Good Investing Talks - What to learn from Buffett's Early Investments, Brett Gardner?

Episode Date: April 28, 2025

Brett Gardner, the author of Buffett's Early Investments joined us to discuss his book and what he learned from writing it.

Dear viewers of Good Investing Talks, it's great to have you back and it's great to welcome Brad Gardner, the offer of this wonderful books. It's called Buffett's Early Investments. And we are talking now about this book, close to the Berkshire meeting 2025. It's one of the hot new books that's out there for the Berkshire meeting. And Brett is also holding an event there that you can join or you have different events present. You present there and you can maybe tell a bit about this what you're doing around the Berkshire meeting before we dive into the book sure thanks for having me Tillman so i'm going to be speaking at a couple of events that weekend the first is the value investors conference which i'm speaking at on thursday

i'm also speaking at the gobelly breakfast on friday morning a private event with the entrepreneurs organization then value x in the afternoon as well as a fireside chat hosted by Dissarine Group and Red Eye in a Friday evening. And finally, I will be selling books at the Markell brunch Sunday morning. So there's a great opportunity for everyone to meet you in Omaha and also get a signed book copy if you still have some to sell. There will also be recordings of these events, I think, for sure. And so if you search for Brett, you'll find more on the book, if you want to learn more outside of this podcast.

But maybe let's get back to the book. You've spent one year on writing this book. Was it worth it, Brett? Absolutely. So, you know, not only did I find the experience of writing and researching this part of Buff's career rewarding, but it's gotten me in touch with a ton of incredibly impressive people, such as yourself, Tillman, and many members of the good investing community.

I've been very lucky that sales have been good, the reception has been positive, and I've been able to meet a ton of incredibly impressive people over the course of marketing the book. That's great to hear. Why was such a book missing in the Berkshire Book Universe? So there are so many books about Berkshire, but why did you see this missing? Sure. I think that there were kind of two main reasons why I wrote the book. One was that I thought that this period of Buffett's career was misunderstood.

And the reason why I thought it was misunderstood is that the documents are very difficult to come by. So in the book, I go through 10K studies of Investments Buffett made in the 1950s and 1960s. and I don't think any other author has gone through each investment in the death that I did in part because the documents was very hard to get. For example, Holtel Cohn, which is one of the chapters in my book, was not a public company. I had to find their annual reports deep in a Maryland archive. So that's why I think that these are kind of understudied companies. It's just hard to get the research material necessary to do.

the work. The second reason I wrote the book is that I think that to understand Buffett today, you have to understand these years and what led him to kind of gravitate towards the better business, what led him to create Berkshire Hathaway. And you kind of see these early lessons when he's in his mid-20s carry through the rest of his career even, you know, through today when he's approaching 95. So imagine a person who wants to go out after this podcast and buy the book. By the way, there's a link in the show notes if you want to do this. And how can or should this person read the book? Is it more like a brunch buffet where you can pick out different snacks or is it more like a nice dinner table

where you should sit down and someone brings you the food in an exact order and you have to follow this order? How have you designed the book to be read? So I designed it to be read chronologically, meaning from beginning to end, the reason why I think that's best is because you get to see how Buffett carries the lessons forward in the book. So, for example, the first three chapters are companies that were very cheap, but did not really do that great due to capital allocation. And you see Buffett kind of hone in on the importance of corporate governance and capital allocation and you see that carry forward

throughout the book. So in my view, the lessons compound. However, you know, people are free to read whatever chapter they like in whatever order. Like you can, Disney is the last chapter in the book, you can read that chapter and then hop around if you so choose. I don't think you lose a lot by doing that.

