Other[Music][Music]he along with his friend G Speerhe along with his friend G Speerhe along with his friend G Speer successfully bid $650,000 for a charitysuccessfully bid $650,000 for a charitysuccessfully bid $650,000 for a charity lunch with with Warren Buffett in7 andlunch with with Warren Buffett in7 andlunch with with Warren Buffett in7 and Mish humbly describes it as an overdueMish humbly describes it as an overdueMish humbly describes it as an overdue tution fee to his mentor Mish has a longtution fee to his mentor Mish has a longtution fee to his mentor Mish has a long and a strong relationship with Charlieand a strong relationship with Charlieand a strong relationship with Charlie monger and we have witnessed the bondmonger and we have witnessed the bondmonger and we have witnessed the bond between these gentlemen flourish overbetween these gentlemen flourish overbetween these gentlemen flourish over the years as you will experience shortlythe years as you will experience shortlythe years as you will experience shortly Manish is a great teacher of valueManish is a great teacher of valueManish is a great teacher of value investment philosophy and he hasinvestment philosophy and he hasinvestment philosophy and he has authored two books The Links Mosaic andauthored two books The Links Mosaic andauthored two books The Links Mosaic and dandoo investor both of which would bedandoo investor both of which would bedandoo investor both of which would be dropped in the chat for those who aredropped in the chat for those who aredropped in the chat for those who are interested monish also runs a successfulinterested monish also runs a successfulinterested monish also runs a successful nonprofit named dakshana Foundationnonprofit named dakshana Foundationnonprofit named dakshana Foundation dakshana sponsors kids from the empowdakshana sponsors kids from the empowdakshana sponsors kids from the empow social economic backgrounds and putssocial economic backgrounds and putssocial economic backgrounds and puts them through a rigorous training programthem through a rigorous training programthem through a rigorous training program to get into top tier Technical andto get into top tier Technical andto get into top tier Technical and medical schools by spending about $2,000medical schools by spending about $2,000medical schools by spending about $2,000 per student and taking advantage of the
Otherper student and taking advantage of the subsidized College tution from the Indian government at these colleges the life of the students and their families is transformed needless to say the ROI that matches the low risk high reward we also have many DNA Scholars working here at Microsoft and a few might join this call as well we would encourage them to come off mute on the camera when the Q&A is live and say hello with that I'll pass on the floor to Mish and for the Q&A part we have curated some questions we can directly go to the questions um and then um depending on who raises their hand we can go back and forth Rahul and I will moderate the session
Otherwelcome Gokul thank you thank you so much it's a pleasure and honor to be with this August group it's wonderful the it firm I had started in my mid 20s in Chicago few years after it started
Questionerin Chicago few years after it started became a Microsoft solution provider andbecame a Microsoft solution provider andbecame a Microsoft solution provider and I think it was 95 1995 Bill Gates wasI think it was 95 1995 Bill Gates wasI think it was 95 1995 Bill Gates was withering Chicago and they arangwithering Chicago and they arangwithering Chicago and they arang a lunch for him with few of the solutiona lunch for him with few of the solutiona lunch for him with few of the solution providers in town so I was one of theproviders in town so I was one of theproviders in town so I was one of the yo-yos who joined him for lunch whichyo-yos who joined him for lunch whichyo-yos who joined him for lunch which was wonderful and we had great timewas wonderful and we had great timewas wonderful and we had great time together and I I remember I I had askedtogether and I I remember I I had askedtogether and I I remember I I had asked bill at that time about durability ofbill at that time about durability ofbill at that time about durability of the Microsoftthe Microsoftthe Microsoft franchise and he was very skeptical andfranchise and he was very skeptical andfranchise and he was very skeptical and he said look the record of greathe said look the record of greathe said look the record of great companies going into Oblivion is almostcompanies going into Oblivion is almostcompanies going into Oblivion is almost 100% so he says Microsoft will one day100% so he says Microsoft will one day100% so he says Microsoft will one day go into the Oblivion just like othersgo into the Oblivion just like othersgo into the Oblivion just like others great ones that have come before themgreat ones that have come before themgreat ones that have come before them the interesting thing is that I thinkthe interesting thing is that I thinkthe interesting thing is that I think Bill is probably mostly right in thatBill is probably mostly right in thatBill is probably mostly right in that assessment so far wrong about it withassessment so far wrong about it withassessment so far wrong about it with Microsoft and you know interesting thingMicrosoft and you know interesting thingMicrosoft and you know interesting thing is he sold down his stake over the yearsis he sold down his stake over the yearsis he sold down his stake over the years quite a bit and he Diversified intoquite a bit and he Diversified into
Otherquite a bit and he Diversified into things that have not done as well as things that have not done as well as things that have not done as well as Microsoft would have done but of course Microsoft would have done but of course Microsoft would have done but of course it Diversified his his and the it Diversified his his and the it Diversified his his and the foundations netw worth on the other hand foundations netw worth on the other hand foundations netw worth on the other hand our man Mr bomber just all in you know our man Mr bomber just all in you know our man Mr bomber just all in you know and and ended up becoming one of the and and ended up becoming one of the and and ended up becoming one of the wealthiest guys so it's interesting how wealthiest guys so it's interesting how wealthiest guys so it's interesting how one of them who's not the founder was one of them who's not the founder was one of them who's not the founder was much more bullish for much longer and much more bullish for much longer and much more bullish for much longer and such but I'll look forward to your such but I'll look forward to your such but I'll look forward to your questions what you guys want to talk questions what you guys want to talk questions what you guys want to talk about and we'll take it from there thank about and we'll take it from there thank about and we'll take it from there thank you monish we'll start with the the you monish we'll start with the the you monish we'll start with the the questions Frank if you you can go ahead questions Frank if you you can go ahead questions Frank if you you can go ahead with your first question thank you so with your first question thank you so with your first question thank you so much for your time uh my question is um much for your time uh my question is um much for your time uh my question is um AI enlarged language models are AI enlarged language models are AI enlarged language models are transforming industries from automation transforming industries from automation transforming industries from automation to R&D with significant U economic to R&D with significant U economic to R&D with significant U economic implications given your expertise and implications given your expertise and implications given your expertise and identif Ying transformative trends like identif Ying transformative trends like identif Ying transformative trends like how do you see the AI en llarge language
Warrenwell I think you're asking the wrong person you know mostly outside my circle of competence you're probably better situated to answer the question than I am I mean everything I see around me there's very embryonic at this point and I think it has a lot of implications many of which we don't understand many of which are negative so we have to see how it unfolds but I so far I have not seen much change in the way I spend my time or run my Affairs and so on it'll probably go through change on that front too I'm generally a person who's you know more set in my ways than others probably a negative we'll see how it plays out
Questionerhi Manish uh thanks so much
Questionerplays out hi Manish uh thanks so much for being here today really appreciate it so so when I think about your style of investing along with Warren Buffett it's very aligned to Value investing and when we think of value funds those overweight in financials utilities Industrials they've underperformed growth funds since the O8 crisis growth has W the led the way of outperformance particularly in Tech when we think of the S&P 500 over 25% of the weight is in the top five tech compan ianes we have Nvidia Apple Microsoft Amazon and meta do you see any upcoming catalysts to flip in the favor of value investing and has the dominant growth uh stocks changed your investment style or perspective
Otherall right well Nicole that's a great question so value and growth are joined at the hip they are two sides of the same coin all intelligent investing
