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Othera Visionary although he will tell youa Visionary although he will tell youa Visionary although he will tell you he's a cloner monish is a longtime valuehe's a cloner monish is a longtime valuehe's a cloner monish is a longtime value investor and CEO he's an on ENT preneurinvestor and CEO he's an on ENT preneurinvestor and CEO he's an on ENT preneur an author and a philanthropist hean author and a philanthropist hean author and a philanthropist he regularly gives his time to meet withregularly gives his time to meet withregularly gives his time to meet with students to share his wisdom onstudents to share his wisdom onstudents to share his wisdom on investing business and life more broadlyinvesting business and life more broadlyinvesting business and life more broadly monish is the founder of the Pmonish is the founder of the Pmonish is the founder of the P investment funds and one of the mostinvestment funds and one of the mostinvestment funds and one of the most successful value investors in the worldsuccessful value investors in the worldsuccessful value investors in the world he is an admirer and disciple of Warrenhe is an admirer and disciple of Warrenhe is an admirer and disciple of Warren Buffett and Charlie Munger and famouslyBuffett and Charlie Munger and famouslyBuffett and Charlie Munger and famously paid just overpaid just overpaid just over $650,000 to have lunch with Warren$650,000 to have lunch with Warren$650,000 to have lunch with Warren Buffett back in 2007 which he later saidBuffett back in 2007 which he later saidBuffett back in 2007 which he later said was worth every penny we'll get to thiswas worth every penny we'll get to thiswas worth every penny we'll get to this without further delay let us extend awithout further delay let us extend awithout further delay let us extend a warm welcome to the man himself Mrwarm welcome to the man himself Mrwarm welcome to the man himself Mr monice BB please join me in giving him amonice BB please join me in giving him amonice BB please join me in giving him a virtual Round of Applause okay so nowvirtual Round of Applause okay so nowvirtual Round of Applause okay so now back to DJ Khaled DJ Khaled is famousback to DJ Khaled DJ Khaled is famousback to DJ Khaled DJ Khaled is famous for his song All I Do Is Win I know we'dfor his song All I Do Is Win I know we'dfor his song All I Do Is Win I know we'd all love to win all the time but maybe
Questionerall love to win all the time but maybe that isn't realistic monish you've taken a slightly different road and you have this say heads I win tails I don't lose much that you've used in reference to your own style of investing in the stock market your successful run at the casinos and also the patels who started investing in motels in the 1970s or so so monish what does heads I win tails I don't lose mean to you how do you come up with this framework and how have you applied it in investing and other business dealings in your response feel free to address any or all of the examples I mentioned including your experience in the stock market and casinos and or the patels and motels
Othersure well Charles it's great to be here and it was also wonderful to bump it into you at the air train at JFK which was which was kind of fun short
Otherwhich was which was kind of fun short meeting there yeah I think I think many many times in life we are confronted with exactly these types of odds where if you go for something it could be a winner and the downside is very limited you know from taking a random meeting with a stranger to a variety of other things that you might engage with you know like you know I think Michael Jordan said you you miss all the shots that you don't take you know so basically sometimes going for a few things even if it's not 100% sure bet can can work out work out really well in life and I think one of the one of the misnomers that people have about about entrepreneurs is that they think entrepreneurs are Risk Takers and actually the reality is the complete opposite so if I look at startups and you know I would put startups into two different categories Venture back
Questionerdifferent categories Venture back startups and non-venture back startupsstartups and non-venture back startupsstartups and non-venture back startups non-venture back startups make upnon-venture back startups make upnon-venture back startups make up 99.999% of all startups and Venture back99.999% of all startups and Venture back99.999% of all startups and Venture back startups actually are the normally sostartups actually are the normally sostartups actually are the normally so I'm not talking about Venture backI'm not talking about Venture backI'm not talking about Venture back startups we can ignore that those thosestartups we can ignore that those thosestartups we can ignore that those those startups but non-venture back startupsstartups but non-venture back startupsstartups but non-venture back startups basically tend to havebasically tend to havebasically tend to have entrepreneurs who tend to even thoughentrepreneurs who tend to even thoughentrepreneurs who tend to even though they don't think about it in it in thisthey don't think about it in it in thisthey don't think about it in it in this format explicitly they do everything informat explicitly they do everything informat explicitly they do everything in their power to minimize risk and youtheir power to minimize risk and youtheir power to minimize risk and you know I I gave the example in my in myknow I I gave the example in my in myknow I I gave the example in my in my book that let's say there's a a barberbook that let's say there's a a barberbook that let's say there's a a barber in a small town and he has a he has ain a small town and he has a he has ain a small town and he has a he has a barber shop and he's got customers andbarber shop and he's got customers andbarber shop and he's got customers and you know he's kind of doing okay butyou know he's kind of doing okay butyou know he's kind of doing okay but there's just about as many Barbers asthere's just about as many Barbers asthere's just about as many Barbers as are needed in that town so no one justare needed in that town so no one justare needed in that town so no one just does extraordinarily well but everyonedoes extraordinarily well but everyonedoes extraordinarily well but everyone does okay there's an the barber noticesdoes okay there's an the barber noticesdoes okay there's an the barber notices that there's a new kind of New Town
Questionerthat there's a new kind of New Town emerging about 10 or 15 miles away and he goes out there and he sees that you know kind of there's some growth happening people moving in ETC and that there are no barber shops in that place because it's brand new and so what he does is he basically you know sublets a small space puts in a chair and decides to spend one or two days a week starts with one day a week at the emerging town and because he's the only game in town he can charge more for a haircut and and the opportunity cost for the people live in this in that town is that they would have to travel 10 or 15 miles for another barber and so they're willing to pay a little bit more uh just for the convenience and so he goes out there once a week and since he's the only game in town and hair grows and people need their follicle trims and so
Questionerpeople need their follicle trims and so on and business picks up takes off and he is's doing better than average you know he's making more in one day there than he does one day in the town with a lot of Barber so he bumps it up to two days you know basically he starts spending more time there and that is the way entrepreneurs go about it so if you think about what is the risk that barber is taking by stepping into this new town well he sues some very small space he probably buys some used equipment he doesn't really have any payroll or anything he's just going kind of himself and you know he might for a for a few days not have a 100% load so he might lose some business that he would have had in the other place but the the whole risk profile is extremely muted it's very low on the other hand if this town booms he could eventually be full-time
Otherbooms he could eventually be full-time in the new he might even be able to hirein the new he might even be able to hirein the new he might even be able to hire other Barbers to work at his shop andother Barbers to work at his shop andother Barbers to work at his shop and now he has at least temporarilynow he has at least temporarilynow he has at least temporarily supernormal profits and so basicallysupernormal profits and so basicallysupernormal profits and so basically this is kind of classically how a lot ofthis is kind of classically how a lot ofthis is kind of classically how a lot of entrepreneurs goes about it this is theentrepreneurs goes about it this is theentrepreneurs goes about it this is the way the patels went about you know theway the patels went about you know theway the patels went about you know the patels came to the us as refugees theypatels came to the us as refugees theypatels came to the us as refugees they were thrown out of Uganda by idam theywere thrown out of Uganda by idam theywere thrown out of Uganda by idam they had been there for 100 years you knowhad been there for 100 years you knowhad been there for 100 years you know and so iamin said that Africa is forand so iamin said that Africa is forand so iamin said that Africa is for Africans these these guys were AfricansAfricans these these guys were AfricansAfricans these these guys were Africans basically they didn't they weren't blackbasically they didn't they weren't blackbasically they didn't they weren't black but they had been there for severalbut they had been there for severalbut they had been there for several generations and they became statelessgenerations and they became statelessgenerations and they became stateless because he threw them out and theybecause he threw them out and theybecause he threw them out and they dominated the Ugandan economy because ofdominated the Ugandan economy because ofdominated the Ugandan economy because of their you know great approach to doingtheir you know great approach to doingtheir you know great approach to doing business and the UK took some of them inbusiness and the UK took some of them inbusiness and the UK took some of them in as refugees the can Canada took some ofas refugees the can Canada took some ofas refugees the can Canada took some of them and the US took some of them refthem and the US took some of them refthem and the US took some of them ref and they basically all their assets were
Questionerand they basically all their assets were nationalized so they lost almost everything and they were able to convert a few of their assets into gold and get it out of the country but when they came into the US they didn't really have too many skills that would have been in high demand in the US and the motel business looked very attractive because they could live in one or two rooms of a small motel a bank would Finance 70 80 90% of it and they could employ the entire family into motels are labor intensive into doing all all the different you know tasks needed for the motel the housekeeping and front desk and so on and what the what happened is the patels basically accidentally didn't really set out to do this they became low cost providers because they had no workers comp or payroll or anything and because they were the lowcost provider in a
Warrenthey were the lowcost provider in a particular area they could look at what other motels were charging in the area and charge 10 or 15 % less and still have the same profitability of of everybody else but when they charge 10 or 15% less their occupancy went to nearly 100% And so they had supern normal profits relative to the other Motel owners and this very small group of refugees that came in I mean you know I would say patels in the US are in the tens of thousands today they're not in the hundreds of thousands Maybe they might be 100 or 200,000 but if you look at the US population of you know 330 340 million they're not even one tenth of 1% of US population today they own north of 50% of all motels in the country when you're at a motel somewhere you may not realize it but you're at a Patel motel and and they've moved upscale into the
Questionerand and they've moved upscale into the Marriotts and the Hilton and all of thatMarriotts and the Hilton and all of thatMarriotts and the Hilton and all of that so they've actually so amongst theso they've actually so amongst theso they've actually so amongst the motels the lower-end motels they have 50motels the lower-end motels they have 50motels the lower-end motels they have 50 60% ownership but even at the higher end60% ownership but even at the higher end60% ownership but even at the higher end ones they're creeping up on the 15 20ones they're creeping up on the 15 20ones they're creeping up on the 15 20 25% of those and it all worked just the25% of those and it all worked just the25% of those and it all worked just the way the barber shop worked except inway the barber shop worked except inway the barber shop worked except in their case what happened is sotheir case what happened is sotheir case what happened is so entrepreneurs start off as Arbitrageentrepreneurs start off as Arbitrageentrepreneurs start off as Arbitrage players that's really what they're doingplayers that's really what they're doingplayers that's really what they're doing they Arbitrage player the barber is thethey Arbitrage player the barber is thethey Arbitrage player the barber is the classic example of an Arbitrage playerclassic example of an Arbitrage playerclassic example of an Arbitrage player and what happens is that over time inand what happens is that over time inand what happens is that over time in that newthat newthat new town that barber shop supern normaltown that barber shop supern normaltown that barber shop supern normal profits will notprofits will notprofits will not last more Barbers are going to come intolast more Barbers are going to come intolast more Barbers are going to come into that town and eventually all those extrathat town and eventually all those extrathat town and eventually all those extra profits and higher prices that heprofits and higher prices that heprofits and higher prices that he charges usually would will get erodedcharges usually would will get erodedcharges usually would will get eroded away now what may happen sometimes whataway now what may happen sometimes whataway now what may happen sometimes what happens in business is he's a talentedhappens in business is he's a talentedhappens in business is he's a talented Barber and people get used used to it
CharlieBarber and people get used used to it you know we kind of creatures of habit you know we kind of creatures of habit you know we kind of creatures of habit and they like him and if he's very and they like him and if he's very and they like him and if he's very talented they might be willing to pay talented they might be willing to pay talented they might be willing to pay him 10 15% more than anyone else just him 10 15% more than anyone else just him 10 15% more than anyone else just because even though they are other because even though they are other because even though they are other Barbers available they now have a habit Barbers available they now have a habit Barbers available they now have a habit of coming to him and so on so sometimes of coming to him and so on so sometimes of coming to him and so on so sometimes what should be a non-durable competitive what should be a non-durable competitive what should be a non-durable competitive competitive Advantage ends up becoming a competitive Advantage ends up becoming a competitive Advantage ends up becoming a competitive Advantage by accident and competitive Advantage by accident and competitive Advantage by accident and that's the same thing that happened with that's the same thing that happened with that's the same thing that happened with the the the patels what should have been a patels what should have been a patels what should have been a non-durable Advantage actually became a non-durable Advantage actually became a non-durable Advantage actually became a a sustaining advantage over a 50-year a sustaining advantage over a 50-year a sustaining advantage over a 50-year period they just you know took over that period they just you know took over that period they just you know took over that industry and we see this over and over industry and we see this over and over industry and we see this over and over so this heads I win Tails I don't lose so this heads I win Tails I don't lose so this heads I win Tails I don't lose much is actually the way almost all vent much is actually the way almost all vent much is actually the way almost all vent non-venture back businesses get started non-venture back businesses get started non-venture back businesses get started if you look at a small M and pop Chinese if you look at a small M and pop Chinese if you look at a small M and pop Chinese restaurant that opens they go through
