Other[Music][Music][Music][Music] this evening uh we will have a chance to speak to Mish PAB uh known initially perhaps for his launch with Warren Prof alongside gu spear in 2007 for the first few years of his investing career Mish generated returns of over 70% compounded annual growth rate was born and brought up in India uh studied Computer Engineering at Clemson University in mid 1980s and following his education he worked for a few few years uh for a company called TBS uh before launching his own it Enterprises so over the years Mish has written a couple of investment books uh perhaps the most popular one is the thunder investor which is uh which a lot of people know of uh within especially within the valley investing Community uh but his earlier book and perhaps for me the more interesting book is called Mosaic uh perspectives on investing apart from investing uh
Otherinvesting apart from investing uh perhaps the most important thing Mish might be working on uh is his foundation
OtherDua on a more light-hearted note uh Mish has received a lifetime ban uh from a casino in Las Vegas uh for playing Blackjack and winning uh without counting cards for the call today itself uh will be uh with the opening remarks I'll hand over to Mish to say a few words but after that we'll kick off into a Q&A so there's a lot we stand to learn it is absolute honor for me um it is over a decade of research into this world monish over to you and thank you so very much for giving us this time
Otherwell kishan it's a pleasure to be here and thanks for having me it's great to be here and I'm more Curious to hear about what you guys have on your mind so I'll just keep the Preamble short last year Buffett in his in his letter had highlighted that in a 58-year
Questionerletter had highlighted that in a 58-year you know run at Burkshire there were about a dozen Investments that had really moved the needle made a impact on and actually led to what we recognize as Burkshire today and so Buffett said it was approximately one good investment every 5 years on average you know both Buffett and Munger very hardworking Warren is still very hardworking Charlie was still placing buy orders on a stock 6 days before he passed away and I think even the day off or the day before he passed away he was trying to close some Grant to some institution so he was you know working till the end but when you look at these two brilliant off the charts Minds you know one plus one becoming 11 when they work together and when you consider that with them turning over as many rocks as they did and working as hard as they did it seems
Questionerand working as hard as they did it seems strange that they could only find a good idea every 5 years so the question is you know why is that why is it so hard for people who are so talented and what hope is there for the rest of us and these dozen Investments That Warren didn't name but we can make a guess on are companies like Coke Seas candy Burlington Northern you know the hiring of a Jane and you know cap cities ABC and and so on Seas candy so one of the questions that I think comes up is that why would there be just 12 outstanding Investments and so many mediocre ones and several poor ones from these two geniuses who worked so hard and who are the best we've ever had and I have some thoughts on that it's an area I'm still kind of you know feeling my way through if you will one of the things about investing is that we have to stay within our circle of
Questionerwithin our circle of competence and when we start out Young by definition the circle of competence is going to be pretty narrow and it might be initially limited to a subset of products and services that you you you directly use and then of course as you get to know the way the world works by osmosis that that Circle expands and as it expands and as you learn more things you're able to uncover uh more opportunities but there's no real easy way or I would say prescribed way to increase that Circle and this is definitely an area where you want to be an inch wide and a mile deep rather than an inch deep and a mile wide because an inch deep and a mile wide because then you would have no competence if you were inch deep and a mile wide so if we look at the investment that Burkshire made in Seas candy C candy was a really quite a stretch investment for them one of the first times that Warren paid
Questionerof the first times that Warren paid three times Book value for a business the family was looking for $30 million Burkshire offered 25 million and they also told the family at $25 million $1 they would walk away and thankfully the family accepted their offer and sees became part of Burkshire Hathaway both Warren and Charlie have said that they were at that time barely smart barely smart enough to buy C's and it was actually quite dumb not to have been willing to pay up for a business like C's candy and they didn't realize how good a business it was till they had a few years of experience observing how the business did and they got a very big education on Brands and pricing power over a few years so Warren famously delegates you know it's delegation to the point point of abdication as manger says with sees the only area that he got
Questionersays with sees the only area that he got involved in was on January 1st he raiseinvolved in was on January 1st he raiseinvolved in was on January 1st he raise prices on the candy every year and so heprices on the candy every year and so heprices on the candy every year and so he basically had them send them the pricebasically had them send them the pricebasically had them send them the price list and he would scratch out all thelist and he would scratch out all thelist and he would scratch out all the old prices and put in all the new pricesold prices and put in all the new pricesold prices and put in all the new prices and tell them okay this is the newand tell them okay this is the newand tell them okay this is the new prices for the year and those pricesprices for the year and those pricesprices for the year and those prices were being raised at significantly abovewere being raised at significantly abovewere being raised at significantly above the rate of inflation and what theythe rate of inflation and what theythe rate of inflation and what they observed was that the pounds of candyobserved was that the pounds of candyobserved was that the pounds of candy sold grew on average from the time theysold grew on average from the time theysold grew on average from the time they bought Seas till about today it's grownbought Seas till about today it's grownbought Seas till about today it's grown at approximately 1 and a half or 2% aat approximately 1 and a half or 2% aat approximately 1 and a half or 2% a year which they actually found quiteyear which they actually found quiteyear which they actually found quite running because they were you knowrunning because they were you knowrunning because they were you know putting through 10 15% price increasesputting through 10 15% price increasesputting through 10 15% price increases when inflation might be 3 4 5% orwhen inflation might be 3 4 5% orwhen inflation might be 3 4 5% or something so significantly abovesomething so significantly abovesomething so significantly above inflation and the customers didn'tinflation and the customers didn'tinflation and the customers didn't protest and it surprised them itprotest and it surprised them itprotest and it surprised them it surprised them how much they were ablesurprised them how much they were ablesurprised them how much they were able to raiseto raiseto raise prices and actually if we look at CES is
Warrenprices and actually if we look at CES is very heavily a California company if we look at California GDP growth in that period from let's say the mid 70s to let's call it 2000 if you look at that 25e period California GDP probably grew at a faster rate than US GDP and it might have grown four to 5% a year at least in the 70s and 80s so C's was growing below California GDP in terms of volume growth it was growing ahead of California GDP from a revenue point of view and part of that might have been the very heavy price increases they were going putting through but also they were dealing in box chocolate with you know dedicated retail outlets which is a very unusual formula and a formula they have found very difficult to replicate in other other location they've repeatedly tried to expand Seas to other locations and most of the time they have failed so
Questionerand most of the time they have failed so even today it needs it it is heavily a California story but but they got a big education in brands from owning seas and the investment in Coca-Cola which came about 13 years after the Seas investment in the late 80s would not have happened if the Seas investment hadn't happened so in 1988 Burkshire haway put one quarter of its entire book value into Coca-Cola it was huge bet that they made on coke and they were were very confident about that bet I think that the the time it took to learn to make that bet might easily have been five or 10 years of ownership of seas at least five years so you would be B gone into the 80s and then to compare and contrast a Coke to a Seas is another exercise that would have taken them some time these are not quantitative issues is are very qualitative issues you get into and
Warrenvery qualitative issues you get into and even though we we think Coke is a product we are very familiar with and it appears to be a relatively straightforward simple business it's actually a very complicated business even today so if you look at Coca-Cola today you know it was founded in 1886 it's 138 years old even after 138 years it is an emerg story and with emerging market growth kind of numbers in a number of countries and even in some countes some areas have matured there are other areas which are very embryonic so even after 138 years Coke is not a mature company it's still growing and it's still expanding and it's actually more than 100 brands and the flagship brand still make makes up probably 70 80% of the pie even after you know 138 years of all these different Acquisitions and different brands and different things they brought