Questionerthe same coin all intelligent investing is value investing and it doesn't really is value investing and it doesn't really is value investing and it doesn't really matter if a company is going to grow a lot in the future it's going to shrink a lot in the future it's going to shrink a lot in the future it's going to shrink a lot in the future it's going to stay the lot in the future it's going to stay the lot in the future it's going to stay the same in the future all three of those same in the future all three of those same in the future all three of those types of businesses can fall into the types of businesses can fall into the types of businesses can fall into the tent of value investing all value tent of value investing all value tent of value investing all value investing is looking at the sum of investing is looking at the sum of investing is looking at the sum of future cash flows that a business is future cash flows that a business is future cash flows that a business is likely to deliver from now till Judgment likely to deliver from now till Judgment likely to deliver from now till Judgment Day discounted to present value by a Day discounted to present value by a Day discounted to present value by a reasonable interest rate and then we reasonable interest rate and then we reasonable interest rate and then we compare that to the price that is it's compare that to the price that is it's compare that to the price that is it's being offered at so so at One Price being offered at so so at One Price being offered at so so at One Price Nvidia could be a value investment and Nvidia could be a value investment and Nvidia could be a value investment and another price it could be a speculative another price it could be a speculative another price it could be a speculative investment and the same applies to investment and the same applies to investment and the same applies to Microsoft and the same applies to Microsoft and the same applies to Microsoft and the same applies to Burkshire haway and a zillion other Burkshire haway and a zillion other Burkshire haway and a zillion other companies so when Buffett invested in companies so when Buffett invested in companies so when Buffett invested in Apple for Apple for Apple for example he was not quote unquote buying example he was not quote unquote buying example he was not quote unquote buying something with low growth and value and
Questionersomething with low growth and value and so on he basically looked at the future cash flows versus what he was paying for it and the equation made sense to him that is really the equation we are for we are focused on which is you know like Buffett says he he says you know ESOP says one A Bird in Hand is worth two in the bush and he says the question to ask is How likely are there two birds in the bush and how long is it going to take you to get those two birds when you give the one bird and that's basically what investing is all about so to illustrate the point a little further the difficulties we run into inv value investing the definition of investing and value investing is painfully simple you know the sum of future cash flows discounted back the difficulty we run into is even in the simplest of businesses estimating those future cash
Questionerbusinesses estimating those future cash flows is relatively difficult to do and it becomes more and more difficult the further out in years that I go you know Rahul gave a big disclaimer about no Insider information to be disclosed Etc but if I were to ask this audience you know just a very simple question you're insiders at Microsoft just tell me the next 10 years of cash flows give me the next 10 years of cash flow with a 80% or higher probability and if you can do that if you could give me those 10 years in cash flows is a 80% or higher probability and you guys are insiders so you got you guys are well positioned to give me that number and Rahul might break out in hives if you give me that number but that's okay we don't care much about that I could then discount to present value you know that that would be relatively a simple exercise to
Warrenbe relatively a simple exercise to Discount that to present value but my suspicion is that even Satya could not give me that number or even Bill couldn't give me that number because they don't know and because it's a range and that range could be pretty wide and so investing becomes more and more speculative and away from what we would call intelligent investing the less we are able to have convictions and confident confidence in those future cash flows so my own response to that you know and everyone has a different response to that someone like Nick sleep that some of you might have heard of has a very different response to the Future uncertainties my own response to that is to try to take away those uncertainties as much as I can so to give you an example real world example in 2004 I ran into a steel company based in Canada called ipsco
Questionercompany based in Canada called ipsco these guys made tubulous steel kind of these guys made tubulous steel kind of these guys made tubulous steel kind of stuff that goes into pipelines and you stuff that goes into pipelines and you stuff that goes into pipelines and you know oil rigs and so on and ipsco was a stock that was trading at around $40 a share they had issued guidance which share they had issued guidance which share they had issued guidance which said that in the next two years in each said that in the next two years in each said that in the next two years in each of the next two years their cash flows of the next two years their cash flows of the next two years their cash flows would be $15 a share and ipsco had no would be $15 a share and ipsco had no would be $15 a share and ipsco had no debt and they had $15 a share on their debt and they had $15 a share on their debt and they had $15 a share on their balance sheet so in this case there was balance sheet so in this case there was balance sheet so in this case there was very uncertainty about the next two very uncertainty about the next two very uncertainty about the next two years of cash flows because the company years of cash flows because the company years of cash flows because the company is pretty much black and white telling is pretty much black and white telling is pretty much black and white telling you and they weren't just coming out of you and they weren't just coming out of you and they weren't just coming out of these numbers just you know out of thin these numbers just you know out of thin these numbers just you know out of thin air they had long-term contracts with air they had long-term contracts with air they had long-term contracts with these pipelines Etc to deliver Steel in these pipelines Etc to deliver Steel in these pipelines Etc to deliver Steel in certain quantities and time frames to certain quantities and time frames to certain quantities and time frames to them so these were you know hard them so these were you know hard them so these were you know hard purchase orders with specific time purchase orders with specific time purchase orders with specific time frames for delivery Etc it was not them frames for delivery Etc it was not them frames for delivery Etc it was not them making some sales forecast the sales
Questionermaking some sales forecast the sales were already done these were in the bag were already done these were in the bag were already done these were in the bag so the certainty around those cash flows so the certainty around those cash flows so the certainty around those cash flows was extremely high so the way I looked at it as if SC had 15 in cash another 30 in cash coming in two years that's 45 in in cash coming in two years that's 45 in in cash coming in two years that's 45 in cash the stocks at 40 there's billion cash the stocks at 40 there's billion cash the stocks at 40 there's billion dollars plus of value in the plant and dollars plus of value in the plant and dollars plus of value in the plant and equipment and inventory and all that equipment and inventory and all that equipment and inventory and all that which is free not accounted for it all which is free not accounted for it all which is free not accounted for it all so what is the intrinsic value of ipsco so what is the intrinsic value of ipsco so what is the intrinsic value of ipsco well we don't know because we don't know well we don't know because we don't know well we don't know because we don't know what year three year four year five Etc what year three year four year five Etc what year three year four year five Etc are but my take on that was that it is are but my take on that was that it is are but my take on that was that it is unlikely that the intrinsic value of unlikely that the intrinsic value of unlikely that the intrinsic value of IFCO is below the current stock price IFCO is below the current stock price IFCO is below the current stock price and it was quite likely it was and it was quite likely it was and it was quite likely it was significantly above the current stock significantly above the current stock significantly above the current stock price just because of the economics of price just because of the economics of price just because of the economics of the $45 you were going to get in two the $45 you were going to get in two the $45 you were going to get in two years versus the $40 stock price so I years versus the $40 stock price so I years versus the $40 stock price so I put 10% of my fund into ipsco just with
Questionerput 10% of my fund into ipsco just with that muchthat muchthat much certainty that I knew that year threecertainty that I knew that year threecertainty that I knew that year three cash flows could go to zero cash flowscash flows could go to zero cash flowscash flows could go to zero cash flows could even go negative it's a steelcould even go negative it's a steelcould even go negative it's a steel company it's cyclical but I said I justcompany it's cyclical but I said I justcompany it's cyclical but I said I just want to see what how Mr market priceswant to see what how Mr market priceswant to see what how Mr market prices this thing in two years when there's $45this thing in two years when there's $45this thing in two years when there's $45 a share of cash in the balance sheet soa share of cash in the balance sheet soa share of cash in the balance sheet so one year goes by and ipsco announcesone year goes by and ipsco announcesone year goes by and ipsco announces another $15 a share in cash flows inanother $15 a share in cash flows inanother $15 a share in cash flows in year year three hallelujah we're in theyear year three hallelujah we're in theyear year three hallelujah we're in the money now so now it's $60 coming in themoney now so now it's $60 coming in themoney now so now it's $60 coming in the price of the stock had kind of driftedprice of the stock had kind of driftedprice of the stock had kind of drifted up and it was now trading at about $90 aup and it was now trading at about $90 aup and it was now trading at about $90 a share I had held the stock for 14 or 15share I had held the stock for 14 or 15share I had held the stock for 14 or 15 months and I'm thinking you know monishmonths and I'm thinking you know monishmonths and I'm thinking you know monish you don't know what's going to happen inyou don't know what's going to happen inyou don't know what's going to happen in year four we have a double in 15 monthsyear four we have a double in 15 monthsyear four we have a double in 15 months this is even better than what Microsoftthis is even better than what Microsoftthis is even better than what Microsoft does you know Microsoft don't give me adoes you know Microsoft don't give me adoes you know Microsoft don't give me a double in one year usually it does indouble in one year usually it does indouble in one year usually it does in some years but not every year and I said