With what kind of avatar or person did you write the book in mind? So Buffett writes his letters for her his sister and who were you thinking of in writing the book the typical investing nerd who listens to this podcast or is it a different person yes so i wrote it uh first of foremost for value investing nerds um people who have kind of gone through all the buffet material and um kind of you know worship buffet the same i i do um however i want to write in a way that anybody can get anything out of it, like anybody with a passing interest in business history or Warren Buffett would

find it informative, I think. Finally, I kind of want to write, I want to write the book that I wanted to read, especially when I was younger and like in college where it's not, the financial metrics aren't too intricate and the writing is, the book is written in a way that it's very easy to read and understand um so i was hoping that like anybody with accounting or finance background like maybe a year one or two student uh would understand it is there any other group especially resonating with the book you were surprised uh about um i think that i've gotten a lot of inbound from people who are not investors but are kind of just like interested in buff it that

These people have reached out to me and said how much they like the book. And that kind of surprised me, where I thought it was pretty much going to be like only the value investing nerds. But industry folks have seemed to enjoy it as well. With the book, as with every other story, you have to put a start and then end until you leave out some stuff of this history. Did you leave out something that could be worth investigating further and if so, why? So there were a couple of investments that I wrote about that I ended up stricken out of the book for a couple of reasons. One was this company called Time and Close, which is a NetNet that did poorly. And I took that out of the book because it was going to be my fourth net net like that where it just didn't work out.

And I thought that the readers got the point, basically. The first three stories are kind of similar. And having a fourth one like that didn't really do much for the first. reader in my view. The other company I wrote about was Lone Star Steel, which actually makes a quick appearance in the Philadelphia writing chapter. I had that one in the initial manuscripts, and I took it out to swap it out for American Express. I didn't feel comfortable writing about Lone Star Steel because there were a couple

facts that couldn't nail down. I couldn't get certain documents. Generally, though, I think that there's still a lot of ground to cover. in this period of Buffett's career, the issue is that I think it's hard because the relevant documents are not publicly available. So, you know, I think Buffett has tons of archives that may become available one day. That might be worth digging into. So you have this chapters that are kind of also like oriented around investment cases. I hope people can see this. Here's Walt Disney, for instance, and which three cases are your personal favorites?

It's hard to ask such a question, so sorry for this, but where you have he said, oh, I could spend another book just on this case, and why? So my three favorite are Philadelphia and Reading, Walt Disney Productions, and then Amex. So Philadelphia and Reading, to me, is the inspiration of Berkshire Hathaway, where it's Buffett's largest position when he's 24 years old his hero Ben Graham's on the board and they quickly transform the company into a diversified glamorate from a dying anthracite coal company

they buy Fruit of the Loom, they buy Acme boots and they keep buying all these companies and the stock basically goes from $9 a share when Buffett made his biggest position to over $200 by the time Mickey Newman is done transforming the company. And I think Buffett was like 24 years old and sitting in his Graham Newman office, seeing what they were doing with the company and had the idea in his head that he was going to do this one day.

My second favorite investment in the book is Walt Disney Productions. The reason why I like this investment so much is that Buffett's talked about it quite a bit over the course of his career. He's written about it in his letters, talked about it at the annual meetings. But he's left out the corporate governance risk. that was critical to being comfortable making the investment. So essentially Walt Disney, the person, had a person to hold of company that was siphoning value from Walt Disney Productions, the company who stock Buffett bought. And he was making all this money from things that really should have gone to the company. He had rights to get profits from some of the movies produced by the company, such as Mary Poppins, where he made about a million dollars from personally.

And Buffett really had to investigate and understand these risks. And he's never really talked about them publicly. So I thought I covered new ground there that I'd actually love to hear Buffett comment on. The third investment was American Express. So this was the most profitable partnership investment. And a couple things I really like the chapter. One is the history of American Express, the company. So I trace it back from its founding.

in 1850 and talk about where it was when Buffett bought in 1964, from an express business to money order business, to travel checks business, then finally to the charge card in 1964. You know, I just kind of love studying it history. And the second thing is I dive pretty deeply into the salad oil scandal, which led to the stock getting cheap. And I think there's a lot of intricacies around that scandal that are not necessarily, not thoroughly understood by investing public. Hey, Timon here.

