Chit Chat Stocks - [INVESTING UNSCRIPTED] Bestselling Author of The Warren Buffett Way: Robert Hagstrom

Starting point is 00:00:00 okay everyone welcome in we have a special edition of chit chat stocks today and actually it is a cross-promotion episode with our friends over investing unscripted is an interview they did with robert hagstrom author of the warren buffett way that they released back in april ahead of the annual meeting and when the author hagstrom had just released the 30th anniversary edition of the book, The Warren Buffett Way. It's a fantastic book. It's a fantastic podcast episode. We highly recommend that you go follow Investing Unscripted at Apple Podcasts, Spotify, YouTube, or wherever you get your podcasts. So I'll let this interview speak for itself. Without further ado, here is the Investing Unscripted episode, bestselling author of The Warren Buffett Way, Robert Hagstrom.

Starting point is 00:00:54 Hey, everybody. Welcome back to Investing Unscripted, where we ask the hard questions about investing. I'm Jason Hall, joined as always. Wait, almost always, Jeff. Did we finally nail that down? Yes, joined almost always. The voice of the people, Jeff Santoro. Hey, buddy. Hey, how you doing? I'm good. And I'm excited because we've got a great guest lined up for this show. The Berkshire Hathaway annual meeting's coming up been about six or seven weeks. Always a lot to talk about when we get to that. Got somebody coming on that I interviewed a couple of years ago, wrote one of the very few

Starting point is 00:01:35 definitive books on Warren Buffett and Warren Buffett's investing, Robert Hatch. We're going to talk to Robert in just a second here, but first, Jeff, do a little bit of housekeeping. Yep. So normal housekeeping announcements for everyone. Thanks again to those who've been reviewing and rating the show. That really helps everyone find our podcast. I learned this week, Jason, that you can actually edit an old episode rating on our review on Apple Podcasts. Someone came back and updated their earlier review and said that they were happy that we were still doing a good job. So we pleased the customer many months ago and he's still pleased. So that was kind of cool. But if you could take a moment to give us a rating, give us a review, we really

Starting point is 00:02:14 appreciate that. Um, and that's it. I'll keep the housekeeping short so we can, uh, get to our interview. I want to add one thing onto that. I think it's, it's kind of an improvement. We had a reviewer recently who pointed out that we were improving. And of course we interpreted that to mean that we were good, but just getting even better. This is even better than that. This isn't somebody that was surprised. This was somebody that was pleased. So yeah, I'll take, I'll take, he said he, uh, he hoped we get re-upped for season three. So here we go. Well, Well, I got a good feeling with getting great people, great guests like Robert Hagstrom on. That's going to help. Robert, how are you?

Starting point is 00:02:51 Great. Jason and Jeff, great to be with you. Thanks so much for the invitation. Yeah, really happy to have you on. So for those that don't know, Robert Hagstrom authored The Warren Buffett Way, one of two or three books that are really definitive books on Warren Buffett and Warren Buffett, the investor. Robert, I was lucky enough to have a conversation with you a couple of years ago, right before the Berkshire Hathaway annual meeting. A lot has happened since then. And the one thing that's really exciting that is about to happen, so the timing just kind of worked out pretty good. What's going on with the Warren Buffett way that we want to start off with? Well, thanks guys. And I am excited about the new book. It is,

Starting point is 00:03:33 it actually, I guess, would write us the fourth edition. The first one came out in 94, which was the very first book, Roger Lowenstein's book. I don't know if you count his book as one of the great books, but Buffett, The Making in American Capitalists, which I thought was the best biography, came out shortly after mine. And then we did a second edition in 2004 and a third edition in 2014. And Wiley came back and said, would you do the 30th anniversary edition? I said, well, what are we talking about here? The fourth edition. And they said, no, we want to make this So while the investment classics, and when they said that, that, that meant a lot to me because I thought Warren, uh, and the book on Warren deserved to be, you know, in a, in a library shelf that included, you know, we're talking about some of the great investment books, you know, the common stocks and uncommon profits by Phil Fisher. Reminiscence of a Stock Operator, Where the Customer Shots, great book, Battle for Investment

Starting point is 00:04:26 Survival, Super Money, which is one of Warren's favorite books, The Optimity of Finance by Soros, Bogle on Mutual Funds, Warren loved Bogle. And so it would rank into that library. And I thought a book on Warren Buffett definitely deserved to be there. It'll be in prep 50 years from now. And that was the catch, the idea that somewhere down the road, there'll be a college student, not unlike Warren Buffett, you know, trying to figure out things and there may be a dusted copy in the back of the library still in print. And I thought, yeah, that was it. So the idea to wrap it up here was that we would take the best of the Warren Buffett way, the best of the Warren Buffett portfolio, which talks about concentrated low turnover portfolios and the best of the money

Starting point is 00:05:07 mind, which I wrote a few years ago, which was not a method book. It was more of a philosophical book. And so mindset book. Yeah. So it's a compendium, if you will, of all three books. And I think it turned out pretty well. Warren has seen it. He's pleased and he's very pleased that the book is going to be reprinted and stay in print. So all is well in Omaha. Robert, let's, before we get into the topic at hand, Warren Buffett, your book, some of the things from the book, the process of writing it, how you've seen Buffett evolve, how you've evolved. Let's lay your background on what your history is. What's your origin story? How did you come to investing? And then lead you to write one of the definitive Warren Buffett books. Yeah. If you believe this story, and I assure you it's true, you would say there's no chance in hell that Robert Hagstrom would have ever written a book about Warren Buffett, because I had no starter. I was not at the start line when the gun went off. It was really haphazard. I was a political science major in college with the Villanova University and did my undergraduate graduate in political science, never took an economics course, never took a finance accounting, anything. And I actually had done some writing in college. I wrote for the Villanova and started the Libertarian Society. That was my great claim to fame and had interviewed some politicians and after graduation decided to go to Washington.

Starting point is 00:06:30 And I wanted to be the next Woodward Bernstein. You know, I wanted to be kind of an investigative journalist, if you will, and spent about three months there and was so disgusted with the place, I immediately ran home with my tail between my legs, went back to the local newspaper, the Suburban Wayne Times, and said, boy, I'd love to have a job as a writer, a columnist, if you will. And they said, we can't afford to pay you, but if you go out and sell quarter page ads in a newspaper, maybe we'll let you do a column once a month. And so, you know, right-handed God, I walked up and down the main line, Route 30, outside of Philadelphia, finding you on doors saying, would you like to buy a quarter page ad in the newspaper? And, you know, nine out of 10 said no. Walked by a place called Lake Mason, Woodwalker, members of the New York Stock Exchange. Had no idea what that meant. I thought maybe it was a law firm or an accounting firm.