Otherrestaurant that opens they go through the exact same calculus they look look at okay I'm looking at Cambridge do they have an over Supply or under supply of Chinese restaurant oh there are too many Chinese restaurants in Cambridge let's forget about that idea how about going you know 70 miles away from Cambridge what's the situation there and there you might find a town with pathetic Chinese food and these guys are talented chefs and they might make it happen and that again non-durable comparative advantage if they talented and they get a following may become sustaining over time and that's the way capitalism works and uh that framework also is applicable in investing I mean the import and thing in value investing you know as practiced by Warren Buffett and Charlie Munger and so on the very first thing is downside protection you know we
Questionerthing is downside protection you know we don't even look at upside until we first look at the downside and it's just like the barber you know the barber doesn't want to lose his shirt when he opens this new place he's not going to go sign some fancy lease on some big space and put all his savings into that new thing he's going to scr to keep the risk down and if he does the fancy place with all the rasm mataz he will be out of business really soon and that'll be the end of the barber and and all of that so the the entrepreneurs that make it they Arbitrage players they they focus on the downside and we as investors in value investors we do the exact same thing we whenever I'm looking at an investment what we want is we're looking for free lunches we want the downside to be zero or as close to zero as we can get with a massive upside and because we function in a ution
Charlieupside and because we function in aution driven markets and because auctiondriven markets and because auctiondriven markets and because auction driven markets have a tendency todriven markets have a tendency todriven markets have a tendency to overshoot or undershoot things getovershoot or undershoot things getovershoot or undershoot things get either too richly priced or tooeither too richly priced or tooeither too richly priced or too pathetically priced the richly priced wepathetically priced the richly priced wepathetically priced the richly priced we can leave aside you know don't need tocan leave aside you know don't need tocan leave aside you know don't need to go byy noia that's fine I mean sorrygo byy noia that's fine I mean sorrygo byy noia that's fine I mean sorry don't don't need to buy Nvidia but youdon't don't need to buy Nvidia but youdon't don't need to buy Nvidia but you can look at things which are hated andcan look at things which are hated andcan look at things which are hated and unloved and there's always things thatunloved and there's always things thatunloved and there's always things that are hated and unloved and when you getare hated and unloved and when you getare hated and unloved and when you get things that are hated and unloved youthings that are hated and unloved youthings that are hated and unloved you can get mispricing in the rightcan get mispricing in the rightcan get mispricing in the right direction and if seven moons line updirection and if seven moons line updirection and if seven moons line up where once in a while some greatwhere once in a while some greatwhere once in a while some great businesses hated an unlock for temporarybusinesses hated an unlock for temporarybusinesses hated an unlock for temporary reasons or you know some temporary issuereasons or you know some temporary issuereasons or you know some temporary issue and then that can lead to a good resultand then that can lead to a good resultand then that can lead to a good result so that's what we try toso that's what we try toso that's what we try to do
Questionerwonderful wonderful thanks fordo wonderful wonderful thanks fordo wonderful wonderful thanks for breaking that down and so I I would likebreaking that down and so I I would likebreaking that down and so I I would like to backtrack a little here um so youto backtrack a little here um so you
Questionerto backtrack a little here um so you were born and raised in India you camewere born and raised in India you camewere born and raised in India you came to the US for college and studiedto the US for college and studiedto the US for college and studied engineering at Clemson um afterengineering at Clemson um afterengineering at Clemson um after graduating like many of us I think ongraduating like many of us I think ongraduating like many of us I think on the call you went to work for a companythe call you went to work for a companythe call you went to work for a company for a few years but in your mid 20s youfor a few years but in your mid 20s youfor a few years but in your mid 20s you decided to start your own business candecided to start your own business candecided to start your own business can you tell us what that business was whatyou tell us what that business was whatyou tell us what that business was what motivated you and gave you the couragemotivated you and gave you the couragemotivated you and gave you the courage to take the risk if you even viewed itto take the risk if you even viewed itto take the risk if you even viewed it as risky to start the business and howas risky to start the business and howas risky to start the business and how did your upbringing anything I'vedid your upbringing anything I'vedid your upbringing anything I've touched on in terms of you growingtouched on in terms of you growingtouched on in terms of you growing growing up in India studying in the USgrowing up in India studying in the USgrowing up in India studying in the US or anything else influenced youror anything else influenced youror anything else influenced your decision to go off on your owndecision to go off on your owndecision to go off on your own relatively early to start your firstrelatively early to start your firstrelatively early to start your first business
Otheryeah so actually that businessbusiness yeah so actually that businessbusiness yeah so actually that business was actually my third business the firstwas actually my third business the firstwas actually my third business the first business which I was trying to do when Ibusiness which I was trying to do when Ibusiness which I was trying to do when I was about 22 about like few months afterwas about 22 about like few months afterwas about 22 about like few months after I started working I had some idea um for
QuestionerI started working I had some idea um for some software tools and I probably spent maybe $5 or $600 and it never went anywhere and I put it to bed and again it was classically heads I win Tails I don't lose much you know $500 down we can handle that and the second business which I tried to get off the ground was actually with two other good friends of mine one of them was a very talented software uh programmer and he had developed some tools and we W were going to try to see if we could Market those and so on and that one I probably spent May maybe a couple of thousand and maybe about 6 months you know part-time on the side whatever and that didn't go anywhere and we put that to bed too and again it was easy to handle that too no problem and the third business which I was by now about 25 years old was one I decided to do on my own and this one basically I was doing I
Otherown and this one basically I was doing I was trying to get the business off the ground while I was working because I'm like the barber guy I'm like the barber shop you know we're not taking any risk we have like zero risk and so for about nine months from the time I founded that company to the time I quit I was basically working like 80 hours a week you know so I was doing my job and what I had decided to do for my third business was that you know I always used to get great reviews and you know was always focused on making sure I was a good employee and all that so one of the changes I made in my mental model is that we're not interested in great reviews we're not interested in being employee of the month or employee of the year or you know top ranks or anything we just want to make sure that I don't get fired and I'm putting all my energy
Otherget fired and I'm putting all my energy into the new business I'm getting offinto the new business I'm getting offinto the new business I'm getting off the ground and the only thing I need thethe ground and the only thing I need thethe ground and the only thing I need the existing job to do is keep the paycheckexisting job to do is keep the paycheckexisting job to do is keep the paycheck coming so I try to figure out how much Icoming so I try to figure out how much Icoming so I try to figure out how much I need to work and what kind ofneed to work and what kind ofneed to work and what kind of productivity I need to have so they doproductivity I need to have so they doproductivity I need to have so they do not fire me because that would kabashnot fire me because that would kabashnot fire me because that would kabash the plan pretty badly and I think Ithe plan pretty badly and I think Ithe plan pretty badly and I think I calibrated it pretty well and this thirdcalibrated it pretty well and this thirdcalibrated it pretty well and this third business after about nine months I hadbusiness after about nine months I hadbusiness after about nine months I had three clients there was significantthree clients there was significantthree clients there was significant revenue from each client and I was justrevenue from each client and I was justrevenue from each client and I was just dying with so much work to do and youdying with so much work to do and youdying with so much work to do and you know I was kind of evenings weekendsknow I was kind of evenings weekendsknow I was kind of evenings weekends early mornings so I had enough cash flowearly mornings so I had enough cash flowearly mornings so I had enough cash flow coming out of this business that wascoming out of this business that wascoming out of this business that was more than what my paycheck was so I wentmore than what my paycheck was so I wentmore than what my paycheck was so I went into my boss and I gave myinto my boss and I gave myinto my boss and I gave my resignation and and he said what are youresignation and and he said what are youresignation and and he said what are you going to do I said you know I got thisgoing to do I said you know I got thisgoing to do I said you know I got this business off the ground doesn't competebusiness off the ground doesn't competebusiness off the ground doesn't compete with the company I'm at or whatever and
Questionerwith the company I'm at or whatever and and I was you know doing two things for and I was you know doing two things for and I was you know doing two things for nine months so I met with my boss and nine months so I met with my boss and nine months so I met with my boss and his boss and they said to me you know his boss and they said to me you know his boss and they said to me you know Mish we really were puzzled what Mish we really were puzzled what Mish we really were puzzled what happened to you in the last few months happened to you in the last few months happened to you in the last few months because we saw such a big drop off in because we saw such a big drop off in because we saw such a big drop off in the monish v knew and he said we had the monish v knew and he said we had the monish v knew and he said we had several discussions about what's going several discussions about what's going several discussions about what's going on and we discussed whether you should on and we discussed whether you should on and we discussed whether you should be fired and the conclusion we came to be fired and the conclusion we came to be fired and the conclusion we came to was that it's not so bad that he needs was that it's not so bad that he needs was that it's not so bad that he needs to be fired I said exactly I was trying to be fired I said exactly I was trying to be fired I said exactly I was trying to calibrate so I kept above firing to calibrate so I kept above firing to calibrate so I kept above firing level just slightly above just my neck level just slightly above just my neck level just slightly above just my neck above water he said you hit it so well above water he said you hit it so well above water he said you hit it so well because we never got to the point where because we never got to the point where because we never got to the point where it would when it dropped so much I said it would when it dropped so much I said it would when it dropped so much I said man this this was beautiful and so man this this was beautiful and so man this this was beautiful and so anyway both of them stayed they still anyway both of them stayed they still anyway both of them stayed they still still good friends and they after about still good friends and they after about still good friends and they after about 10 years they both invested in P funds 10 years they both invested in P funds
Questioner10 years they both invested in P funds and you know they investors with me andand you know they investors with me andand you know they investors with me and so on so it's been a it's been aso on so it's been a it's been aso on so it's been a it's been a relationship for a long time so therelationship for a long time so therelationship for a long time so the third business got traction there was athird business got traction there was athird business got traction there was a IT consulting system integrationIT consulting system integrationIT consulting system integration business and basically it was the samebusiness and basically it was the samebusiness and basically it was the same thing as a barber shop you know insteadthing as a barber shop you know insteadthing as a barber shop you know instead of like opening a barber shop 10 milesof like opening a barber shop 10 milesof like opening a barber shop 10 miles out I was just doing two jobs at theout I was just doing two jobs at theout I was just doing two jobs at the same time someone's paying the paychecksame time someone's paying the paychecksame time someone's paying the paycheck someone's paying the rent you know doingsomeone's paying the rent you know doingsomeone's paying the rent you know doing all of that and there's no downside andall of that and there's no downside andall of that and there's no downside and the first business $500 gone no problemthe first business $500 gone no problemthe first business $500 gone no problem second business 2,000 gone no no problemsecond business 2,000 gone no no problemsecond business 2,000 gone no no problem the third business I took $330,000 outthe third business I took $330,000 outthe third business I took $330,000 out of my 401k I was 25 years old I wasn'tof my 401k I was 25 years old I wasn'tof my 401k I was 25 years old I wasn't concerned about retirement I said we canconcerned about retirement I said we canconcerned about retirement I said we can deal with retirement later and then Ideal with retirement later and then Ideal with retirement later and then I took every credit card that would youtook every credit card that would youtook every credit card that would you know give me an offer so I had aboutknow give me an offer so I had aboutknow give me an offer so I had about 70,000 in unuse credit cards with me and70,000 in unuse credit cards with me and70,000 in unuse credit cards with me and then one by one because the business
Questionerthen one by one because the business needed a lot of cash for cash flow I maxed out all my credit cards so basically eventually 100,000 went into that business but it was already profitable it was already it had clients as customers and eventually you know I I sold that business and then went into the investing business but everything I've done in my career I only had one employer has always been the minimization of risk and and anytime I've done Ventures where I've decided to you know do something very professionally with proper resources etc those have all failed it has only been these you know scy crappy startups which don't take any Capital that have really worked and so that's that's been the journey so far yeah so first business didn't go so well but that's okay tails you didn't lose much second business the same thing third business comes around
Questionersame thing third business comes around you're in your mid 20s you start this one you have some traction I believe a few years passed by you're now in your early 30s it's the year 2000 and you sold your and you sold that business for 20 million I think you netted about 1 million I think you netted about 1 million personally and today's dollars adjusted for inflation I think that's about 1.8 million I'm no the the the
Otherbusiness sold I mean we were doing about 20 million in Revenue it sold for a lot more than that a lot more okay okay but you're you're quoting my return numbers in terms of the in terms of netting the The Profit I think it was a significant amount personally yeah so actually what happened is that in in 90 yeah I sold that business in 2000 I actually stopped working there in 99 I actually lost interest in the business and I got a lot more interested in
