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Questionerreally excited to be able to host this really excited to be able to host this really excited to be able to host this virtual session today my name is Julius virtual session today my name is Julius virtual session today my name is Julius lung I will be representing the lung I will be representing the lung I will be representing the helvision investment club today the helvision investment club today the helvision investment club today the largest student-run finding Society of largest student-run finding Society of largest student-run finding Society of Switzerland based here at the University Switzerland based here at the University Switzerland based here at the University of sankine with me today I have two very of sankine with me today I have two very of sankine with me today I have two very very special guests we're incredibly very special guests we're incredibly very special guests we're incredibly honored um to to have you both here with honored um to to have you both here with honored um to to have you both here with the value investing background still we the value investing background still we the value investing background still we did not want to focus or at least limit did not want to focus or at least limit did not want to focus or at least limit ourselves to investing today we believe ourselves to investing today we believe ourselves to investing today we believe that there lies great value that there lies great value that there lies great value um to be to be picked up in this session um to be to be picked up in this session um to be to be picked up in this session today Beyond investing so usually in our today Beyond investing so usually in our today Beyond investing so usually in our live sessions we now have a warm live sessions we now have a warm live sessions we now have a warm Applause I sure hope my little intro Applause I sure hope my little intro Applause I sure hope my little intro will do thank you very much will do thank you very much will do thank you very much for being here with me today for being here with me today for being here with me today it's a pleasure Julius it's our pleasure it's a pleasure Julius it's our pleasure it's a pleasure Julius it's our pleasure to be with you to be with you to be with you so um maybe maybe starting it off still so um maybe maybe starting it off still so um maybe maybe starting it off still um as I said we don't want to limit
Questionerum as I said we don't want to limit ourselves to investing but but let's kick it off since it's the the um in our our same denominator um in for that matter Monash you in a previous interview you said um you started out investing in 95 and in one of the the four stocks that you initially picked um turned out to be a 140 bagger if I remember correctly so why don't you tell us um to to maybe get everybody on board here what is it that it's that is so great about value investing why do you do it and why do you keep doing it
Questioneryeah well Julius it's a pleasure to be here and with all of you I haven't done this type of a format before so it's always fun to expand my horizons which is wonderful yeah in uh 95 I ran to this company in India I was looking to I was managing about a million dollars and I uh wanted to just step my toe into India a little bit what
Ted Weschlerstep my toe into India a little bit what I actually should have done in hindsight would have should have been a lot more than just a toe but I put twenty thousand dollars off that one million into Indian equities and at that time it was very cumbersome to actually open an account and trade and all that but anyway I got all that done and there was a Company satyam Computer Services I was in the I.T business at the time and I knew these guys because they their sales guys would meet me and want to do business together and whatever else and I I like the company I admired some of the people and such and I was surprised that when I looked at the business in 95 this was a company that was growing probably 60 70 a year and and it it was going to be doing that for quite a while the market cap of the business was less than the value of their real estate in
Otherthan the value of their real estate in Hyderabad so basically you were buying it below uh you know real book value significantly below that and no one was concerned about the earning stream which was very significant and so I had no idea how big this business would get or what type of return I would get what I decided to do at that time India did not have dmat so I got these kind of very flimsy stock certificates in my home in Chicago after I bought and they're like kind of falling apart whatever else and I basically stuck them in the bottom of my desk drawer and I said okay you know we don't need to really open this drawer pretty much forever just kind of because these are good businesses and we just let them do their thing and so on and that's that's kind of what I what I focused on and it then you know we had the.com bubble and
Questionerthen you know we had the.com bubble and then the.com bust so satyam had spun out a.com company and then from mid 99 onwards the stock started going crazy and I think in January February of 2020 I decided to take a look at the business again in terms of the valuation because it had gone up over 100x and I couldn't make her a tale of those numbers I mean I think it was a deep and bubble territory and ten thousand I I put half the bet in India into satyam so 10 000 that I put in was sitting at about like 1.3 1.4 million and Indian government theoretically had told me that I could repatriate it all back and India has a lot of exchange control so I didn't have a lot of confidence in what they were saying so I said I wonder if they let me you know take the 1.4 million out just like that and so I gave the sell order and then I also told them to wire the
Questionerand then I also told them to wire the funds and the next day the funds were with me and it all went very smoothly so that was that and then the stock dropped I think 70 percent or so in the next 18 months when it came down to more rational valuations had some controversy uh much later when they started cooking their books Etc it wasn't a situation that was traveling island in the company in the duration that I owned it that started really several years after I had exited amazing I mean highlighting our very special setup today
Questionerum as I previously mentioned I was team previous guest Guy is with us as well um Guy having having known monitor for a long time um and then having mentioned one example of a great investment what do you believe guy Monash um to to make or distinguish from other value investors and what is it actually that that makes a great value investor you
Questionerthat makes a great value investor you know Julius there's only one person whom I've now introduced to monish that I won't name here because I don't have this permission that has as unusual mind as monish does and um there are so many circumstances including what I described in the Buffett launch where he took a set of facts that was available for everyone but saw them in a completely different way and uh and and arrange them in a different way and it and just to give you very briefly it's an example of how uh monish thinks differently I meet him for breakfast at the Mandarin Oriental Hotel with the view over the park and he says you know um I'm gonna bid again on the launch with Buffett would you like to join me something like that and I kind of respond to him with a what a stupid idea and within five minutes he explained to me why it was not a stupid idea and I
Otherme why it was not a stupid idea and Ime why it was not a stupid idea and I completely adopted the thinking socompletely adopted the thinking socompletely adopted the thinking so um uh what makes monish an unusualum uh what makes monish an unusualum uh what makes monish an unusual investor is that capacity to take theinvestor is that capacity to take theinvestor is that capacity to take the same set of facts and arrange them verysame set of facts and arrange them verysame set of facts and arrange them very differently in his mind and seedifferently in his mind and seedifferently in his mind and see something different to what other peoplesomething different to what other peoplesomething different to what other people see exactly where that comes from I havesee exactly where that comes from I havesee exactly where that comes from I have no idea I think that's maybe someno idea I think that's maybe someno idea I think that's maybe some combination of genetics and unusualcombination of genetics and unusualcombination of genetics and unusual upbringing and uh but it's not reallyupbringing and uh but it's not reallyupbringing and uh but it's not really clear to me that's what makes monish doclear to me that's what makes monish doclear to me that's what makes monish do these unusual Investments and that'sthese unusual Investments and that'sthese unusual Investments and that's what makes people follow him and it'swhat makes people follow him and it'swhat makes people follow him and it's great that I have a front row seat I getgreat that I have a front row seat I getgreat that I have a front row seat I get to learn every time we discuss stuff andto learn every time we discuss stuff andto learn every time we discuss stuff and uh the only thing that I've managed touh the only thing that I've managed touh the only thing that I've managed to do with monish is that uh you know I Ido with monish is that uh you know I Ido with monish is that uh you know I I often am not convinced by him and I Holdoften am not convinced by him and I Holdoften am not convinced by him and I Hold On To My Views which I think he quiteOn To My Views which I think he quiteOn To My Views which I think he quite enjoys when when we end up having theenjoys when when we end up having theenjoys when when we end up having the debates but and I think that probably indebates but and I think that probably in