Warrensome years but not every year and I said let's ring the register and move on right and I'm as I'm thinking through those thoughts I wake up one morning and the stocks at 155 and some Swedish Steel company offered to buy them for 160 and why that steel company did not make that offer a year ago at $60 a share for example is beyond me but you know as Mark Twain says that truth is Stranger Than Fiction because fiction has to make sense and so you know we had like a Forex and ipsco in like 15 16 months and we moved on and I don't particularly try to put a company like ipsco into a growth bucket or a value bucket or any bucket it's just weighing what I'm putting out in cash today versus what I'm hoping to get in cash in the future and the way I look at it is I'm looking for as much certainty as possible in those cash flows and the more I go into the high
Questionerflows and the more I go into the highflows and the more I go into the high flow flying Tech names which many of youflow flying Tech names which many of youflow flying Tech names which many of you may have overdosed on the more I go intomay have overdosed on the more I go intomay have overdosed on the more I go into those highflying Tech names the morethose highflying Tech names the morethose highflying Tech names the more difficult it gets for me to estimatedifficult it gets for me to estimatedifficult it gets for me to estimate those cash flows in the future 5 and athose cash flows in the future 5 and athose cash flows in the future 5 and a half years ago on my second visit tohalf years ago on my second visit tohalf years ago on my second visit to Turkey I ran into I actually went andTurkey I ran into I actually went andTurkey I ran into I actually went and visited a company called Ras they are invisited a company called Ras they are invisited a company called Ras they are in the warehousing business they rentthe warehousing business they rentthe warehousing business they rent warehouses to Amazon car 4 Ikea Toyotawarehouses to Amazon car 4 Ikea Toyotawarehouses to Amazon car 4 Ikea Toyota Mercedes and so on largest WarehouseMercedes and so on largest WarehouseMercedes and so on largest Warehouse operator in Turkey the market cap on theoperator in Turkey the market cap on theoperator in Turkey the market cap on the day I visited them it was $16day I visited them it was $16day I visited them it was $16 million6 and the liquidation value onmillion6 and the liquidation value onmillion6 and the liquidation value on the day I visited them was more thanthe day I visited them was more thanthe day I visited them was more than $600$600$600 million it was trading atmillion it was trading atmillion it was trading at 25% of liquidation value25% of liquidation value25% of liquidation value 97.5% discount to what it should be97.5% discount to what it should be97.5% discount to what it should be worth in other words if it went to itsworth in other words if it went to itsworth in other words if it went to its liquidation value it would be a 40xliquidation value it would be a 40xliquidation value it would be a 40x return now in that case the future cashreturn now in that case the future cashreturn now in that case the future cash flows were relatively easy to assertainflows were relatively easy to assertainflows were relatively easy to assertain
Warrenflows were relatively easy to assertain because they have 10year leasesbecause they have 10year leasesbecause they have 10year leases inflation index Etc it's rental incomeinflation index Etc it's rental incomeinflation index Etc it's rental income you can you can at least conservativelyyou can you can at least conservativelyyou can you can at least conservatively tell what the rent is going to be and Itell what the rent is going to be and Itell what the rent is going to be and I thought this would trade by appointmentthought this would trade by appointmentthought this would trade by appointment and turkey is a country filled withand turkey is a country filled withand turkey is a country filled with gamblers who are trading these shares atgamblers who are trading these shares atgamblers who are trading these shares at a very high velocity anyway we spent $8a very high velocity anyway we spent $8a very high velocity anyway we spent $8 million and we got oneir of the companymillion and we got oneir of the companymillion and we got oneir of the company and yesterday the company cross lost aand yesterday the company cross lost aand yesterday the company cross lost a billion dollars in market value for thebillion dollars in market value for thebillion dollars in market value for the first time and the Turkish l in the lastfirst time and the Turkish l in the lastfirst time and the Turkish l in the last five and a half years has lost like 80%five and a half years has lost like 80%five and a half years has lost like 80% of its value it was irrelevant becauseof its value it was irrelevant becauseof its value it was irrelevant because steel and concrete and land Etc aresteel and concrete and land Etc aresteel and concrete and land Etc are effectively inflation index we didn't really care and so our return in Turkish ler is infinite but we don't really carereally care and so our return in Turkish ler is infinite but we don't really carereally care and so our return in Turkish ler is infinite but we don't really care about that our return in dollars is moreabout that our return in dollars is moreabout that our return in dollars is more than acceptable but the company'sthan acceptable but the company'sthan acceptable but the company's liquidation value nowliquidation value nowliquidation value now is north of 2 billion and so we don't
Todd Combsis north of 2 billion and so we don't care whether Ras is growth or value it does happen to be from the way you guys might think about it somewhat of a growth company and the Very Good Very gifted Capital allocators they're increasing the value of the business I've not seen them do anything stupid increase the value by two and a half times in the last 5 years and I think of Raa as like a family business you know I'm not a Founder I don't have a board seat I don't tell them what to do I wouldn't even know what to tell them to do and we just want to be a passive investor of that business and we think in 5 or 10 years it might be worth 5 or 10 billion and we just want to sit there and you know be an owner like Mr bomber and that's it so anyway next question
Questionergok how many this is a pinch me on a dreaming moment a very great honor to
Questionerdreaming moment a very great honor to meet you on the same call best teamsmeet you on the same call best teamsmeet you on the same call best teams call I've had at Microsoft so far um Gcall I've had at Microsoft so far um Gcall I've had at Microsoft so far um G given like the size of your portfolio Igiven like the size of your portfolio Igiven like the size of your portfolio I would assume that like there's like awould assume that like there's like awould assume that like there's like a minimum size of a company that you'reminimum size of a company that you'reminimum size of a company that you're willing to take a position just becausewilling to take a position just becausewilling to take a position just because you have to like take a minimum positionyou have to like take a minimum positionyou have to like take a minimum position size um so if that's like if that's asize um so if that's like if that's asize um so if that's like if that's a true statement like if you were to starttrue statement like if you were to starttrue statement like if you were to start from scratch and like be kind of afrom scratch and like be kind of afrom scratch and like be kind of a smalltime investor again you know wouldsmalltime investor again you know wouldsmalltime investor again you know would you spend more time hunting for deals inyou spend more time hunting for deals inyou spend more time hunting for deals in smaller micro cap companies just becausesmaller micro cap companies just becausesmaller micro cap companies just because there's more inefficiencies and thenthere's more inefficiencies and thenthere's more inefficiencies and then just more generally you talk about thatjust more generally you talk about thatjust more generally you talk about that you love turkey investing are thereyou love turkey investing are thereyou love turkey investing are there other a cemeteries that like small timeother a cemeteries that like small timeother a cemeteries that like small time investors like us can be utilizing justinvestors like us can be utilizing justinvestors like us can be utilizing just because larger more institutionalbecause larger more institutionalbecause larger more institutional investors just just can't go after huntinvestors just just can't go after huntinvestors just just can't go after hunt in certain places yeah that's a greatin certain places yeah that's a great
Questionerin certain places yeah that's a great question Nick and actually Joel