Questionerand I got a lot more interested in investing and Buffett and Burkshire so what I had done with that business is in 94 I had sold a portion of that company a small portion of the business and after taxes I got about a million dollars so I still own the business but I just sold one small piece of it and that million I started investing in the equity markets using Buffett's approach and that million over the next five or six years became about 13 million well done much you know and that was like you know 70% annualized rate of return or something and and I got more and more interested in the investing side less and less interested in being like a CEO and managing I mean the the business I was running had close to 200 people at that time so it was very kind of operationally intensive and I just like to like you know lead a you know laidback life and
Questionerknow lead a you know laidback life and life was not laidback with prettylife was not laidback with prettylife was not laidback with pretty intense so what I did in 99 was I didintense so what I did in 99 was I didintense so what I did in 99 was I did two things one is I applied to Warrentwo things one is I applied to Warrentwo things one is I applied to Warren Buffett for a job because I decided IBuffett for a job because I decided IBuffett for a job because I decided I was thinking about what do I want to dowas thinking about what do I want to dowas thinking about what do I want to do next I said what I want to do is want tonext I said what I want to do is want tonext I said what I want to do is want to go work for Warren Buffett that'd bego work for Warren Buffett that'd bego work for Warren Buffett that'd be great and I already had enough moneygreat and I already had enough moneygreat and I already had enough money where I didn't feel like I need to workwhere I didn't feel like I need to workwhere I didn't feel like I need to work anymore you know so I said now I can youanymore you know so I said now I can youanymore you know so I said now I can you know do whatever I want and Buffett saidknow do whatever I want and Buffett saidknow do whatever I want and Buffett said thanks no thanks I work alone and and sothanks no thanks I work alone and and sothanks no thanks I work alone and and so then I my friends told me to start athen I my friends told me to start athen I my friends told me to start a fund like the Buffett Partnerships whichfund like the Buffett Partnerships whichfund like the Buffett Partnerships which is what I did in 99 and then I basicallyis what I did in 99 and then I basicallyis what I did in 99 and then I basically hired a CEO to run the business and thenhired a CEO to run the business and thenhired a CEO to run the business and then about 6 weeks after he came on board toabout 6 weeks after he came on board toabout 6 weeks after he came on board to run it he moved from EDS in Dallas herun it he moved from EDS in Dallas herun it he moved from EDS in Dallas he called me and said someone wants to buycalled me and said someone wants to buycalled me and said someone wants to buy the business now I had done a deal withthe business now I had done a deal withthe business now I had done a deal with him where he's going to have you knowhim where he's going to have you know
Questionerhim where he's going to have you know all these kindall these kindall these kind of you know incentives if he grows theof you know incentives if he grows theof you know incentives if he grows the business whatever else and so I saidbusiness whatever else and so I saidbusiness whatever else and so I said look you know I don't want to reallylook you know I don't want to reallylook you know I don't want to really pull the rug out from under you what dopull the rug out from under you what dopull the rug out from under you what do you think we should doyou think we should doyou think we should do so he says sell the business so all ofso he says sell the business so all ofso he says sell the business so all of his options and everything that he hadhis options and everything that he hadhis options and everything that he had wested immediately upon change ofwested immediately upon change ofwested immediately upon change of control so for six weeks of work he wascontrol so for six weeks of work he wascontrol so for six weeks of work he was going to get paid a lot of money and thegoing to get paid a lot of money and thegoing to get paid a lot of money and the new people who were buying the companynew people who were buying the companynew people who were buying the company they were not looking at me because Ithey were not looking at me because Ithey were not looking at me because I had already left they wanted to lock himhad already left they wanted to lock himhad already left they wanted to lock him up to run the business and so they wereup to run the business and so they wereup to run the business and so they were going they gave him a new deal with agoing they gave him a new deal with agoing they gave him a new deal with a new package so he said please sell thenew package so he said please sell thenew package so he said please sell the business so I can ring the register oncebusiness so I can ring the register oncebusiness so I can ring the register once and then work on ringing the registerand then work on ringing the registerand then work on ringing the register the second time and so and I was happythe second time and so and I was happythe second time and so and I was happy because I had no interest in thebecause I had no interest in thebecause I had no interest in the business anymore sobusiness anymore sobusiness anymore so everyone worked out great for everyone
Questionereveryone worked out great for everyone and then I I started focusing on PAB and then I I started focusing on PAB and then I I started focusing on PAB funds and we started with a million funds and we started with a million funds and we started with a million dollars from eight investors and we grew dollars from eight investors and we grew dollars from eight investors and we grew that over the over the years and it's that over the over the years and it's that over the over the years and it's worked out worked out worked out okay can you talk a little bit more okay can you talk a little bit more okay can you talk a little bit more about this and thank you for the about this and thank you for the about this and thank you for the clarifications there can you talk a clarifications there can you talk a clarifications there can you talk a little bit more about the transition little bit more about the transition little bit more about the transition from running that business to getting from running that business to getting from running that business to getting into investing following the buffet into investing following the buffet into investing following the buffet framework I think in the near future if framework I think in the near future if framework I think in the near future if not already many people on this call not already many people on this call not already many people on this call will find themselves with sizable amount will find themselves with sizable amount will find themselves with sizable amount of cash and will want to and need to do of cash and will want to and need to do of cash and will want to and need to do something with it so I'm curious what something with it so I'm curious what something with it so I'm curious what advice do you have for us and how do you advice do you have for us and how do you advice do you have for us and how do you choose and how did you choose how to choose and how did you choose how to choose and how did you choose how to actually go invest that money that you actually go invest that money that you actually go invest that money that you earned well I mean I think the investing earned well I mean I think the investing earned well I mean I think the investing the money was a easy easy thing for me the money was a easy easy thing for me the money was a easy easy thing for me to do because I had been studying to do because I had been studying
Otherto do because I had been studying
Questionerto do because I had been studying Buffett's approach to investing for a while it had been about five or six years i' had been studying it i' applied it I had done very well with it and so I just had a very simple approach which was a what I would call a 10x10 portfolio so I was only making investments in the public markets if I made an investment it was typically one0 of assets and and basically you know when I was fully invested I'd have like 10 stocks and and that was it and then basically wait for them to you know reach intrinsic value sometimes you make a mistake many times you make a mistake and the B the investing business is very forgiving even if you're wrong half the time you'll still do really well and and so basically I knew that I could invest well and so then I never really was I never really planned to be in the investment business business what
Otherinvestment business business what happened in 99 was that a few friends of mine came to me so I used to give my friends stock tips from like 94 to 99 I'd buy some company and after I'm loaded up I'd tell my friends hey you know I I research this business and it looks good and if you want to you can feel free to invest in it you know Place some trade on E trade or whatever you want and you know no reps and guarantees or anything but you can do whatever you want and many of them would take my tip tips and inv West and they did really well and so they came to me as a group in 99 and they said that we would like you to manage some money for us because this is too random you know you give us a stock tip then we don't see you for a while and then we don't know what to do and whatever and so basically PAB funds really started as a hobby between me and
Questionerreally started as a hobby between me and eight friends and they gave me collectively about a million dollars I put 100,000 in and you know now I manage around 900 million or so and so I I actually just thought of it as a hobby at that time in 99 then in 2000 the first year we started in July 99 by June of 2000 we were up like 70% and the NASDAQ had crashed everything had crashed and nothing had happened to us and nothing had happened to us because I was buying funeral homes when everyone else was buying pets.com I was buying Funeral Homes at two times earnings and I was buying Steel company Coal Company and whatever that people didn't have an interest in and everyone else was interested in you know all these highflying internet stocks that eventually went to zero and so in fact the markets were a difficult place to be
Questionerfrom 2000 onwards because they were so overheated you know Coke trading at 50 times earnings Microsoft was at a six or 700 M billion doll market cap it did not see that market cap again for 10 or 11 years so if you invested in Microsoft in 2000 you had seriously negative results for the next 10 12 years and of course I had no interest in investing in Microsoft I I was just looking at very basic businesses at that time so I changed my investing style in the 90s I was doing a lot of tech investing because it was not overheated and I understood the space well in the 2000 early 2000s I switched to hardcore Ben Graham deep value and because that was the only thing that made sense I could never make sense of investing in Microsoft or something at that time and so it it worked out just fine no problems got it got it and I imagine through that time
Questionergot it and I imagine through that time as you were studying some of these investors you were picking up there principles and philosophies I've heard you mention that this wasn't really the common Trend during that time and so it's made me wonder how could have the best investor in the world sitting in Omaha Omaha you know openly sharing his investment philosophy and approach and virtually no one follows it and in fact I think many cases they do they go ahead and they do the exact opposite I'd guess that Mr Buffett doesn't analyze companies using Excel you have your investing Ten Commandments and one rule is thou sh not use Excel I think in your book Dondo investor you've also demonstrated by instead of using Excel evaluation of Bed Bath and Beyond using a Texas Instruments calculator and you ran a DCF a discounted cash flow model
Questionerran a DCF a discounted cash flow model um and you came up with valuation forum and you came up with valuation forum and you came up with valuation for Bed Bath and Beyond I'm wondering howBed Bath and Beyond I'm wondering howBed Bath and Beyond I'm wondering how should we think about and reconcile thisshould we think about and reconcile thisshould we think about and reconcile this on the one hand as business schoolon the one hand as business schoolon the one hand as business school students a lot of us here sit throughstudents a lot of us here sit throughstudents a lot of us here sit through Finance classes and develop models andFinance classes and develop models andFinance classes and develop models and Excel but your view correct me if I'mExcel but your view correct me if I'mExcel but your view correct me if I'm wrong is that if the investment requireswrong is that if the investment requireswrong is that if the investment requires you to fire up Excel you take anyou to fire up Excel you take anyou to fire up Excel you take an automatic pass on it so again how shouldautomatic pass on it so again how shouldautomatic pass on it so again how should we think about this and reconcile thatwe think about this and reconcile thatwe think about this and reconcile that
CharlieI'm so sorry to break it to you CharlesI'm so sorry to break it to you CharlesI'm so sorry to break it to you Charles but they wasted yourbut they wasted yourbut they wasted your time they have filled your head withtime they have filled your head withtime they have filled your head with mush you need tomush you need tomush you need to reprogram you need toreprogram you need toreprogram you need to detox you know you need to go into rehabdetox you know you need to go into rehabdetox you know you need to go into rehab and then come out the other sideand then come out the other sideand then come out the other side with no need for Excel ever again andwith no need for Excel ever again andwith no need for Excel ever again and life will be great so one of the thingslife will be great so one of the thingslife will be great so one of the things I found which is The Quirk about humansI found which is The Quirk about humansI found which is The Quirk about humans that I know the Quirk exists I'm notthat I know the Quirk exists I'm notthat I know the Quirk exists I'm not exactly sure why it exists and I'veexactly sure why it exists and I'veexactly sure why it exists and I've
Questionerexactly sure why it exists and I've tried to actually try to understand why it exists I still haven't figured it out so for whatever reason humans have an aversion to cloning you know you you said I'm a cloner I'm not a cloner I'm a Shameless cloner you know so let's not miss the full thing you know cloner just doesn't do justice Shameless cloner so I remember when I first met Warren and Charlie and you know they were asking me so I had I had replicated the rules of the Buffett Partnerships which I thought were really good rules and I told Charlie I said look Warren ran these Partnerships from 1956 to 1969 they had the best record of any investment partnership even probably till today there might be very very few that have done better than that and he had an approach to doing that that made all the sense in the world he never charged any management fees he took 1/4
Questionercharged any management fees he took 1/4 of The Upside over 6% and I I replicated all those rules so I told Charlie that look the Buffett Partnerships ended in 1969 the Indian guy in front of you starts the PAB funds in 1999 30 years later I said I looked high and low for anyone who had replicated that model in the last 30 years and all I could find was nobody zero and I realize just like so many other things that people are not willing to clone that when you find something that's a great idea what you will repeatedly find is nobody else is interested and I just really don't understand why this is the case if I look at a business like Chipotle you know Chipotle is a fantastic business I actually wrote about it in my first book okay and I wrote about how amazing the business is from then till today I mean what is so difficult about Chipotle nothing okay if
Questionerdifficult about Chipotle nothing okay if you're a talented Chef you could clone every single aspect of Chipotle okay nobody has done that okay now we've had some players come in like Cava and a few others in others Fields but they came after a long time and no one thought that I should do a burrito or do a taco in a format where the user control r s what goes in it okay that was the thing they changed you know you don't order the taco and tell them give me this and that you actually direct each ingredient going in which is what makes it unique because you can make it exactly what you want right it's not rocket science but just like no one replicated the buffet Partnerships there's a gazillion things around us which are terrific businesses and terrific ideas there could be five of those and no one's interested you know this is the nature of humans so