Questionerbrands and different things they brought into the tent the core product remains a very central part so understanding Coke to the point that a insurance company would put a quarter of his book value into it and considered a total no-brainer bed is not something that would happen in a month or three months or something thing so basically the circle of competence they had went through a very significant shift because of the se's acquisition and of course Coke and C's are very different in the sense that coke travels really well Seas doesn't travel and Buffett has said that one of the advantages Coke has is that it doesn't have an aftertaste we cannot consume endless amounts of chocolate you know after we consume some chocolate our propensity to consume more chocolate goes down but with Coke and other products they have that propensity to have it on a
Questionerhave that propensity to have it on a very regular basis doesn't go down and so you get through some remarkable statistics in terms of uh you know per capita a down servings per year in different countries and so on if you look at a business like Burlington Northern the railroad so for the longest time Buffett and Munger were very negative on railroads rightfully so it's a very regulated industry it's very high Capital Investments you have to take loads of toxic chemicals which could cause you a lot of problem if there's a you know train derailment or something you can't refuse shipments of chlorine or something because you're concerned about that and you don't get paid extra for it so basically because you're a common carrier you have to transport those things at published prices of other Commodities and so on but again it they realized after studying it for a while
Questionerrealized after studying it for a while that there had been a number of changes and they were actually late to the party so for example the change from single Decker to double decker trains where they double stack the containers and redoing the bridges so that the taller trains to pass through was a project that took many years to get done but it gave the rails a huge advantage and similarly there were a lot of advances that came about in terms of efficiency of Labor and you know when diesel prices or gasoline prices start going up then rails become a lot more competitive versus trucks so again it took them a few years to understand that there had been a big change in railroads and they acquired Burlington Northern they first bought the stock but they they acquired the entire business in late 2009 and again that was another example
Warren2009 and again that was another example of something that took several years so I think that when you look at investing when we look at investing what we are looking for is so when they finally figured out Burlington Northern they had an edge which the rest of the world didn't have and when they figured out Coke they also had an edge that the rest of the world didn't have Coke was at a single digit trailing multiple it had two very gifted managers who were running the place they had started to transform the way they were allocating Capital they were shedding all the non-core businesses you know C had bought movie studios and shrimp farms in Thailand and all kinds of things under the which were totally useless unrelated very poor businesses and they were shedding all of those and it became a buyback machine and so all those different kind of
Warrenand so all those different kind of factors coming together became what Charlie would call a lulaa and you know 1 plus one becomes 11 and it led them to understand that there was a huge differential between where the company was going to be you know what what it was going to generate in terms of growth and cash flows in the future versus the past and the same with railroads right I mean they they saw a huge Delta similarly with the utility business under that leadership with Greg AEL and Dave soal or like AIT Jane coming on the scene running insurance so each of these things was a big aha moment and in a investing lifetime if we end up with two or three of these big aha moments we're doing pretty well and so investing is a game where there can be long periods where there's nothing interesting and then suddenly something shows up and suddenly you have an edge
Questionershows up and suddenly you have an edge you understand things better than the you understand things better than the you understand things better than the rest of the world does or we've done a rest of the world does or we've done a rest of the world does or we've done a drill down which has helped you drill down which has helped you drill down which has helped you understand it better than the world does understand it better than the world does understand it better than the world does and then as Charlie would say you go all and then as Charlie would say you go all and then as Charlie would say you go all in and so those opportunities in and so those opportunities in and so those opportunities few and far between usually they don't few and far between usually they don't few and far between usually they don't last for that last for that last for that long and so it's a game of extreme long and so it's a game of extreme long and so it's a game of extreme patients with extreme decisiveness so patients with extreme decisiveness so patients with extreme decisiveness so that combination of extreme patients that combination of extreme patients that combination of extreme patients with extreme decisiveness may not come with extreme decisiveness may not come with extreme decisiveness may not come naturally to a lot of humans I'll stop naturally to a lot of humans I'll stop naturally to a lot of humans I'll stop there longer Preamble than I wanted but there longer Preamble than I wanted but there longer Preamble than I wanted but I just I just think that uh it's an area I just I just think that uh it's an area I just I just think that uh it's an area where when I look back at my own where when I look back at my own where when I look back at my own investing journey I can see that there investing journey I can see that there investing journey I can see that there were these moments not that many in the were these moments not that many in the were these moments not that many in the last almost 30 years and it was obvious last almost 30 years and it was obvious last almost 30 years and it was obvious that you had to step up to the bat and that you had to step up to the bat and that you had to step up to the bat and go big and thank you because uh that go big and thank you because uh that go big and thank you because uh that video of Warren Buffett talking about
Otherbook not having taste memory in 2007 was the reason why I went into the world of investing literally that was my light bulb moment okay I want to ask you in all of this the Common Thread really is talking about how difficult it is to actually estimate intrinsic value right uh you know when when you know Buffett bought Coca-Cola um I think all the analysts were bearish everybody had a price Target that was nowhere close to what the intrinsic value of the business was and is today you had incredibly smart people looking at the stock um people who want to make money who are very motivated to make money and yet the analysts missed estimating the intrinsic value of Coca-Cola I want to get a sense of why possibly you think it is like this because effectively we're just doing a future you know present valuing future cash flows getting it to a a
Questionerfuture cash flows getting it to a afuture cash flows getting it to a a present value and then saying okaypresent value and then saying okaypresent value and then saying okay that's what it's worth per share yetthat's what it's worth per share yetthat's what it's worth per share yet even with the same data the sameeven with the same data the sameeven with the same data the same information people are missing it uh andinformation people are missing it uh andinformation people are missing it uh and there must be plenty of stocks todaythere must be plenty of stocks todaythere must be plenty of stocks today which especially in the smaller marketwhich especially in the smaller marketwhich especially in the smaller market caps which are just not being pricedcaps which are just not being pricedcaps which are just not being priced correctly so I'm curious I think oncecorrectly so I'm curious I think oncecorrectly so I'm curious I think once you do the work the intrinsic valueyou do the work the intrinsic valueyou do the work the intrinsic value would be very obvious so basically Iwould be very obvious so basically Iwould be very obvious so basically I think that when Warren and Charliethink that when Warren and Charliethink that when Warren and Charlie looked at Koch it would not have takenlooked at Koch it would not have takenlooked at Koch it would not have taken them that long to figure out that therethem that long to figure out that therethem that long to figure out that there was a huge gap between price and Val andwas a huge gap between price and Val andwas a huge gap between price and Val and but they wouldn't have been able tobut they wouldn't have been able tobut they wouldn't have been able to figure that out if they hadn't had thefigure that out if they hadn't had thefigure that out if they hadn't had the experience with seeds and if they hadn'texperience with seeds and if they hadn'texperience with seeds and if they hadn't had the experiences of many other thingshad the experiences of many other thingshad the experiences of many other things like they understood the notion oflike they understood the notion oflike they understood the notion of BuyBacks they understood the notion ofBuyBacks they understood the notion ofBuyBacks they understood the notion of capital allocation they understood howcapital allocation they understood howcapital allocation they understood how so one of the things that Roberto Goa