Questionergreenblat made an observation that if you know someone was starting out with $100,000 to invest or a million dollar to invest or $10,000 to invest they could look in all kinds of nooks and crannies that most other people couldn't you know merger Arbitrage junk bonds just different places you could you can go to some crevices that a lot of other people cannot go into uh simply because you couldn't put much Capital to work and if you are really good at that I mean if you started with a million dollars and you were really good at what you were doing you wouldn't be sitting at a million dollars after five or 10 years it might be several million dollars and as you increase the capital under management your ability to keep focused on those nooks and crannies changes because you can't be making
Questionerchanges because you can't be making $100,000 bets on a 1020 million portfolio you can do it on a $1 million portfolio and so you would naturally move up so you might start off looking at things where you could put a 100,000 to work and after a few years you might be looking at things where you might put a million dollars to work which means that that 100,000 space has vacuum now so investing has an interesting phenomena where the lower end spaces continue to become new fertile hunting grounds for new entrance because the incumbent players have moved moved on the successful ones have moved on the unsuccessful ones we don't care about and so it's almost an evergreen business from that point of view it's also a business where the little guy has an advantage over the big guy so the little guy can go all kinds of places you know when buff burshire and Buffett made
Questionerwhen buff burshire and Buffett made their bet on the Japanese conglomerates you know the trading companies it was Mickey Mouse for Warren Buffett I mean it took him a year to put the money to work and he did it just you know for the hell of it but didn't really move the needle much for Burkshire haway but for somebody else that could move the needle a lot I mean you know they could they could deliver some spectacular Returns on a portfolio even a sizable portfolio by doing that so yes absolutely you can do well by looking at NS and crannies and there's always nooks and crannies to look at and I didn't have any particular Affinity towards turkey I just saw that in 2018 it was screening really cheap it was screening super cheap and it was screening cheap because currency was unstable and everyone was exiting and I happen to have a friend in Turkey who's
Otherhappen to have a friend in Turkey who's kind of a classic Ben Graham type investor and I just told him listen I'd like to visit Turkey and I just want to visit the companies in your portfolio starting with the one that you have the most money in and going down the list and don't take me to any business where you don't have money invested and he was very excited to do that and here we are with our I think at this point maybe 70% of my assets are in turkey and there was no plan to be there 5 years or six years ago so that's the nature of it
Questionerhey Manish and thanks for making the time uh I kind of have two questions so the first one is uh was investment always kind of a passion of yours even at a young age or was there like a turning point where you decided that this is kind of what I'm going to make as my living so that's counter number one and then number two was there
Questionernumber one and then number two was there like a turning point point where you like a turning point point where you like a turning point point where you decided to adopt essentially value decided to adopt essentially value decided to adopt essentially value investing as your philosophy you know investing as your philosophy you know investing as your philosophy you know just like Warren Buffett with stopping just like Warren Buffett with stopping just like Warren Buffett with stopping to focus on the cigar birs for example to focus on the cigar birs for example to focus on the cigar birs for example like I'm just curious how all that kind like I'm just curious how all that kind like I'm just curious how all that kind of came together those are great of came together those are great of came together those are great questions and no investing was not questions and no investing was not questions and no investing was not something I had an interest in till I something I had an interest in till I something I had an interest in till I was I think north of just around 30 was I think north of just around 30 was I think north of just around 30 years old I I grew up with any years old I I grew up with any years old I I grew up with any entrepreneurial father who had started entrepreneurial father who had started entrepreneurial father who had started many different businesses I had started many different businesses I had started many different businesses I had started my own company when I was about 25 and I my own company when I was about 25 and I my own company when I was about 25 and I accidentally read learned or heard about accidentally read learned or heard about accidentally read learned or heard about Warren Buffett uh just as I was turning Warren Buffett uh just as I was turning Warren Buffett uh just as I was turning 30 and one of the big aha moments I had 30 and one of the big aha moments I had 30 and one of the big aha moments I had when I was reading up on Buffett was when I was reading up on Buffett was when I was reading up on Buffett was that what I realized is that when as an that what I realized is that when as an that what I realized is that when as an entrepreneur we start a business we may entrepreneur we start a business we may entrepreneur we start a business we may spend maybe 2 3 4% of our time figuring spend maybe 2 3 4% of our time figuring spend maybe 2 3 4% of our time figuring out the strategy and direction of the
Questionerout the strategy and direction of the company you know what what's going to do and how we're going to kind of get sales and pricing and HR and all these things and then 95 97% of the time is all the blocking and tackling to make it happen to execute and when I read about Buffett and his approach I realized that Buffett had a has a great quote he said I'm a better investor because I'm a businessman and I'm a better businessman because I'm an investor what I realized is the 3 or 4% of time that entrepreneur spend in figuring out the direction of their businesses is using the same part of the brain and the same brain cells that an investor will use to figure out which business to invest in and so both those activities actually go and leverage the same part of our brains and I always enjoyed that 34% of you know Direction and strategy
Questioneryou know Direction and strategy lot more than the blocking and tackling lot more than the blocking and tackling lot more than the blocking and tackling and the blocking and tackling was fine and the blocking and tackling was fine and the blocking and tackling was fine the first or second time I did it but the first or second time I did it but the first or second time I did it but the strategy Direction was always the strategy Direction was always the strategy Direction was always Evergreen I always love that so I said Evergreen I always love that so I said Evergreen I always love that so I said the aha moment was me I said well if I'm the aha moment was me I said well if I'm the aha moment was me I said well if I'm an investor I don't need to do the an investor I don't need to do the an investor I don't need to do the blocking and tackling what a utopian blocking and tackling what a utopian blocking and tackling what a utopian existence to only think and try to existence to only think and try to existence to only think and try to figure out which businesses have got figure out which businesses have got figure out which businesses have got their strategies right and then you know their strategies right and then you know their strategies right and then you know go into business with them effectively go into business with them effectively go into business with them effectively and just be a passive investor and such and just be a passive investor and such and just be a passive investor and such and compound Capital so to me that was a and compound Capital so to me that was a and compound Capital so to me that was a big takeaway when I heard about waren big takeaway when I heard about waren big takeaway when I heard about waren Buffett and I decided I'm going to I'm Buffett and I decided I'm going to I'm Buffett and I decided I'm going to I'm going to make a change to go in that going to make a change to go in that going to make a change to go in that direction so one of the important things direction so one of the important things direction so one of the important things to keep in mind is that when you to keep in mind is that when you to keep in mind is that when you encounter a simple idea take that idea encounter a simple idea take that idea encounter a simple idea take that idea very very seriously so for example if very very seriously so for example if very very seriously so for example if you look at someone like Sam Walton you
Questioneryou look at someone like Sam Walton you know we think of a icon in retailing Sam and wal Walmart never came up with any Innovation on retailing for at least the first 25 years of their existence every single aspect of Walmart was cloned from somewhere else okay it was not some Innovation Sam Walton came up with Sam's Club was cloned from price Costco the Walmart model was cloned from Kmart and on and on and he took so many things and so many competitors and even if you look at the business Microsoft for example you know big R&D organization big research group most of the success of Microsoft has come from external cloning you know word from word perfect and Excel from Lotus and we know all of the browser Wars and all of that so if you just go back even when you look at the current you know AI push and kind of where the Genesis of that push came from