Otherknow this is the nature of humans soknow this is the nature of humans so there is a lot ofthere is a lot ofthere is a lot of opportunity in a lot of different fieldsopportunity in a lot of different fieldsopportunity in a lot of different fields because humans are not interested so Ibecause humans are not interested so Ibecause humans are not interested so I told Charlie listen 30 years the Indiantold Charlie listen 30 years the Indiantold Charlie listen 30 years the Indian guy had to finally come along and doguy had to finally come along and doguy had to finally come along and do this so Charlie said well Mish there arethis so Charlie said well Mish there arethis so Charlie said well Mish there are there were a couple of guys who clonedthere were a couple of guys who clonedthere were a couple of guys who cloned our model I said yeah but Charlie Iour model I said yeah but Charlie Iour model I said yeah but Charlie I didn't know about them he said no theydidn't know about them he said no theydidn't know about them he said no they were very obscure you would have neverwere very obscure you would have neverwere very obscure you would have never heard of them and you are absolutelyheard of them and you are absolutelyheard of them and you are absolutely right that 99.99 99% of humans have noright that 99.99 99% of humans have noright that 99.99 99% of humans have no interest in what we were doing and nowinterest in what we were doing and nowinterest in what we were doing and now when I look at Buffett's approach towhen I look at Buffett's approach towhen I look at Buffett's approach to investing I mean there are very very fewinvesting I mean there are very very fewinvesting I mean there are very very few Business Schools Colombia University ofBusiness Schools Colombia University ofBusiness Schools Colombia University of Florida Missouri uh Jack McDonald atFlorida Missouri uh Jack McDonald atFlorida Missouri uh Jack McDonald at Stanford you notice I skippedStanford you notice I skippedStanford you notice I skipped Harvard okay it's a place with a lot ofHarvard okay it's a place with a lot ofHarvard okay it's a place with a lot of intelligent life but no strong valueintelligent life but no strong valueintelligent life but no strong value investing program doesn't exist bizarreinvesting program doesn't exist bizarreinvesting program doesn't exist bizarre you know so but it's the way it is and
Otheryou know so but it's the way it is andyou know so but it's the way it is and and if I look at the other like you knowand if I look at the other like you knowand if I look at the other like you know 100 other business schools in the US no100 other business schools in the US no100 other business schools in the US no program and that's because you know theprogram and that's because you know theprogram and that's because you know the capital asset pricing model and acapital asset pricing model and acapital asset pricing model and a zillion other things efficient marketzillion other things efficient marketzillion other things efficient market theories these are beautiful things totheories these are beautiful things totheories these are beautiful things to play around in Excel and they haveplay around in Excel and they haveplay around in Excel and have nothing to do with reality and nothingnothing to do with reality and nothingnothing to do with reality and nothing to do with the way the world reallyto do with the way the world reallyto do with the way the world really works and so you know what wouldworks and so you know what wouldworks and so you know what would actually be a way to make a lot of ofactually be a way to make a lot of ofactually be a way to make a lot of of money is not taught in these schools youmoney is not taught in these schools youmoney is not taught in these schools you know it's just taught in very very fewknow it's just taught in very very fewknow it's just taught in very very few places and you actually don't need to goplaces and you actually don't need to goplaces and you actually don't need to go to any school you can just you knowto any school you can just you knowto any school you can just you know buffett. CNB cnbc.com has all the annualbuffett. CNB cnbc.com has all the annualbuffett. CNB cnbc.com has all the annual meetings for the last more than 25 yearsmeetings for the last more than 25 yearsmeetings for the last more than 25 years six hours each so it's about 150 hourssix hours each so it's about 150 hourssix hours each so it's about 150 hours of Warren and Charlie so I went throughof Warren and Charlie so I went throughof Warren and Charlie so I went through every single one of those in the showerevery single one of those in the showerevery single one of those in the shower twice took about like six seven monthstwice took about like six seven months
Questionertwice took about like six seven months while I'm showering and shaving andwhile I'm showering and shaving andwhile I'm showering and shaving and brushing every morning and I'm goingbrushing every morning and I'm goingbrushing every morning and I'm going through it right now for the third timethrough it right now for the third timethrough it right now for the third time each time I learn more and every morningeach time I learn more and every morningeach time I learn more and every morning I get educated you know and it's rightI get educated you know and it's rightI get educated you know and it's right now I'm in the year 2001 the afternoonnow I'm in the year 2001 the afternoonnow I'm in the year 2001 the afternoon session it's an orgasmic experience andsession it's an orgasmic experience andsession it's an orgasmic experience and and the thing is it's all there it'sand the thing is it's all there it'sand the thing is it's all there it's free then you have all the Burkshirefree then you have all the Burkshirefree then you have all the Burkshire letters and you have all the transcriptsletters and you have all the transcriptsletters and you have all the transcripts I mean there's you really don't need toI mean there's you really don't need toI mean there's you really don't need to spend even $ five dollar you know it'sspend even $ five dollar you know it'sspend even $ five dollar you know it's all there don't need to pay tuition toall there don't need to pay tuition toall there don't need to pay tuition to nobody but no one's interested you knownobody but no one's interested you knownobody but no one's interested you know it's all there but no one's interestedit's all there but no one's interestedit's all there but no one's interested so I just said okay the Buffett partnso I just said okay the Buffett partnso I just said okay the Buffett partn partner structure no one's interestedpartner structure no one's interestedpartner structure no one's interested I'll clone it Buffett's approach toI'll clone it Buffett's approach toI'll clone it Buffett's approach to investing no one's interested I'll doinvesting no one's interested I'll doinvesting no one's interested I'll do that too and even today you know somethat too and even today you know somethat too and even today you know some people follow value investing it's apeople follow value investing it's apeople follow value investing it's a still a very small sliver so we continue
Todd Combsstill a very small sliver so we continue to find inefficiencies in the markets we continue to find widely mispriced great businesses and you know there's a $100 bill on the on the on the ground there's two University of Chicago economists walking by they see the $100 bill and the one guy says oh look there's a $100 bill he the other guy says you know they're both efficient market theist he said it's not there if it was there it would have been gone a long time ago it's not there start keep walking okay that's the way the world works the $100 bill that they can see is not there okay and so the Indian guy is going to go in and pick up the stupid $100 bill that no one else wants to see and it's okay you know that's what we do we just go pick up the $100 bills lying around
Questionerwow so $5 for this Buffet education here I am paying a couple
Questionereducation here I am paying a couple thousand noted I'll probably have to wait until after the semester but once I'm done with my classes I'll scrub my mind of excel maybe you should ask for a refund I don't know if that'll work out I think another another thing is this this idea and power behind diversification and I personally see some benefits to it and we learn quite a bit about it in our first year but I can also appreciate one consolidating their efforts and in investment on a few select opportunities you've said to make few bets big bets and frequent bets particularly when there's little risk and high uncertainty can you talk more about your view on diversification I know Charlie Munger refers to it as diversification and perhaps you can even highlight how your perspective on diversification has influenced your Investments at prri funds well the thing
QuestionerInvestments at prri funds well the thing is if we go back to the 99.99% of startups that are not venture back and some of them succeed like my company my third startup succeeded for a long period of time more than 90% 95% of my net worth was in one company and that's not unusual the couple that owns the Chinese restaurant they got 90% of Assets in one company and the barber shop most of it is one company okay they're not Diversified not only are they not Diversified it's not liquid okay they can't trade it they can't monetize it they can't do anything with it and they are very happy with all of that you know you don't see them breaking out in hives about the fact that oh my God I only have everything in one one business so so when we you know control is overrated you know saying that if I have everything in one business just because I control it I
Questionerbusiness just because I control it I should be okay I mean that's that's a flawed approach so in the stock market we have the option we and the and the option of not having it all in one one business right but once you get past five six seven maybe 10 businesses after that you start hurting yourself because you're not going to know the 11th business as well as your second business and why buy more of the 11th business when you know the second best business you love so well right and so you know a few years back I started investing in Turkey right and no one's interested in Turkey in in fact when I was investing everyone was exiting all the foreign investors had left everyone left and the local Turkish investors they're all gamblers so the the if you look at the Turkish stock market which has you know two or 300 listed companies and you exclude the stake owned by the
Questionerand you exclude the stake owned by the promoters the founders of the businesses the float is cycling every nine days so if some company has you know 70% float of their stock it's changing hands completely every nine days every nine days is a new set of shareholders now
QuestionerBuffett has a quote stock market is a mechanism to to transfer wealth from the active to the inactive I looked at turkey and I said this is beautiful I'm playing poker with people who want to be blindfolded and if you want to be blindfolded and playing poker no problem I'll play poker with you and and so when I went into turkey there was so much fear everyone exited we today own three businesses in Turkey okay one is a warehouse operator so this the warehouse Operator just to tell you about the $100 bill on the floor that no one wants to pick up so this company when I the day I went to
Todd Combsthis company when I the day I went to meet them in 2019 the market cap was 16 million usar six the liquidation value of the business was about 800 million 800 2% of liquidation value and the liquidation value would take about 20 minutes to figure out because they got a bunch of warehouses rented out to Amazon Ikea car 4 Mercedes Toyota Dupont on and on all these you know multinationals 99% lease 10e leases inflation index that you could flip and be done so there those those warehouses worth about a billion dollars there was 200 million of debt you would net about 800 million and there were cash flows coming out of those rents and the market cap was 16 million and then I thought you know it's going to be IL liquid what am I going to get for $8 million I got one 3 of the company okay now fast forward to 23 when I was investing the Turkish L
Charlie23 when I was investing the Turkish L was five L to thewas five L to thewas five L to the dollar now it's 28 L to the dollar it'sdollar now it's 28 L to the dollar it'sdollar now it's 28 L to the dollar it's collapsed okay in dollars the market capcollapsed okay in dollars the market capcollapsed okay in dollars the market cap is over 700 million in dollars in L myis over 700 million in dollars in L myis over 700 million in dollars in L my result is my return is infinite but whoresult is my return is infinite but whoresult is my return is infinite but who cares about that and the business is nowcares about that and the business is nowcares about that and the business is now worth about a billion ion and a half Iworth about a billion ion and a half Iworth about a billion ion and a half I mean they've increased the value of themean they've increased the value of themean they've increased the value of the business over the years so the thebusiness over the years so the thebusiness over the years so the the dollar bill was just sitting on thedollar bill was just sitting on thedollar bill was just sitting on the ground and no one was interested and Iground and no one was interested and Iground and no one was interested and I remember Templetonremember Templetonremember Templeton funds who was in a hurry to get out offunds who was in a hurry to get out offunds who was in a hurry to get out of turkey they sold me a block 5% block ofturkey they sold me a block 5% block ofturkey they sold me a block 5% block of that company I own onethird of thethat company I own onethird of thethat company I own onethird of the company but 5% block of that company forcompany but 5% block of that company forcompany but 5% block of that company for a million dollars you know $1 milliona million dollars you know $1 milliona million dollars you know $1 million for 5% of that company which is todayfor 5% of that company which is todayfor 5% of that company which is today worth uh a billion and a half so it' beworth uh a billion and a half so it' beworth uh a billion and a half so it' be about 75 million you so it be about 175about 75 million you so it be about 175about 75 million you so it be about 175 of the current value is what some guy inof the current value is what some guy inof the current value is what some guy in New York decided he wanted to sell thatNew York decided he wanted to sell that
WarrenNew York decided he wanted to sell that for that's fine no problem and then we own a Coke bottler in turkey and Coke bottling is a great business and we own an a an airport operator all three assets were widely mispriced were $100 bill sitting on the ground and so you know what I do is I just spend all my time talking to students like Charles and then every once in a while we find some $100 bill on the ground we go do some work we pick up the $100 bill and come back to talking to the students again and that's my life thank you
QuestionerWarren so yeah and speaking of Warren um like to go there actually so just shoveling a little bit back to 2007 so you put into practice Buffett's rules of investing you're simultaneously developing your own complimentary investment philosophy and you're outperforming the market um as you would say life is good um and then
Questioneryou would say life is good um and then at that point I think it gets even better for you you get the opportunity to bid for a charity lunch with Warren Buffett you invite your friend guy spear to join you and together you pay over $650,000 to win the auction uh with Buffett now I remember within the first few months or so um at business school a professor of mine took the time to tell my class that as we go through the this business school Journey we should make sure that we're developing relationships um that aren't just trans transactional um the opposite of a transactional relationship is a relation re relational relationship uh which emphasizes building trust Mutual understanding and a long-term connection without an immediate expectation of receiving something in return so do you feel that this opportunity you had to have lunch and interact with Buffett was
Questionerand interact with Buffett was transactional or was that relational and how and why did you intentionally cultivate one over the other and finally what unforeseeable benefits did that lead to