Starting point is 00:07:15 And I swear, I almost walked right by. But I said, no, you promised you'd bang on every single door, walked in, may I see the manager? They took me back. I said, you know, I'm Robert Hagstrom, worked for the Suburban Wayne Times. Would you like to buy a quarter page out of the newspaper? He said, no. Would you like to be a stockbroker? And it was 1983, which is right there at the beginning of the bull market.

Starting point is 00:07:37 Well, for those that don't know, let me say this as well, just for those that don't know. Legg Mason is one of the most well-regarded value investing shops in the world, right? And that was helpful in itself. But, you know, I was dating a young woman at the time that I was hoping would become my wife. And I thought to myself, she may be a little more impressed with a stockbroker, which is what we were called in those days, that a quarter page ad in the salesman. Went into training three weeks and was totally clueless. I mean, they did the value line investment survey, all these great value investors from Lake Mason. And all they did was talk numbers and balance sheets and income statements. And I was totally lost. And the Thursday night of the third week, we were going to leave the next day. I had it in my mind I would resign. The trainer said, the trainee, Laura Lane, wonderful woman, said, listen, I have a photocopy of a Berkshire Hathaway and a report, which I had never heard of, written by a guy named Warren Buffett, which I had never heard of, and said, I want you to read that tonight.

Starting point is 00:08:31 Come back and discuss in the morning. Took it to the hotel room, opened it up, was instantly depressed. There's no tables, no photographs, you know, it's 20 pages of Warren talking. And it was epiphanic. It was, you know, the proverbial light bulb went on. It was an epiphany because what he began talking about was this woman, Rose Blotkin, who started a Nebraska furniture mart and then talked about Chuck Huggins at See's Candies and Jack Barnett, Geico, Stan Lipsy at the Buffalo Evening News. And he spent the whole, whole, you know, shareholder report talking about companies, their businesses, their products and services and the people that ran them. And I said to myself, oh, this is what investing is, you know, and, and in that, in that instant moment, the numbers, you know, grew flesh and, and muscle and blood. And, and I went back in and I said, okay, I got it figured out. And I went into production and I just imitated him.

Starting point is 00:09:25 Uh, you know, I decided I'd just buy great companies. I got every Berkshire Hathaway in report, read it all, every company that he bought, I had the in report. And I was like the kid following a ballplayer. Whatever he did, I did. And so that's how I got baptized into the Warren Buffett mafia, if you will. You know, it's funny you tell that story, Robert, because I've only read the last handful of years letters because I'm a little late to the game here. but this year's letter jumped out to me for what sounds like the same reason that that one jumped out to you his way of telling the story of what has happened with his company through the eyes of

Starting point is 00:10:00 a shareholder sure and it was just it was just such a nice reminder that you know intellectually i think i understand that we're buying little pieces of companies but it's so easy to lose sight of that and the way he writes kind of always pulls you back into that so it's just interesting i i can totally resonate with how that might have impacted you yeah we'll have to get you the 1965 through the 2023 annual letters. I think they've got them up to 2020 now on Amazon. And it really is. It's great reading. I mean, now I think I counted, it's almost a thousand pages of a chairman's letter. And you could not do Moby Dick or Warren Peace, or you could do Warren Buffett. And after a thousand pages of Warren Buffett, you've got a pretty good idea of how

Starting point is 00:10:43 investing works. He's a great writer. Just for edification, Carol Loomis, who was the editor of Fortune Magazine and a dear friend of Warren, is his editor. And he could not have picked a better editor because I have editors and believe me, they always make me sound much better than I actually am. So he, Warren Lucknow, getting Carol Loomis to be his editor. Not to fast forward too much, but then you would spend roughly a decade from reading that first Warren Buffett shareholder letter, building your career, becoming established, finding your own way as an investor. Bridge that gap, that 10 years between when you started, when the Warren Buffett Way first edition was published, how did you come to write the Warren Buffett Way?

Starting point is 00:11:26 Well, and that, you know, it's a story in itself. You know, back in the days in the eighties, stockbrokers, we weren't fee-based managers. EF Hutton had not come out with a wrap fee on separately managed accounts. And so we were all commission guys and gals. And so your paycheck was based upon what you bought and sold. And my manager came up to me one day, you know, me following the Warren Buffett math process. And he said, you know, Robert, you could double your salary if you ever sell anything. And I said, well, that's not how this works.

Starting point is 00:11:53 I mean, we're compounding, you know, we're compounding stocks over time. And look, I bought this two or three years ago. Look what it's worth now. And he goes, no, but you've got to start. If you don't ever sell something and buy something, you've got to start with it. So I left the sell side. I think this was 87, 88. I went to the buy side, worked for a bank there in Philadelphia, Fidelity Bay, went into the CFA program, got my CFA, left the bank, went to a small investment counseling firm.

Starting point is 00:12:19 And it was 1992 that the CFA Institute came out with what was called the performance presentation standards and said, in so many words, if your decision-making process is not 100% yours, it's not considered discretionary. discretionary. It's considered non-discretionary and therefore it's not your track record. You can't publish it. And our investment counseling firm was very much like a trust company. I mean, the client had a favorite stock. He got into the portfolio. There was tax issues. We'd work with them on it. If the son wanted to start, you know, so we did not qualify for track record. And I said to my partners, I said, we're in a whole lot of trouble. I said, we no longer have a track record. And I said, we've got to get a track record. And they said, well, what do you want to do? And I said, well, let's do this Buffett thing. And of course they were kind of like up to here

Starting point is 00:13:05 with me and Buffett. You and Buffett were sick of it. And the deal was, you know, write a white paper, a marketing paper on it. And if you can sell it and enough people sign up, we'll make that our discretionary track record. So the Warren, by the way, actually started in 1992 as a, you know, kind of a white paper on Warren Buffett, how to think about stocks and businesses, how to think about portfolio management. And that was the genesis of the book. Somebody got a hold of the white paper and said, you know, this would make a interesting, interesting, I mean, they got ahold of the white paper and said, this would make an interesting book. I had thought, you know, well, gosh, I don't know if I got a book in me. I swear to God, I went to Samson