Otherwhere the Genesis of that push came from a lot of it has come from outside the company and the company has spent billions internally on incredible brain power and incred incredible research but the external stuff that they've just lifted has been far more effective that's in the nature of things you know we Rise by standing on the shoulder of shoulders of giants so that's you know I'm grateful to Mr Buffett and you know opening my eyes about that shift and I've never missed in more than 25 years the execution part I leave the execution part of building businesses to many other great people who can do it far better than me and in the meantime I can you know be an armchair investor and life is great thanks Mish for a really informative session here um uh question I have is you have mentioned uh Mr buffet in terms of his investment style
Questionerbuffet in terms of his investment style um uh apart from the recent news that heum uh apart from the recent news that heum uh apart from the recent news that he is investing in Domino's Pizza of allis investing in Domino's Pizza of allis investing in Domino's Pizza of all companies uh um previously there werecompanies uh um previously there werecompanies uh um previously there were news that he has the Burkshire Hathawaynews that he has the Burkshire Hathawaynews that he has the Burkshire Hathaway has cash reserves of up wor of 300has cash reserves of up wor of 300has cash reserves of up wor of 300 billion uh and I think even afterbillion uh and I think even afterbillion uh and I think even after Domino's investment it's probablyDomino's investment it's probablyDomino's investment it's probably something similar to that um do yousomething similar to that um do yousomething similar to that um do you think this is a take on the value uhthink this is a take on the value uhthink this is a take on the value uh maybe not easy to find Value in themaybe not easy to find Value in themaybe not easy to find Value in the market or maybe the market might bemarket or maybe the market might bemarket or maybe the market might be overvalued where you have to pick andovervalued where you have to pick andovervalued where you have to pick and choose where you put your money andchoose where you put your money andchoose where you put your money and maybe it is I wonder if it is overvaluedmaybe it is I wonder if it is overvaluedmaybe it is I wonder if it is overvalued and maybe it's due for Corrections howand maybe it's due for Corrections howand maybe it's due for Corrections how do you look at it I mean it's hard todo you look at it I mean it's hard todo you look at it I mean it's hard to time the market but in general what doestime the market but in general what doestime the market but in general what does that tell you that he has so much cashthat tell you that he has so much cashthat tell you that he has so much cash Reserve
Otheryeah that's a great question so first of all Domino's was probably not first of all Domino's was probably not first of all Domino's was probably not Warren Buffett it was probably one ofWarren Buffett it was probably one ofWarren Buffett it was probably one of his two lieutenants anything which is
Warrenhis two lieutenants anything which is less than a 10 billion 20 billion investment is not warn probably oh I see
WarrenI have no inside information but if I would take a guess it's to or Ted
QuestionerI want to tell you about a visit I made uh to Microsoft headquarters in early 2000 I think this was about January 2000 there was a very early employee at Microsoft Vijay Washi some of you may have heard of him and a wonderful guy and vij was a very early investor in my fund and he basically said look Bish if you're ever in Seattle I can introduce you to a bunch of current and former Microsoft people who may have an interest in investing in your fund you know and I said vij what a coincidence I'm going to be in Seattle in two days and he said oh that's great you know so I met vij we went to Microsoft headquarters and he took me to a bunch of different offices
Othertook me to a bunch of different offices and introduced me to a bunch of people at Microsoft including I met Satya he had a head full of hair at that time and a bunch of wonderful some of the guys some of you guys might know and so on and so just met some wonderful great people at that trip and I was asked this question actually I wasn't even asked this question I actually gave my perspective I told the Microsoft people and the ex Microsoft people I met at that time I said look when you're in Microsoft at this time your livelihood comes from Microsoft most of your net worth excluding your residence is in Microsoft stock and I said it's a terrible investment and it's going to play out really badly for you and they told me look Mish you are a value guy you don't understand these things you don't understand Tech you have no idea about this company this is one of the best
Questionerthis company this is one of the bestthis company this is one of the best businesses that has ever been putbusinesses that has ever been putbusinesses that has ever been put forward on the face of face of thisforward on the face of face of thisforward on the face of face of this Earth I said yes but you're going toEarth I said yes but you're going toEarth I said yes but you're going to have a horrible ride and of course theyhave a horrible ride and of course theyhave a horrible ride and of course they all thought I was stupid and you knowall thought I was stupid and you knowall thought I was stupid and you know didn't do anything and if you look atdidn't do anything and if you look atdidn't do anything and if you look at the Microsoft stock performance fromthe Microsoft stock performance fromthe Microsoft stock performance from 2000 to about2000 to about2000 to about 2012 it was a terrible r i mean at one2012 it was a terrible r i mean at one2012 it was a terrible r i mean at one point you lost like 60 70% unrealizedpoint you lost like 60 70% unrealizedpoint you lost like 60 70% unrealized loss hopefully if they didn't sell butloss hopefully if they didn't sell butloss hopefully if they didn't sell but it would have been a very difficultit would have been a very difficultit would have been a very difficult right to hold on and it wasn't becauseright to hold on and it wasn't becauseright to hold on and it wasn't because they were wrong about the futurethey were wrong about the futurethey were wrong about the future prospects of the business they wereprospects of the business they wereprospects of the business they were absolutely right Microsoft was a greatabsolutely right Microsoft was a greatabsolutely right Microsoft was a great company then and is a great companycompany then and is a great companycompany then and is a great company today the S&P 500 it's not just me but atoday the S&P 500 it's not just me but atoday the S&P 500 it's not just me but a lot of people say that say in the nextlot of people say that say in the nextlot of people say that say in the next 10 or 15 years if you have an10 or 15 years if you have an10 or 15 years if you have an expectation that you're going to getexpectation that you're going to getexpectation that you're going to get more than 3 to 5% a year from the S&Pmore than 3 to 5% a year from the S&Pmore than 3 to 5% a year from the S&P 500 I would like to take the other side
QuestionerI would like to take the other side of the bet on that with you so I think the odds that the S&P delivers over 5% returns a year for the next 10 or 15 years approximates zero this is why I was asking and saying at the beginning that you know the Magnificent 5 or the Magnificent 7 tell me those cash flows you know just run an exercise on your own look at the value of those businesses if Nvidia is valued at three or three and a half billion trillion sorry not billion trillion the cash flows need to be in the range of two or three or 400 billion in a relatively short period because as I go further out in the years then I have to discount it yeah so when is NVIDIA going to deliver a year single year 500 billion cash flow okay 700 billion cash flow because if I'm putting out three and a half trillion let's say I have a family fortune of 10 trillion and I buy the
Questionerfortune of 10 trillion and I buy the whole of Nvidia three and a half trillion if I'm putting out three and a half trillion I want 78 trillion out of it right I want to double my money in a few years how am I going to get 78 trillion the only way I get 78 trillion is somehow there's like that much in cash flows that comes in the next 15 20 years discounted back which means the cash flows need to be like 15 trillion or something to get my 7 trillion I need 15 trillion in cash flow show me how they're coming and which year what cash flows are coming and I just think that the math on that is hard I mean to me it's just going through a too hard pile
Otherso Warren Buffett increasing his cash position he's publicly stated that he thinks that the corporate tax rates are at a record low rate right now one of the reasons he's given for reducing the
Questionerthe reasons he's given for reducing the stakes is to basically realize the gainstakes is to basically realize the gainstakes is to basically realize the gain while tax rates are low but I think hewhile tax rates are low but I think hewhile tax rates are low but I think he clearly understands that this 3 to 5% isclearly understands that this 3 to 5% isclearly understands that this 3 to 5% is not lost on him between us girls it'snot lost on him between us girls it'snot lost on him between us girls it's not going to benot going to benot going to be 5% it going to be less than5% it going to be less than5% it going to be less than 3% okay and Warren actually kicks3% okay and Warren actually kicks3% okay and Warren actually kicks himself for not being aggressive enoughhimself for not being aggressive enoughhimself for not being aggressive enough during the financial crisis he's alsoduring the financial crisis he's alsoduring the financial crisis he's also said the fact that we will have asaid the fact that we will have asaid the fact that we will have a dislocation in the market in the nextdislocation in the market in the nextdislocation in the market in the next 100 years is 100% the odds that we have100 years is 100% the odds that we have100 years is 100% the odds that we have a significant dislocation in the marketa significant dislocation in the marketa significant dislocation in the market in the next 10 years is quite High notin the next 10 years is quite High notin the next 10 years is quite High not 100% but quite high so his perspective100% but quite high so his perspective100% but quite high so his perspective is okay man one dislocation that'sis okay man one dislocation that'sis okay man one dislocation that's possible for bur to have is when Warrenpossible for bur to have is when Warrenpossible for bur to have is when Warren passes away okay they stopped buying thepasses away okay they stopped buying thepasses away okay they stopped buying the stock they buy they're not even buyingstock they buy they're not even buyingstock they buy they're not even buying their own stock now because they thinktheir own stock now because they thinktheir own stock now because they think it's too richly richly priced so itit's too richly richly priced so itit's too richly richly priced so it would not be imprudent to read intowould not be imprudent to read intowould not be imprudent to read into Buffett's la cash position that the