Questionerso one of the things that Roberto Goaso one of the things that Roberto Goa was doing was he was separating bottlingwas doing was he was separating bottlingwas doing was he was separating bottling from the syrup business uh bottling fromfrom the syrup business uh bottling fromfrom the syrup business uh bottling from the concentrate you know the twothe concentrate you know the twothe concentrate you know the two businesses he was basically separatingbusinesses he was basically separatingbusinesses he was basically separating them out and you know the thethem out and you know the thethem out and you know the the concentrate business which is the oneconcentrate business which is the oneconcentrate business which is the one that K is in today that's like athat K is in today that's like athat K is in today that's like a software company you know basically yousoftware company you know basically yousoftware company you know basically you know product you create for a dollarknow product you create for a dollarknow product you create for a dollar gets sold for5 or $10 and you can keepgets sold for5 or $10 and you can keepgets sold for5 or $10 and you can keep increasing the price on that and so Iincreasing the price on that and so Iincreasing the price on that and so I think that when theythink that when theythink that when they understood you know in terms of humanunderstood you know in terms of humanunderstood you know in terms of human population and in terms of countries andpopulation and in terms of countries andpopulation and in terms of countries and in terms of where Coke was in itsin terms of where Coke was in itsin terms of where Coke was in its trajectory and all of that and theytrajectory and all of that and theytrajectory and all of that and they looked at that whole equation from wherelooked at that whole equation from wherelooked at that whole equation from where Coke was inCoke was inCoke was in 88 they saw a huge multi multi- deade88 they saw a huge multi multi- deade88 they saw a huge multi multi- deade Runway that Runway so now it's been likeRunway that Runway so now it's been likeRunway that Runway so now it's been like you know 36 years since they made thatyou know 36 years since they made thatyou know 36 years since they made that investment and that Runway is stillinvestment and that Runway is stillinvestment and that Runway is still going strong if you look at a business
Todd Combsgoing strong if you look at a business like Geico for example when Burkshire took control of Geico Geico had 2% market share of the auto business Auto uh Insurance business the US it's a double digit market share now and it's knocking on the door of the you know second the second largest or the first largest player and so on so basically once you have these you will have aha moments many of them will end up being fake aha moments which means that you know you go a little further into the rabbit hole and fund well no we don't really have what we were looking for here which is fine but you will run into some where you go down the rabbit hole and you find that you are able to see things that almost nobody else can see and that particular Nuance of being able to see something so clearly that the other you know six or seven billion people on planet Earth cannot see by
Questionerpeople on planet Earth cannot see by definition is going to be a rare event but it does happen you know if you put your nose to the grindstone and you set conditions and criteria and you do the work you will find inefficiencies and you will find anomalies and then you can you can take advantage of those you know this weekend you were attended the memorial service for Charlie you know as I was mentioning earlier we were actually really lucky Charlie had confirmed that he'd be speaking to us in January of this year the happiest day of my life when I got got that email but of course sadly he passed away I want to know learning about Charlie and spending time with him getting to know his friends as well know give us a sense of what you took away and especially with you know uh the undergraduates and graduates on the call what were the one
Warrengraduates on the call what were the one or two things perhaps that you think you'll carry with you and you want generations of your family to be also knowing well I think they broke the mold after they made Charlie so we are not going to ever have another Charlie M so Charlie was a very unusual person from a number of fronts you know in one of his last interviews I think someone asked him you know what you what would you like on your gravestone and he said that I tried to be useful and I think that's really exactly how Charlie went about his Affairs he was trying to be useful till the last day 99.9 years and uh there's a book that came out a few years back by Adam Grant called give and take and basically Adam gr said there are three kinds of people in the world givers takers and matchers so the givers just you know help out other people without
Otheryou know help out other people without expecting anything in return the takersexpecting anything in return the takersexpecting anything in return the takers who you want to truly avoid in your lifewho you want to truly avoid in your lifewho you want to truly avoid in your life are the ones who want to just take fromare the ones who want to just take fromare the ones who want to just take from you without giving anything back and theyou without giving anything back and theyou without giving anything back and the matchers are the ones who like to keepmatchers are the ones who like to keepmatchers are the ones who like to keep kind of tabs oh he did me a favor let mekind of tabs oh he did me a favor let mekind of tabs oh he did me a favor let me try to do the same kind of favor for himtry to do the same kind of favor for himtry to do the same kind of favor for him and they feel good about that that youand they feel good about that that youand they feel good about that that you want to eliminate the takers and thewant to eliminate the takers and thewant to eliminate the takers and the matchers from your lifematchers from your lifematchers from your life completely and you want to be surroundedcompletely and you want to be surroundedcompletely and you want to be surrounded bybyby givers and you want to yourself be agivers and you want to yourself be agivers and you want to yourself be a giver and this year when Buffett wrotegiver and this year when Buffett wrotegiver and this year when Buffett wrote his letter he pointed out that in 65his letter he pointed out that in 65his letter he pointed out that in 65 when he bought burshirewhen he bought burshirewhen he bought burshire hathway and Charlie told him he had madehathway and Charlie told him he had madehathway and Charlie told him he had made a mistake by buying burshire hathway anda mistake by buying burshire hathway anda mistake by buying burshire hathway and he said that it's okay you made thehe said that it's okay you made thehe said that it's okay you made the mistake I'm going to try to help if youmistake I'm going to try to help if youmistake I'm going to try to help if you fix it and Warren said basically Charliefix it and Warren said basically Charliefix it and Warren said basically Charlie had no ownership stake in Burkshire athad no ownership stake in Burkshire athad no ownership stake in Burkshire at the time there was no plans for him to
Questionerthe time there was no plans for him to have ownership stake but he was going to selflessly help a friend right and the selfless helping of a friend led to about 11 or 12 years after that or I think 11 years when he became vice chairman and formally became a partner with Warren in the further Evolution and creation of Burkshire and of course the rest with history so I think the one lesson is that you want to be a giver you don't want to be trying to keep some scorecard and you don't want to extract from the world and you know try to be smart about it because the world will figure that out so I think that was a really big lesson for Charlie is that Charlie tried to be helpful to everyone he encountered in any sphere of his life so he was helpful at the Good Sam's hospital he was very help helpful to Costco where he was on the board for 27
WarrenCostco where he was on the board for 27 years and never missed a board meeting he was obviously very helpful to Burkshire and he was helpful to countless students with all of the you know zingers and onliners and all his writings and speeches and everything else he tried to help investors become better and left us a mountain of material to go through so I think that's one of the lessons the other thing about what I learned I learned more from observing char as opposed to direct words he would have said to me I mean he said a lot of words to me he helped me in difficult times in my life quite a bit which was great but what I observed about Charlie was that every time I'd see him he was focused on a couple of problems he was working on at the time and those problems took 200% of his attention so I try to remind him about his legacy I Tred to remind him about the huge body of work
Otherremind him about the huge body of work that he had created and all these accomplishments in the past and he would brush it all aside he was not interested in even thinking about all that or talking about all that what he would be focused on is like he was searching for a CEO for Daily Journal he was trying to find a successor there and he had his energies focused on that or for example when he was designing the dorms for UCSB you know I'd go meet him he'd be working on the plans and he would ask me questions like you know how tall is a F-150 truck you know I'm building a parking lot I want to make sure the F-150 can go through I don't want have it too higher you know he was just constantly very focused on the the the topic at hand in front of him and I think that's another big lesson is that we humans to waste a lot of energy on