Starting point is 00:13:44 Street in Philadelphia. There's a how to do it bookstore. And it was like, you know, how to fix your roof, how to fix the engine, how to repair the refrigerator. And one of the books said how to write a nonfiction book. I said, well, that's kind of very skinny. And I opened it up. The first page said, had you ever written a 20 page term paper? And I said, well, yeah. And I said, have you ever, you know, gotten a B or better? And I thought, well, in my college career, there's got to be a couple of Bs that I could point to. And then it said, you know, could you write eight term papers in a year? I said, well, heck, I used to write three in the last week of the semester. Surely I get in bed. They laid it out in such a way that writing a nonfiction book, and this is

Starting point is 00:14:22 different than fiction, but writing a nonfiction book is really nothing but a string of term papers. And the first chapter is what you're going to tell them. And the last chapter is what told them. Right. Tell them what you're going to tell them. Tell them, tell them what you told them. Yeah. So I had, I had a book outline. I had a sample chapter. I took it to a couple of publishers. Every one of them said, Robert, we are not interested in a book about Warren Buffett. We want a book written by Warren Buffett. Right. Right. Of course, he always flirted with the idea that he would do it, which he never did. And, uh, with this great guy, Miles Thompson, who was the beginning editor, John Wiley, said, you know, I'll take a shot on it. And he published it. And

Starting point is 00:15:00 boy, another story is how it became a New York Times bestseller. But it began as a marketing piece, how to build a track record. And John Wiley took a shot on it and it became their very first New York Times bestseller. So, Robert, I've heard that once the book was written or as you were writing it, it got reviewed by or had to kind of get cleared by Warren Buffett. What's the background story there. All right. So Warren's deal was this. So I actually, I'd sent him this letter. This is before. Each of the shareholder letters, these are copywritten, copyrighted, right? These are copyrighted. Jason, you're right on cue, which is, I had decided that I would take the quotes from his letters and have him speak through the book as if Warren was, you know,

Starting point is 00:15:42 describing to the reader what was going on. Of course, then I knew I had to have copyright permission. I sent him a letter and I said, you know, Keywood Plaza, Omaha, spam on the envelope, sent it to U.S. Mail. And about three weeks later, here it comes back. And it said, dear Robert, thank you very much for your letter. And he said, I can't give you copyright permission just yet. Well, being in sales, I knew not just yet, I mean, that's not a no, it's just what do we got to do here? Right. Push the door open a little further. And he said, you know, I've seen some bad experiences with investment books. I don't want a book that's the get quick, rich schemes of Warren Buffett or how to make a billion like Warren Buffett. The deal was this. I had to

Starting point is 00:16:21 send him every chapter. And at the end, if he was okay with it, he wanted to know how the book was going to be titled, how it was going to be marketed. He said, at the end, if I'm satisfied, I'll give you copyright permission. At that time, his secretary was a woman by the name of Debbie Pazanik. Debbie Pazanik is his secretary. She must've been 17 years old at the time. And I would send a letter in the mail and she would call me back and say, Robert, you're okay. Keep going. Well, this what chapter one, chapter two, you're okay. Keep going. Never made a change. Right. And while he was saying, where's the copyright permission? Where's the copyright permission? I said, it's coming. It's coming. It's coming. Don't worry. We got to the end of the

Starting point is 00:17:00 book and he said, okay, you know, here it is. What's the title. Miles said the worm by the way. And I said, fine with me. This is how we're going to market it. And he gave me that copyright permission, did not change one word of the book. Now that's not to say the book is perfect. It wasn't, but he didn't go in and make any things. And he didn't need to, because basically all I did was take what he had written and organized it in such a way, dividing it into business tenants, financial tenants, management tenants, value tenants, and then took all the stocks that he bought and just lined them up and and it spoke to him so i didn't invent anything i didn't exaggerate but boy i was damn lucky um that he gave copyright permission because the book wouldn't have been

Starting point is 00:17:44 success without i mean having warren speak through the book yeah uh was a you delivered a little bit what what those other publishers said they wanted you know yeah in some ways yeah i mean they got they got warren speaking through the book although it wasn't a book by warren but it got as close as any book could have gotten to them by having him speak through the book. One of the things that I appreciate about your book, and there's a little bit, you mentioned the Lowenstein book as well. That's another, I think your book and Roger Lowenstein's book are the two by far without par on Buffett. The chapter two or three, I can't remember which it is, that talks about the people who influenced Buffett. And you have his father, right? Deep,

Starting point is 00:18:26 deep influence. And then you have some of the greatest investors of the 20th century as well that influenced them. Yeah. Well, in the first edition, you know, it was very simple. It had to be Ben Graham, right? So, you know, Warren read The Intelligent Investor. He was, you know, 18 years old or 19 years old at the time, 1950. It wasn't his birthday until August. And he had, his dad was a stockbroker and Warren was all over the math buying stocks. He even did technical analysis. He was all over the chart and he read The Intelligent Investor and the whole idea of margin of safety. Buying stocks at 50 cents on the dollars really resonated to him. He thought that Ben Graham was dead. But then in looking him up, he found out that, in fact, he was a professor

Starting point is 00:19:06 at Columbia University, then discovered there was a book called Security Analysis that was written with David Dodd. He was also a professor at Columbia. And he, you know, within a month, you know, had gotten accepted and was on a plane going to New York and was, you know, on campus in the fall of 1950. So Graham, huge influence, which he has repeated many times over. I had also had thought, because Warren had tipped his hat,

Starting point is 00:19:31 that he had met Phil Fisher, who had written Common Stocks and Uncommon Profits, and said that he had an influence. And I think at the time he said, and this was in the 1960s, I picked up a magazine article written. He said, I'm 85% Graham, 15% Phil Fisher. So I went and read Phil Fisher's book.

Starting point is 00:19:48 I actually ended up into a letter uh we became very friendly exchanging letters phenomenal man i read um common stocks and uncommon profits and it was the bridge it kind of gap between graham doing this quantitative hard book low pe and fisher doing the fundamental side what makes for good business what makes for good management right so i said in the book i said yeah it's graham but in addition you got to take a look at phil fisher and and so i went through all of phil fisher's his 12 points and you know i i'm sorry it's like 20 points in account and so i the first edition was that the second edition actually before that when we did the one month of portfolio uh had charlie in

Starting point is 00:20:29 there i hadn't included charlie too much in the first edition of the book and the second edition of the book i really plowed into charlie and said you know charlie and because charlie was not a ben grant guy he was you know he had run his own investment partnership and he was by a bet you You know, if you read the tribute this year, Warren said, you know, Charlie was the architect of Berkshire. You know, I was just the general contractor. And that's true because Charlie was never a big fan. He respected Ben Graham, but didn't buy into the low PE, low price-to-book type stuff. He was more of a Phil Fisher guy.