Questionerwell it led to all kinds of great things which I never imagined so I I didn't I didn't do so much business school thinking about the lunch okay all I all I did was I you know uh the Indian guy comes to the us as a foreign student you know he finds this guy in om reads up on him makes some money and in 2007 he finds he's worth $85 million and most of it is coming from plagiarizing everything Buffett's done so you know cloning the hell out of him and I'm just saying you know there's a tuition bill due here even though he didn't charge me there's a tuition bill due and then I see that the guy takes bribes to have lunches once a year you know so I said we're going to pay the
Ted Weschlerknow so I said we're going to pay the bribe we're going to have the lunch and then I thought about you know what should be the tuition bill for something that makes you you know 70 80 million or something and I said you know how about $2 million I said 2 million done you know 3% something you know it's pretty cheap deal you know if you give 3% for what what you get so I I told my friend gpia because we allowed to bring like seven people to the lunch right so I told my friend gpia listen you know I want to bid for this lunch I didn't know him very well then and he was the only guy I approached and I said do you want to come in on with me on this he said yeah you know my wife and I would love to attend so I said look there'll be four of us because I was going to go with my kids and there'll be two of you so you pay one3 I'll pay 2/3 okay and I said
Otherpay one3 I'll pay 2/3 okay and I said look I'm going to bid up to 2 million so he said who wait wait I can't I can't do 650 whatever, it's a too rich for me so I said how much can you do he said I'm good for a quarter million I said okay no problem you're capped at a quarter million no matter what the bidding goes crazy at you have two slots at the lunch for a quarter million and so he said okay and so I was still willing to bid 2 million nobody else wanted to bid more than 650,000 so I won it for 65,00 you know even what I wanted to spend on the lunch I couldn't do such as life and then you know my only agenda item when I met Warren was to look him in the eye and just say thank you I had no other agenda item now the lunch goes for like two three hours you can ask all kinds of questions I wrote down a bunch of questions my kids were asking
Ted Weschlerof questions my kids were asking of questions my kids were asking questions guy was asking questions so we had a ball you know and when Buffett came for the lunch he we had the lunch in New York City he said look I got nothing going on all afternoon so when you guys get sick and tired of me you let me know I'll leave but I don't have to be anywhere till like 700 p.m. so I'm here for as long as you want me to be here okay and so basically you know and I never expected that the lunch would lead to anything right I mean I was just I I told I told Warren that I want to thank you you know I learned so much from you I plagiarized you I cloned your model and all of this without asking your permission so I'm so sorry but thank you so much and and then you know he introduced us to Charlie Munger so I met Charlie with my wife and I actually enjoyed the lunch with Charlie a lot
Questionerenjoyed the lunch with Charlie a lot more than Warren that was so many thatmore than Warren that was so many thatmore than Warren that was so many that was so much fun and and then that led towas so much fun and and then that led towas so much fun and and then that led to a friendship with Charlie and then aa friendship with Charlie and then aa friendship with Charlie and then a friendship with Warren so that lunchfriendship with Warren so that lunchfriendship with Warren so that lunch became like you know Buffett used tobecame like you know Buffett used tobecame like you know Buffett used to have a brunch every Sunday at thehave a brunch every Sunday at thehave a brunch every Sunday at the Burkshire meeting for his like directorsBurkshire meeting for his like directorsBurkshire meeting for his like directors all the CEOs of all his companies hisall the CEOs of all his companies hisall the CEOs of all his companies his friends and he would invite guy and mefriends and he would invite guy and mefriends and he would invite guy and me to that Branch that's like all a-listerto that Branch that's like all a-listerto that Branch that's like all a-lister so guy and I would go to that lunch andso guy and I would go to that lunch andso guy and I would go to that lunch and I would tell guy listen guy don't turnI would tell guy listen guy don't turnI would tell guy listen guy don't turn around but right behind us Bill Gatesaround but right behind us Bill Gatesaround but right behind us Bill Gates and Bono are having a conversation okayand Bono are having a conversation okayand Bono are having a conversation okay and maybe we'll go get some picturesand maybe we'll go get some picturesand maybe we'll go get some pictures with them a little later but I met sowith them a little later but I met sowith them a little later but I met so many NFL players there I met you knowmany NFL players there I met you knowmany NFL players there I met you know Hollywood stars there Bill Gates wouldHollywood stars there Bill Gates wouldHollywood stars there Bill Gates would always show up and then all these youalways show up and then all these youalways show up and then all these you know Bono and whatever musiciansknow Bono and whatever musiciansknow Bono and whatever musicians whatever else is going on and a bunch ofwhatever else is going on and a bunch ofwhatever else is going on and a bunch of celebrity CEOs and whatnot so you know I
Ted Weschlercelebrity CEOs and whatnot so you know I every year I tell guy next year we're going to be off the list we're the only two yo-yos here you know everyone else is somebody except us you know but we keep getting the invite and so so I had no agenda for the lunch I just wanted to you know say thank you pay pay a 2 3% tuition bill I didn't even pay 1% you know it was a very cheap deal and and then most recently that lunch went for I don't know I think 19 million the last one they did so and now there are no more lunches he stopped taking bribes so such as life
Questionerwow that's great so you managed to outperform the market um you've generated all this wealth for yourself and others who have invested in your fund you've met the guru of all gurus and the investing World Warren Buffett and managed to form a close relationship with his business partner
Questionerrelationship with his business partner Charlie Munger and now you have to decide what else you want to do with your life and what to do with all the money uh that you've accumulated I think around this time in 2007 you also started the ducka foundation as I mentioned earlier in the intro it's an extraordinary organization that has had you success and has helped to lift thousands of families out of poverty but don't take my word for it I have here a copy of a letter from Warren Buffett which he wrote to you it's a copy of the letter and this letter reads if I can pull it up here I know it's here somewhere okay he says dear monish I remain incredibly impressed by what you have done are doing and will do act du sh it is simply terrific far more impressive than what business Titans investment gurus and famous politicians have ever accomplished I'm glad my
Warrenhave ever accomplished I'm glad my annual report doesn't get compared to the duana annual report it's an honor to even be quoted in it with admiration
Otherso Warren Buffett is known for his reports and he says he doesn't want it to be compared to Du Shana's annual report how has duana managed to accomplish what it has for its students and families what advice do you have for us about how we should think about social impact philanthropy and finding meaning in the work that we do
Otherwell first of all we should not believe everything Mr Bufford says or writes so I think he's being very modest he was very generous with the letter he wrote made my day made my year made made my life you know it was great and but you know obviously his annual reports are the gold standard I cloned his annual report that's why he likes my annual
Otherreport that's why he likes my annual report we don't put any pictures inreport we don't put any pictures inreport we don't put any pictures in annual report just like his annualannual report just like his annualannual report just like his annual report I use the same font that he usesreport I use the same font that he usesreport I use the same font that he uses so I think he likes it because of allso I think he likes it because of allso I think he likes it because of all those reasons but anyway so the thing isthose reasons but anyway so the thing isthose reasons but anyway so the thing is you know at the core at the core whatyou know at the core at the core whatyou know at the core at the core what Mish is mish is a game play okay I likeMish is mish is a game play okay I likeMish is mish is a game play okay I like to play games Blackjack brto play games Blackjack brto play games Blackjack br investing philanthropy it's all gamesinvesting philanthropy it's all gamesinvesting philanthropy it's all games okay but I don't just like to play gamesokay but I don't just like to play gamesokay but I don't just like to play games some psychologist who got into my headsome psychologist who got into my headsome psychologist who got into my head to figure out who I am they said to meto figure out who I am they said to meto figure out who I am they said to me Mish this is what they said to meMish this is what they said to meMish this is what they said to me exactly they said Mish we cracked yourexactly they said Mish we cracked yourexactly they said Mish we cracked your head open we know exactly what's goinghead open we know exactly what's goinghead open we know exactly what's going on they said to me you like to playon they said to me you like to playon they said to me you like to play games I said that's right I like to playgames I said that's right I like to playgames I said that's right I like to play games he said but not just any kind ofgames he said but not just any kind ofgames he said but not just any kind of games you like to play games where yougames you like to play games where yougames you like to play games where you think you can win I said yeah who wantsthink you can win I said yeah who wantsthink you can win I said yeah who wants to play games that you're going to loseto play games that you're going to loseto play games that you're going to lose that he said no a lot of people play a
Otherthat he said no a lot of people play a lot of different games but you like to play games that you know that you have some Edge that you can win so basically you know I'm playing one of the games I'm playing is there's a compounding game that's going on you know we go to Turkey we pick up some dollar bills we we buy some coal companies in the US that nobody wants to touch whatever else you know we do okay so this compounding engine builds wealth now I have no ability to spend this wealth nothing that I would do with this money would increase happiness or anything you know I live the life I I have the lifestyle that I want and it I don't need to go beyond that right so there is going to be hopefully significant amounts left over now what I want to have happened so June 11th 2054 June 11 2054 is the day I am leaving planet Earth
Otherleaving planet Earth okay and
okay and
okay and so one day before that which is June
so one day before that which is June
so one day before that which is June 10th
10th
10th 2054 my network needs to be down to
2054 my network needs to be down to
2054 my network needs to be down to $100 maybe $1,000 so the funeral gets
$100 maybe $1,000 so the funeral gets
$100 maybe $1,000 so the funeral gets taken care of okay but basically my
taken care of okay but basically my
taken care of okay but basically my network needs to be down to a few
network needs to be down to a few
network needs to be down to a few thousand at the most done so we have an
thousand at the most done so we have an
thousand at the most done so we have an engine that is growing
engine that is growing
engine that is growing wealth there needed to be another engine
wealth there needed to be another engine
wealth there needed to be another engine that takes that wealth
that takes that wealth
that takes that wealth down and so there are two games going on
down and so there are two games going on
down and so there are two games going on the wealth accumulation game and the
the wealth accumulation game and the
the wealth accumulation game and the wealth disbursement game now because I'm
wealth disbursement game now because I'm
wealth disbursement game now because I'm a game player I want to play the games
a game player I want to play the games
a game player I want to play the games well so if we're going to give the money
well so if we're going to give the money
well so if we're going to give the money away we're not going to do some nonsense
away we're not going to do some nonsense
away we're not going to do some nonsense you know we're not going to just
you know we're not going to just
you know we're not going to just randomly pick some you know nonprofit
randomly pick some you know nonprofit
randomly pick some you know nonprofit charity whatever we want to find the
charity whatever we want to find the
charity whatever we want to find the best charity you so first what I tried
best charity you so first what I tried
best charity you so first what I tried to do is I looked for organizations that
to do is I looked for organizations that
to do is I looked for organizations that impressed me in terms of how they went
impressed me in terms of how they went
impressed me in terms of how they went about doing social good and I was
about doing social good and I was
Otherabout doing social good and I was looking at this in 2005 2006 and looking at this in 2005 2006 and looking at this in 2005 2006 and actually what I came up with was deep actually what I came up with was deep actually what I came up with was deep disappointment I could not find even one disappointment I could not find even one disappointment I could not find even one nonprofit that impressed me with doing nonprofit that impressed me with doing nonprofit that impressed me with doing things the way I thought they should be things the way I thought they should be things the way I thought they should be done which is that when we are giving done which is that when we are giving done which is that when we are giving money away we have to look at Social money away we have to look at Social money away we have to look at Social return on invested Capital we have to return on invested Capital we have to return on invested Capital we have to look at what we put in and what is the look at what we put in and what is the look at what we put in and what is the output and we have to measure that output and we have to measure that output and we have to measure that output so we if if I give a charity output so we if if I give a charity output so we if if I give a charity $1,000 I want to know what happened to $1,000 I want to know what happened to $1,000 I want to know what happened to the Thousand what did it do what benefit the Thousand what did it do what benefit the Thousand what did it do what benefit did it create the problem with giving did it create the problem with giving did it create the problem with giving money away is measurements are really money away is measurements are really money away is measurements are really hard very very hard even most Charities hard very very hard even most Charities hard very very hard even most Charities run by by well- meaning people but run by by well- meaning people but run by by well- meaning people but they've not even thought about measuring they've not even thought about measuring they've not even thought about measuring because it's so hard to do so what I did because it's so hard to do so what I did because it's so hard to do so what I did is I used Charlie munger's principle is I used Charlie munger's principle is I used Charlie munger's principle which is the inversion principle he says which is the inversion principle he says which is the inversion principle he says invert always invert so what I said is
Charlieinvert always invert so what I said is okay the only causes I'm going to look at a causes where measurements are easy so we have you know we could go into Environmental Health Care homelessness education poverty whatever there 100 different causes you could go focus on I said I'm going to focus and the ones where we can measure outcomes easily and one of the things that happens in education when you focus on education is there's a report card and there's you can measure those outcomes you know like the Gates Foundation thought that if you reduce class size you would get better outcomes and they put a lot of money behind it later discovered that reducing class size actually didn't have the outcome so they gave up on that but they measured it and they found that it didn't work so they went and did something something else so in our case we said okay if we prep