It's great that you've made it that far into the video, and I think it shows a certain passion for investing you're having. If you want to dive deeper and go further down the rapid hole, you're invited to apply to my community Good Investing Plus. It's a place that's very helpful to people who are ambitious about investing. It's helpful to investment talent as well as experience. experience fund managers so if you're interested please click on the link below and now without further ado enjoy the conversation thank you for everyone who just is there for information about

the book now is a good time to maybe end the podcast and just buy the book because the second part i want to spend a bit talking about the writing of the book and the offer process and the link below if you just want to go out and buy the book but for I also have a few questions for Brad. So what do you learn about yourself when you were writing the book? That's a great question. I think I learned that I liked researching more than writing. I kind of love going through the old files and reading books on the companies.

But the writing process was very hard for me. So I had a lot of the research done before I took a year off to actually do the writing. and I thought that that was the most difficult part of the book is actually writing in a way that people might find interesting and also figuring out how to cut things out. And I like to think I got a lot better as a writer, and part of that is understanding that all the information you have in your head is not that interesting to a reader,

and also you need to present it in a way that they're able to understand your point, rather than just throwing facts at them. How did writing the book transform you as a person? So if you think about you without the book and now, how are you different? I'm being a lot more patient when reviewing other people's creative endeavors because I know how much hard work goes into it. For example, if I go to see a play, I'm not as harsh as a critic as I was a couple of years ago.

So I think I got a little nicer. And how did it also change your social capital, your network, and people you know? So I've got a lot of outreach over the book from people who obviously wouldn't have known me otherwise. I've gotten invitations to speak at events that I wouldn't have. for example Valley Conference, SkySphere's Get Value X just put me in touch

with a ton of incredibly thoughtful investors which I'm very lucky to have had happen. What are your key learnings about the publishing process of a book you took away from this endeavor?

That's a great question. So I actually initially had an agent who was going to sell the book to publishers, and I didn't think that he was selling the book properly, so I ended up doing it myself, and I got an introduction to Harriman House, who eventually made an offer. I think the thing that I took away was that you have to fight for your book, meaning I had an offer from another publisher who wanted to change the tone and slant the book in ways

that I was unwilling to do. I really wanted to write the book that I wanted to write, and I was kind of inflexible about um the inclusions and things like that um the other thing is that i think i learned that it's all pretty much on your shoulders uh so i talked to um other authors wrote this process um including some who have sold millions of copies and they've also the same thing that like everything is kind of on your shoulders from like the marketing um even even the editing to a large extent i worked with a great editor at haremont house um but it's all you. It's 100% your work and responsibility to make sure it's a product you like and to make sure people know about it. The marketing, I think, is a heavier lift than I anticipated my sort

of writing where you think that you make a couple of LinkedIn posts or Twitter posts and everybody knows who you are, but you're going to have to keep at it and go on podcast and speak at events as much as you can. What kind of false essence? did you have before you went through this whole process or you kind of answered this a bit but maybe there's more yeah um i thought the marketing process would be a little bit easier where um i thought that like once you did five or six podcasts you were you were kind of done and everybody knows about you um i thought that um i thought that more people um um um um would buy the book without needing to market it's kind of a silly assumption that everybody

you make a couple tweets and everybody sees it so I think that that's probably the big one is the marketing is just a little bit harder than you think and making sure that the books get into people's hands

is more difficult and more challenging and more work than you anticipate so maybe reframe this a bit differently how hard is it to sell a book? So that's a tough question.

So I'm honoring my sales monthly, obviously, and the biggest thing that drove sales was the Wall Street Journal article on the book by Jason Zweig. That led to a big gap up. And then there's some other things that have been really beneficial. For example, Michael Mobuson tweeted about it, I'm very grateful for. I've heard some people, some investors have talked about at conferences. So it's always very hard to tie sales to a specific thing, other than the Wall Street Journal article, which I think very clearly gave me a big boost.