Starting point is 00:21:04 So I gave Charlie a lot of airtime in the book, deservedly so, in the future books. And then when we did the money mine, Jason, you might remember, I figured that what we missed, we mentioned his father, Howard Holman, Howard Holman Buffett. It was a congressman, stockbroker, and Warren said the most important man in my life, other than Ben Graham, most important man in my life. And so I started drilling down on Howard Buffett and, you know, went through the newspapers and stuff like that. And Roger gave me a great idea. Roger said that it was the link to Graham was basically having Warren learn the Emersonian philosophy from his dad that made possible his connection to Graham. So I went, Emerson. Well, I remember Ralph Waldo Emerson. And so you go to his famous essay called Self-Reliance, and there's Buffett. If you read Self-Reliance, you go, there's Warren Buffett. So you can imagine, here's this 9, 10, 11-year-old guy. He worships his dad. There's no TV, sometimes radio. His dad's a libertarian. And all he's doing is talking about Emersonian philosophy. So now the book today starts with Howard Holman Buffett, then goes to Graham, then says, no, it's not Graham, it's Phil Fisher's, the additive. And then it finishes up with Charlie, justifiably so that Charlie, you know, raised the bar for Warren, not only in buying better businesses, but and also obviously in the legal because he was an attorney. But, you know, the whole idea of the psychology of his judgments was huge. I had written about the latest work of mental models, a book now called Investing the Last Little Art. And, you know, Charlie's a polymath. And so Charlie is kind of the end of that chapter of the education. So you really begin to come away with Warren's influence. It's his dad, Ben Graham, Phil Fisher, and Charlie Munger all collected together. And what a power, what a powerhouse. You know, if you followed those four guys, you know, you would definitely succeed.

Starting point is 00:23:02 So you mentioned the tribute that Buffett wrote in this year's annual letter about Charlie Bunger. It jumped out to me as being, I guess that was more credit to Berkshire's success than I would have expected Buffett to give. And it got me thinking about their relationship and the way they played off of each other. So I'm just curious, as someone who's obviously spent a lot more time thinking about Warren Buffett and Charlie Munger than I have, did that surprise you? Or do you think that that's an accurate portrayal of how Berkshire kind of came to be? And maybe it's just the greater media that has always given Buffett most of the credit, even if it was equally split or maybe even more Charlie than Warren. Um, I, I was, I was very much surprised at, not surprised, but can I say surprisingly pleased that Warren basically said it was chocolate, you know, and then you go back to See's Candy. There was the pivot in 1972 when they bought this chocolate candy company on the West Coast, you know, it was three or four times multiple of book value. Warren says, you know, this looks very expensive to me.

Starting point is 00:24:09 Charlie says, no, it's not. You don't get it. This is the business we want. It's a cash generation and sees, you know, it was almost, and it was, you know, Warren begrudgingly, I mean, it was a $40 million purchase price. They had 10 million on the ballot sheet. So it was 30 million to buy it. And even Warren tried to probably scale the deal by offering 25 million and they

Starting point is 00:24:28 took it and what happened over the next 20 some odd years was just phenomenal cash generation out of C's candy. So had Charlie not pushed him to buy C's, it would have been delayed, you know, not impossible but it would have been delayed because you could look at what happened next you know coca-cola you get into the american express and even some people say apple today um that sees candies that that charlie said warren pay attention to this started everything and that was the pivot he pivoted from graham went into the better businesses and the rest is history now he made mistakes you know buying airlines and you know stuff like that but overall he says even today

Starting point is 00:25:10 when I come away with Graham, there's only two chapters in the Intelligent Investor, Chapter 8 and Chapter 20. Chapter 8 is margin of safety, and Chapter 20 is how to think about words. That's it. In the 1992 annual report, he described value investing has nothing to do with price-earnings ratios, price-to-book, dividend yields. Low P doesn't mean it's a value. Neither does high P. I mean, it's not a value. And really turned everybody upside down. Introduced John Burr Williams, the dividend discount model, and says, I'm looking for coupon clippers. I want money coming in the door so I can buy more companies for Berkshire. That's Charlie. Companies generate a lot of cash. He had already learned early on that buying stocks based upon

Starting point is 00:25:49 Ben Graham's low PE didn't generate cash. They were capital intensive, low margin, headache companies. He was trying to build a conglomerate, but he didn't have any firepower from the companies that he was buying from Graham's methodology. But when he pivoted to Charlie, big gush the money just gushed in well there's a you know there's a few things from that that it reminds me of um number one is and i can't remember who it was that said it but the when the facts change i changed my opinion and i think warm like warren buffett demonstrates mental flexibility maybe more than any other investor that i can think of and his willingness and his reasoning behind investing in the airlines made sense, that it had become a more consolidated

Starting point is 00:26:35 industry and there was opportunity. And then of course, everything that's happened since then has said, well, sometimes the facts may change and it'll not work out. But thinking about shifting away from that Ben Graham style, back when Graham and Dodd were professors at Columbia and before that, they had access to information, they had a competitive advantage to find those deeply discounted opportunities. And with quantitative computing and everything on the SEC website instantaneously available, we don't, as retail investors, that's, we don't have the advantage of that information to find that deeply discounted value anymore. Right. And having, you know, Charlie standing, I can picture Charlie kind of standing behind him a little bit with that

Starting point is 00:27:19 gruff look on his face. You know, just, just constantly reminding him, Warren, you're mine, your ability to find moats that's a competitive advantage yeah and charlie's saying sure or warren saying sure but you know what i'm still not going to pay more than 15 times earnings yeah right and kind of the combining of those those those strengths not completely evolving from one thing to the next but combining the taking away like you said those two chapters from from um um, from Graham and combining that with how he could leverage that in the modern world. And then, and this is the last thing I want to ask you about on this, before we start talking about the, the, the 12 tenants on investing. Um, one of the most powerful things he figured out

Starting point is 00:28:05 Geico, I think opened his eyes to it, um, is the power of being able to use leverage in a smart way, you know, banking the danger with leverage is you get a run and you're out of business. Yeah. Yeah. In insurance. Cause that was, I believe the first, I believe the first acquisition was the insurance company in Omaha. I can't remember the name. Yeah. It was national indemnity. Yeah. That, that really spoke, you know, he got a great education from national indemnity. But having said that when he was in college doing his master's with Graham,

Starting point is 00:28:39 he noticed that Graham had a huge position in Geico, which was always, and we talked about this in the book was always kind of odd because it was not a classic value stock. And, and by any stretch of the imagination and Graham was very much don't lose, don't lose, don't lose. And when you looked at Geico, you know, it was based more on the future of them selling agentless insurance at discounted prices, untested. So it really didn't fit, but he actually looked up, they were in Washington DC.