Otherin our case we said okay if we prep these kids for the IIT entrance exam in India basically the interesting thing about the iits and the medical schools in India is if you get in they're basically free to attend and if you get in Microsoft will hire you Amazon will hire you Google will hire you because that's where they go to recruit so but getting in is really hard and the prep to get in in India now costs like 56,000 I'm dealing with families with are on 1 or 2 dollars a day for the whole family to live on you know so you got a family making $300 a year or $600 a year how are they going to spend $5,000 on prep for a test where 1.3% are successful so you're not going to spend 5,000 on 1.3% short even if you had the money you know you you need to have $100,000 to put the 5,000 at Stak so the only people who are able to afford and
Otheronly people who are able to afford and without professional prep for these schools I mean the iits have two million kids applying for 13,000 seats okay it's a 1.3% admit rate it's really hard so what we what we were able to do is we created an engine to find Ro Talent amongst really poor kids in rural India wherever and then we reset everything we brought them into a campus we you know room board faculty everything you know we have seven campuses in India one of them the largest One is9 Acres and we basically give them it's a better facility than any of the for-profit prep places because you know we just we didn't build it to make money we buildt it to give the best thing and and it worked so you know and we were able to take these kids who would have many of them wouldn't have gone to college whatever else and now there a lot of
Otherwhatever else and now there a lot of them many of them in the US they're working at all these multinationals whatever else and and we get a report card every year and my team cannot manipulate the report card because it's the IIT entrance results no one can manipulate that basically it is what it is it's what the test result is and it's independent third party test result so I said okay we got measurements and now we've been doing this for like 16 years or so so every year when we get the results we look at the results we look at what what can we change and we tweak the model we we make kind of fine tune okay if we you know spend more time on thermodynamics we will get this result and if we spend less time on organic chemistry you know we kind of tweak things around whatever else to optimize things and and we just keep keep doing that and it worked so and I think Warren
Questionerthat and it worked so and I think Warren Warren appreciates all of this because it's it's and it worked out way better than I thought this was all like a you know academic pipe dream I expected to fail on this you know I have no expertise in any of this when we started I still don't have expertise and I just ended up with a great team in India which made this happen so it worked and it kind of worked in spite of all the odds and and now we have so many of our alums who work for us So eventually dakna will be completely run by our own alums you know they'll be run by them managed by them they'll do everything and it's great it's worked out great so but the but the game is still you know one engine creating the wealth one engine giving it away and I still have to figure out because the wealth if the wealth building engine compounds and you know 2054 is 31 years
Questionercompounds and you know 2054 is 31 years away and if I can compound at a good healthy rate that's a good amount of money you know you know even if it even if I compile found it for example at let's say 10% a year you know I mean Rule of 72 every 7 years it would double that'd be like four or five doubles okay so five doubles is 15x okay you know 2 4 8 16 32 32x it's 32x so whatever I have would be 32 times in that period and I'd have to give away the whole 32 times and so we have to keep figuring out ways to give away the money but we need to do it in an optimal way so you know I play bridge I play Blackjack I play investing and I play philanthropy these are the four games I play that's it little bit of tennis little bit of pickle ball a little bit of golf and that's it the last three I'm trying to pick up myself I'll Circle very soon uh to what you said
QuestionerCircle very soon uh to what you said about 204 but before we get there I just wanted to say so I met you in person for the first time it was in May 2022 at the Burkshire annual meeting in Omaha I visited your office in Austin in August 2022 um and met some members on your staff and then this summer on a train ride to JFK you addressed this in the beginning you and I randomly totally random sat next to each other on the train and as you could tell I was very surprised Ur rised uh to see you there and in your classic way you said to me in only the way you could the universe conspires to help us so what did you mean by this and do you actually believe this and in what sense is there a higher power and what can we do as humans to maybe get in sync with the universe or that higher power and help it conspire to help us even more
Otherto help us even more yeah I mean I I think that you know many of the things I noticed in my life they turn out magically and they shouldn't really turn out magically they should be really hard I mean d is a good example I mean India is a very difficult place to do things and we should have failed in fact I expected to fail and it worked and I think it worked because there was a purity of purpose so the team that came they they are more passionate about it than I am because it's such a pure purpose and I think when you have this purity of purpose the universe does conspire to help you it just is it's it's hard to explain but I think that the important thing in life is be a good person focus on some core principles which are good principles some good mental models and then after that you know I think what happens is that just
Questionerknow I think what happens is that just naturally great things happen you knownaturally great things happen you knownaturally great things happen you know there's a book written by Adam Grantthere's a book written by Adam Grantthere's a book written by Adam Grant give and take you know he he says thatgive and take you know he he says thatgive and take you know he he says that three kinds of people in the world thethree kinds of people in the world thethree kinds of people in the world the givers the takers and the matchers sogivers the takers and the matchers sogivers the takers and the matchers so the matchers are people like you know ohthe matchers are people like you know ohthe matchers are people like you know oh someone did me a favor I'm going to do asomeone did me a favor I'm going to do asomeone did me a favor I'm going to do a similar favor for them you know theysimilar favor for them you know theysimilar favor for them you know they kind of match things in life thekind of match things in life thekind of match things in life the takers who you want to have nothing totakers who you want to have nothing totakers who you want to have nothing to do with are extractors you know the usedo with are extractors you know the usedo with are extractors you know the use car salesman all of that so you don'tcar salesman all of that so you don'tcar salesman all of that so you don't want to takers in your life and then thewant to takers in your life and then thewant to takers in your life and then the givers the givers are the ones whogivers the givers are the ones whogivers the givers are the ones who basically are doing things for youbasically are doing things for youbasically are doing things for you without any expectation of anythingwithout any expectation of anythingwithout any expectation of anything coming back to them and what Adam Grantcoming back to them and what Adam Grantcoming back to them and what Adam Grant pointed out in his book is that thepointed out in his book is that thepointed out in his book is that the givers are trying to give things butgivers are trying to give things butgivers are trying to give things but what ends up happening is they get 10xwhat ends up happening is they get 10xwhat ends up happening is they get 10x more then it's like the like the buffetmore then it's like the like the buffetmore then it's like the like the buffet lunch right the buffet lunch there was
Questionerlunch right the buffet lunch there was no agenda it was just thank you B you've been so good right so much came back from it that I never wanted thought expected none of that right and so and this happens repeatedly so what you want to do in life is you want to be a giver you want to make sure that there are no matchers or takers in your life eliminate them now this is really hard for most humans so you have some friend who is a matcher decent person whatever they need to be wiped out and that's hard for humans but that's the path you need to be on so you need to have only givers around you you know and so when you do that when there's only givers around you it just becomes a different kind of life you know very different kind of life you know when I was I I used to play bridge with Charlie Munger when he was going to his Club every Friday probably two three
Questionerhis Club every Friday probably two three times a month and I got to know Charlie's friends you know I played Bridge with them and I got to know them and it struck me that these were some of the highest quality people I had ever met in my life I mean Charlie had collected a set of people that were unbelievably high quality so I said you know what I'm never going to be able to find people like this on my own so you know what I'm going to do I'm going to go One Step Beyond cloning I'm just going to make these guys my friends that's what I did I worked on making them my friends because I knew I could not find better people than okay all of them are givers okay and and so we have to be harsh graders with who we spend time with we become who we spend time with and so we have to focus on spending time with people who are the highest quality people that we can find
Otherhighest quality people that we can find who will have us as their friends and after that it becomes so magical well summarized and so last one terms of this portion for me but you know Warren Buffett recently turned 93 years old and his partner Charlie Munger will turn 100 years old on January 1 I believe you've said that you have until I think 2054 uh left I hope that you clone uh the age aspect of both Warren and Charlie and uh you live much longer than that but in any case what's next for you how do you even approach maximizing the time that you have left in other words what's your framework for discovering what matters most to you and then in a world full of noise really focusing on those things and doing them exceptionally well
Questionerno I mean actually I don't I don't try to approach it that way I told you I I approach it from the point of view of a
Charlieapproach it from the point of view of a game player and I want to have fun at all the games I play so investing has to be fun DNA has to be fun Bridge has to be fun and if if we doing things that are fun we will do them well we'll enjoy them we'll do them well so I don't really have any big plan I have no idea where the next investment idea will come from it's a very opportunistic uh thing I don't know where D will be in five years I have no idea you many things so there's really no kind of blueprint or plan it's just that there's a high level idea that we want to you know end up at zero and and you know so that's kind of the there's a guy I think I'm forgetting the name the there a book called the billionaire who wasn't his name will come to me but anyway he succeeded in doing that you know he he created a bunch of businesses made billions and
Otherbunch of businesses made billions and actually now he just has a rented condo in San Francisco and a very basic you know lives on5 $6,000 a month and everything's gone you know he's like in his 80s or whatever and so he was very successful at doing that and so that's that's the model but I don't really have much more than that kind of laid out all right all right so that's sort of it on my portion I did want to maybe open it up to the audience and see if we can get a few uh questions in from the audience so if anyone does have a question again you can go ahead and raise your hand uh please state your name what school or what your occupation is and come off mute and we'd love to hear from you I think the first one is Tracy Dixon we go ahead and take hi my name is Tracy I'm at the Harford Graduate School of Education and the online education leadership program it
Questioneronline education leadership program it is a pleasure to hear you speak I had a question about I'm a music teacher I teach violin and I'm making a shift I don't know what I'm doing I'm 49 years old so bit mixed up but my question is about like strategy with stocks I I come from humble beginnings and I've been investing since like the early 90s but like I didn't know what I was doing and now I have some money and I keep as as I try to keep buying bits of the Burkshire b-class stocks because that's what I can afford and in my mind my strategy is to continue chip chip chipping until I can keep until I can get to that next spot so I just wanted to know is that a strategy or I I'm constantly learning
Warrenactually ccie that's a very good strategy I think the burshire bees are great the only possible change I would make is I would maybe do 50%
Questionerwould make is I would maybe do 50% Burkshire B and 50% S&P 500 and I wouldBurkshire B and 50% S&P 500 and I wouldBurkshire B and 50% S&P 500 and I would not like sell your burshire bees to gonot like sell your burshire bees to gonot like sell your burshire bees to go into the S&P what I would do is if youinto the S&P what I would do is if youinto the S&P what I would do is if you have a certain allocation to bua bees inhave a certain allocation to bua bees inhave a certain allocation to bua bees in the future I would move the futurethe future I would move the futurethe future I would move the future savings as you as they come in into thesavings as you as they come in into thesavings as you as they come in into the S&P so that way you would end up withS&P so that way you would end up withS&P so that way you would end up with two vehicles you know and and I thinktwo vehicles you know and and I thinktwo vehicles you know and and I think that it's hard for me tothat it's hard for me tothat it's hard for me to predict which of the two does betterpredict which of the two does betterpredict which of the two does better even I think Warren and Charlie may haveeven I think Warren and Charlie may haveeven I think Warren and Charlie may have a difficult time figuring that out buta difficult time figuring that out buta difficult time figuring that out but it it just gives you a little bit moreit it just gives you a little bit moreit it just gives you a little bit more diversification that and even thoughdiversification that and even thoughdiversification that and even though Burkshire itself is quite DiversifiedBurkshire itself is quite DiversifiedBurkshire itself is quite Diversified but I think the burshire B is a good waybut I think the burshire B is a good waybut I think the burshire B is a good way to go and maybe just add the S&P on topto go and maybe just add the S&P on topto go and maybe just add the S&P on top of it and you're done and you can get aof it and you're done and you can get aof it and you're done and you can get a lowcost ETF very low frictional cost onlowcost ETF very low frictional cost onlowcost ETF very low frictional cost on the S&P 500 at Vanguard or one of thosethe S&P 500 at Vanguard or one of thosethe S&P 500 at Vanguard or one of those places so the the cost is low and and soplaces so the the cost is low and and soplaces so the the cost is low and and so that can work well thank you very very
Otherthat can work well thank you very very very much I think in the interest of time we'll take these three more that are up there so Johnson I see you next if you want to come off mute
Questioneruh hi Mish uh my name is Johnson uh I'm a senior researcher uh here at Harvard uh I'm a big fan of yours I've been following you for a long time and I've read both your books um uh which I think are both great uh for aspiring investors uh my question is why did Buffett I I I never I never quite I never quite understood this why did Buffett close his partnership he had this great engine he was generating great returns you know you cloned it 30 years later why did he shut it down why didn't he continue with it
Warrenyeah so I think the the reason he shut it down he made the decision to shut it down in late 69 he actually ended it in SE 1970 was because the markets were
Questioner1970 was because the markets were extremely overheated at that time and he was having a very hard time finding literally any investment you know we had the nifty50 at the time there was Major bull market going and he was just having difficulty and he you know Warren at that time personally was worth about 25 or 30 million dollar around then which in today's money would be more than 200 million and you know he basically I think when when when he hit that point he was just around 40 years old 39 years old and he wasn't sure kind of what to do next he knew that that if he just managed the money on his own he would do okay with that and he didn't want to keep at that point his thinking was that he didn't want to keep chasing an investment rabbit for this whole life some of his friends thought that he would like run for president or