Warrenwe humans to waste a lot of energy on looking back on you know looking aroundlooking back on you know looking aroundlooking back on you know looking around and Charlie basically was trying to readand Charlie basically was trying to readand Charlie basically was trying to read as much as he could put as much greatas much as he could put as much greatas much as he could put as much great content into that incredible brain ofcontent into that incredible brain ofcontent into that incredible brain of his and then the the L work synthesizinghis and then the the L work synthesizinghis and then the the L work synthesizing of that was just incredible I mean Iof that was just incredible I mean Iof that was just incredible I mean I would bring up questions to him aboutwould bring up questions to him aboutwould bring up questions to him about dsh where I was sitting on a folk in thedsh where I was sitting on a folk in thedsh where I was sitting on a folk in the road and I'd been noodling on this and Iroad and I'd been noodling on this and Iroad and I'd been noodling on this and I didn't know the answer and before I haddidn't know the answer and before I haddidn't know the answer and before I had even finished articulating the questioneven finished articulating the questioneven finished articulating the question he'd already answered what the solutionhe'd already answered what the solutionhe'd already answered what the solution was and I said well why didn't I thinkwas and I said well why didn't I thinkwas and I said well why didn't I think of that myself you know it's so obviousof that myself you know it's so obviousof that myself you know it's so obvious and he doesn't know India and doesn'tand he doesn't know India and doesn'tand he doesn't know India and doesn't know all these things but his answersknow all these things but his answersknow all these things but his answers are right on and that's because he wasare right on and that's because he wasare right on and that's because he was you know pounding so much into his brainyou know pounding so much into his brainyou know pounding so much into his brain and it was filed in a manner where theand it was filed in a manner where theand it was filed in a manner where the Lis work of mental models was fullon heLis work of mental models was fullon heLis work of mental models was fullon he was able to pull from different models
Questionerwas able to pull from different models and so on so it was just great to see that in action and we've seen that in action at the bush show meetings you know Warren will be rambling for 5 or 10 minutes and Charlie will give a one line Zinger which is more effective so that's the way it is thank you I don't want to ask too many further questions uh we should open up the floor to questions so I'll open up the floor to questions but while that's happening I want to ask you about dakna because I've studied it and I was actually really happy to see Prem wat is a notable contributor I visited the f tax offices just a few days ago but I want to ask you about dakna and your vision for it because to me this looks like you're investing in it and this is going to be your Masterpiece am I have I thought about this correctly or is this just an experiment for now well
Questioneris this just an experiment for now well
QuestionerI mean I think that in philanthropy the rules are different so in investing we try to go low risk High return we try to minimize risk as much as we can and we try to maximize the return as much as we can we want a huge Delta in those two if you want to make a difference in this world on the philanthropic side you have to go high risk High return so it's a lot more like venture capital and it's a lot more swinging for the fences so the correct way to approach philanthropy is to go very bold and not be concerned if there's a high probability of failure what you really want is that if it works it moves the needle in a major way and if it doesn't work it's okay so for example The Gates Foundation for decades has spent a lot of money on vaccine development and so far they have nothing to show for it right but the
Othernothing to show for it right but the thing with these vaccines is that if we get a malaria vaccine or you know some of these other ugly diseases humans deal with it changes the game I mean you know the polio vaccine changed the game the small box vaccine changed the game so vaccines are an example of that highrisk high return type approach right and so when I started daksh we were definitely going to go high return for sure and I wasn't really concerned about whether we would be successful or not and I did not know whether we would be successful or not and I actually didn't care it was irrelevant so the way dakna was designed so I am the Shameless cloner you know not just a cloner a Shameless cloner and before I started Dak and actually discussed this with Warren Warren had just set up his giving where he was giving 5% of the Burkshire shares he
Questionergiving 5% of the Burkshire shares he owned every year to these four foundations five foundations and so let's say he had half a million shares of Berkshire to start with right so the first year 25,000 shares went the second year it would be 5 % of 475,000 so each year the number of shares given is going down but because berkshire's intrinsic value is increasing at more than 5% the amount he's giving each year on average is going up right and basically if he lived for a thousand years he would still be giving away money in effect because the compounding is more than 5% so I said oh this is a really good formula that Warren's come up with I'll clone this formula so in 2007 when our net worth was over 50 million I said okay I don't want to wait till I'm 7080 years old to start giving money away I'll give away 2% a year okay and above
OtherI'll give away 2% a year okay and above 50 million 2% was at least a million50 million 2% was at least a million50 million 2% was at least a million dollar and $1 million gave me enoughdollar and $1 million gave me enoughdollar and $1 million gave me enough ammunition to do somethingammunition to do somethingammunition to do something meaningful and my idea was okay in 2007meaningful and my idea was okay in 2007meaningful and my idea was okay in 2007 I think that time you know the givingI think that time you know the givingI think that time you know the giving was 1.3 or 1.4 million or something thatwas 1.3 or 1.4 million or something thatwas 1.3 or 1.4 million or something that year I was perfectly happy if the moneyyear I was perfectly happy if the moneyyear I was perfectly happy if the money gotgotgot torched okay and nothing came out and intorched okay and nothing came out and intorched okay and nothing came out and in fact when I was going to do this infact when I was going to do this infact when I was going to do this in India I was a guy in shorts inIndia I was a guy in shorts inIndia I was a guy in shorts in California who was running an investmentCalifornia who was running an investmentCalifornia who was running an investment fund I was not going to move to India Ifund I was not going to move to India Ifund I was not going to move to India I was going to have to rely on a team thatwas going to have to rely on a team thatwas going to have to rely on a team that didn't exist leadership that didn'tdidn't exist leadership that didn'tdidn't exist leadership that didn't exist uh a corrupt country all kinds ofexist uh a corrupt country all kinds ofexist uh a corrupt country all kinds of issues so I fully expected that everyissues so I fully expected that everyissues so I fully expected that every year whatever money we would put inyear whatever money we would put inyear whatever money we would put in would just disappear nothing wouldwould just disappear nothing wouldwould just disappear nothing would happen and I felt like in 10 years ofhappen and I felt like in 10 years ofhappen and I felt like in 10 years of doing that beating my head against thedoing that beating my head against thedoing that beating my head against the wall I would learn something andwall I would learn something andwall I would learn something and possibly in year 11 we would get some
Otherpossibly in year 11 we would get some traction okay after 10 years of hitting ahead against a brick wall that was a plan for D what actually happened was we got Traction in a few weeks I ended up finding great leaders I found by accident a great model the model worked the Partnerships with the government of India actually came about so all kinds of unlikely things that should have not happened actually happened and we never wasted I don't think dakna spun at wheels and lost even $10,000 and so life is great better to be lucky than good I'm looking forward to dakna because I I secretly feel like the way structure they going to the annual report uh there's much more coming out of this so I think I think this is something that's that's something that I'm actually going to follow and see well we're going to keep swinging for the fences and sometimes we
Questionerswinging for the fences and sometimes we will miss and that's okay that is no problem the ROI the social return on invested Capital at D is so extreme I mean so off the charts that even if we become extremely sloppy on you know the next five Ventures we go into and they fail we would still end up okay so life is good no I think the present value of what you're doing and just the present value of Life you've touched is something that's extraordinary you know you spoke about uh in one of the interviews you spoke about Fiat Chrysler and understanding you know spending a few months going a mile deep in in that industry you came to understand Sergio his surname is a Marion yeah in in a better detail uh you've dealt you've spoken to a number of company managements uh by default CEOs and CFOs tend to be good with people they can convince people so what exactly have you
Questionerconvince people so what exactly have you seen that makes an exceptional management or a CEO or a leader number one number two how did you go about actually digging in and going a mild deep like you start with the 10ks the annual reports do you call up the investor relations teams do you go through the transcripts but beyond that what else do you do how do you how do you become an expert in that field perhaps better than most other investors