Starting point is 00:29:06 He opts a train on a Saturday morning out of New York Penn station, gets down to Washington DC, bangs on the door, janitor answers the door and Warren says, can I talk to anybody about this? The janitor takes him back, and it's Lorimer Davidson, who's the CEO, and they spent three hours talking about insurance. So what he says, though, in the annual reports, and it's actually true, insurance companies are great investment vehicles. They're not always great investments, right?

Starting point is 00:29:34 You could screw up an insurance company pretty good, but for the time being, when the premiums are coming in, that's your float that you get to invest. So they are terrific investment vehicles. So Warren figured out real quickly, you know, I get a lot of cash that I get to invest in the market. And as long as we don't screw up the pricing and betting the risk, you know, I can, that's the leverage, right? That's, I can take other people's money that I don't have to pay them just yet and invest

Starting point is 00:30:00 it in the stock market, earn an excess return up and beyond what I got to pay them when the claims come in. And, and that's how he leveraged it. And, and that's why the insurance business is the single largest, most valuable part for each other. Yeah. Yeah. That's where the money for so much of the other investments have come from. It's remarkable. Yeah, absolutely.

Starting point is 00:30:19 So one of the chapters, maybe my favorite chapter is on the tenets of it. Well, I guess it's over a couple of chapters, the 12 tenets of investing. I want people to read the book. I don't want to share all of them, but if you can talk a little bit about the tenets of investing, your realization of these central tenets that are in Buffett's process, how you kind of came to that? Well, you know, once again, warrants, you read all the annual reports, you can start to write down how many times he talks about what makes for a good business. And then you write down how many times he talks about what makes for good management. And then you write down all the things that he says, these are the best financials. And those, in a sense, became the four buckets. And the last part is valuation. And that was John Burr Williams dividend discount model and Ben Graham's margin of safety. But, you know, it was so simple. He goes, look, I don't buy a business I don't understand. I went, all right, simple and understandable too. I like to buy, you know, businesses that have had a consistent operating history. I don't like turnarounds. I want to know that you know what you're doing and you've proven you know what you're doing. And so that was, you know, consistent operating history. And the third one, which is probably the single hardest thing, and Warren has said, this is where I make most of my mistakes, is long-term favorable outlook. And so those were the three tenets.

Starting point is 00:31:37 I've got to be able to understand it. You've had to have a consistent operating history. And third, there has to be a favorable long-term outlook. Warren says of the mistakes that I made, the one that I most frequently made is not the price that I paid. I paid a good price. It wasn't that management turned on me and ended up being evil allocators of capital. It is that I misjudged the long-term competitive nature of the business. Now, he's good on modes, but the mistakes that we've made and I've made and probably everybody else is that we didn't quite accurately calculate how long that competitive advantage period would last.

Starting point is 00:32:11 And when you get that part wrong, then things change pretty quickly. So that was interesting. management you know a lot of there's a lot of phil fisher in management candor you know rational allocation of capitals things of that nature finance was you know very return on equity was more important to him than eps growth but you know you take owner earnings which is adjust for the capital investments you need high margins the other one i thought was really good and he used it very early was for every dollar reinvested in the company it has to produce at least one dollar market value. Well, that's, you go back and that's actually, I'm trying to think it's

Starting point is 00:32:46 Al Rappaport creating shareholder value. That was the very beginning of companies that earn above the cost of capital increase intrinsic value. Companies that earn below the cost of capital destroy its shareholder value. So when you have a company that takes a dollar of investment in and creates more than $1 of market value, clearly it's earning above the cost of capital. I mean, that's just a litmus test. If you take a dollar in and you're not earning at least $1 market value, then obviously you're destroying shareholder value. So Warren picked up that way before, you know, McKinsey and Stern Stewart guys were doing PBA and all that stuff. That was just a litmus test. He said, over time, I can figure out if it's a good business

Starting point is 00:33:24 based upon what the market value is after they had invested all the money back into the company. And it was great. It was, it was a perfect. What's interesting to me with these tenants, you just explained some of them and they're very clear and easy to understand. And he's been writing annually and be doing interviews for decades. He's very upfront about his whole process. Why do you think that we've not seen anyone able to replicate what Berkshire's done or, or are there people out there that you think have come close who maybe just don't get the headlines? Well, I, this is something that I'm going to talk about at Berkshire this year. With Charlie back in 2017, he said, if we're so smart, why are so many eminent places wrong?

Starting point is 00:34:04 Why aren't we taught at universities and why aren't we embraced by big money management organizations? There are Buffett people out there and, you know, they're well-known, the Tom Russo's of the world. You know, Tom Gaynor at Markel is trying to do it. But if you look at a percent of the money managed that is of a Buffett clan, if you will, or the Buffett way, however you want to describe it, it is minuscule based upon the amount of money that is being managed in this world. Let's take the alternatives off the table. Take venture capital, private equity, take that all off the table. If you think about it, it is less than 1%. It would be a fraction of 1%.

Starting point is 00:34:43 And the question is why? And in the book, the new book, we actually tracked that down. And Harry Markowitz, fine young man, brilliant, played the violin, great reader and everything, liberal arts major, just like me, decides he wants to do his graduate degree in economics and finance at University of Chicago, ends up writing a paper on risk and return in economics. And if you go back and look at the original paper, he said risk and return is related. And of course it is. You know, the more return you want, the more risk you have to take. And the less return you want is probably the less risk. So he had that part right. He said return is the dividend yield economic return.

Starting point is 00:35:26 He said, no, risk, though, I define as the variable, the variability of the return, the price return, which I deem to be undesirable. This is 1952. Right then and there, somebody should have stood up and said to him, you're wrong. The Dissertation Committee didn't say anything. His thesis advisor didn't say anything. In 1949, Intelligent Investor was written and said risk is margin of safety. Security Analysis was in its third edition in 1951 and said risk is not price volatility. It is margin of safety.