Questionerdebates but and I think that probably in the audiencethe audiencethe audience I think there are two things one is uhI think there are two things one is uhI think there are two things one is uh um acknowledge when somebody in yourum acknowledge when somebody in yourum acknowledge when somebody in your life has that kind of mindset and andlife has that kind of mindset and andlife has that kind of mindset and and learn from them there's nothing wronglearn from them there's nothing wronglearn from them there's nothing wrong with acknowledging in oneself when thatwith acknowledging in oneself when thatwith acknowledging in oneself when that one doesn't have that mindset and thenone doesn't have that mindset and thenone doesn't have that mindset and then figure out the people who do and getfigure out the people who do and getfigure out the people who do and get around them you know I even havearound them you know I even havearound them you know I even have discovered that when it comes to writingdiscovered that when it comes to writingdiscovered that when it comes to writing there are specializations some peoplethere are specializations some peoplethere are specializations some people are good at editing some people are goodare good at editing some people are goodare good at editing some people are good at authoring for example when it comesat authoring for example when it comesat authoring for example when it comes to investment research and Analysisto investment research and Analysisto investment research and Analysis there are different people who havethere are different people who havethere are different people who have different strengths you want to getdifferent strengths you want to getdifferent strengths you want to get yourself around people who complementyourself around people who complementyourself around people who complement your strengths surely definitelyyour strengths surely definitelyyour strengths surely definitely agreeing I mean speaking of greatagreeing I mean speaking of greatagreeing I mean speaking of great mindsets you already mentioned themindsets you already mentioned themindsets you already mentioned the joined joined lunch with Mr Buffett umjoined joined lunch with Mr Buffett umjoined joined lunch with Mr Buffett um back in the time I wondered if Iback in the time I wondered if Iback in the time I wondered if I answered correctly guy you you're
Questioneranswered correctly guy you you're interested in doing a second one to ask that why was that a second launch with Warren so but yeah my question was rather I mean um I know that that uh a uh introduction to totally manga developed from the the lunch with Mr Buffett um what was the motivation to to do a second lunch um with Mr Butler I'm not sure that we did a second launch I think that we we went multiple times to the Buffett branch on Sundays after the Berkshire meeting and monish has he can talk about uh you know it's it they lived in the same state not exactly they both love Bridge uh they both have similar minds uh it not exactly clear to me but uh but that is now of private friendship with monish I I mean if you want me to Riff on that the one thing that I I mean I feel like I have a front row seat on that friendship I think there's enormous
Questionerthat friendship I think there's enormous learning that's happened from honest through that friendship I think I've learned through having a front row seat and I've shared some of those ideas I think even with the uh sungalan group this idea that some of the most kind and generous people develop for quite a graph exterior because they have so many people coming at them and some of the most useless people that you don't want to be around have these incredibly seductive exteriors which I kind of learned that lesson with the front row seat between Monash and Mark and Charlie but I don't know Warren can speak sorry Monash can speak to his relationship to Charlie better than I can
Otherthat'd be really interesting and as we've said great great mindsets in both Charlie as well as as well as Warren monish how do how do they differ um on a maybe as personal basis as you want to
Questionermaybe as personal basis as you want to go into what makes them individually succeed
Otheryeah I'll just take a little detour before I I answer your question so you know I've I've talked about before that cloning is a great mental model another great mental models is doing things which have asymmetry and doing things where downside is muted or non-existent and upside is unknown you know and in fact if you look at a person like Jeff Bezos or Amazon that's what they do they basically throw a lot of stuff against the wall they're all relatively small bets most of them don't work but a few do and then when they do you get huge payoffs and we see that investing in investing too like for example we talked about my satyam investment right so you know the 10 000 not working out is was like one percent of my portfolio at the time and with the Buffett lunch actually
Ted Weschlertime and with the Buffett lunch actually I didn't really think about it at that time in terms of asymmetry but in looking back that makes sense but basically I think in 2007 my net worth was over 80 million much of it attributed almost all of it attributed to following Buffett and Munger and Graham's approach to investing so in effect I had lifted their intellectual property and I felt like there was a tuition bill due you know I thought to myself well what's uh what's a reasonable tuition bill to pay I said well you know a couple of million is definitely within the realm it's just you know two and a half percent or whatever of the net worth so my only Desire with the lunch was to look Mr Buffett in the in the eye and just thank him for everything he had done for me not just in terms of investing but you know both him and Charlie have so many
Ted Weschlerknow both him and Charlie have so many principles that will lead you to be a better human being and such and of course you know we got it for a lot less than two million and Guy pitched in a third so it actually was you know 400 odd thousand uh for me which was a perfectly fine sum and then you know it was buy one and get infinite free because that lunch led to a friendship at Warren it led to an even deeper friendship with uh Charlie it led to a friendship with Warren's assistant Debbie which continues to this day for both guy and me and you know I met Charlie's friends over the years you know I played a lot of bridge with Charlie and his friends and the quality of those individuals is so high and you know I endeavored to make them my friends so a bunch of Charlie's friends have become my friends which you know so when I look back on the lunch and what
Ted Weschlerwhen I look back on the lunch and what it led to none of this was planned you know the plan was just to just thank Mr Buffett and that would be the end of it and and this repeatedly happens in life like for example when I started my first business I took uh 70 000 in credit card debt and uh 30 000 emptied out my retirement account uh the downside was just the thirty thousand thirty thousand we get wiped out in bankruptcy but the upside was millions and so there was and you know if it didn't work I could just go back to take to a job whatever and that worked and it you know made me independently wealthy and all of that so also for example in the last few years I bought an insurance company I raised a bunch of money and of course we've now returned most of it that's a bet that didn't work but again even if it doesn't work there's no downside it was
Questionerwork there's no downside it was basically we we were where we started and we didn't really lose anything basically when I look back at a number of Endeavors I think the combination of cloning and asymmetry anytime you can identify asymmetry in some action or something that you could take you should go for it so for example Charlie told me and I've seen it with him is he likes to introduce Randomness into his life so sometimes when I meet him you know from his court pocket he'll remove a bunch of letters he's received from people all over the world you know there's a lot of people write to him and whatever and he'll go through a few letters and say okay this one I'm gonna have breakfast with this person I'm just thinking you know that guy's gonna fall off his chair and someone from uh you know Charlie's assistant contacts him or something but Charlie
Othercontacts him or something but Charlie likes likes that Randomness it has led to many great friendships and in some cases business Partnerships for him and again there's no downside and so you know I moved to Austin and uh what I do in Austin is at least a couple of times a month I make incredible Assam tea and a couple of times a month I invite people I don't know over for afternoon tea in fact there's a person coming tomorrow who I've never met you know he kind of lives in Monaco and he's got some apartments and stuff he owns here in Austin and he's visiting and he asks if I could I could meet him you know I have no idea how that meeting is going to go or what's going to happen but you know if it's not going so well then the tea won't go for so long and on the other hand the last guy I met for tea I think was amazing I mean I think I'm
Questionerthink was amazing I mean I think I'm meeting him again this Friday and it's incredible so I think this uh the asymmetry and cloning like you know I cloned the randomness from Charlie has a lot of benefits and the friendship with Charlie and I I always think when I meet Charlie he's finally going to figure out one day the emperor has no clothes he's going to figure out I'm a total fraud and whatever and that that'll be the end of my my meetings with Charlie and so far uh surprisingly that hasn't happened and I told Charlie when I was moving to Austin I said listen uh Charlie just ignore the fact that I'm not in town anytime you know you're twiddling your thumbs for dinner you can just call me and I can take a Southwest flight over and it's easy and since I moved about eight nine months ago I think I've met him three times twice for dinner and once once