Questioneryeah so first of all to figure out the nature of management and the competence and capability of management is relatively straightforward don't go by what they tell you what they say is going to happen just go by what's actually happened so if they've been around for 10 15 20 years it's easy to look at the track record so we can go back so with Sergio there was a very long history there were a few cases
Questionerlong history there were a few cases Harvard Business School had done on himHarvard Business School had done on himHarvard Business School had done on him there were even a book about him notthere were even a book about him notthere were even a book about him not about him but which covered him Mondoabout him but which covered him Mondoabout him but which covered him Mondo Elli which was on the Elli family whereElli which was on the Elli family whereElli which was on the Elli family where they covered Sergio so actually when youthey covered Sergio so actually when youthey covered Sergio so actually when you went back and looked at the body of whatwent back and looked at the body of whatwent back and looked at the body of what had happened in the past there was abouthad happened in the past there was abouthad happened in the past there was about eight years of history of him being ateight years of history of him being ateight years of history of him being at Fiat and Fiat had cycled through fiveFiat and Fiat had cycled through fiveFiat and Fiat had cycled through five CEOs in the previous 12 months beforeCEOs in the previous 12 months beforeCEOs in the previous 12 months before Sergio came on the scene and Fiat was onSergio came on the scene and Fiat was onSergio came on the scene and Fiat was on life support they were losing more thanlife support they were losing more thanlife support they were losing more than a million dollars a day they had noa million dollars a day they had noa million dollars a day they had no money basically the equity was gone themoney basically the equity was gone themoney basically the equity was gone the banks were you know kind of closing inbanks were you know kind of closing inbanks were you know kind of closing in all the walls were caving in and it wasall the walls were caving in and it wasall the walls were caving in and it was a business in very deep trouble anda business in very deep trouble anda business in very deep trouble and Sergio came in and I just studied kindSergio came in and I just studied kindSergio came in and I just studied kind of what he did and how he did it and heof what he did and how he did it and heof what he did and how he did it and he learned a lot from Le aokoka and he tooklearned a lot from Le aokoka and he tooklearned a lot from Le aokoka and he took the Le aokoka Playbook and basicallythe Le aokoka Playbook and basically
Questionerthe Le aokoka Playbook and basically replicated it and what leoka had done which was again when Chrysler was in deep trouble is he got rid of all of his direct reports that he inherited he went deep into the organization sometimes three four five levels below him and he pulled a bunch of 30s something about you know seven or eight 30 something and promoted them to be his direct reports and basically there was this new Young young team and they headed out of the park right I mean it was a very calcified business and uh I think Sergio looked at Fiat very similarly he was a good judge of people and he was a great manager so it was very easy I think I think when you started diving in if the question was what kind of leader do we have here it was very clear relatively soon that we have an extraordinary leader over here because he had already
Otherbecause he had already delivered in incredible miraculousdelivered in incredible miraculousdelivered in incredible miraculous results in theresults in theresults in the past and the Fiat Chrysler merger hadpast and the Fiat Chrysler merger hadpast and the Fiat Chrysler merger had already taken place three years beforealready taken place three years beforealready taken place three years before that so there was a lot of treadmarksthat so there was a lot of treadmarksthat so there was a lot of treadmarks over there as well it wasn't like I wasover there as well it wasn't like I wasover there as well it wasn't like I was coming in when the merger was beingcoming in when the merger was beingcoming in when the merger was being contemplated Etc they had already it'scontemplated Etc they had already it'scontemplated Etc they had already it's it's a big and undertaking to bringit's a big and undertaking to bringit's a big and undertaking to bring these two companies together and it hadthese two companies together and it hadthese two companies together and it had been highly successful that integrationbeen highly successful that integrationbeen highly successful that integration and was still embryonic but it was goingand was still embryonic but it was goingand was still embryonic but it was going and U Sergio actually had givenand U Sergio actually had givenand U Sergio actually had given five-year plans he was telling you whatfive-year plans he was telling you whatfive-year plans he was telling you what was going to happen in 2017 andwas going to happen in 2017 andwas going to happen in 2017 and 2018 and what he was telling you was2018 and what he was telling you was2018 and what he was telling you was going to happen in 2017 and 20178 madegoing to happen in 2017 and 20178 madegoing to happen in 2017 and 20178 made Fiat Chrysler less than a poo one okayFiat Chrysler less than a poo one okayFiat Chrysler less than a poo one okay the no one believed him no one believedthe no one believed him no one believedthe no one believed him no one believed when he actually put it black and whitewhen he actually put it black and whitewhen he actually put it black and white in hisin hisin his presentations guys this is my guidancepresentations guys this is my guidancepresentations guys this is my guidance for 20 2017 in 201 12 okay nobody doesfor 20 2017 in 201 12 okay nobody does
Otherfor 20 2017 in 201 12 okay nobody does that in the auto business okay Elon doesthat in the auto business okay Elon doesthat in the auto business okay Elon does it but uh he misses them usually butit but uh he misses them usually butit but uh he misses them usually but that's okay I think just like with Kokethat's okay I think just like with Kokethat's okay I think just like with Koke and Geico and others once you go downand Geico and others once you go downand Geico and others once you go down the rabbit hole and you find that therethe rabbit hole and you find that therethe rabbit hole and you find that there is meat on the boat and you keep diggingis meat on the boat and you keep diggingis meat on the boat and you keep digging basically the answers will keep comingbasically the answers will keep comingbasically the answers will keep coming so any question you have uh these wereso any question you have uh these wereso any question you have uh these were such well documented well followedsuch well documented well followedsuch well documented well followed Industries long histories and fear chryIndustries long histories and fear chryIndustries long histories and fear chry at the end of the day was a reallyat the end of the day was a reallyat the end of the day was a really simple business you know they had thesimple business you know they had thesimple business you know they had the ram franchise which was bulletproof itram franchise which was bulletproof itram franchise which was bulletproof it was a oligopoly they had the jeepwas a oligopoly they had the jeepwas a oligopoly they had the jeep franchise that was bulletproof they hadfranchise that was bulletproof they hadfranchise that was bulletproof they had the minivan franchise that was bulletthe minivan franchise that was bulletthe minivan franchise that was bullet bulletproof the rest of it they couldbulletproof the rest of it they couldbulletproof the rest of it they could just toss in the garbage it didn'tjust toss in the garbage it didn'tjust toss in the garbage it didn't matter and then they had 80% of Ferrarimatter and then they had 80% of Ferrarimatter and then they had 80% of Ferrari they had Maserati Alfa Romeo so when youthey had Maserati Alfa Romeo so when youthey had Maserati Alfa Romeo so when you started to you know put the piecesstarted to you know put the piecesstarted to you know put the pieces together you know the market kep was 5
Othertogether you know the market kep was 5 billion and RAM was going to produce more than 5 billion a year in cash flow and Jeep was going to produce more than five billion a year in cash flow and then everything else is going to produce something you know so it was very easy to come up with valuations which was more than 10 times of the stock was so it was simple all right um and I'll we'll we'll see on questions but we have vpal uh who's got a question yep do you want to go ask your question hello yes
Questionerhi my name is yep uh I yes I had a question um with from the conversation as like a new investor well first for personally um you've talked a lot about like finding an edge and going down the this Rabbit Hole when you found something that's abnormal or something that's like meaty but I guess my question is like a how do you know that