WarrenBuffett's la cash position that the future is not that great for a lot of the High Flyers and even other flyers in the SNP so a lot of you have a lot of money in Microsoft I think the world of the company I think it's a fantastic business if I owned Microsoft today I would be more bullish on it than I would I was in 2000 so I wouldn't want to sell I mean I don't like to sell things which are great which is what I was asking people in 2000 but 2000 there was just egregious it was just 10 billion or less in cash flows on a 600 700 billion market cap it was like a trailing P of 70 or something Satya is fantastic the team is fantastic but I would say that probably having at least half your assets outside Microsoft isn't the worst thing in the world you could do an please go for it
Questionersure um hey Mish um U very honored to be interacting with you um thanks for all
Questionerinteracting with you um thanks for all the education and wisdom you share I follow your content online um I'm going to set up the context for my question and then I'll ask my question um so in in value investing as you go through the rabbit hole like you describe right and peel the layers the why why why eventually you get to a state of why money why you know what is life you get more philosophical right so my question is more philosophical than investing you you and your mentors um both Buffett and Munger have quite a bit of mental models right and one such model is mode mode of a business right how how do we think about business protecting itself my question is what are the modes that personal modes that one need to develop right and the context is do you have a mental model for that first that's the question and the context is um you know in tech
Questionerand the context is um you know in tech industry and in life in general you have various curve curve balls thrown at you but is there a mental model that you or your mentors follow where you know I see you you guys as very happy guys and you know very calm and collected so so what kind of mental models you know are there that one can follow to to develop a personal mode uh that's my question
OtherI think that's a fantastic question if you have not read po Charlie Almanac I would say that's a great book to read I try to reread it every year there's a new edition that just came out and last speech in that book which is the psychology of human misjudge judement which is a long speech I think that that talk is better than a four-year college degree you you learn more and it teaches you about human nature and all that so Munger always said that it should be our duty go to
Othersaid that it should be our duty go to bed slightly wiser than when we woke up
Otherand he also said that he did not know any wise people zero who did not read all the time and I would encourage the reading reading is a great way to you know Broad New Horizon and now we have podcasts which make it even uh faster and easier for us to ingest knowledge and I think the most important thing is that to figure out what are you passionate about which is not an easy question but once you know what you're passionate about if you go all in on that you know you TR to learn it and become good at it and all that it's difficult to be great at something if you're not passionate about it and yeah
Questionerthat's right Christian just said there're the free word version of poor Charlie Almanac which is the digital Charlie Almanac which is the digital version they specifically made it free for the digital version so not that you
Questionerfor the digital version so not that you guys have any affordability issues but you can you know best things in life are free figure out what you are truly passionate about it may or may not have anything to do with what you do for a living but you should be driving everything towards that passion you should be trying to figure things out become better I mean kind of like your boss Bill Gates did or Satya did you know they just went all in at age of 10 or 11 or whatever and of course Satya at that age was all in on Cricket but then he kind of Switched things a little bit later so that's what I would say that's how you build a mo you know you basically all of us are different we have different likes and different things that we are passionate about find your passion go all in on it try to become wiser every day and Charlie said
Otherbecome wiser every day and Charlie said if you basically follow this formula
Otherif you basically follow this formula
Otherif you basically follow this formula you're going to wake up after 20 years
Otheryou're going to wake up after 20 years
Otheryou're going to wake up after 20 years and you're going to look to your right
Otherand you're going to look to your right
Otherand you're going to look to your right and look to your left and all your peers
Otherand look to your left and all your peers
Otherand look to your left and all your peers are so far behind you you can't even see
Otherare so far behind you you can't even see
Otherare so far behind you you can't even see them you've left them in the dust so
Otherthem you've left them in the dust so
Otherthem you've left them in the dust so it's just uh that steady Daily Progress
Otherit's just uh that steady Daily Progress
Otherit's just uh that steady Daily Progress get you to amazing places hello man so
Otherget you to amazing places hello man so
Otherget you to amazing places hello man so I'm AB I'm a d scholar I met you in
OtherI'm AB I'm a d scholar I met you in
OtherI'm AB I'm a d scholar I met you in kotam in 2015 December yeah thanks to D
Otherkotam in 2015 December yeah thanks to D
Otherkotam in 2015 December yeah thanks to D currently I am work at Microsoft living
Othercurrently I am work at Microsoft living
Othercurrently I am work at Microsoft living in Redmond yeah so my question is not
Otherin Redmond yeah so my question is not
Otherin Redmond yeah so my question is not about investing I wanted to ask you more
Otherabout investing I wanted to ask you more
Otherabout investing I wanted to ask you more about philanthropy like what made you
Otherabout philanthropy like what made you
Otherabout philanthropy like what made you start DNA Foundation I heard multiple
Otherstart DNA Foundation I heard multiple
Otherstart DNA Foundation I heard multiple stories but and they are are different
Otherstories but and they are are different
Otherstories but and they are are different so I wanted to hear from your yourself
Otherso I wanted to hear from your yourself
Otherso I wanted to hear from your yourself like what made you go into philanthropy
Otherlike what made you go into philanthropy
Otherlike what made you go into philanthropy why did you start ders yeah well abishek
Otherwhy did you start ders yeah well abishek
Otherwhy did you start ders yeah well abishek great to have chance to talk to you
Othergreat to have chance to talk to you
Othergreat to have chance to talk to you always like to interact with alums and
Otheralways like to interact with alums and
Questioneralways like to interact with alums and you know this year when I was at the Burkshire meeting akna Alam came up to me in Omaha and I never expected those two worlds to collide you know and so it was just great to see that Collision of Omaha with dakna scholar who was there which was Wonder F so I like to play games I like to play mathematical games you know and so I'm basically if you kind of get to the ESS essence of who I am I'm a game player and some psychologists who actually got into my head try to figure out who I was they actually fine-tuned it a little bit more for me they said monish you just it's not that you just like to play games or like to play mathematical games you like to play games that you know you have some Edge that you can win and they said that you are a single player game player so I'm not a guy who will enjoy being on a soccer team that's
Otherwill enjoy being on a soccer team that's not Mish you know soccer is a great game it's not my game okay so it needs to be single player game for me that's the way the weird way I'm wired and I'm playing two games and I'm so sorry to break it to you abishek that you were a part of that game without really knowing about it but now we're going to spill the beans and let you know about what's going on really in life here you know so I find it fun to play two games okay the first game is the game of compounding right and the game of compounding that I learned from Mr Buffett was that if you start with a million dollars and if if you are able to compound at a high rate let's say something like 25 26% a year the money doubles every 3 years in 30 years it becomes a billion dollars which is a stunning number for a million to a billion okay and I I started playing a