Othertimes twice for dinner and once oncetimes twice for dinner and once once July for the harbor cruise in SantaJuly for the harbor cruise in SantaJuly for the harbor cruise in Santa Barbara with his family which was reallyBarbara with his family which was reallyBarbara with his family which was really special on his uh catamaran that hespecial on his uh catamaran that hespecial on his uh catamaran that he designed anyway like I said I think thatdesigned anyway like I said I think thatdesigned anyway like I said I think that it's it's led to so many things I thinkit's it's led to so many things I thinkit's it's led to so many things I think I should do more I don't do enough withI should do more I don't do enough withI should do more I don't do enough with asymmetry I think Amazon does an awesomeasymmetry I think Amazon does an awesomeasymmetry I think Amazon does an awesome job with asymmetry I think tencent doesjob with asymmetry I think tencent doesjob with asymmetry I think tencent does an awesome job in asymmetry I thinkan awesome job in asymmetry I thinkan awesome job in asymmetry I think Facebook does a terrible job withFacebook does a terrible job withFacebook does a terrible job with asymmetry so the difference betweenasymmetry so the difference betweenasymmetry so the difference between Amazon and Facebook even though youAmazon and Facebook even though youAmazon and Facebook even though you didn't ask is you know the two Jeffsdidn't ask is you know the two Jeffsdidn't ask is you know the two Jeffs throw a lot of stuff against the wallthrow a lot of stuff against the wallthrow a lot of stuff against the wall basically more stuff doesn't work butbasically more stuff doesn't work butbasically more stuff doesn't work but it's small bets you know at meta there'sit's small bets you know at meta there'sit's small bets you know at meta there's a massive multi-billion single bet anda massive multi-billion single bet anda massive multi-billion single bet and good luck with that that kind ofgood luck with that that kind ofgood luck with that that kind of violates the rules so I'm definitelyviolates the rules so I'm definitelyviolates the rules so I'm definitely sure that there will be a lot of peoplesure that there will be a lot of peoplesure that there will be a lot of people drafting letters right now to you ordrafting letters right now to you ordrafting letters right now to you or maybe someone we're lucky enough to to
Questionermaybe someone we're lucky enough to to have coffee or tea with you um you mentioned how how developing a um you mentioned how how developing a circle around you um which is even might be more wise or it has to be more wise to actually pick up stuff um still your your day-to-day um or at least I imagine it to be um as as a investor is um is not it does not involve as much teamwork and usually at a university we are we are um we're not just this mindset of that teamwork works and and as a team you can achieve great stuff um what has allowed you to to achieve all this this greatness um by yourself is it your personality that it's set up to to work alone or is it even working alone
Otherwell the team is going to have difficulty getting to consensus on stuff that's distressed or hated or unloved so I'll give you an example right I mean I'm I started visiting turkey four years ago and I don't know how many of my
Questionerago and I don't know how many of my friends including one I'm looking at right now you know I've talked about the great merits of looking at Turkey because basically everyone and their brother exited and the valuations and you know there's some great businesses with great management and and great moats and such and I've talked to so many people I admire and no one's interested right I mean I I taught I talked to Charlie about it and he said I'm not interested right and you know so and of course guys not interested and and uh and the thing is so I think the problem with the team is that if I were in in a team with you Julius and your friends and I brought up you know this great company I found in turkey and we had to make investments by consensus it'd be really hard to get to consensus that's why I don't believe investing is a team sport and I think that what ends
Othera team sport and I think that what ends up happening if you're doing it as a team is you know you don't get fired from buying IBM at least you used to not get fired for my IBM it's these businesses which are non-controversial great businesses great modes and also at you know ridiculous valuations that everyone is comfortable with and that's where you end up so so I'm I have some skepticism of teams in investing I think you can you can have an analyst and you can have some people help you that's okay but it needs to be a dictatorship so so so having considered that you do it alone um what is it that you do especially thinking of um well now in an era of abrupt techno and technological change what is it that allows you or how do you actually um pick out companies um which you believe to to have a great great payoff in the future
Questionergreat payoff in the future um is there something uh especiallyum is there something uh especiallyum is there something uh especially considering the the change in type ofconsidering the the change in type ofconsidering the the change in type of companiescompaniescompanies um that that allows you um to to seeum that that allows you um to to seeum that that allows you um to to see these signs more clearly
Ted Weschleryeah I mean Ithese signs more clearly yeah I mean Ithese signs more clearly yeah I mean I think again it was a it was athink again it was a it was athink again it was a it was a combination of the two models of cloningcombination of the two models of cloningcombination of the two models of cloning and asymmetry so there's a guy fromand asymmetry so there's a guy fromand asymmetry so there's a guy from Turkey who came to my annual meetingTurkey who came to my annual meetingTurkey who came to my annual meeting many years ago he's a fund manager theremany years ago he's a fund manager theremany years ago he's a fund manager there you know very high quality guy I likedyou know very high quality guy I likedyou know very high quality guy I liked him a lot and I was seeing differenthim a lot and I was seeing differenthim a lot and I was seeing different things going on in Turkey so I told himthings going on in Turkey so I told himthings going on in Turkey so I told him listen would you mind if I came tolisten would you mind if I came tolisten would you mind if I came to Istanbul and we just visited everyIstanbul and we just visited everyIstanbul and we just visited every business in your portfolio and I hadbusiness in your portfolio and I hadbusiness in your portfolio and I had nothing else in mind other than doingnothing else in mind other than doingnothing else in mind other than doing that I had no plans to invest in Turkeythat I had no plans to invest in Turkeythat I had no plans to invest in Turkey it was one of those asymmetric things init was one of those asymmetric things init was one of those asymmetric things in the sense of what's the downside youthe sense of what's the downside youthe sense of what's the downside you know there's an airfare and a few daysknow there's an airfare and a few daysknow there's an airfare and a few days in a great City and a good guy I know Iin a great City and a good guy I know Iin a great City and a good guy I know I knew he was a he was a high quality
Ted Weschlerknew he was a he was a high quality person and he said oh yeah this would be a lot of fun and I spent a week visiting the Turkish market had already been through one filter in the sense that I told him I don't want to visit any companies that he doesn't actually have an investment in right so it was already already business businesses that had gone through his filter and he'd put real money against them and and then I did again the next year and I'm going to you know I've done it several times I'm going to again do it in March next year and so so I I think that's a good way to think about it is you know the combination of asymmetry and cloning you know two great mental models kind of intersecting is great so this is all concerns public markets um when did you realize that that public markets were especially interesting for you and then why are they still um have
Questioneryou and then why are they still um have you ever thought about of um have I thought about incorporating other asset classes into your portfolio
Questioneryeah the public markets are unique and I think one of the things that they have uh to offer that is not available in in other markets or asset classes is that you're not doing negotiated transactions these are auction driven markets which are subject to fear and greed so for example I mean let's say I look at some apartment in the you know City Center Zurich nice two-bedroom apartment let's it's available for I don't know what the price is about let's say it's available for 1.5 million every day I ask a realtor friend of mine hey can you tell me the price of the department now he would say the next day it's 1.5 million still and then the day after he would say a listen dummy it's still 1.5 million and if I kept doing it every
Questioner1.5 million and if I kept doing it every day and he kept humoring me by giving me the current price that price would probably range from between say 1.5 to maybe a Max of 1.7 million in a year you know maybe 10 percent or so movement in that in that one year if I throw a dart at any random stock on the New York Stock Exchange and I just look at the 52-week range on it even a blue chip stock you know like let's say Microsoft or Amazon or whatever I mean the range I would see on these companies even if I picked a company like Berkshire Hathaway would be well beyond 10 it would be more like 50 percent and if that apartment were publicly traded it would again have this 50 variance so basically in a negotiated transaction you have a intelligent buyer most of the time you have an intelligent buyer facing an intelligent seller and they