Questionerwould like run for president or something which you know he even says now that's just not him and actually what happened in 1977 so it was a very easy decision for him to say look we've had a great run we've made all this money for all these people I'm not sure I want to keep doing this I've got plenty of money on my own so I'm going to basically disband the partnership he already had a stake in Burkshire haway and he rolled his portion of the fund into Berkshire haway and he didn't really there was no really any grand plan it owned a few uh private companies and such but he basically just said okay those look undervalued I just keep it there in 19 1977 when he turned 47 years old he actually felt that his life was over basically his his wife Susie had left him she moved to San Francisco she wanted to end the marriage but decided in the end they decided they
Questionerbut decided in the end they decided they would stay married but they would just be separated and and he felt that he had accomplished everything he set out to accomplish an investing and he really felt like everything was done everything was over and he was talking about this recently he said that really most of the interesting things in his life happened after 77 after he was 47 and he never even thought that that would happen you know so most of the interesting investments in Burkshire and all the different things that happened in his life and so on really came after that so the the Partnerships being shut down was simply a function and actually what ended up happening is like Charlie Munger for example continued running his partnership and he got clobbered the 7374 downturn was very intense I mean the stock market went down you know 60
Questionerthe stock market went down you know 60 70% over that two-year period it was a70% over that two-year period it was a70% over that two-year period it was a crash and slow motion and Charlie endedcrash and slow motion and Charlie endedcrash and slow motion and Charlie ended his partnership in 74 after that hugehis partnership in 74 after that hugehis partnership in 74 after that huge downdraft and amazingly Warren Buffettdowndraft and amazingly Warren Buffettdowndraft and amazingly Warren Buffett being Warren Buffett he was on thebeing Warren Buffett he was on thebeing Warren Buffett he was on the sidelines with all this cash and thesidelines with all this cash and thesidelines with all this cash and the markets had crashed and inmarkets had crashed and inmarkets had crashed and in 1975 you know he made a quote in he said1975 you know he made a quote in he said1975 you know he made a quote in he said a he had a quote in 19 you know 1969 hea he had a quote in 19 you know 1969 hea he had a quote in 19 you know 1969 he said I feel like a sex starve man on asaid I feel like a sex starve man on asaid I feel like a sex starve man on a deserted island okay meaning he coulddeserted island okay meaning he coulddeserted island okay meaning he could just find nothing to do right and injust find nothing to do right and injust find nothing to do right and in 1975 he makes a quote he said I feel1975 he makes a quote he said I feel1975 he makes a quote he said I feel like a sexstar man in a harm Okay solike a sexstar man in a harm Okay solike a sexstar man in a harm Okay so there was such a massive changethere was such a massive changethere was such a massive change everything had collapsedeverything had collapsedeverything had collapsed 75 I mean the Dow bottomed in 81 you75 I mean the Dow bottomed in 81 you75 I mean the Dow bottomed in 81 you know I mean the 75 to 81 period andknow I mean the 75 to 81 period andknow I mean the 75 to 81 period and through the 80s uh was an incrediblethrough the 80s uh was an incrediblethrough the 80s uh was an incredible period to be investing in so basicallyperiod to be investing in so basicallyperiod to be investing in so basically he was able to come back and with allhe was able to come back and with allhe was able to come back and with all that dry powder on the side really kindthat dry powder on the side really kindthat dry powder on the side really kind of killed it after that okay Harvey I
Otherof killed it after that okay Harvey I
Questionerthink you're next hi monish thank you so much I'm Harvey I'm a partner of an HB student and uh thank you for so much for your talk I wanted to go back to the issue of diversification I was listening to a conversation that you had with d spear earlier today where you were talking about throughout the life of an investment manager people tend to get more concentration in their portfolio as the winners become really big Winners I'm wondering if that philosophy of not constantly trimming the huge winners in your portfolio is limited in any sense is it it relevant mostly for investment managers is it relevant mostly for people who are starting out and throughout the course of their life trying to build wealth through investing is there a point at which is there a point at which greater diversification
Questionerpoint at which greater diversification makes sense and and the the one thing makes sense and and the the one thing makes sense and and the the one thing that really stuck with me was you that really stuck with me was you that really stuck with me was you mentioned that the Walton family still mentioned that the Walton family still mentioned that the Walton family still has most of their net worth in in has most of their net worth in in has most of their net worth in in Walmart's stock does that you know still Walmart's stock does that you know still Walmart's stock does that you know still make sense if if one is a is a new make sense if if one is a is a new make sense if if one is a is a new Walton coming in not to diversify away Walton coming in not to diversify away Walton coming in not to diversify away from that so thank you very much
Warrenyeah I think that's a that's a great question yeah I think that's a that's a great question yeah I think that's a that's a great question you know the the Davis family so Chris you know the the Davis family so Chris you know the the Davis family so Chris Davis is on the board of bsha haway he Davis is on the board of bsha haway he Davis is on the board of bsha haway he replaced Bill Gates and he's the third replaced Bill Gates and he's the third replaced Bill Gates and he's the third generation so the grandfather Davis was generation so the grandfather Davis was generation so the grandfather Davis was an insurance actuary and then he an insurance actuary and then he an insurance actuary and then he basically started investing in insurance basically started investing in insurance basically started investing in insurance companies in companies in companies in 1930s and he bought a gazillion 1930s and he bought a gazillion 1930s and he bought a gazillion insurance companies and basically insurance companies and basically insurance companies and basically insurance is a difficult business even insurance is a difficult business even insurance is a difficult business even though he knew it well they were mostly though he knew it well they were mostly though he knew it well they were mostly mod mediocre to useless Investments 2% mod mediocre to useless Investments 2% mod mediocre to useless Investments 2% of his portfolio went into AIG when AIG of his portfolio went into AIG when AIG of his portfolio went into AIG when AIG was really really tiny insurance company
Questionerwas really really tiny insurance companywas really really tiny insurance company ininin Shanghai and one of the things thatShanghai and one of the things thatShanghai and one of the things that grandfather Davis did is good bad orgrandfather Davis did is good bad orgrandfather Davis did is good bad or ugly he never sold anything just keptugly he never sold anything just keptugly he never sold anything just kept the entire basket and that 98% of thethe entire basket and that 98% of thethe entire basket and that 98% of the basket did nothing it was all uselessbasket did nothing it was all uselessbasket did nothing it was all useless but the 2% becamebut the 2% becamebut the 2% became 95% of the pie and AIG became you know95% of the pie and AIG became you know95% of the pie and AIG became you know huge you know nor of 100 billion markethuge you know nor of 100 billion markethuge you know nor of 100 billion market cap whatever and the Davis Family becamecap whatever and the Davis Family becamecap whatever and the Davis Family became incredibly wealthy so like Monger saysincredibly wealthy so like Monger saysincredibly wealthy so like Monger says you only need to get rich once and and Iyou only need to get rich once and and Iyou only need to get rich once and and I think that if we are at athink that if we are at athink that if we are at a point where we don't have you know we'repoint where we don't have you know we'repoint where we don't have you know we're not independently wealthy we haven'tnot independently wealthy we haven'tnot independently wealthy we haven't made a lot of money I think the approachmade a lot of money I think the approachmade a lot of money I think the approach of keeping the winners and concentratingof keeping the winners and concentratingof keeping the winners and concentrating especially when you know the businessespecially when you know the businessespecially when you know the business and understand the business well is theand understand the business well is theand understand the business well is the way to go so and I already mentionedway to go so and I already mentionedway to go so and I already mentioned like you know the Chinese restaurant thelike you know the Chinese restaurant thelike you know the Chinese restaurant the patels they're anyway sitting with 90patels they're anyway sitting with 90patels they're anyway sitting with 90 95% of net worth in one illiquid company
Questioner95% of net worth in one illiquid company right and they're comfortable with it right and they're comfortable with it right and they're comfortable with it they're not breaking out hives over that they're not breaking out hives over that they're not breaking out hives over that so I would be a proponent of that so I would be a proponent of that so I would be a proponent of that now if someone if the Walton family now if someone if the Walton family now if someone if the Walton family decided that you know we've built all decided that you know we've built all decided that you know we've built all this this this wealth and what if I take half of it and wealth and what if I take half of it and wealth and what if I take half of it and put it into the S&P 500 or something for put it into the S&P 500 or something for put it into the S&P 500 or something for example it's not the worst decision in example it's not the worst decision in example it's not the worst decision in the world you know pretty okay you know the world you know pretty okay you know the world you know pretty okay you know that's that's a that's a good wealth that's that's a that's a good wealth that's that's a that's a good wealth preservation view in the end capitalism preservation view in the end capitalism preservation view in the end capitalism is very brutal and in the end everything is very brutal and in the end everything is very brutal and in the end everything goes to zero I mean there are no goes to zero I mean there are no goes to zero I mean there are no businesses that survive forever I think businesses that survive forever I think businesses that survive forever I think the oldest business on the planet is a the oldest business on the planet is a the oldest business on the planet is a 700 year old hotel in Kyoto in Japan and 700 year old hotel in Kyoto in Japan and 700 year old hotel in Kyoto in Japan and then you know you start looking in there then you know you start looking in there then you know you start looking in there very few businesses that have been very few businesses that have been very few businesses that have been around for 3 or 400 years and even been around for 3 or 400 years and even been around for 3 or 400 years and even been around for 150 2 200 years so durability around for 150 2 200 years so durability around for 150 2 200 years so durability becomes a real issue becomes a real issue
Ted Weschlerbecomes a real issue so I I am of the opinion that you know Iso I I am of the opinion that you know Iso I I am of the opinion that you know I would like to keep concentrated on goodwould like to keep concentrated on goodwould like to keep concentrated on good businesses uh the the big mistake I'vebusinesses uh the the big mistake I'vebusinesses uh the the big mistake I've made in most of my career is I've soldmade in most of my career is I've soldmade in most of my career is I've sold too soon repeatedly sold greattoo soon repeatedly sold greattoo soon repeatedly sold great businesses too soon and and so like forbusinesses too soon and and so like forbusinesses too soon and and so like for example you know this coke bottleryexample you know this coke bottleryexample you know this coke bottlery owned in Turkey which actually does cokeowned in Turkey which actually does cokeowned in Turkey which actually does coke bottling in about a dozen countries andbottling in about a dozen countries andbottling in about a dozen countries and they also have the number one beer brandthey also have the number one beer brandthey also have the number one beer brand in another dozen countries I hope I'min another dozen countries I hope I'min another dozen countries I hope I'm smart enough to hold that for a verysmart enough to hold that for a verysmart enough to hold that for a very long time you know the airport operatorlong time you know the airport operatorlong time you know the airport operator I hope I hold that for a very long timeI hope I hold that for a very long timeI hope I hold that for a very long time and you know it's going to become aand you know it's going to become aand you know it's going to become a large portion of the netw worth the thelarge portion of the netw worth the thelarge portion of the netw worth the the warehouse business already is more thanwarehouse business already is more thanwarehouse business already is more than 60% of one of the funds I manage you60% of one of the funds I manage you60% of one of the funds I manage you know and and I keep telling my investorsknow and and I keep telling my investorsknow and and I keep telling my investors every quarter that this is the way it isevery quarter that this is the way it isevery quarter that this is the way it is you know you have discomfort then youyou know you have discomfort then youyou know you have discomfort then you should do something and so yeah I I I do
Questionershould do something and so yeah I I I do think that concentration is the only way to really build wealth and one would not fault you after you became independently wealthy if you took some chips off the table but I would be more in the camp if it's a great business to keep it there Mr Cash yes thank you Mish and thank you for being so generous with your time I'm a first year here at Harvard Business School and my question is about questions actually because I find that questions tend to direct your attention so I'm curious if you have any perspective or or rather like this who in your life asks the best questions and if you could share like what have some of those questions been that have been able to sort of direct your attention and and kind of shift the way that you think about things
Warrenwell I mean I I think the the person who asked the best questions is