Questionerquestion is like a how do you know that something that you found is really ansomething that you found is really ansomething that you found is really an edge like what makes something an anedge like what makes something an anedge like what makes something an an edge or like what makes it so how do youedge or like what makes it so how do youedge or like what makes it so how do you know the difference between if this isknow the difference between if this isknow the difference between if this is something that's specific to thissomething that's specific to thissomething that's specific to this certain company or this specific settingcertain company or this specific settingcertain company or this specific setting uh like within how you talked about oruh like within how you talked about oruh like within how you talked about or the Seas candy company where like theirthe Seas candy company where like theirthe Seas candy company where like their business model it fit mainlybusiness model it fit mainlybusiness model it fit mainly California's ecosystem and their growthCalifornia's ecosystem and their growthCalifornia's ecosystem and their growth but it didn't extrapolate to otherbut it didn't extrapolate to otherbut it didn't extrapolate to other places and how do you differentiateplaces and how do you differentiateplaces and how do you differentiate those kinds of ideas and how do you umthose kinds of ideas and how do you umthose kinds of ideas and how do you um identify what is extrapolatedidentify what is extrapolatedidentify what is extrapolated extrapolatable uh in in those kinds ofextrapolatable uh in in those kinds ofextrapolatable uh in in those kinds of like areas
Warrenso actually you have a biglike areas so actually you have a biglike areas so actually you have a big advantage overadvantage overadvantage over me inme inme in finding those great nuggets and thosefinding those great nuggets and thosefinding those great nuggets and those great future opportunities the reasongreat future opportunities the reasongreat future opportunities the reason you have an edge over me is because youyou have an edge over me is because youyou have an edge over me is because you are young and you are in a place whereare young and you are in a place whereare young and you are in a place where there's a lot of change taking place andthere's a lot of change taking place andthere's a lot of change taking place and so for example landlines which you may
Questionerso for example landlines which you may not know what a landline is that's okay but the first people who disconnected landlines were college students okay so there was a time in this country where everyone had a landline phone yeah right like if you watch Seinfeld you might see a landline phone yeah okay and it was at the college campuses where the cord cutting on landline phones happened first and it came much later to you know mainstream America okay that was a very gradual kind of 20year transition it used to be accepted wisdom uh that 2% of the population would subscribe to cell phone service and once you reached 2% of the population you were at saturation because Sal cell service was so expensive that nobody beyond that 2% and also you know so just the infrastructure and all of that was it just made it hard we are at 100% Today right or close to
Questionerwe are at 100% Today right or close to 100% so Facebook started on the Harvard campus and it was only for Harvard students initially and then they expanded to other ivy league MIT was probably right there probably the top four or five campuses and so the students at Harvard the students at MIT knew what Facebook was all about at least eight or 10 years before the the rest of the old people like me there was a huge Advantage so what I'm saying is the thing that you should do make a list of every product and service that you have consumed in the last couple of years so what brand of clothing are you buying what perfumes are you buying what online services are you buying make a list of every dime do you go to Sweet green for lunch do you go to Chipotle for lunch so the college students were the first to go to Chipotle they knew about Chipotle
QuestionerChipotle they knew about ChipotleChipotle they knew about Chipotle because before the rest of the world abecause before the rest of the world abecause before the rest of the world a long time ago so if you made a list oflong time ago so if you made a list oflong time ago so if you made a list of everything that you spend anything moreeverything that you spend anything moreeverything that you spend anything more than 5 cents a month okay it's verythan 5 cents a month okay it's verythan 5 cents a month okay it's very difficult for a company to convin you todifficult for a company to convin you todifficult for a company to convin you to even give them $1 a year or $1 a montheven give them $1 a year or $1 a montheven give them $1 a year or $1 a month it's very difficult they have to reallyit's very difficult they have to reallyit's very difficult they have to really prove themselves and there has to beprove themselves and there has to beprove themselves and there has to be something there and if you made thatsomething there and if you made thatsomething there and if you made that list and you put it away somewhere solist and you put it away somewhere solist and you put it away somewhere so make a list of all the publicly tradedmake a list of all the publicly tradedmake a list of all the publicly traded companies that are products and servicescompanies that are products and servicescompanies that are products and services that you are usingthat you are usingthat you are using today and if you fast forward 10 or 20today and if you fast forward 10 or 20today and if you fast forward 10 or 20 years and just look at that list thereyears and just look at that list thereyears and just look at that list there will be 50 bagswill be 50 bagswill be 50 bags from that list and so there's already afrom that list and so there's already afrom that list and so there's already a short list you have and now you justshort list you have and now you justshort list you have and now you just have to do work on that short list and Ihave to do work on that short list and Ihave to do work on that short list and I can't do that but you can you have a bigcan't do that but you can you have a bigcan't do that but you can you have a big Edge right I'll I'll be sure to takeEdge right I'll I'll be sure to takeEdge right I'll I'll be sure to take that advice yeah thank you all the bestthat advice yeah thank you all the best
Otherthat advice yeah thank you all the best thankthankthank you we have a thing called the visitingyou we have a thing called the visitingyou we have a thing called the visiting fellows program uh you can come in forfellows program uh you can come in forfellows program uh you can come in for three months and spend time on campusthree months and spend time on campusthree months and spend time on campus and so just just putting it out there itand so just just putting it out there itand so just just putting it out there it might help my wealth situation we havemight help my wealth situation we havemight help my wealth situation we have three questions uh from the Q&A chat onethree questions uh from the Q&A chat onethree questions uh from the Q&A chat one is from an anonymous attendee thank youis from an anonymous attendee thank youis from an anonymous attendee thank you for sharing your time generously uh canfor sharing your time generously uh canfor sharing your time generously uh can you share youryou share youryou share your perspective on the impact of AI and howperspective on the impact of AI and howperspective on the impact of AI and how managers run their companies what aremanagers run their companies what aremanagers run their companies what are some of the areas they should watch outsome of the areas they should watch outsome of the areas they should watch out for but just generally even in thefor but just generally even in thefor but just generally even in the investment world I mean AI is just hugeinvestment world I mean AI is just hugeinvestment world I mean AI is just huge you know how are you thinking about thisyou know how are you thinking about thisyou know how are you thinking about this and what have you seen so far
WarrenI am the wrong person to ask you should ask your fellow classmates so all the action that's happening in Ai and all the changes that are happening in Ai and what's going to change in the future the MIT campus is front and center how can
QuestionerMIT campus is front and center how can me sitting in Austin hold a candle to that so I am so set in my ways and so hosed in so many ways and so I'm the wrong guy I mean from a from a periphery point of view I can just see that there's transformational impacts everywhere there's so much uh happening and there's so many different just today one of my friends was telling me that there's some AI app where it's able to take like they Outsource some work to India but when somebody in India is talking about something in an Indian accent this product will change it to a Native American a local American talking in an American accent and the AI will just switch that whole thing to whoever's voice you want so you could have you know Morgan Freeman for example you know doing that for you and so what I'm saying is that there all these things that are happening at such a such
Questionerthings that are happening at such a such a pace and it's so fast and even like a pace and it's so fast and even like a pace and it's so fast and even like for example the the stock photography for example the the stock photography for example the the stock photography business you know the the the images business you know the the the images business you know the the the images being generated through AI is being generated through AI is being generated through AI is unbelievable I mean the thing is it it unbelievable I mean the thing is it it unbelievable I mean the thing is it it already probably obsoleted the stock already probably obsoleted the stock already probably obsoleted the stock photography business you know so I think photography business you know so I think photography business you know so I think that I think you guys are you know MIT that I think you guys are you know MIT that I think you guys are you know MIT media labs and all of that I think you media labs and all of that I think you media labs and all of that I think you guys are so far ahead on that so that's guys are so far ahead on that so that's guys are so far ahead on that so that's a that's a great area to just look at a that's a great area to just look at a that's a great area to just look at what's happening on the campus and here what's happening on the campus and here what's happening on the campus and here I was just remembering when when I was just remembering when when I was just remembering when when somebody asked about Buffett investing somebody asked about Buffett investing somebody asked about Buffett investing in cars they said I knew at least I in cars they said I knew at least I in cars they said I knew at least I should short horses is but here it's should short horses is but here it's should short horses is but here it's like you have to short almost everything like you have to short almost everything like you have to short almost everything because like you just the world is going because like you just the world is going because like you just the world is going to change in 10 years you know 5 to 10 to change in 10 years you know 5 to 10 to change in 10 years you know 5 to 10 years because of this yes the next years because of this yes the next years because of this yes the next question comes from aruja thanks for question comes from aruja thanks for question comes from aruja thanks for coming Mish I want to I just want to