Questionerfacing an intelligent seller and they arrive their splice Discovery and they arrive their splice Discovery and they arrive their splice Discovery and they arrive at a price that works in auction arrive at a price that works in auction arrive at a price that works in auction driven markets especially if there is driven markets especially if there is driven markets especially if there is distress you're going to get crazy distress you're going to get crazy distress you're going to get crazy pricing sometimes you can get crazy pricing sometimes you can get crazy pricing sometimes you can get crazy pricing where things are very euphoric pricing where things are very euphoric pricing where things are very euphoric kind of like you know snowflake after kind of like you know snowflake after kind of like you know snowflake after the IPO or carvana after the IPO and the IPO or carvana after the IPO and the IPO or carvana after the IPO and subsequently or you can get extremely subsequently or you can get extremely subsequently or you can get extremely depressed pricing because it's depressed pricing because it's depressed pricing because it's it's faceless buyers and sellers doing it's faceless buyers and sellers doing it's faceless buyers and sellers doing different things which attenuate the different things which attenuate the different things which attenuate the ranges so it's because of that more ranges so it's because of that more ranges so it's because of that more extreme attenuation extreme attenuation extreme attenuation that guy and I are able to make a living that guy and I are able to make a living that guy and I are able to make a living I think it's a lot harder if you if I I think it's a lot harder if you if I I think it's a lot harder if you if I were to go into private Equity then were to go into private Equity then were to go into private Equity then you're you know you're playing other you're you know you're playing other you're you know you're playing other games like you're Levering up and games like you're Levering up and games like you're Levering up and different things like that and you know different things like that and you know different things like that and you know putting lipstick on a pig sometimes and putting lipstick on a pig sometimes and putting lipstick on a pig sometimes and so on so forth so I think that it's so on so forth so I think that it's so on so forth so I think that it's harder to do it in most of the asset
Questionerharder to do it in most of the asset classes than it is in auction driven markets auction driven markets really are a gift to investors so realizing these asymmetries how do you deal with the situation um if those asymmetries you you might see in in stocks and markets that you are not too familiar with I'm thinking of the circle of competence um ethereum um maybe so so how does the situation come up do you then read in or how do you how do you educate yourself um and then how maybe has your circle of competence where you feel comfortable um has developed over the over the past years
Warrenyeah one doesn't need to sweat expanding the circle of confidence so I think when we are young and start out there are relatively few things we understand you know we might understand mostly Brands and companies that we are consumers of those will probably be the
Todd Combsconsumers of those will probably be the most apparent and most easy to get our arms around because we've got kind of experience with them more you know other businesses which are not consumer businesses might be more difficult but over time it is natural if you are you know reading and thinking a lot that basically the circle is going to expand one doesn't need to focus on expanding the circle it'll happen organically but one one needs to be very careful that one when one is looking at something when which is outside their Circle outside your circle that you're very intellectually honest and taking a pass and you know many times the mistake I've made is I thought I knew something and I didn't and so that that may not work out so well
Questionerguy how has this developed for you what's your take on on your circle of competence and the development of
Questionerof competence and the development of thisthisthis you know before I get there I was justyou know before I get there I was justyou know before I get there I was just coming back on on one thing that I justcoming back on on one thing that I justcoming back on on one thing that I just think is important knowing you and somethink is important knowing you and somethink is important knowing you and some of the students at uh in Sun Garland isof the students at uh in Sun Garland isof the students at uh in Sun Garland is thatthatthat and it's another of the many lessonsand it's another of the many lessonsand it's another of the many lessons that I learned from monish is that thethat I learned from monish is that thethat I learned from monish is that the reason why not working in a team worksreason why not working in a team worksreason why not working in a team works for monish when it comes to investing isfor monish when it comes to investing isfor monish when it comes to investing is very related to the way that monisha'svery related to the way that monisha'svery related to the way that monisha's mind works and it's worth saying that hemind works and it's worth saying that hemind works and it's worth saying that he was speaking as I understand it directlywas speaking as I understand it directlywas speaking as I understand it directly to investment decision making there is ato investment decision making there is ato investment decision making there is a team around monish it's just thatteam around monish it's just thatteam around monish it's just that they're not very heavily involved in thethey're not very heavily involved in thethey're not very heavily involved in the investment decision making which is asinvestment decision making which is asinvestment decision making which is as monish said a dictatorship but if you'remonish said a dictatorship but if you'remonish said a dictatorship but if you're going to send monitor an email that'sgoing to send monitor an email that'sgoing to send monitor an email that's going to arrive at an assistance deskgoing to arrive at an assistance deskgoing to arrive at an assistance desk who will take a look at it so there arewho will take a look at it so there arewho will take a look at it so there are other people around monish and I thinkother people around monish and I thinkother people around monish and I think that the more general idea is that we
Todd Combsthat the more general idea is that we need to figure out what we do best and there are some people who will only be happy working in a team full-time in a team and I would argue just speaking for myself yes the investment decision making ought to be made alone but that doesn't mean you don't get enormous amounts of support and help from other areas of your life and so another area that I actually I'll come back to this but I think that Monash has really unique insight and expertise into the extraordinary changes that going on in India so I'm Julius I'm going to plant a question with you if you decide to ask it admonish has some real estate investments in India I think that's public knowledge and some unique ways in which India's only started responding in a more Singaporean or Dubai way of looking at the world and kind of leapfrogging what is happening uh in um
Questionerleapfrogging what is happening uh in umleapfrogging what is happening uh in um what is how the way Western Europe andwhat is how the way Western Europe andwhat is how the way Western Europe and North America have developed which isNorth America have developed which isNorth America have developed which is kind of exciting he has more expertisekind of exciting he has more expertisekind of exciting he has more expertise way more than I do and so it would be away more than I do and so it would be away more than I do and so it would be a nice question to pitch to him in termsnice question to pitch to him in termsnice question to pitch to him in terms of my circle of competence
Otherwell first ofof my circle of competence well first ofof my circle of competence well first of all I'll just addall I'll just addall I'll just add I think that from your perspectiveI think that from your perspectiveI think that from your perspective Julius or the from the perspective of aJulius or the from the perspective of aJulius or the from the perspective of a student uh there's this question if youstudent uh there's this question if youstudent uh there's this question if you start approaching investing which whichstart approaching investing which whichstart approaching investing which which goes like you know why the hell am I notgoes like you know why the hell am I notgoes like you know why the hell am I not Warren Buffett why am I not a genius atWarren Buffett why am I not a genius atWarren Buffett why am I not a genius at figuring out my uh circle of competencefiguring out my uh circle of competencefiguring out my uh circle of competence and the the and and I can spend timeand the the and and I can spend timeand the the and and I can spend time around somebody like monish pabri sayingaround somebody like monish pabri sayingaround somebody like monish pabri saying why the hell are you not monish pabriwhy the hell are you not monish pabriwhy the hell are you not monish pabri and sorry just rewinding to another partand sorry just rewinding to another partand sorry just rewinding to another part of the conversation for me just rememberof the conversation for me just rememberof the conversation for me just remember that when when Monash and I teamed up tothat when when Monash and I teamed up tothat when when Monash and I teamed up to to do to bid on the launch I'd metto do to bid on the launch I'd met