Questionerperson who asked the best questions is person who asked the best questions is Charlie Charlie Charlie Munger I think like for example one of Munger I think like for example one of Munger I think like for example one of the things he says is you know in the the things he says is you know in the the things he says is you know in the principle of principle of principle of inversion you know he also says that inversion you know he also says that inversion you know he also says that you really have you really have you really have no business having an no business having an no business having an opinion if you cannot State the other opinion if you cannot State the other opinion if you cannot State the other side of that argument just as side of that argument just as side of that argument just as eloquently eloquently eloquently so if you so if you so if you were a big fan of trump for were a big fan of trump for were a big fan of trump for example can you also say why he's so example can you also say why he's so example can you also say why he's so useless or if you think he's useless can useless or if you think he's useless can useless or if you think he's useless can you also say why he's so good and those you also say why he's so good and those you also say why he's so good and those are hard things for humans it's hard are hard things for humans it's hard are hard things for humans it's hard things for humans to keep two ideas things for humans to keep two ideas things for humans to keep two ideas conflicting ideas in their head at the conflicting ideas in their head at the conflicting ideas in their head at the same time so I mean I think that you same time so I mean I think that you same time so I mean I think that you know rationality you know like people know rationality you know like people know rationality you know like people ask Charlie you know what's the one ask Charlie you know what's the one ask Charlie you know what's the one reason you've done well he said I'm reason you've done well he said I'm reason you've done well he said I'm rational so I always find that Charlie rational so I always find that Charlie rational so I always find that Charlie asks the best asks the best asks the best questions he has these great mental questions he has these great mental questions he has these great mental models he's able to run through I I I models he's able to run through I I I models he's able to run through I I I remember I would have these
Questionerremember I would have these conversations with Charlie about kind of fork in the road issues that be facing with dakshana for example he's never been to India he doesn't really have you know the Frameworks and all that but before I've even articulated the question he's given the answer and it's a perfect answer and so just that the way that his brain works so I think I think Munga runs through so many scenarios like that so well in his head and with these you know these principles of inversion and different mental models he's using there's a there's an essay so there's a book poor Charlie Almanac which is a great book I think to read he gave a talk at Harvard many years ago the psychology of human misjudgment and that's a incredible talk I try to reread that every year but if you really understand those weird nuances on of humans it would give you a
Questionernuances on of humans it would give you anuances on of humans it would give you a big Edge you know to understand kind ofbig Edge you know to understand kind ofbig Edge you know to understand kind of the quirks in the way our wiring isthe quirks in the way our wiring isthe quirks in the way our wiring is because I our brains are such a mishmashbecause I our brains are such a mishmashbecause I our brains are such a mishmash of ancient and modern and differentof ancient and modern and differentof ancient and modern and different weird wiring coming from Evolution thatweird wiring coming from Evolution thatweird wiring coming from Evolution that it's not really wired optimally to wayit's not really wired optimally to wayit's not really wired optimally to way we would want it to be and sowe would want it to be and sowe would want it to be and so understanding those quirks can give youunderstanding those quirks can give youunderstanding those quirks can give you a big leg up but yeah I always find thata big leg up but yeah I always find thata big leg up but yeah I always find that Charlie has the best questions Onish doCharlie has the best questions Onish doCharlie has the best questions Onish do you have time for one more it looks likeyou have time for one more it looks likeyou have time for one more it looks like we have one more on the board yeah whywe have one more on the board yeah whywe have one more on the board yeah why not let's go let's go Tim hi I just wantnot let's go let's go Tim hi I just wantnot let's go let's go Tim hi I just want to say thank you so want being J withto say thank you so want being J withto say thank you so want being J with their time my name is Tim Kusa I'm thetheir time my name is Tim Kusa I'm thetheir time my name is Tim Kusa I'm the first here at HBS appreciate appreciatefirst here at HBS appreciate appreciatefirst here at HBS appreciate appreciate the not to Vanguard for the call Ithe not to Vanguard for the call Ithe not to Vanguard for the call I actually spent five years at Vanguardactually spent five years at Vanguardactually spent five years at Vanguard was most recently on our man onwas most recently on our man onwas most recently on our man on vanguard's manager due diligence team myvanguard's manager due diligence team myvanguard's manager due diligence team my question has evolved over over thequestion has evolved over over the
Questionerquestion has evolved over over the course of the call and so I given yourcourse of the call and so I given yourcourse of the call and so I given your most previous response on Charlie andmost previous response on Charlie andmost previous response on Charlie and you shared over the call Charles theyou shared over the call Charles theyou shared over the call Charles the audio on that was really bad I couldn'taudio on that was really bad I couldn'taudio on that was really bad I couldn't get the question did you get theget the question did you get theget the question did you get the question um I caught some of it so I Iquestion um I caught some of it so I Iquestion um I caught some of it so I I think and Tim feel free to hop in andthink and Tim feel free to hop in andthink and Tim feel free to hop in and correct but I think he's asking aboutcorrect but I think he's asking aboutcorrect but I think he's asking about you know how do we play this potentiallyyou know how do we play this potentiallyyou know how do we play this potentially this role of number two so you havethis role of number two so you havethis role of number two so you have Warren Buffett who leads Burkshire he'sWarren Buffett who leads Burkshire he'sWarren Buffett who leads Burkshire he's the chairman I think Charlie merer isthe chairman I think Charlie merer isthe chairman I think Charlie merer is the vice chairman but has done thisthe vice chairman but has done thisthe vice chairman but has done this incredible job of playing number two atincredible job of playing number two atincredible job of playing number two at the firm and so how does one you knowthe firm and so how does one you knowthe firm and so how does one you know play that role do it you know in a wayplay that role do it you know in a wayplay that role do it you know in a way that's exceptional I think that yeah Ithat's exceptional I think that yeah Ithat's exceptional I think that yeah I mean I think these two guys are verymean I think these two guys are verymean I think these two guys are very unusual I I find Charlesunusual I I find Charlesunusual I I find Charles is a very strong type A personality andis a very strong type A personality andis a very strong type A personality and I actually asked him I said Charlie youI actually asked him I said Charlie youI actually asked him I said Charlie you have different businesses with different
Questionerhave different businesses with different partners and with all the other partners you have you are the dominant alpha male in that relationship and Burkshire is the only one where you are very clearly the number two so I said I cannot imagine you ever making a decision to be number two to anyone right so how did that at Burkshire how do you he said he said why wouldn't I want to be number two to Warren Buffett what kind of no-brainer is that you know so he said of course I want to be number two but Warren Warren has a quote he say Burkshire has been created with the architectural model created by Charlie Munger my role has that been that of a general contractor so what Buffett is saying is that Munger basically came up with what Burkshire should be and they actually didn't have a they didn't even have the framework it evolved over time but it
Questionerframework it evolved over time but it was really Charlie who was kind of leading the charge even today you know Charlie's big proponent of paying up for the better businesses and Warren got there eventually but few years back Warren war made this joke at the annual meeting they came back right from lunch and Warren says you know Charlie and I were on this airplane and it got hijacked and you know I see Charlie is very puzzled he's looking at Warren like he's really confused and then he says you know the hijackers knew that we were loaded and they said you know we're going to make some demands of some Ransom to your families and then when they pay that money you guys can go right so they made this demand for several million dollar and Warren said that families told them listen these two guys are really useless they really don't do anything all day
Questionerthey really don't do anything all day they just sit around so we don't have any use for them and we're definitely not sending any money so you can do whatever you want okay so the hijackers at this point are quite upset they're saying not only are we not going to get paid we're going to lose two bullets in getting rid of you guys so before we put an end to B of of your lives do you have a last wish and Charlie raises his hand and says I'd like to talk one more time about the virtues of investing in Costco and Warren says shoot me first okay so you know Costco which is you know Charlie was the manager forever he tried so hard to get worn to pay up and take a stake in Costco and Warren just could never get there right and now Warren regrets it you know it's been a great investment and Charlie was on the board of Costco telling him this is unbelievably great
Othertelling him this is unbelievably great business and so yeah so the second you know the second in command is a very unusual role but it's the power of Charlie's mind that he even was able to accept that being the alpha male that he is and it's worked out beautifully and it's amazing that he doesn't you know Warren and Charlie say that they've disagreed many times but they've never had an argument uh which is remarkable and Charlie's very opinionated so even in a situation like Costco where Warren is you know clearly he knows clear Warren is wrong he just accepts that he's the boss and I'm the I'm the helper and of course Warren understands that Charlie is really the architect and he's tried to get get there but he's still not all the way there so it's it's a great partnership all right and Robie take us home thank you so much for spending so
Questionerhome thank you so much for spending so much time with us today my question is regarding private Market investing so I'm a new student for Benjamin Graham reading up of reading up about buying small pieces at negotiated price and big public Enterprise and this summer I was very close home to you in Houston investing in Energy Services market and I saw a lot of oil field services businesses private at ones selling at steep discount because everybody thinks they they are too toxic to touch and the hypothesis that I developed over the summer was why not use a lot of Leverage not that this is a good time to buy get debt but in in decent markets use leverage to buy all these private companies which are basically $100 lying down on the ground and do you think that's a viable plan or this strategy is better fit in only in public markets when you buy non-negotiated small parts
Questionerwhen you buy non-negotiated small parts of public companies well if you are picking up assets for pennies on the dollar you shouldn't need to lever it right so I mean if something is one of liquidation value or you know intrinsic value then leverage isn't needed to get a great return I think in general it it is it is a good idea to avoid uh leverage in your life you know I know private Equity doesn't work that way but also I feel that maybe when you're starting out if you were able to structure it in a kind of non-recourse way where if things went South you know your loss is limited and and such then it can work but I would just say that if the if the business is that good and in fact it may be it may actually Cloud your judgment to think of it in a kind of levered return point of view it may be better to think of it in a un unlevered return point of
Questionerof it in a un unlevered return point of view there's a really good book that came out this year it's called what I learned from Darwin about investing written by a guy named Pak Pak Prasad in Singapore a really well-written book and one of the things Pak does in his invest Investments he's done really well in his Investments is none of his portfolio companies have any leverage zero you know so the fund doesn't have any leverage but you know he doesn't invest in businesses that use leverage and his logic is that a a leverage business basically doesn't have optionality and freedom in a downturn they start of have to play defense and what you really want to do in a downturn is play offense and so the businesses that have no debt you know when the bad times come they're not feeling any pressure you know they're they're in good shape and
Questionerknow they're they're in good shape and so in general it's a good idea I thinkso in general it's a good idea I thinkso in general it's a good idea I think that's a really good investing model tothat's a really good investing model tothat's a really good investing model to to follow that and if you if you have ato follow that and if you if you have ato follow that and if you if you have a great business it really should not needgreat business it really should not needgreat business it really should not need leverage to generate great returns soleverage to generate great returns soleverage to generate great returns so that's kind of my two cents onthat's kind of my two cents onthat's kind of my two cents on Leverage thank you so much allLeverage thank you so much allLeverage thank you so much all right all right thank you thank youright all right thank you thank youright all right thank you thank you monish and thanks all for the greatmonish and thanks all for the greatmonish and thanks all for the great questions
Questionerso now to wrap I've you knowso now to wrap I've you knowso now to wrap I've you know really enjoyed organizing this event andreally enjoyed organizing this event andreally enjoyed organizing this event and I love how it came together monish I'dI love how it came together monish I'dI love how it came together monish I'd like to do more events like this and solike to do more events like this and solike to do more events like this and so as we close I have two final questionsas we close I have two final questionsas we close I have two final questions one is who should our next guest be andone is who should our next guest be andone is who should our next guest be and the other is what's one question you'dthe other is what's one question you'dthe other is what's one question you'd want to ask thatwant to ask thatwant to ask that person well I mean I think the the twoperson well I mean I think the the twoperson well I mean I think the the two folks that I think you should try to getfolks that I think you should try to getfolks that I think you should try to get are the two lieutenants working forare the two lieutenants working forare the two lieutenants working for Warren you know Ted wler and ToddWarren you know Ted wler and ToddWarren you know Ted wler and Todd kums and to the extent that they'rekums and to the extent that they'rekums and to the extent that they're willing to share you should ask them how
Questionerwilling to share you should ask them how the sausage is made you know you should basically go behind the scenes you know like for example I think Todd goes over to Buffett's house on many Saturdays and they discuss different companies and Investments and so on and Ted lives in Charlottesville Virginia but he you know private jets on his own dime to Omaha every Monday comes back every Thursday or something and you know spends time with Warr on different things and so I would just say with these two you know fly on the wall what can we learn right and the good news is you know just like you you miss all the shots you don't take there's no downside to asking them right right I think that's a a great next setup so we'll see how it goes but thank you monish thank you so much and on behalf of everyone attending today I'd like to present
Questionerattending today I'd like to present these gifts just a small token of appreciation so there's a water bottle here Harvard Business although I know how you I know how you truly failed that Harvard Business School now but well actually you may not know this but I'm an Alum of HBS so I didn't go through the MBA program but I went through 11 I spent 11 weeks on campus over 11 years and I think after nine years doing the Harvard YPO president seminar they gave me alarm status so so I have something like you know the the same status as the HBS HBS grad so yeah looks like you did it more efficiently though so and then this I don't think you're a big hat person but gonna send this that's great a little HPS hat so we'll send that over so yeah thank you again mon for your time being so generous with it and it's been a pleasure to spend Friday afternoon with you and thank you to everyone in the audience for your participation I hope this was a meaningful and valuable experience for you so thank you