Questionercoming Mish I want to I just want to know more about if you if you try to strike a balance between Financial return and impact at the Dua Foundation or is it if it's focused on social impact solely if you were to try and find and you know if you do try and find a balance between both and then how I think we you've kind of answered this well I would just say that you want to have separation of church and state so I don't think you want to mix investing with saving the planet and a lot of people try to do that so I think that when I'm looking at philanthropy I'm looking at philanthropy when I'm looking at investing I'm looking at investing and the two shall never meet so it is it's two separate activities and two very different mindsets and I think trying to combine them in any way is not going to get you to the promised land okay but uh just
Questionerto the promised land okay but uh just ARA's second question was also really interesting she said or he said sorry uh it would be great to know a bit about an interesting aha moment in your career uh in investing you know what was the what was the one thing that just like yeah hit you and you're like okay this is something
Ted Weschlerwell I mean I think the AHA moments come like for example when I was studying feat Chrysler at the time when I started to to study it I had deep hatred for the auto business extreme hatred you know it's unionized it's high capex it's subject to Consumer taste you may spent three billion trying to develop a car and nobody likes it and so on and you know it's so much of it is commoditized and so on it's a lot of ugliness in the auto business and the reason I went down that rabbit hole is I saw that Ted Wexler had made an
Questionersaw that Ted Wexler had made an investment in General Motors and I think I saw that David Einhorn had made an investment in General Motors and I said why would these two smart people invest in such a horrible industry that we all know obviously is horrible so I said I only went down the rabbit hole to try to answer that question because I said I it makes no sense to me so actually one of the things in investing is when things do not make sense to you you have to stop yourself and take some notes and say I think I need to go down this Rabbit Hole so for example Seinfeld wrote a book you know audience doesn't understand Seinfeld which is very unfortunate but Seinfeld wrote a book uh which I thought was a great book uh is this something okay or something like that is the title is this something every day he sits down for an hour with a yellow pad thinking
Otherfor an hour with a yellow pad thinking about anything that he's encountered in his life in day-to-day encounters which could be weaved into a story for standup comedy right so humans have all kinds of things going on which if you really stop to think about it they don't make any sense like for example there was an episode on Seinfeld where he goes to a car rental place at the airport and he says you know I have a reservation Etc and they tell him I'm sorry so we don't have any cars he says I have a reservation he says yes we have your reservation but we don't have any cars so he says well if you have my reservation you know you have to have a car right and and so that whole thing became an episode right because he just noted down that sometimes people have a reservation and they don't have a car available and how do you kind of
Questioneravailable and how do you kind of correlate that or uh one time there was a episode about George's very thick wallet you know he had a super thick wallet right and so again there was a whole episode on that so I think the thing is that he's writing down anything that looks like an anomaly or weird things about humans to him right and most of those may not pan out into something that turns into some great you know 10 minute or 15 minute uh you know standup routine but some of them will and so the discipline of sitting down every day so anytime you encounter something that makes no sense to you so when I encountered David and Ted vexler on GM it led to the work on fear chryler and which was a huge home run and of course now one of the problems that came about in that huge home run was I missed it the biggest piece of that home run was that P Chrysler owned 80% of Ferrari
Questionerwas that P Chrysler owned 80% of Ferrari
Otherwas that P Chrysler owned 80% of Ferrari and I didn't even care that much about and I didn't even care that much about and I didn't even care that much about the value of Ferrari because I was the value of Ferrari because I was the value of Ferrari because I was focused so much on these other pieces focused so much on these other pieces focused so much on these other pieces which were going to make the market cap which were going to make the market cap which were going to make the market cap in earnings in a single year and Ferrari in earnings in a single year and Ferrari in earnings in a single year and Ferrari was making a quarter billion dollars a was making a quarter billion dollars a was making a quarter billion dollars a year and I said okay so it's worth like year and I said okay so it's worth like year and I said okay so it's worth like three billion 4 billion you know if you three billion 4 billion you know if you three billion 4 billion you know if you want to be really excited about it but want to be really excited about it but want to be really excited about it but so what you know five billion here we're so what you know five billion here we're so what you know five billion here we're going to have the rest of the business going to have the rest of the business going to have the rest of the business be worth 40 50 billion so I didn't care be worth 40 50 billion so I didn't care be worth 40 50 billion so I didn't care about Ferrari but actually Ferrari was about Ferrari but actually Ferrari was about Ferrari but actually Ferrari was my I had a good return on Ferrari I my I had a good return on Ferrari I my I had a good return on Ferrari I think I made it five six times my money think I made it five six times my money think I made it five six times my money but the big mistake I made was it should but the big mistake I made was it should but the big mistake I made was it should never have been sold from then till now never have been sold from then till now never have been sold from then till now it's almost a 25 it's almost a 25 it's almost a 25 bagger and it's 25 bagger on a 20 bagger and it's 25 bagger on a 20 bagger and it's 25 bagger on a 20 million dollar investment is about four million dollar investment is about four million dollar investment is about four or 500 million that's more than Chum or 500 million that's more than Chum or 500 million that's more than Chum chain so even I missed it even in in
Otherchain so even I missed it even in inchain so even I missed it even in in that scenario where I was looking atthat scenario where I was looking atthat scenario where I was looking at this thing so carefully for so manythis thing so carefully for so manythis thing so carefully for so many years so I think that that is theyears so I think that that is theyears so I think that that is the business we are inbusiness we are inbusiness we are in we are in the business of drilling downwe are in the business of drilling downwe are in the business of drilling down anomalies just like I told theanomalies just like I told theanomalies just like I told the student her job is to look at everystudent her job is to look at everystudent her job is to look at every public company that she is giving even apublic company that she is giving even apublic company that she is giving even a dollar a year to and drill down on so asdollar a year to and drill down on so asdollar a year to and drill down on so as as Buffett and and I think said focus isas Buffett and and I think said focus isas Buffett and and I think said focus is the most important thing in thisthe most important thing in thisthe most important thing in this business right yeah so we have one lastbusiness right yeah so we have one lastbusiness right yeah so we have one last question from Tony Tian uh he says hiquestion from Tony Tian uh he says hiquestion from Tony Tian uh he says hi monish thank you for sharing yourmonish thank you for sharing yourmonish thank you for sharing your insights with us considering theinsights with us considering theinsights with us considering the significant impact of political eventssignificant impact of political eventssignificant impact of political events on investment climates uh and with aton investment climates uh and with aton investment climates uh and with at least 64 countries representing aboutleast 64 countries representing aboutleast 64 countries representing about half of the world's population expectedhalf of the world's population expectedhalf of the world's population expected to hold national elections this year howto hold national elections this year howto hold national elections this year how should one navigate and capitalize onshould one navigate and capitalize onshould one navigate and capitalize on Associated risks and opportunities inAssociated risks and opportunities in