Questionerto do to bid on the launch I'd met monish twice before the launch happenedmonish twice before the launch happenedmonish twice before the launch happened I actually flew out no I was on my wayI actually flew out no I was on my wayI actually flew out no I was on my way to Australia and I specifically made ato Australia and I specifically made ato Australia and I specifically made a stop in Irvine because I thought I'dstop in Irvine because I thought I'dstop in Irvine because I thought I'd better get to know this guy a little bitbetter get to know this guy a little bitbetter get to know this guy a little bit better before the launch happens for mebetter before the launch happens for mebetter before the launch happens for me an enormous benefit of the launch wasan enormous benefit of the launch wasan enormous benefit of the launch was just this front row seat with monish andjust this front row seat with monish andjust this front row seat with monish and he has immigrated my thinking in so manyhe has immigrated my thinking in so manyhe has immigrated my thinking in so many ways uh it's and in terms of how to liveways uh it's and in terms of how to liveways uh it's and in terms of how to live my life and how to to run a business Imy life and how to to run a business Imy life and how to to run a business I just want to give you one thing uh thatjust want to give you one thing uh thatjust want to give you one thing uh that it kind of comes across in thisit kind of comes across in thisit kind of comes across in this conversationconversationconversation Monash is completely relaxed why is heMonash is completely relaxed why is heMonash is completely relaxed why is he completely relaxed because he's 100 onecompletely relaxed because he's 100 onecompletely relaxed because he's 100 one 100 truthful with the world so he's not100 truthful with the world so he's not100 truthful with the world so he's not worried about how the conversation'sworried about how the conversation'sworried about how the conversation's going to unfold or what's going togoing to unfold or what's going togoing to unfold or what's going to happen he doesn't even care what hehappen he doesn't even care what hehappen he doesn't even care what he doesn't know what's going to happen butdoesn't know what's going to happen butdoesn't know what's going to happen but it's okay because he's completelyit's okay because he's completely
Otherit's okay because he's completely aligned with the reality of the world aligned with the reality of the world aligned with the reality of the world he's not concerned with an external view he's not concerned with an external view he's not concerned with an external view of how people see him and how he himself of how people see him and how he himself of how people see him and how he himself feels about how he ought to be viewed feels about how he ought to be viewed feels about how he ought to be viewed that takes away so much stress and that takes away so much stress and that takes away so much stress and tension which just comes across in the tension which just comes across in the tension which just comes across in the conversation when I met monish who I conversation when I met monish who I conversation when I met monish who I presented to the world and who I was presented to the world and who I was presented to the world and who I was inside was so far apart and I got into inside was so far apart and I got into inside was so far apart and I got into knots just you know I'd call monish up knots just you know I'd call monish up knots just you know I'd call monish up every five minutes saying this friend every five minutes saying this friend every five minutes saying this friend wants to share the cost of the lunch wants to share the cost of the lunch wants to share the cost of the lunch with us I'm not sure do you think we with us I'm not sure do you think we with us I'm not sure do you think we should get together and ask questions we should get together and ask questions we should get together and ask questions we need to prepare the questions that we need to prepare the questions that we need to prepare the questions that we ask Warren we need to have talked about ask Warren we need to have talked about ask Warren we need to have talked about it beforehand he's like he's like guys it beforehand he's like he's like guys it beforehand he's like he's like guys stop it it's gonna be just fine just stop it it's gonna be just fine just stop it it's gonna be just fine just leave it alone so um that's just leave it alone so um that's just leave it alone so um that's just something that is is interesting for me something that is is interesting for me something that is is interesting for me that uh the asymmetry for me the upside that uh the asymmetry for me the upside that uh the asymmetry for me the upside for me which was in a certain way if you
Otherfor me which was in a certain way if you really genuinely if you said what I like to have met uh Warren Buffett and Charlie Mungo would I like to have met monish pabri they would have been in a certain way wasted on me all the all the learning that I've had through monish has been better for me than if I would have just met Warren and Charlie once for example so when it comes to circle of competence the real question is not why am I not Warren Buffett and figuring this out so well is just how do I figure out where I am in this moment and how do I be brutally honest with myself about what I actually can know and do know and what I don't know and not worry so much about where monishes circle of competences or where Charlie Monger service Charlie Monger subtle of competences I don't know if that helps you and I think that you know in my case which has come out
Otheryou know in my case which has come out many times before although I have to say you know I'm no I'm not in Turkey for all sorts of reasons we can get into it but I have made investments in the Philippines where people try to which were successful so but in general I'm uh you know we we joke about it I'm willing to do sports that I could get myself killed in like cycling and various sports like that that but I'm very very scared around losses of of money and monishes like very very conservative when it takes comes to his physical because that's actually more important than whether or not you've lost a little bit of money one year but um and that's also fine so I think that uh the way I would Define when I'm going through the world trying to figure out my circle of competence I'm far more conservative and I like to hang out around these you know strong brands for
Questioneraround these you know strong brands for example whereas monish with his very unusual way of seeing things will see something that is is actually he sees that it's within a circle of competence because he sees the whole world including his friend guy just doesn't get it and maybe the eighth time that I've been through it with him I start understanding the way he's arrayed the facts and it's like actually that makes a lot of sense so you know maybe that then the situation comes into my circle of competence because I've learned his thinking uh but the my point to you is don't when you ask that question and when you ask yourselves the group who are watching this is this within my circle of competence don't have a voice that's sitting there saying you idiot you're not Warren Buffett you're not Charlie Munger you don't have the insights that monish
Questionerdon't have the insights that monish pabri has that's the least important thing I'll stop there I don't know if that's helpful I hope it is back to you Julius
Questionerwell I think it solely is a very mindset to be aspired um the the mindset you monitor um have developed is that something as I mentioned that develops over time which comes with more confidence with oneself or how how was this achieved to be so truthful and and um relaxed with with the the place you are in
Otherwell I mean I think a lot of it is uh generic I think uh you know the streets we're born with some treats we can pick up but I I don't think you're going to take some hyperactive Trader and convert them into you know long-term value investors and they have them be happy uh doing that so some of these inborn traits some can be learned but you're gonna have difficulty if you're
Questioneryou're gonna have difficulty if you're trying to do something which is very far away from what your natural tendency or bias is so it's really important to know yourself you know I've been around monish when he's been with people who are kind of like in a very mild and perhaps even subtle way misrepresenting reality in one way or another and you know you can practically I I maybe it's exaggeration say there's a physical reaction in Monash but he reacts to it very very fast in a way that I think that when I first met monish I kind of like it was surprising to me and I think I've now gotten better but I I suspect that that reaction to people who are not aligned well I'm curious I'll ask you the question monish did you always have that or did it grow with time no
Questioneralignment actually came about I would say the seminal thing that happened to me was I read this book Powers is force