Starting point is 00:35:58 He cited John Burr Williams' book, Theory of Investment Value, in the preface. John Paul Williams said. It is buying something for less than it's worth based upon the cash flows. All right. So he said, okay, that's it. William Sharpe shows up 10 years later. He jumps on board and says, yeah, based upon Markowitz, all these non-correlative trades you have to do, why don't we just come up with something that is singular? He got beta. So beta was risk. Nothing happened with this for 20 years. We get on the other side of the 73, 74 bear market. We blew up the money. Nobody. Ben Graham had already retired. The guy that came in after him, I'm just having a senior moment. I'll think of him in a second, had retired. There was no value investing program

Starting point is 00:36:40 at Columbia in 1974. The go-go stocks were all the big deal. Security analysis was not being taught anymore. We got to the other side of 73, 74, and there was a vacuum. Bill William Bernstein had written, you know, people were worried about their pensions. We blew up this money. Everybody it was pissed off. And they said, what are we going to do? And a bunch of academicians who hadn't been heard of in 20 years said, hey, I got an idea. You know this price thing? That's the evil. That's the demon. Why don't you put together portfolios that tamp down price volatility? Get a bunch of non-quantitative assets in your portfolio that reduce the risk of price variability, and you can get through a bear market like this. And they said, I'm in. That's exactly what I want.

Starting point is 00:37:22 And in 1982, when everybody came back, it was already the seeds that were planted. It was easily scalable. Everybody bought broadly diversified portfolios of non-correlative securities and industries. And then on top of that, everybody began rushing for short-term performance. And interesting, go back and look at the risk tolerance exams back then, questionnaires, 10 questions, seven of them are about how do you feel about the bounciness of a stock price, which everybody says, I hate this. So you then figure out, okay, go to Thomas Tune's theories of scientific revolution. You have a paradigm, you know, which was, you know, the, what I call the high priest of modern finance who were never investors, never owned businesses, had never been in the stock market and came up with a theory that got planted.

Starting point is 00:38:05 And, you know, they had more disciples that came in as dissertation guys who got their PhD. And all of a sudden you got this Leviathan that is called modern portfolio theory that seeks to defeat, you know, price volatility. And then Warren starts to vocalize his, you know, idea that that's not right. I'll do it the other way. But, you know, we were so small, we were outnumbered. Yeah. And today, you know, today to this day, people will prefer to have a smooth ride over the bouncing 15. And that's the world we're stuck in.

Starting point is 00:38:36 And that's why, you know, active money management is in such dire straits. Money's leaving yet to go to alternatives, to venture capital, to quant driven, whatever it is. But the long-moving manager is a dying breed today, except, I would argue, the guys that do high active share concentrated portfolios are doing just fine. They just need to raise the banner a little bit more and get people aware that this is a viable strategy. it's just different than than what has you know been part of this edifice for the last 40 years

Starting point is 00:39:05 i know that was long preachy but i had to get that off my chest no it's great and it um as you were saying it i was reminded of some of the more chippier comments charlie made over the last couple years in in meetings and on interviews it seems like as time went on he more than warren i don't know just to me anyway seemed to be a little bit more annoyed that everything that you just said is happening he would throw these little barbs out there well you know and well if you go back to the kunzian theories he basically says even the people at the original paradigm so let's say you're you're a phd in modern portfolio theory or you have a money management practice 10 billion dollars based on modern portfolio theory are you going to stand up one day and say you know

Starting point is 00:39:44 everything that i've been teaching you and practicing is a bunch of bullshit and i think we should do it differently of course right right you're not going to give up the ship you're not going to give up your intellectual capital you're not going to give up your paycheck your mortgage to say, everything that I've been doing is suboptimal and you should do it like Warren Buffett does. They'd have no business. They'd have no, these guys wouldn't be teaching classes. Robert, one of the, one of, one of my favorite episodes that we've done and something we, it's kind of a recurring theme here is talking about the power of incentives. Yeah, sure.

Starting point is 00:40:15 And this is, that's, this is a textbook case of that. I think, I also think it's remarkable too, that finance and investing is one of the few studies, one of the few disciplines that the way that it is taught is completely separate from the way that it is actually practiced historically. It is remarkable. It is remarkable that that's the reality. I think a good place to pivot from here is exactly this idea of taking, moving it from the page of the book, moving it from Buffett's annual letters to applying those lessons in the real world. And the two questions for you, I'll ask them together.

Starting point is 00:40:59 How has studying Warren Buffett affected you both professionally as an investment manager, but also how you invest for yourself? Well, whenever I, I'm kind of like Warren, you know, you eat your own cookie and whatever I do for my clients is what I do for myself or whatever I do for myself is what I do for my clients. So there's no cross-purposes, you know, 100% of my equity money is in my portfolio that goes to my clients.

Starting point is 00:41:25 What has changed, I think, is, well, it's kind of, I feel like, you know, Dodd-Coyote swinging at the windmills. You know, I've never met anybody who has ever disagreed with, I said, you know, this is this Buffett thing, this is what we do, and this is Warren Buffett. And I said, would you like to invest like that? You know, nine out of 10 people said, yeah, I'm in, let's do this. And six months down the road, you know, eight out of nine have already lost their mind because we didn't own Bitcoin or we didn't own oil and all the- It wasn't exciting enough.

Starting point is 00:41:55 It wasn't whatever the latest FOMO craze is. It's kind of like the marshmallow test. You know, they needed that instant gratification. Yeah, right, right. And I said, you know, that's not how it works. I said, you know, we compound money over time, you know, and people just can't do that. They just are mentally not wired. And by the way, in the 1980s, what came out then was Tversky and Kahneman's prospect theory.

Starting point is 00:42:16 And the high priest of modern finance said, see, I told you, you know, when a price goes down, it has twice as much pain as when the price goes up a single, you know. And so they jumped on that. And people are all about that. I said, it's not the, you know, we've become an investment community that knows the price of everything and the value of nothing. We're trading prices and we're not understanding where the value is. Now, I would say we've built a nice practice and it's not a big one. It's five billion, but we've got a good core of people that are business investors. And if you said to me, guys, who's the best investor that you can find?

Starting point is 00:42:49 I said, find me a business owner. Find me a business owner so I can talk to him about how he runs his business and what's important to him and how he thinks about the future of his business. And I'll tell him that I'll run his stock money exactly the same way. Those are the best guys we've got. And I mean, they go, I'm all in. That's what I want to do. But the people that can't make that connection that a stock is a business, as I did in 1984 back then, they just lose their mind. I can't figure out how to solve that.