QuestionerAssociated risks and opportunities in the 2024 investment landscape additionally in your view do the political Essence and public sentiment outweigh Financial fundamentals in the scenarios
OtherI think I'll add to this turkey your turkey play it's the wrong question and the wrong way to approach it you need to start with a business it's a big mistake to start high level and try to go down that's just not a a good way to go about it I had an interest in Turkey because it there was a lot of dislocation at the time and it was hated and unloved but immediately after I made when I made my first trip to Turkey my focus was on meeting companies and I was just going there to understand what these businesses did and I love figuring businesses I didn't care whether we made an investment in turkey or not and I didn't really know I didn't even think we would ever invest in
Questionereven think we would ever invest in Turkey but basically I probably in the last few years visited probably 70 or 80 uh listed Turkish businesses and I didn't really care about the macro whatever was was going on it was there in the background what I was looking everything was on sale everything was very cheap what I was looking for is the greatest businesses that were immune for to any of the macro things that are going on so for example if we have a Coke bottler in turkey or let's take a more extreme situation because turkey is too too Mickey Mouse to talk about Coke bottling let's let's say we have a thermonuclear massive thermonuclear event in in the world thousands of warheads go off instead of 7 billion humans we're left with 2 million humans the human race is basically almost wiped out okay somebody somewhere will start bottling Coke okay
Questionersomewhere will start bottling Coke okay the currency will be gone everything will be gone I don't really care if it's seashells but a person will be willing to trade some amount of their labor laor for a 8 O serving of coke okay so in a thermonuclear event which wipes outoutout 99.99% of humanity Coke is around so do we really are we going to really care about the Turkish Le no completely irrelevant and so when I invested in the Coke botler and when I started going to Turkey 5 years ago it was five lader to the dog now it is 42 L to the dollar all our investments in dollars are up massively all Mickey Mouse didn't care about the macro all I cared about is that if you have a Coke bottler people will be willing to trade certain amount of their labor for a 8 ounce serving of coke doesn't matter what the inflation rate is doesn't matter what the exchange
Questionerrate is doesn't matter what the exchangerate is doesn't matter what the exchange rate is doesn't matter what anything sorate is doesn't matter what anything sorate is doesn't matter what anything so we start with a business that that'swe start with a business that that'swe start with a business that that's pretty cool now I have one finalpretty cool now I have one finalpretty cool now I have one final question for you mon this a day in yourquestion for you mon this a day in yourquestion for you mon this a day in your life I think I've gone through all thelife I think I've gone through all thelife I think I've gone through all the interviews that you have on YouTube I'veinterviews that you have on YouTube I'veinterviews that you have on YouTube I've I've gone through everything else I'mI've gone through everything else I'mI've gone through everything else I'm really curious I'm genuinely curiousreally curious I'm genuinely curiousreally curious I'm genuinely curious like okay what is a day in your life Ilike okay what is a day in your life Ilike okay what is a day in your life I see all the books behind uh you know howsee all the books behind uh you know howsee all the books behind uh you know how much do you read versus how much do youmuch do you read versus how much do youmuch do you read versus how much do you talk to people on average over let's saytalk to people on average over let's saytalk to people on average over let's say a six month period and you know how howa six month period and you know how howa six month period and you know how how do you kind of condense this down indo you kind of condense this down indo you kind of condense this down in your mind and how do you ultimatelyyour mind and how do you ultimatelyyour mind and how do you ultimately decide okay this is because you're goingdecide okay this is because you're goingdecide okay this is because you're going to have competing information comingto have competing information comingto have competing information coming from from everywhere opinions all sortsfrom from everywhere opinions all sortsfrom from everywhere opinions all sorts of information flows so walk us throughof information flows so walk us throughof information flows so walk us through this and I I'm curious I really amthis and I I'm curious I really amthis and I I'm curious I really am curious about this the only thing onlycurious about this the only thing onlycurious about this the only thing only
Questionercurious about this the only thing only meeting or business thing on my calendar today was this event okay and I don't think there's anything on my calendar tomorrow and basically one of the things I learned from Boren and Charlie is be extremely good at saying no so I say no to almost everything I especially say no to anything related to a call or a meeting or anything like that so when I wake up in the morning I don't want to have a predetermined agenda of okay this this is my schedule for today or any of that I don't want that I want complete free form and so then I can decide okay are we in the middle of a rabbit hole and we can keep going down that Rabbit Hole or are we looking for the next Rabbit Hole or what do we want to do so it's very flexible how the time gets spent so the reading I love to read the priority always is investment reading right so if I'm
Questionerinvestment reading right so if I'm looking at a business or something then I've got a lot of things to look at and read but but in the lull periods when we don't have exciting rabbit holes then we've got books that we can read and and such so probably I may have read a quarter to a third of the books in my library so there's plenty of stuff on the shelves that I haven't gotten to yet so I can always wander in any area into any subject and pick it up and I'm a harsh grader so a lot of books don't get finished you know one one of the things I found curious is Bill Gates says that once he starts a book he has to finish it and I would be just so hosed if I had to do that because most books should be five pages long and they are 300 pages long all the content is in four or five pages and I'm trying to get to those four or five pages of content that some
Questionerfour or five pages of content that some idiot has buried somewhere yeah so if a book doesn't grab me after you know a few pages of 10 20 30 pages I may move on you know move on to another one and keep going from there so basically the idea is that and I think Buffett and Munger try to operate very similarly I saw this with Charlie especially I think Warren is very similar you know even though they all those people in headquarters I mean he has his door closed and he's just reading and doing his thing or whatever he's doing and he guards his schedule very carefully doesn't put stuff on the schedule so I think less is more it's uh really important so if you work backwards where if you say okay someone says to you you were 90 years old and yesterday you died and pretend you're your best friend and your best friend's going to reite your eulogy
Questionergoing to reite your eulogy and they're going to present this eulogy in about five minutes so it's like a one page or one and a half page long to your close friends and family okay and they're going to talk about whatever happened in your life and what great how great you were and all of that the question to ask yourself is if something's not going to make it in your eulogy why are you spending time on it
Questionerso I think Buffett and Monger what I noticed is they were really really good at getting to the essence and so so there's a lot of wasted time with a lot of humans you know people want to meet for lunch or meet for coffee or whatever else is going on and I think that just takes away Focus but so I'm sorry to disappoint M there's just not much going on just the way it is
Otherno and and that's that's that's a wonderful wonderful Point actually to bring the call to a
QuestionerPoint actually to bring the call to a close uh I just have one last favor if you have a reading list uh from all the speakers that we we have we're trying to get a reading list so if you have a recommend reading list that you share out uh we'd be most grateful for you uh if you could sh send that to us okay and uh just Mish it's uh it's been a journey of over a decade for me to get this call so I just wanted to say thank you I'm deeply deeply grateful to you and from all of us here we're just super super grateful and lucky uh to have had this opportunity so thank you
Otherwell you're at a wonderful institution amongst the best in the world if not the best and I think it's a great place to be and everything that's going to changes happening there so you have the you're at a front row seat on all of it so you can uncover very big fortunes by just asking what is
Othervery big fortunes by just asking what is that and where is that going a side fact here is we actually have access to Moody manuals from 1909 all of them right that's great slowly I'm trying to get my head round it's a it's a slow interface but that's awesome well thank you for having me it was wonderful thank you thanks Mish and uh look forward to seeing you soon all right we'll talk to you later bye