So it's more about just keeping at it and being tenacious and keep finding interesting things to post. Like in the lead up to the release, I would say for the prior six weeks to the November 5th release, I was posting Buffett content I thought it was interesting but didn't make into the book two or three times a week and I always found like there were new people

who found it like and I also was surprised at the unpredictability of success meaning I would post something that I thought was like absolutely fascinating I thought it would go viral and it'd get like 500 views and then I post something that I thought

was like not that interesting and it got like 24,000 so it was more about the consistency see a post than what I do does the quality and obviously

there's a balance you shouldn't just be you know engagement farming but you do have to keep posting keeping at people's minds

I mean there were funny a couple funny interactions on Twitter where like people who would engage with a post would be like oh I still haven't bought

your book yet and I'm like I thought you really liked the stuff I was posting and if you do you should buy the book because that's much better

than Twitter posts so you really have to keep being tenacious and trying to be top of mind I think everybody knows that you're trying to promote and you don't want to be overly promotional but people are going to forgive you for making five posts a week

I think good with three-day interactions you sometimes have interesting interactions there yeah how much do you have a rough estimates how much time you've spent percentage-wise in

researching, writing, and selling or promoting or distributing the book? So it's accumulatively probably that 70% 75% researching 15, 20% actually writing.

Actually, now that I'm saying out loud, probably a little bit more writing. So probably researching 60, writing 20 to 30, rest selling but obviously like selling over the past six months has been all of it

so I found that I had to carve out time time during the week I mean usually on weekends because I work a full-time job just to market to rather respond to emails to make sure I'm posting something on LinkedIn or Twitter

you know finding interesting things to post So I don't think like it's something that happens naturally. I think it's something that I have to set time for on the weekends in order to do it properly. How did you get 101 reviews in Amazon? What is your magic formula there? So I ask people to, meaning like if somebody, so I have an email in the book that I encourage people to reach out to. and if they say nice things about the book I asked them to review on Amazon

that's pretty much it and then I also would tweet and LinkedIn and make post on LinkedIn about it and ask people to do it that that's really it but it's a nice hack you should just copy it if you can

what would you recommend everyone who's thinking about writing a book an investing book right now So I think that people should spend a lot of time thinking about what they went out of it in order to figure out if it's worth it, meaning I don't think a lot of people write books about investing just for, but I think they also have an idea about how it will help their career. And I think people should think hard about that and how that's going to be worth it. Because I don't think generally the money from publishing a book makes it worth the time investment for most books, statistically. And therefore, if you're going to spend like a year or two years or weekends writing it, I think you have to think about the pros and cons of writing a book and then the amount of work it has to go, you have to put in in order to sell it. I think that you have to be a very clear-eyed about that, too,

and understand the probabilities are that most books fail and most books are not successful. Most books don't sell that well. And then I also think you have to spend a lot of time thinking about what makes your book different, meaning I try to write a book that was different from the other Buffett books. A lot of the stuff that I talk about might be in the public domain, but I try to take a different angle

or use documents that other people haven't referenced in order to do something. different. I think that an issue in business and investing books is that they're very repetitive. So I think you have to be clear-eyed and honest with yourself about what you're doing differently. And that will lead to like commercial success and give you a ton of other benefits. And as well as being a very interesting book to readers. I don't think readers, want to read the same thing over and over again. It was something different.

So I'd recommend people spending a lot of time thinking about what is different about their book and why. Great. Thank you very much for sharing the insights. For the end of our interviewer, I want to give you the chance to add anything we haven't discussed. This might be interesting to the listener. Is there anything you want to add?

No, I think, as Charlie said, I have nothing to add. I guess one thing is people can reach out to me on LinkedIn or on X, my username on X is Brent Gardner underscore 10. And LinkedIn, if you search. Where's this email you mentioned in the book? On which page do people find it? I actually don't remember, but it's in the, it's in the, I could pull it up for you and get that.

It's Brett at Buffett's Early Investments.com. Great. That's great. There's also an email. if you want to use this. And he might refer you to Amazon to write a review. Maybe. And great, thank you very much for your time, Brett.

You can get the book if you want to wire the link below. And thank you very much for listening to here and bye bye. Bye. I really hoped you enjoyed this conversation. If you did, please leave a like and a comment and for sure subscribe to my channel. Traditionally, I want to close this conversation with the disclaimer. So here you can find a disclaimer. It says, please do your own work.

This is no recommendation. What we are doing here is just a qualified talk that helps you, but it's no recommendation. Please always do your own work. Thank you and hope to see you in the next episode. Bye-bye.