Starting point is 00:43:17 So I'll pitch one to you. I thought maybe the way to do this, what does private equity have today? What, $3 trillion? They have about a trillion in dry powder that they haven't invested. Yeah, that's about right. All right, so private equity says, we're going to go in, we're going to buy a business, we're going to make it better. Now, Warren says, I don't want to buy a business, I have to make it better. I just want to have a good business.

Starting point is 00:43:35 But basically, a private equity has got to be the sweetest deal ever, never mind the payout, the incentives. We'll talk about that later. So every month I have to report my performance. Every quarter I have to report my performance. Every year I have to, right? So does private equity. But it's amazing. Their NAV never changes.

Starting point is 00:43:53 When they invest the money, the NAV is like a dollar. And then like three months later, it's like 99 cents. And then, you know, six months later, it's like five. And then, you know, and so they never have the bounciness of their NAV and private equity because they're calculating the NAV relative to the economics of what they own. And then when they get their payout, you're seven, you know, there's a big tail at the end and it goes up 50 to 100 percent. Well, it's the benefit of not having to deal with the voting machine part of the cycle. But people don't. I love private equity. It never goes down.

Starting point is 00:44:25 Well, I don't. Yeah, I love my portfolio. The economics have never gone down. But the prices are all over the place. And so private equity has got a winning hand that they don't have to play the bouncy game. I'm trying to do the same thing the private equity guys are, but I'm not trying to buy bad businesses that need to turn around and replace management. That's hard. I'm just saying, I'll do the same thing they're going to do. They're compounding money over time. I'm going to do the same thing and I'm not going to charge you, you know, 1% and 2 and

Starting point is 00:44:50 20 or whatever the number is, you know, we're, you know, we're a cheap shop. And they go, yeah, that's, that's pretty good. I said, well, why don't you do that with your publicly traded securities? Why just because they have a quote, do you have to lose your mind just because there's a daily price quote? why don't you just buy like a private equity guy and they go oh yeah that makes sense of course tomorrow they're saying bc's on and they've lost their mind again right it's hopeless i you know we've been trying to do this for a hundred plus years and we're still we still can't figure it

Starting point is 00:45:16 out it it always seemed to me that as long as we're going to get as long as we're you know we're going to keep living in a 24 7 news world which we do this will never be solved you know we would have to be in a world where you only get to see your stock price once a month or once every six months or whatever that'd be the only way out of it but well you know i'm not i'm not a big proponent of tax but i remember charlie and warren saying one way they'd fix it is they just you know tax capital gains short-term capital gains at 90 right you don't hold something for six months and you sell it at a profit 90 is tax well that that changes that behavior pretty quick yeah incentives never happen you know i'm not advocating that but you got to find a way to

Starting point is 00:45:55 make it painful for somebody to trade short term and thus far and what's all it happened you guys know it better than anybody is we just made the price of buying and selling go down and go down and go down and as you make the price cheaper it allows you to do it more often or the other way to do it is we should have raised commissions of this time and people would have traded less it would have been no quad shops you know they could have never if right commissions hadn't been uh you know you know deconstructed in the 1970s you know there couldn't have been a quad shop that could have traded like they did. It's remarkable how something that has made the market so much more accessible to so many more people has also made it harder to be successful because of that loss

Starting point is 00:46:37 of friction. You know, write that down and put it up on a bulletin board. We think, you know, the politicians thought if you make it cheaper and easier and more transparent, it makes it better. It has not. I would argue it has not made it better. Maybe for the one-tenth of one percent smart people that are running machine. And if you read Simmons book on renaissance capital, what is it from the man that solved the market or whatever it does? I mean, these are PhD mathematician and you know, when people say I could speculate, I go, yeah, let me show you the CV of people that actually do this for a living and make a lot of money. You're not even close to what this is, you know, that's a totally different brief.

Starting point is 00:47:15 Yeah. So, um, other than it sounds like we're talking about the next thing I wanted to ask, which is there are a lot of people, I think there are some individual investors who try to mimic what Buffett does, but they do it in a way where they just look at the 13F and go buy what he bought and who knows when he bought it or what price he paid and all that stuff. But I'm curious for just the average listener to this podcast, what are the most tangible two or three lessons that any retail investor can learn from Buffett beyond just everything we just talked about in terms of being patient and being willing to get rich slowly? Yeah. Well, if you would have said to me, you've got one thing to look at at a company, and there's just one thing, only one

Starting point is 00:48:01 variable, one thing I would do, if not return on equity, return on invested capital. Tell me what that is. Tell me what that was last year. Tell me what it is this year. Tell me what it is the next year, the third year, fourth year, fifth year. If I could look at one thing to say, am I in a good business or I'm in a bad business, I would look at what the company earns each and every year based upon its capital employed. If it's going in the right direction and upward sloping, that's all. Because then you know you've got a good business. You know you've got good management. And oftentimes, you really don't have to buy those companies at a steep discount. If it's a great company compounding at a high rate of return, you can buy it at fair value, not even slightly

Starting point is 00:48:37 above fair value, and do well over time. I would say just look at return on equity. The return on at equity has been good, I would say, look the last couple of years, look at it, where is today? And then you can look at, you know, different research services and what is the expectation for return on equity in the years ahead. If that's above 15%, say the cost of capital is 10%, that's your rate of return on the market. But if you found companies that were generating returns at 15% or better on capital, that gets you a long way down the road now question is how long can you do that and there's the part side of it right and trying to figure out and i was lucky to work with a guy named bill miller at lake mason i ran the growth

Starting point is 00:49:18 fund for bill miller for 14 years the only guy that beat the market for 15 years in a row he was a philosophy phd dissertation absent phd lived on william james pragmatism and he was the first value investor to ever figure out technology and value technology and and he spent all his time figure out technologies, where we need to be going. We just got to figure out one, how to value it and how is it sustainable? How can they do this over time? And that's the trick now in AI, right? Where's the, where's the sustainability of these returns over time?

Starting point is 00:49:51 And if you figure that out, well, you can get a long way down the runway. Uh, just on that. Yeah, that's, I really like, I like the idea of, I mean, I know it's never this simple, but I do like the idea of having, if you could only look at one thing. Yeah. Yeah. I like that. So I want to pivot back a little bit and talk about two things that are sort of related,

Starting point is 00:50:11 and it touches back on two things we talked about. So obviously Charlie Munger passed this year, early this year, or late last year. I forget exactly when it was now. November, yeah. November, right? Okay. End of November. That's right, because he would have been 100 on, what, January 1st or New Year's Eve or something?

