given that talk 30 years ago 40 years ago because he didn't have ago 40 years ago because he didn't have ago 40 years ago because he didn't have the models the models the models so that talk lays out so that talk lays out so that talk lays out something like 30 models 20 20 or 30 something like 30 models 20 20 or 30 something like 30 models 20 20 or 30 models that I try to re-read that talk models that I try to re-read that talk models that I try to re-read that talk every year every year every year and every year when I reread it I think
Questionerand every year when I reread it I think I pick up new stuff and I'm not that good at being able to Overlay these models and recall them that quickly like he does he's got a fluency of recall and a fluency of understanding which ones apply so when you look at a situation and you just look at a lot of data you have in your head against that situation that's a very blunt tool but if you look at a situation and you're able to recall four mental models like one of the one of the mental models for Coke is something we and humans have known as Association tendency so Oak likes to advertise wherever people are happy so they are at the Olympic Games and there they try to be at the Super Bowl and they want to be with you at movie theaters and all of this right because they feel that if you're in a happy place and you consume Coke then what it's kind of Pavlov's dog
Charliewhat it's kind of Pavlov's dog conditioning You're Gonna Act actually think that it's a cork that made you happy right and so the association tendency is something that advertisers understand really well and it's one mental model that coke uses and if you start overlaying these other mental models with that then you start getting these kind of unusual effects that's the same reason why Coke uses celebrities right so if we have some George Clooney type character drinking Coke we're going to think oh we'll be like Clooney too if we drink the Coke and so the associated tendency kicks in there as well so I think that building an arsenal of mental models and one doesn't even need to be that I don't think I'm that good at it I've just got a few models that I think a lot of humans ignore that I don't think one should ignore that can give you a good
Questionershould ignore that can give you a good Edge I think cloning has given me a huge Edge I think cloning has given me a huge Edge I think cloning has given me a huge Edge in in in in getting a head start in life I think getting a head start in life I think getting a head start in life I think that I understood that I understood that I understood how Warren and Charlie how Warren and Charlie how Warren and Charlie went on these treasure hunts went on these treasure hunts went on these treasure hunts and it fits in my psyche to go on and it fits in my psyche to go on and it fits in my psyche to go on treasure hunts treasure hunts treasure hunts so for some people it may not fit with so for some people it may not fit with so for some people it may not fit with their psyche but for some people it will their psyche but for some people it will their psyche but for some people it will and so and so and so the combination of a treasure hunt with the combination of a treasure hunt with the combination of a treasure hunt with being able to take something that shows being able to take something that shows being able to take something that shows up and then overlay a bunch of other up and then overlay a bunch of other up and then overlay a bunch of other models on it so for example this company models on it so for example this company models on it so for example this company in races in Turkey in races in Turkey in races in Turkey was really cheap but the thing that was was really cheap but the thing that was was really cheap but the thing that was more interesting to me about that more interesting to me about that more interesting to me about that company was not that it was a three cent company was not that it was a three cent company was not that it was a three cent dollar bill what was more interesting to dollar bill what was more interesting to dollar bill what was more interesting to me about it was that they're not me about it was that they're not me about it was that they're not interested in investing capital interested in investing capital interested in investing capital if the rate of return is below 25 to 35 if the rate of return is below 25 to 35 if the rate of return is below 25 to 35 percent percent percent so it's the reinvestment rate so it's the reinvestment rate so it's the reinvestment rate that's more interesting so the three that's more interesting so the three
Otherthat's more interesting so the three cent dollar bill I'll get 30Xcent dollar bill I'll get 30Xcent dollar bill I'll get 30X but if the dollar bill becomes a 20 billbut if the dollar bill becomes a 20 billbut if the dollar bill becomes a 20 bill that's far more interestingthat's far more interestingthat's far more interesting and now three cents can become twentyand now three cents can become twentyand now three cents can become twenty dollarsdollarsdollars and that's much more interesting thanand that's much more interesting thanand that's much more interesting than three cents becoming a dollar so thethree cents becoming a dollar so thethree cents becoming a dollar so the mental model of compounding is wellmental model of compounding is wellmental model of compounding is well understood by many of usunderstood by many of usunderstood by many of us so when you overlay cheapness withso when you overlay cheapness withso when you overlay cheapness with goodness which is what you get with highgoodness which is what you get with highgoodness which is what you get with high return Equity businesses good businessesreturn Equity businesses good businessesreturn Equity businesses good businesses generating High returns we know thatgenerating High returns we know thatgenerating High returns we know that high returns over a long period withhigh returns over a long period withhigh returns over a long period with long runways get you remarkable resultslong runways get you remarkable resultslong runways get you remarkable results but when you overlay that with somethingbut when you overlay that with somethingbut when you overlay that with something that's really cheapthat's really cheapthat's really cheap you're going to get one manga would callyou're going to get one manga would callyou're going to get one manga would call lulaplusa effects because if I boughtlulaplusa effects because if I boughtlulaplusa effects because if I bought the same thing at a hundred cents on thethe same thing at a hundred cents on thethe same thing at a hundred cents on the dollar and it compounds I still do welldollar and it compounds I still do welldollar and it compounds I still do well but if I buy it at five cents or threebut if I buy it at five cents or threebut if I buy it at five cents or three cents and then it compounds that's justcents and then it compounds that's justcents and then it compounds that's just off the charts and so
Questioneroff the charts and so I would say focus on the hacks focus on the mental models and build and Monger can give you a big head start because it takes a while to build these and learn these and internalize these thank you so much for sharing okay I think we're are we out of time yeah I was actually just going to ask if you could ask one more question that relates a little bit to what you're just saying for us to longer and which others and that's okay yeah that that'd be great sure excellent excellent first of all as Marianas mentioned brilliant book please all of you read it I'm just reading it now excellent extra book but in one of the things that one of Charlie's interviews in it Monger mentions that one of the reasons that buffer continues to build Berkshire and I'm sure you'll wear this as well is to have a platform to
Questionertoto essentially have people listen to his very good Notions his lessons that he has to share and obviously you've benefited hugees from it we've benefited future from it probably a big reason why Oliver's so good today and now we're also here benefiting from your platform just like to ask you how what's your motivation to build a platform that you have and is it for similar reasons I think the value investing Community going back to Ben Graham has a ethos of knowledge sharing and teaching and it goes back to Graham and Graham did a great job of that very selflessly and then Buffett and Munger did a great job with that very selflessly so I think it's just part of the community I think there are a lot of practitioners in the community who follow that ethos and are going to become any poorer by sharing any of these things and actually I have
Questionerany of these things and actually I have no original ideas whatever I'm sharing from you is coming from other Masters and so it's not I figured something out I haven't figured anything out I'm just Shameless cloner so it's just I would say that I have been deeply enriched by the teachers that came before me who were such great teachers and to the extent that I can be helpful I'm more than happy to be healthy
Otherthank you very much do you think one thing interesting Buffett says that what he wants on his gravestone he says just he was a teacher I think that's what he wants to be most remembered as that he was a teacher
Questionerthank you so much for your time there's no way no better ways to end it other than that can we just give much quicker okay
Otherit was a pleasure thank you very much I really enjoyed the session and I'm sorry my answers are long-winded so we probably didn't get to a lot of your
Questionerprobably didn't get to a lot of your questions but uh hopefully we can do that we can do another session maybe next year and see we can make some progress thank you so much for your time all right bye
Otherthank you