Questionerme was I read this book Powers is forceme was I read this book Powers is force and basically what that what that bookand basically what that what that bookand basically what that what that book showed is that you can't really get awayshowed is that you can't really get awayshowed is that you can't really get away with lying so basically if you lie towith lying so basically if you lie towith lying so basically if you lie to someone and you think they're not reallysomeone and you think they're not reallysomeone and you think they're not really going to know there are things going ongoing to know there are things going ongoing to know there are things going on with your kind of body language and andwith your kind of body language and andwith your kind of body language and and other things which eventually will makeother things which eventually will makeother things which eventually will make that apparent so actually there's on thethat apparent so actually there's on thethat apparent so actually there's on the other hand if you're saying the truthother hand if you're saying the truthother hand if you're saying the truth all the time you're going to in theall the time you're going to in theall the time you're going to in the terms of the book make people goterms of the book make people goterms of the book make people go stronger around you and they'll want tostronger around you and they'll want tostronger around you and they'll want to hang out with you so we want to hang outhang out with you so we want to hang outhang out with you so we want to hang out around the Dalai Lama and we don't wantaround the Dalai Lama and we don't wantaround the Dalai Lama and we don't want to hang out with used car dealers youto hang out with used car dealers youto hang out with used car dealers you know so and that has to do with theknow so and that has to do with theknow so and that has to do with the truth and when I read that book what Itruth and when I read that book what Itruth and when I read that book what I you know I wasn't a kind of a dishonestyou know I wasn't a kind of a dishonestyou know I wasn't a kind of a dishonest deceitful person but what it helped medeceitful person but what it helped medeceitful person but what it helped me do is get rid of the small lies get riddo is get rid of the small lies get riddo is get rid of the small lies get rid of the white lies and that helped a lot
Questionerof the white lies and that helped a lot I mean I think that getting closer to you know pure Candor and pure truth is going to help you a lot in life in terms of being trustable and being trusted is one of the most important things and it's got these extra benefits for so one thing that I've learned from monish and I don't know where you got this from is honest is that uh you know 99 truthful gets you maybe half the way it's that last one percent that gets you the full way but there's something else and I've seen this in two friendships that monish has that I've observed uh in which one of the reasons why they want Monash around is they know he's gonna sugarcoat the truth around them they're going to get an honest reaction for him John Alcan talks about truth tellers get yourself around truth tellers and um extraordinary benefits that you know I
Questionerextraordinary benefits that you know I still what's amazing is that that's one of the books that monish brought up in the first time I met him and I learned so much from that book but I don't think I've applied the lessons as well as monish has I don't think I've applied them in the same 100 way that Monash has and uh it's hard not to tell want to to like tell misrepresent in in in in um in ways that you feel like won't make a difference and actually is just maybe flattery or telling somebody that they look better than they do or and it's that last sort of and to do it automatically without even thinking about it where that's where you live that's the place where you live so solely and and since I am myself being being educated so well here um monitors maybe maybe let's talk about the dakshana foundation which is involved in in alleviating poverty through education
Questionerin alleviating poverty through education which I personally see as a great and then the best course of a foundation to have to um work through education um thinking of Education systems worldwide right now obviously we are here at a university what's your take and perspective on the the current education system is there something um to be improved especially focusing and since you're focusing on it in your foundation
Otherwell I mean I think that when I look back at my undergraduate undergraduate engineering degree they're probably no more than two or three courses that had a long-term impact I mean the one course which was an elective course that I just took kind of without really having much thought which has helped me a lot with a course on public speaking and that was I would have never guessed that I would have much impact but it did so I think
Questionerhave much impact but it did so I think that the way the world works is employers are looking for shortcuts and one of the shortcuts that employers take is that if you are graduating from a elite institution some great employers are going to come over to basically interview you and try to hire you so it's not so much what you learned at that institution it's that it's just that that institution opens doors that would not be open otherwise so I think in general higher education and such has lots of inefficiency I mean if we go to a top end school and this is not just my but my experience but most people's experiences they probably wouldn't be more than a a couple of professors or teachers or courses that had some impact long term on them and so what that means is that there's a lot of low-hanging fruit over there I mean if I
Otherlow-hanging fruit over there I mean if I look at the iits which is where we send a lot of our kids the iits have an incredible incoming class selection filter it's probably the best incoming class selection filter amongst undergraduate institutions anywhere in the world uh it's better than any any other university because it's so objective there's no Legacy and there's no you know subjective stuff which you know you're you're a big donor or whatever else but so it's got great talent coming in it has very mediocre professors in some cases I would say pathetic professors and it has great talent going out and again the same thing if you talk to iitns about what they learned at IIT that was so instrumental uh they're going to be scratching the head oh I had this one great Professor I had this one great class or something like that but basically what it what it does is that
Otherbasically what it what it does is that these guys have so much horsepower and they've also combined that with an ability to work hard so horsepower with the ability to work hard that these great employers show up at IIT recruit and then these people end up at Amazon or Salesforce or Google or whatever and they do really well but it's not because of the IIT education it's because of the filter so I feel that when you know people are spending two years or four years at these great institutions they should get more than a couple of courses out of it so there's a lot that can improve I think surely since I now had that the fortune to to ask you so many questions we want to get the the audience involved now um and we'll be taking questions um you can post them in the chat and maybe you'll be picked or there's one already um we have someone asking in the chat
Questionerum we have someone asking in the chat you have both um I've quite concentrated portfolios does this also mean that you want your Investments to be uncorrelated and if you have to choose between two rather um two rather correlated stocks what are your criteria this is not only limited um to you monitor guy if you uh if you uh
Ted WeschlerI would just say that uh normally when I make investments in the fund I I don't I and I've never invested more than 10 10 of Assets in any one bet typically ideally it's kind of a 10 by 10 portfolio there was a a very good investor in India who passed away recently Rakesh jhunjanwala and he never managed money outside money and he had probably less than you know 500 to his name when he started his career didn't live that long actually died in his early 60s and uh when he passed away his net worth was north of
Otherpassed away his net worth was north of six or seven billion you know no fees all you know organic and he didn't run companies he's all you know passive Investments half that money was from one company so he made a four percent bet a few decades ago in a company called Titan Industries in India which ended up becoming more than half his portfolio and Titan has done extremely well over the years going to keep doing well so if you think of someone like rakesh's portfolio let's say the other 96 of the portfolio went to zero he just hung onto his Titan well you still end up with like 3 billion or something you know and so we start out I would say not that concentrated but if we but if the job is done right you would end up very concentrated so one of the things I I always kind of scratch my head about is that you know these very smart investors