Questionerbillion okay and I I started playing a game of compounding exactly 30 years ago it's worked spectacularly well it's amazing now the thing is that spending money does not directly correlate to happiness it may and it will probably give you some happiness up to a certain Point many things that give you happiness have nothing to do with money but certainly Beyond a certain point money cannot make you happier so the second game I wanted to play was because I knew that it's all useless basically you have a billion dollars a guy who has a billion dollars and a guy who has 50 million you cannot say b or a is happier than the other the correlations go away okay so the second game I wanted to play which is taking it from Chuck Frey and Buffett and so on is one day before I die I want to be left with $10,000 so I want to play this compounding game full on you know you
Othercompounding game full on you know you know pedal to the metal like find the next racas you know blast out 100 x's and do all of that right but on the other hand blast the money out and now one of the things is that one day before I die I have to be at 10,000 so very important in this game in is to know exactly when I'm going to die so that I can plan backwards I just need this much of my body to function the rest of it is irrelevant just this much needs to function okay and uh hopefully this much will keep functioning with full cognition so we're going to try to compound the hell out of the money we're going to try to give the money away and we're going to try to get to the 10,000 okay so there just two games going on and it's just a math game so people you know people say oh du is this and D D daksh please understand is just a star
QuestionerD daksh please understand is just a star star star math game okay that's all itstar star math game okay that's all itstar star math game okay that's all it is so sorry to disappoint you hi Mish uhis so sorry to disappoint you hi Mish uhis so sorry to disappoint you hi Mish uh uh I've been following you ever sinceuh I've been following you ever sinceuh I've been following you ever since you bought that bet to have dinner withyou bought that bet to have dinner withyou bought that bet to have dinner with Buffet so uh and I learn a lot from youBuffet so uh and I learn a lot from youBuffet so uh and I learn a lot from you so my question to you is uh you know youso my question to you is uh you know youso my question to you is uh you know you said you need to have a passion andsaid you need to have a passion andsaid you need to have a passion and money doesn't bring happiness Beyondmoney doesn't bring happiness Beyondmoney doesn't bring happiness Beyond certain point right but let's say oncecertain point right but let's say oncecertain point right but let's say once somebody's closer to that okay and yousomebody's closer to that okay and yousomebody's closer to that okay and you take you took some risk you earned sometake you took some risk you earned sometake you took some risk you earned some big money for your retirement but thebig money for your retirement but thebig money for your retirement but the good thing about engineering is you getgood thing about engineering is you getgood thing about engineering is you get a feel of you envision something and anda feel of you envision something and anda feel of you envision something and and and then you can feel there is alwaysand then you can feel there is alwaysand then you can feel there is always something new happening right whereas insomething new happening right whereas insomething new happening right whereas in the investing it's all about numbers onthe investing it's all about numbers onthe investing it's all about numbers on the spreadsheet so what keeps you goingthe spreadsheet so what keeps you goingthe spreadsheet so what keeps you going right right now maybe you have so manyright right now maybe you have so manyright right now maybe you have so many so much money but you're adding more butso much money but you're adding more butso much money but you're adding more but it's all paper money on this on the
Questionerit's all paper money on this on the Excel right so what keeps you being in this field uh when when you accumulated so much wealth already yeah
Otherthat's a great question Samir so you know Warren Buffett and Bill Gates are very good friends they've been very good friends for a long time and Bill Gates's mother introduced the two of them I don't know if you're familiar with the story but basically there was a gathering that Gates's mom had put together which was in maybe an hour helicopter Drive helicopter ride from Seattle and she told Bill that I want you to come for this Gathering and this was you know I think it's like early 90s or something and Bill is very busy banging on Microsoft he wasn't even taking any vacations and all that he has no interest in going to the stupid Gathering of people and she told him Warren Buffett was coming and he said
QuestionerWarren Buffett was coming and he said yeah I don't have time right and and he wasn't interested in even meeting Buffett because of exactly what you described some guy who just pokes around in numbers whatever else right she told him Catherine Graham was coming who was the CEO Washington Post he wasn't interested so finally the mom basically used her veto power she told Bill you are going to come here bill period there's no you don't have a choice on the matter I'm ordering you to come here so he takes the helicopter very reluctantly from Microsoft goes to this place in the middle of nowhere in state of Washington and he wants to be there for 45 minutes to satisfy his mom and then helicopter back and he starts talking to Warren Buffett and 10 hours later they are still talking okay and he realized that this is not a guy about numbers Warren asked him questions about
Othernumbers Warren asked him questions about IBM and Microsoft that Bill said that all his life he had waited for somebody to ask him those questions nobody ever asked him those questions and so what I find is that for me particularly and for each person is different it's not so much the numbers and things I mean I'm very excited about the study of businesses is almost an infinite Pursuit and you know trying to figure out how things work and why they work a certain way and why they go and you know different entrepreneurs who build different businesses I would rather do that and figure those things out then put my energies into building a business or on some engineering problem and I used to spend my time on engineering problems so each one of us is different right and so what Bill found with Warren was that he was kind of at the top of his art top of of the
Otherof at the top of his art top of of theof at the top of his art top of of the way he was doing things and he had anway he was doing things and he had anway he was doing things and he had an understanding I mean he never investedunderstanding I mean he never investedunderstanding I mean he never invested in Microsoft but he had an understandingin Microsoft but he had an understandingin Microsoft but he had an understanding ofofof IBM and an understanding ofIBM and an understanding ofIBM and an understanding of Microsoft which went well beyond peopleMicrosoft which went well beyond peopleMicrosoft which went well beyond people had spend their entire lives inhad spend their entire lives inhad spend their entire lives in technology and and that's what Drew himtechnology and and that's what Drew himtechnology and and that's what Drew him in you know and and such and so I thinkin you know and and such and so I thinkin you know and and such and so I think that's the way it is I think thethat's the way it is I think thethat's the way it is I think the passions and such are different forpassions and such are different forpassions and such are different for different people if it's an engineeringdifferent people if it's an engineeringdifferent people if it's an engineering problem that excites you then that'sproblem that excites you then that'sproblem that excites you then that's where you should spend your time uh Heywhere you should spend your time uh Heywhere you should spend your time uh Hey Manish um thank you so much for comingManish um thank you so much for comingManish um thank you so much for coming um I don't know if you recognize theum I don't know if you recognize theum I don't know if you recognize the face but um I was a DNA scholar fromface but um I was a DNA scholar fromface but um I was a DNA scholar from between 13 to 15 in Bangalore Urban Ibetween 13 to 15 in Bangalore Urban Ibetween 13 to 15 in Bangalore Urban I recognize I recognize therecognize I recognize therecognize I recognize the face thank you so muchhello again um yeah so I just had ahello again um yeah so I just had ahello again um yeah so I just had a quick question like um oh by the way I Iquick question like um oh by the way I Iquick question like um oh by the way I I just want to say like it's it's good tojust want to say like it's it's good tojust want to say like it's it's good to know that you know it's a game for you
Questionerknow that you know it's a game for you and this game is like uplifting so many and this game is like uplifting so many and this game is like uplifting so many lives changing so many life and lives changing so many life and lives changing so many life and influencing so many people so keep influencing so many people so keep influencing so many people so keep playing the playing the playing the game that yeah and um yeah my question game that yeah and um yeah my question game that yeah and um yeah my question to you was like what were some basic to you was like what were some basic to you was like what were some basic principles or foundations that you you principles or foundations that you you principles or foundations that you you know know know uh keep recalling from your childhood or uh keep recalling from your childhood or uh keep recalling from your childhood or like from your upbringing or the lessons like from your upbringing or the lessons like from your upbringing or the lessons that you learned from your father that you learned from your father that you learned from your father entrepreneur entrepreneur entrepreneur father that keeps you going and make you father that keeps you going and make you father that keeps you going and make you a successful investor