Starting point is 00:50:27 Yeah. So I'm curious if you have any thoughts on, with Buffett running Berkshire in the absence of Charlie, If you have any sense of whether or not that changes his calculus of how long he wants to stay at the helm of the company. And then sort of tied to that, what do you think a post-Buffett Berkshire looks like whenever that happens? Well, you know, knowing how competitive Warren is, he'll want to run Berkshire one day longer than Charlie did. But he's not going to give up the ship yet. When it becomes November 24th of one, that's for seven more years, you know, maybe we'll have to start to worry about it. I mean, from everything that I gather, you know, he just loves every day.

Starting point is 00:51:09 Now, you know, people say to me, you know, when you're 90 years old, you're not hitting on all cylinders with equal force 12 hours a day, but he's still got it. I thought the last annual meeting, he was really back on par and doing a great job. There was a time where Charlie seemed to have a little bit more energy than Warren, but Warren has really pumped up. People that know him more than I do, so the energy's there, the enthusiasm's there, the walk is there. So, you know, God willing, you know, health and everything, he's not going anywhere for a while. And I bet you he's saying, I'll make it one more day than Charlie did. So I'm not worried about this year, next year. We already know the post world is Greg Abel, who seems more than capable.

Starting point is 00:51:52 He's running the largest number of people, not the largest amount of money when you consider what Ajit Jain does at National Indemnity. Ajit is a little bit older than Greg, but Joe Brandon, who came over on the Allegheny deal, Joe Brandon actually worked at Jenry and that was a mess and left and then started Allegheny and Warren hired him. I think it's the only second time that Warren has ever hired somebody twice. The first was actually Rose Blumpkin. He hired Rose Blumpkin or he fought Rose Blumpkin, the master furniture bar, she got in an argument with their sons, quit, went across the street and started a carpet company that was so good that Warren had to buy that company. So he hired Rose twice. Joe Brundon will go down in history as the second person that he hired twice

Starting point is 00:52:37 or the second person that he has hired more than once and Joe will be the backup to a G. So those two parts are in place. Then it's Todd Wexler and Ted Combs who've done a pretty good job of the portfolios. And it said, I don't know if this is to be true, but it said Apple was probably Ted's pick in 2016. But certainly Warren pushed the pedal down in 2018-19. And when he bet $35 billion, it was now Warren's stock, not Ted's stock. So those are good stock pickers. You can see maybe the bench gets enlarged over the years. but the wheels won't come off the wagon. And as so many people say, the culture there is so great, decentralized, so you don't really need to have anybody at the helm. You just have to have good

Starting point is 00:53:20 organizations. Let everybody run their own business and send the money upstream. Greg will allocate it, Ajit will allocate it, Ted and Todd will allocate it, and they'll do an above-average job. Maybe not as great as Warren or not as great as Charlie, but they'll do an above average job. And so I think, you know, I think there's no reason why the company can't continue to do. You know, I said in the book, I said, what's phenomenal about Berkshire Hathaway is that, you know, it could conceivably, you know, live on for another 50 to 100 years, surpassing every company because basically it's not dependent upon technology. It's not on a pharmaceutical. It's not dependent upon anything except compounding it. Compounding,

Starting point is 00:53:57 that's all it does. It just allocates capital. And as long as there's capital to allocate and they don't flush the money down the toilet. There's no reason why Berkshire wouldn't be around 50 years from now. Yeah, it's always struck me that what I most appreciate about Warren Buffett is his ability to change when the facts change, but still remain remarkably consistent.

Starting point is 00:54:16 Yeah. Yeah, I've said that when we've talked about Buffett before, that it's not like he decided how he was going to be in 1955 and never changed. If that had been the case, he wouldn't have bought Apple or allowed anyone to pitch Apple to him. Yeah. But even with that ability to change over time, there's been this remarkable consistency. And I like hearing you talk through the bench, so to speak, in the future. It sounds like we maybe not see any drastic change because it's a group of people that have that same skill set of being able to stay mostly consistent, but still changing when the facts change.

Starting point is 00:54:51 Yeah. And it's got a great board. You've got to remember, there's some really talented people on the board. Howard, his son, will become chairman of the board, non-executive chairman. And his job will be to see that the culture remains and the culture is sustained. So there's nobody that has a different agenda than what Warren does. They all want to just keep doing what Warren laid out. And it's interesting you say about, you know, with stocks, you said, you know, one time about the tenants, he says they're principals. And the funny thing about principals, they last a long time. That's why they're called principals. You don't have to go around changing them.

Starting point is 00:55:22 And I think, you know, I would say I could have called it the Warren Buffett investment principals. That would have been fine. But I think my editor said, why don't we call it the investment tenants? But it's the same thing. Tenants are principals and principals are long lasting.

Starting point is 00:55:34 So, you know, if you follow those tenants, which are warrants tenants, they're not mine, they're warrants, it would keep you in the arena of some good ideas that's going to increase your batting average over time robert one last question yeah when is the 30th anniversary edition coming off the presses pot date april 23rd to pre-order at amazon thank you for the plug um the book will be in omaha i i have heard that the the central book this year and And deservably so, will be Charlie's almanac.

Starting point is 00:56:08 Yeah, a new edition that just came out right after he died. I've already gone through the Kindle. You can't find it because I think all the copies have gone to Omaha. Warren has said that this will be the central book this year, and justifiably so. It's going to be Charlie-centric, but it's going to be a celebration, as Warren would say. Charlie would have it no other way, but it's going to be very Charlie-centric. I'm looking forward to it. And I can't wait to get to Omaha. But thanks for the plug. And guys, you just made it so much fun to spend an hour. This went much faster than I thought it would.

Starting point is 00:56:41 Thank you. Well, likewise, Robert. It was great having you on. Good. This is awesome. Yes. Again, Robert Hagstrom. I don't think we've said it. Chief Investment Officer at Equity Compass, right? Yep. Exactly right. Thank you. Yeah. Absolutely. Robert, hopefully we'll have you on again. Look forward to it. Jeff, Jason, thanks so much. I enjoyed it. Good luck to you. Thank you. Jeff, we did it. We did it.

Starting point is 00:57:02 As always, just a reminder, we love to give our answers to these hard investing questions. Have great guests like Robert Hagstrom to share their insights and their opinions. But it is up to you to answer these questions for yourself. But as always, I believe in you. You can do it. All right, Jeff, we'll see you next time. See you next time.

Chit Chat Stocks - [INVESTING UNSCRIPTED] Bestselling Author of The Warren Buffett Way: Robert Hagstrom

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