Todd Combsthat you know these very smart investors would buy would buy would buy MasterCard after the IPO MasterCard after the IPO MasterCard after the IPO and you know they might be more and you know they might be more and you know they might be more Diversified than me you know maybe they Diversified than me you know maybe they Diversified than me you know maybe they might have 20 positions it's just fine might have 20 positions it's just fine might have 20 positions it's just fine no problem and so MasterCard is like a no problem and so MasterCard is like a no problem and so MasterCard is like a five percent position and then it does five percent position and then it does five percent position and then it does really well and it becomes a 25 position really well and it becomes a 25 position really well and it becomes a 25 position or a 30 position because it's done so or a 30 position because it's done so or a 30 position because it's done so much better than everything else like much better than everything else like much better than everything else like Jack Nicholson said they can't handle Jack Nicholson said they can't handle Jack Nicholson said they can't handle the truth and in some cases their the truth and in some cases their the truth and in some cases their grandmothers took away certain body grandmothers took away certain body grandmothers took away certain body parts when they were 13. so you know parts when they were 13. so you know parts when they were 13. so you know they're done well it gets to 15 and they they're done well it gets to 15 and they they're done well it gets to 15 and they trim it gets to 17 they trim again and trim it gets to 17 they trim again and trim it gets to 17 they trim again and it never gets to even 20 percent it never gets to even 20 percent it never gets to even 20 percent right and to me I really scratch my head right and to me I really scratch my head right and to me I really scratch my head about that so yes you get a diversified about that so yes you get a diversified about that so yes you get a diversified portfolio but you're cutting the flowers portfolio but you're cutting the flowers portfolio but you're cutting the flowers and watering the weeds and that's not and watering the weeds and that's not and watering the weeds and that's not what Rakesh General did and that's not what Rakesh General did and that's not what Rakesh General did and that's not what Warren Buffett did I think if an
Questionerwhat Warren Buffett did I think if an investment manager has done the job right they're going to end up with 80 90 of the net worth in one stock and the way they should think about that stock so if we think about the Walton family and their ownership of Walmart Sam Walton passed away a long time ago there are no Waltons running Walmart there might be a couple of them on the board but they really don't have much influence about the way Walmart runs but almost all the Waltons are extremely concentrated with 90 percent or more of their wealth in just one stock right so you don't need to be a founder or a founding family to have that concentration so my friend Nick sleep for example you know hung up his boots he had three stalks and one stock Amazon became 80 percent uh because it did so well versus and the other two weren't slouches but it did
Todd Combsother two weren't slouches but it did better than Berkshire and Costco and the way to think about Amazon 80 is the way the Walton family thinks about Walmart's talk when it's 80 or 90 which is you are effectively like the founding family and it's a great business and you just leave it alone and um and and but but this is hard this is hard for most people to do and I think I have a lot of respect for Rakesh because of what he was able to do on that front you know so um one of my painful episodes is that I owned one of those called crizzle I had met monish maybe once not even and I go to India for the first time I remember modest you gave me the book by Dalrymple city of jinns to read I don't know if you know that because uh John John valo was a significant shareholder of Grizzle and so I went to his office like the Moody's of India forgive me
Ted Weschlerlike the Moody's of India forgive me this is a uh it was the first stock I've only owned I think three stocks in India I was looking for credit rating agencies around the world found a crizzle uh bought chairs and it went to visit uh made significant return on my investment but then convinced myself that I not only had to trim the flowers I pulled them out and threw them on the Dustbin and um you know that that would have had a very significant impact on my net worth and the net worth of my investors if I'd stuck with it it's probably up 50 or 100 times since I sold it but Monash said I go visit junjun valor's office somewhere somewhere on that kind of peninsula that is Mumbai and there's just you know there's like about there's place for 20 people there and jeonjournville's office is empty and there's one guy there's not a lock on
Otherthere's one guy there's not a lock on the door even it feels to me I kind ofthe door even it feels to me I kind ofthe door even it feels to me I kind of just walk in and there's a guy who looksjust walk in and there's a guy who looksjust walk in and there's a guy who looks at me and says he wonders what I'm thereat me and says he wonders what I'm thereat me and says he wonders what I'm there for that was it that was his old officefor that was it that was his old officefor that was it that was his old office and uhand uhand uh just funny yeah sorry just ajust funny yeah sorry just ajust funny yeah sorry just a reminiscencereminiscencereminiscence yeah and and the thing is that you knowyeah and and the thing is that you knowyeah and and the thing is that you know we are all too soon and why is too latewe are all too soon and why is too latewe are all too soon and why is too late there are so many great businesses thatthere are so many great businesses thatthere are so many great businesses that I sold which I have a very deep regretsI sold which I have a very deep regretsI sold which I have a very deep regrets about you know I had ownership ofabout you know I had ownership ofabout you know I had ownership of something like one percent of Ferrari insomething like one percent of Ferrari insomething like one percent of Ferrari in our funds you know what could be betterour funds you know what could be betterour funds you know what could be better than that and this idiot sold it and thethan that and this idiot sold it and thethan that and this idiot sold it and the idiot's friend is smarter than him andidiot's friend is smarter than him andidiot's friend is smarter than him and he's kept it which is wonderful but onlyhe's kept it which is wonderful but onlyhe's kept it which is wonderful but only half is smart because I sold half of ithalf is smart because I sold half of ithalf is smart because I sold half of it as just as we went into lockdownas just as we went into lockdownas just as we went into lockdown Monash doesn't let me forget that by theMonash doesn't let me forget that by theMonash doesn't let me forget that by the waywayway at least not the whole bunch of flowersat least not the whole bunch of flowersat least not the whole bunch of flowers were thrown away like me we should keptwere thrown away like me we should keptwere thrown away like me we should kept some of them but but the thing is that
Questionersome of them but but the thing is thatsome of them but but the thing is that but the thing is that you know with somebut the thing is that you know with somebut the thing is that you know with some luck I may have another 32 years or soluck I may have another 32 years or soluck I may have another 32 years or so on planet Earth so there is still timeon planet Earth so there is still timeon planet Earth so there is still time to apply the lessons that took a fewto apply the lessons that took a fewto apply the lessons that took a few decades to learn but I think one of thedecades to learn but I think one of thedecades to learn but I think one of the big lessons is that you when you whenbig lessons is that you when you whenbig lessons is that you when you when you find yourself in the great positionyou find yourself in the great positionyou find yourself in the great position of of fractional ownership of a greatof of fractional ownership of a greatof of fractional ownership of a great businessbusinessbusiness you don't really try to do things likeyou don't really try to do things likeyou don't really try to do things like cute things like figure out intrinsiccute things like figure out intrinsiccute things like figure out intrinsic value Etc when in 1972 you know Buffettvalue Etc when in 1972 you know Buffettvalue Etc when in 1972 you know Buffett and Monger they always say that theyand Monger they always say that theyand Monger they always say that they have a perspective on what the intrinsichave a perspective on what the intrinsichave a perspective on what the intrinsic value of Berkshire Hathaway is and theyvalue of Berkshire Hathaway is and theyvalue of Berkshire Hathaway is and they said if both of them wrote down theirsaid if both of them wrote down theirsaid if both of them wrote down their numbers they would be they wouldn't benumbers they would be they wouldn't benumbers they would be they wouldn't be the samethe samethe same but they would be in the ballpark and Ibut they would be in the ballpark and Ibut they would be in the ballpark and I actually disagree with both of them soactually disagree with both of them soactually disagree with both of them so you know in the mid 70syou know in the mid 70syou know in the mid 70s Berkshire stock was forty dollars aBerkshire stock was forty dollars aBerkshire stock was forty dollars a share which is now over four hundred
Questionershare which is now over four hundred thousand dollars you know it's a ten thousand dollars you know it's a ten thousand dollars you know it's a ten thousand X thousand X thousand X what was the intrinsic value of Berkshire in in the early 70s the the answer is that it was a really large number we don't know what that number was but we know it was a very large number now you could you could calculate Book value and you could give it some multiple on Book value but what you're not taking into account is what if this you know great compounder of capital is sitting at the helm of this company for 50 years after that what happens then I think in a lot of great businesses we can get to liquidation value we can get to floor values relatively easily we really cannot get to intrinsic value because if they keep going and you go 10 20 30 years what does that look like I have no idea what that looks like but what you need to do is just stay on for
Questionerwhat you need to do is just stay on for the ride right yes we have a lot of people awaiting answers in the chat um how can students design their career to have a fund like and monitor and be a fund like and monitor and behave a fund like and monitor and be successful with it so how did you design your fund and what's what's the take from it for students