WarrenI think the interesting thing is that some very interesting thing is that some very interesting thing is that some very basic principles in life will take you basic principles in life will take you basic principles in life will take you really far and the important thing is to really far and the important thing is to really far and the important thing is to go all in on these principles so you go all in on these principles so you go all in on these principles so you can't be kind of halfway about it so for can't be kind of halfway about it so for can't be kind of halfway about it so for example it is a huge advantage in life example it is a huge advantage in life example it is a huge advantage in life to be trusted if people can trust you to be trusted if people can trust you to be trusted if people can trust you the world doesn't run on contracts it the world doesn't run on contracts it the world doesn't run on contracts it runs on trust and how do you get trust runs on trust and how do you get trust runs on trust and how do you get trust well the only only way you can get trust
Otherwell the only only way you can get trustwell the only only way you can get trust is by demonstrated exemplary behavioris by demonstrated exemplary behavioris by demonstrated exemplary behavior not by telling people Hey listen I'm anot by telling people Hey listen I'm anot by telling people Hey listen I'm a good guy please trust me okay uh it's agood guy please trust me okay uh it's agood guy please trust me okay uh it's a track record right and so it's thetrack record right and so it's thetrack record right and so it's the entire history of how you conduct yourentire history of how you conduct yourentire history of how you conduct your affairs over time is going to accumulateaffairs over time is going to accumulateaffairs over time is going to accumulate and give you degree of trust that peopleand give you degree of trust that peopleand give you degree of trust that people are willing to put in you so trust is aare willing to put in you so trust is aare willing to put in you so trust is a really important thing Munger talksreally important thing Munger talksreally important thing Munger talks about reliability right being reliableabout reliability right being reliableabout reliability right being reliable like he says McDonald's does more goodlike he says McDonald's does more goodlike he says McDonald's does more good in the world than the Harvard Businessin the world than the Harvard Businessin the world than the Harvard Business School because McDonald's teaches verySchool because McDonald's teaches verySchool because McDonald's teaches very young people The Importance of Beingyoung people The Importance of Beingyoung people The Importance of Being reliable I mean you have to show up atreliable I mean you have to show up atreliable I mean you have to show up at work and on time and when a 16 or 17work and on time and when a 16 or 17work and on time and when a 16 or 17 year old has you know got thatyear old has you know got thatyear old has you know got that inculcated into them it's a biginculcated into them it's a biginculcated into them it's a big advantage in life so it's these basicadvantage in life so it's these basicadvantage in life so it's these basic principles reliability trust beingprinciples reliability trust beingprinciples reliability trust being hardworking one of the things I learnedhardworking one of the things I learnedhardworking one of the things I learned from Charlie is whenever Charlie has any
Questionerfrom Charlie is whenever Charlie has any appointment to meet anyone be anywhere he's always early he makes the point to always be early okay if I'm going to meet somebody at a coffee shop at 11:30 in the morning I will be there 11:15 plan it so that I'm there 15 minutes earlier before I heard this from Charlie I would plan to be there like 11:29 okay but I do it a little bit differently now so I said okay this is a good idea I can easily adopt this idea and it's a it's a good thing because you kind of it's unlikely that you're going to be late and that's that's a good advantage and so I think these basic principles honesty truthfulness reliability hard work these will carry you a long ways and then ends up being just these basic principles but I think that the important thing I remember when I visited Microsoft in 2000 I met some of
Warrenvisited Microsoft in 2000 I met some of you know and I'm not I haven't kept atyou know and I'm not I haven't kept atyou know and I'm not I haven't kept at him but some of you know s you know Somhim but some of you know s you know Somhim but some of you know s you know Som Seer I remember when I visited in 2000 ISeer I remember when I visited in 2000 ISeer I remember when I visited in 2000 I mean I I'm estimating s was incrediblymean I I'm estimating s was incrediblymean I I'm estimating s was incredibly wealthy at that point I mean I think hewealthy at that point I mean I think hewealthy at that point I mean I think he would have been worth tens of millionswould have been worth tens of millionswould have been worth tens of millions of dollars if not more and I noticed sof dollars if not more and I noticed sof dollars if not more and I noticed s shoes when Ishoes when Ishoes when I visited and the heels of his shoes werevisited and the heels of his shoes werevisited and the heels of his shoes were very unevenly worn out okay like thosevery unevenly worn out okay like thosevery unevenly worn out okay like those shoes he should have stopped wearingshoes he should have stopped wearingshoes he should have stopped wearing those shoes years ago okay they shouldthose shoes years ago okay they shouldthose shoes years ago okay they should have been discarded it probably neverhave been discarded it probably neverhave been discarded it probably never occurred to a guy like s my shoes are sooccurred to a guy like s my shoes are sooccurred to a guy like s my shoes are so pathetic that you know I should givepathetic that you know I should givepathetic that you know I should give these up I mean if you saw s walking onthese up I mean if you saw s walking onthese up I mean if you saw s walking on the street you would walk past him andthe street you would walk past him andthe street you would walk past him and not look at him twice you might evennot look at him twice you might evennot look at him twice you might even think oh this guy needs some financialthink oh this guy needs some financialthink oh this guy needs some financial help okay whatever and I remember when Ihelp okay whatever and I remember when Ihelp okay whatever and I remember when I was talking to S and I asked S I said swas talking to S and I asked S I said swas talking to S and I asked S I said s you know you Rose all the way to the top
Otheryou know you Rose all the way to the top you know you Rose all the way to the top I didn't tell him that you Rose all the I didn't tell him that you Rose all the I didn't tell him that you Rose all the way to the top of Microsoft probably not way to the top of Microsoft probably not way to the top of Microsoft probably not because of your shoes Okay whoever because of your shoes Okay whoever because of your shoes Okay whoever promoted you didn't look at your shoes promoted you didn't look at your shoes promoted you didn't look at your shoes like I'm looking at your shoes right so like I'm looking at your shoes right so like I'm looking at your shoes right so I said what what got you to the top of I said what what got you to the top of I said what what got you to the top of Microsoft his answer to me was he said Microsoft his answer to me was he said Microsoft his answer to me was he said if I'm a janitor and I have given been if I'm a janitor and I have given been if I'm a janitor and I have given been given the job to clean a particular given the job to clean a particular given the job to clean a particular bathroom at airport that is my task keep bathroom at airport that is my task keep bathroom at airport that is my task keep a bathroom at the airport clean he said a bathroom at the airport clean he said a bathroom at the airport clean he said I will make sure it's the cleanest I will make sure it's the cleanest I will make sure it's the cleanest bathroom in the airport I'll make sure bathroom in the airport I'll make sure bathroom in the airport I'll make sure it is the best possible bathroom it can it is the best possible bathroom it can it is the best possible bathroom it can be right so he says anytime I'm given be right so he says anytime I'm given be right so he says anytime I'm given any job it doesn't matter whether I like any job it doesn't matter whether I like any job it doesn't matter whether I like that job or I don't like that job or that job or I don't like that job or that job or I don't like that job or whatever I'm going to go all in and do whatever I'm going to go all in and do whatever I'm going to go all in and do the best job I can well anyone who has the best job I can well anyone who has the best job I can well anyone who has that principle is going to go straight that principle is going to go straight that principle is going to go straight to the top right I mean what a great
Questionerto the top right I mean what a great principle you know and so I think that's that's what life is is very basic principles you follow them and you're you're all set great thank you so much you put it in such a simple terms but I'm sure it's not so easy um yeah we're on time um so I want to take a quick moment and um Mr PAB on behalf of all of us here um I would like to extend our deepest gratitude for joining us today your story strategy and Reflections have not only deepened our understanding of value investing but also have inspired us to think differently more critically about the decisions we make in our life and investing thank you again for making the event so meaningful and for leaving us with so much to reflect upon and act upon we hope to welcome you back in the future and wish you continued success in your endeavors thank you very much thank you
Otheryeah I had a great time and thanks so much for having me and it was wonderful to have some of the alums of daksh in this call as well so thank you