Questionerwell so the the simplest way to do that is I'll just tell you my journey is that start by you know whatever small amount of money you have you start by building a track record so you open a brokerage account and you start buying stocks and the amounts aren't that important what is important is that you don't pay your grocery bills out of that account keep it so that you can later have that record audited if you've done well with that account where you've done significantly above market then you can you know you can go to friends family and fools especially the fools and see
Questionerand fools especially the fools and see if some of them will you know give you some money to uh to add to that kitty and you know Buffett says that if you are even a slightly above average investor they will swim to you in the middle of the Atlantic in shark infested waters to invest with you if you do a good job for the friends family and fools there will be more people who will show up to that party and it'll just keep going so basically the investment business is really simple do well for yourself do well for your friends and family and then the World's Gonna show up you know I I Julius I just want to go to something even more basic that uh so I I have not had personal interactions other than maybe one book to Charlie Munger other than a book that I sent him and he sent me a nice note back but my experiences are around uh monish and
Questionerexperiences are around uh monish and around Warren is thataround Warren is thataround Warren is that it's kind of like the way uh they liveit's kind of like the way uh they liveit's kind of like the way uh they live their lives is that they're constantlytheir lives is that they're constantlytheir lives is that they're constantly leaving so much more on the table thanleaving so much more on the table thanleaving so much more on the table than they take and it's in a thousandthey take and it's in a thousandthey take and it's in a thousand different ways I mean the funny thing isdifferent ways I mean the funny thing isdifferent ways I mean the funny thing is when when monish developed thiswhen when monish developed thiswhen when monish developed this friendship with Charlie he bent overfriendship with Charlie he bent overfriendship with Charlie he bent over backwards to try and get me into thebackwards to try and get me into thebackwards to try and get me into the same relationship with Charlie it was itsame relationship with Charlie it was itsame relationship with Charlie it was it was like he kind of drags me over at onewas like he kind of drags me over at onewas like he kind of drags me over at one of these brunches now sit down and talkof these brunches now sit down and talkof these brunches now sit down and talk to Charlie so and and he did thatto Charlie so and and he did thatto Charlie so and and he did that he wasn't he wasn't that's just the wayhe wasn't he wasn't that's just the wayhe wasn't he wasn't that's just the way he is and in a thousand other ways andhe is and in a thousand other ways andhe is and in a thousand other ways and uh Warren the same thing and when Iuh Warren the same thing and when Iuh Warren the same thing and when I realized that he's kind of doing smallrealized that he's kind of doing smallrealized that he's kind of doing small kindnesses for me Mr guy Speer who'skindnesses for me Mr guy Speer who'skindnesses for me Mr guy Speer who's such a nothing in his life I justsuch a nothing in his life I justsuch a nothing in his life I just imagine how many other people he's doingimagine how many other people he's doingimagine how many other people he's doing it for so I would just step back and sayit for so I would just step back and sayit for so I would just step back and say yes a very nice outcome would be able toyes a very nice outcome would be able to
Otheryes a very nice outcome would be able to be we're able to run a fund like howbe we're able to run a fund like howbe we're able to run a fund like how bright funds or aquamarine fund butbright funds or aquamarine fund butbright funds or aquamarine fund but there's a much more basic uh mode ofthere's a much more basic uh mode ofthere's a much more basic uh mode of behavior to get to Joy and it's livingbehavior to get to Joy and it's livingbehavior to get to Joy and it's living one's life constantly making sure thatone's life constantly making sure thatone's life constantly making sure that people that you leave something on thepeople that you leave something on thepeople that you leave something on the table that you that you gave more thantable that you that you gave more thantable that you that you gave more than you took and that you're somebody thatyou took and that you're somebody thatyou took and that you're somebody that people want to be around because goodpeople want to be around because goodpeople want to be around because good things happen when they're around youthings happen when they're around youthings happen when they're around you and one of the outcomes might be runningand one of the outcomes might be runningand one of the outcomes might be running a fund because if you try and starta fund because if you try and starta fund because if you try and start running a fund and you don't have thatrunning a fund and you don't have thatrunning a fund and you don't have that modus operandi you're unlikely I thinkmodus operandi you're unlikely I thinkmodus operandi you're unlikely I think to make a big success of it over theto make a big success of it over theto make a big success of it over the long run so underlying all of that is along run so underlying all of that is along run so underlying all of that is a far more basic orientation and I thinkfar more basic orientation and I thinkfar more basic orientation and I think that the reason why I just get sothat the reason why I just get sothat the reason why I just get so excited about that is that it'sexcited about that is that it'sexcited about that is that it's applicable to everyone and I dove intoapplicable to everyone and I dove intoapplicable to everyone and I dove into investing with the desire to get richinvesting with the desire to get richinvesting with the desire to get rich but I didn't realize that I was going to
Questionerbut I didn't realize that I was going to learn some profound wisdom about how to live my life and it's strange because once I understood it I saw it in some people and some people just don't have it in the book the book I'm referring to here really is Jim Grant Jim Grant no Grant give and take and you just really want to identify the people who are givers not matches or takers and you want to become yourself somebody who's a giver and I think that that leads you to the promised land whether it's running a fund or something else
Otherdefinitely it all reminds me of concept of the concept of compounding Goodwill um and then this then actually leading leading to payoff which was not intended to be to be reached but then reached I believe we have time for one last question um considering the initiation phase of um a young investor what would be the
Questionerum a young investor what would be the mental model required to move on more easily from bad decision taken previously
Warrenwell you know Charlie Munger would say that you want to learn but not learn too much so this is a business where the best investor is going to be wrong one out of three times and most likely the mere models amongst us like me we're probably gonna be wrong half the time but like we saw in the jungenwala example he only needed to be right on four percent of the portfolio didn't matter about the rest so mistakes are very much a part of the landscape we're going to make a lot of mistakes and I think you need to be intellectually honest with yourself and you need to move on you don't need to make the money back the same way you lost it so once you realize that you've made a bet which you know has led to a loss of capital and you know you have a better
Otherand you know you have a better understanding of the business and such it may make sense just move on and you know learn what you can from that experience don't learn too much and keep going from there
QuestionerI couldn't say it better curious I think that's a great great note um to to end our incredibly valuable session today so thank you very much from both Monet and then guy for for spending the hour with us um thank you in the name of the elevation investment club and the whole university for everybody who wants to re-watch this this stream it will be available on on YouTube as well as LinkedIn so thank you and and see you soon hopefully now Julius hold on a second that's very nice of but you didn't give us the chance to thank you and I get the chance to say you know monish I know it's cold in Switzerland but in summertime it's really beautiful
Otherbut in summertime it's really beautiful first of all second of all there really are a special set of students at St Garland I was so impressed they and and um unusual minds and it's a really Stark campus you know if you think that Zurich is Stark think of things like Eastern Switzerland it gets even more Stark and um but I just wanted to thank you you actually I would really say that I went out and gave a talk I don't remember how long it was but it was kind of inspiring to be amongst them and so it's lovely to do this uh streaming but Julius I still have this ambition that we will get managed to Saint Garland at some point well I have to say Julius that you know when guy asked me to jump I just say how high and so he told me you have to do this talk with with Tim Collin and I am glad I I said yes and I really enjoyed the session and I hope we can repeat
Otherthe session and I hope we can repeat this again thank you very much yes yes in terms of How High let's aim for the stars and hopefully we'll have you here on campus soon so um thank you again and and now let's let's end this session so see you soon and thank you very much for being with us goodbye