My First Million - The Guy Who Studied Buffett for 25 Years

Episode Date: September 4, 2024

Episode 626: Shaan Puri ( https://x.com/ShaanVP ) talks to Guy Spier ( https://x.com/GSpier ) about everything he’s learned from studying the greatest value investors of all time.  — Show Notes:�� (0:00) The Posse (5:41) Farmer Mac (17:30) Lessons from going to 9 Tony Robbins seminars (28:57) Handwritten notes from Warren Buffett (42:00) Don’t study lottery winners (59:22) Berkshire vs Index (1:05:13) Finite vs infinite games (1:13:26) Be a promiscuous reader — Links: • Get our business idea database here https://clickhubspot.com/mfm • VALUEx - https://www.valuex.ch/ • Aquamarine - https://www.aquamarinefund.com/ • Guy’s book - https://tinyurl.com/47zvxatr • Power vs Force - https://tinyurl.com/2fn9peya • Influence - https://tinyurl.com/3z2vyfdt • Shareholder Letters - https://www.berkshirehathaway.com/letters/letters.html • Poor Charlie’s Almanack - https://tinyurl.com/bdf6pcww — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano

I have a thought experiment for you. Imagine if you could just snap your fingers and suddenly there was a second version of you, a second body, brain, your eyes, your ears, the way you think, the way you operate, but with one caveat, one change, it would do whatever you said to do. You know what I would tell it to do? I would tell it to go study the art of investing. Investing, like Scott Galloway says, is like having an army of capital go wage war for you, right?

Instead of you working for money, your money works for you. I love that. So how do you get great at something? Well, you would study the grates. And that's exactly what the person who's coming on this podcast today has done. He's gone back and for 25 years has studied everything that Warren Buffett, Charlie Munger, all the great investors, what they have done, read every single annual letter, go and read all the reports, study how they grew from bit by bit, block by block, step by step.

And not just learned them in the book, but then went and practiced it. And so I wanted to ask this guy, what did you learn about investing and what can I learn? How can I spend an hour or two with you and download 10 years of your brain? His name is Guy Speer. He's a very cool guy. A lot of people really respect Guy because he is an incredibly humble, interesting guy. I think you're going to love this conversation. So enjoy this episode with Guy Spear.

I feel like I can rule the world. I know I could be what I want to. I have all these notes about where to start because I'm like, oh, he's value investing. There's going to be good investment. knowledge, but the thing I was actually curious about when I was doing my research was about this group that you had called the posse. Oh, yeah. And I don't know if the posse still exist or this was just a moment in time, but can you explain what was the posse? Who was in it? What was it? Well, what's happened to me is I've discovered that I love Warren Buffett, value investing,

Berkshire Hathaway, so I want to be all over anything that's got to do with that. And in New York City, there's this Ruehne-Connor firm that has a friend of Warren Buffett's, two friends of Warren Buffett's that run it, and they have a mutual fund, and they have an annual general meeting. And I get invited to some event before or after. And there's a guy Whitney Tilson there who's like Master Network to the Power of Master Networker. And we're introduced to each other and we're one year away from each other at Harvard Business School. And the next thing I know, he invites me to meet other people.

And he doesn't invite me to the group on its own. He invites me to meet this person over there or that you're sort of like, hey, go have a coffee with that guy. And so before I know, I've met three or four members of this group. And then it was Whitney who put together a group of five or six of us who were all fascinated by Warren Buffett, who all wanted to become better investors. And we'd meet, I think it was sometimes we'd meet even once a week. And in one of our members' offices, there was a member that had an office in Midtown. And we'd present ideas. And Whitney's friend Bill Ackman was part of that group for a while.

That's how I met Bill Ackman for the few times I'd met him. And I wasn't really aware of what that was or what that was. Well, we'd had a study group at business school, and obviously you want to get together with friends who have common interest, but I didn't realize what a powerful tool for success it was until at that dinner and lunch, first meal with Monash Pabri, where he talked about forums, YPO forums, and he said, you should get into one, you'd benefit.

And then I got switched on, but that posse met for about, I think it met for two or three or four years, and we're still part of an email chain. I mean, Whitney will send out an email, send out a happy birthday message to the group. Some have become very, very good friends of mine, and some are, I'm not even sure where they are now. So what was happening?

So you're meeting, let's say, once a week or every couple of weeks, and you go to someone's office and you said you had, all the commonality was you were all investors who were fans of the Buffett style of investing, value investing. What would happen at these groups? You show up, what actually, is there a substructure? Did you just somebody's got a stock that they're interested in

you start debating it, what would happen? So what I remember is that you needed to show up with a written stock idea. Everybody or one person? Just one person and then you'd discuss it in depth at that meeting. And then the following meeting, another person would come with a written stock idea that you'd distribute a handout, give the handout, and then you'd talk it through. And obviously at the end of that, like a half an hour, 45 minute sort of talk through that, there'd be various other ideas that were discussed.

But as a result of that, what would happen? I remember once sitting in a car with Whitney driving somewhere in New Jersey to visit a company called, it was called Izwe, Interactive Services Worldwide, Inc, ISWI that had gaming software for TVs, for example. So there were sort of follow-on meetings that happened, both social and business-related, or somebody would realize this is at a time when transcripts of conference calls were not available. So somebody would listen to a conference call and they'd make notes and they would pass them out by email, for example. So there's a kind of the structured part of those meetings. But what is really, really fascinating is that unstructured sort of like somebody mentioned something or says something. And I think that many of these best ideas come because somebody says something that is really fascinating.

So as a result of this, we're at a dinner somewhere. Bill was at this dinner and he started talking about MBAA. and he started talking about how the asymmetry of the bet on the credit default swaps on MBIA. And it was not, I could have read that in a document. I could have had that, but it was the way Bill talked about it that really stuck in my mind. I thought, wow, that is really fascinating. And so that kind of meta-information, if you like, is what you really get out of it. Can you tell the Farmer Mac story?

Because I think that was a great example of what it came out of the podcast. So there I am investing, started off investing. I'm investing for friends, fools, and families, I think how Monash would put it. But I'm shit scared. I'm very, very scared because I really, I don't know what I'm doing. What's a Harvard MBA, a guy who pretends to himself in the world that he knows what he's doing when he actually doesn't, you know? But I knew that I didn't know what I was doing.

So you're looking, one of the ways in which I approached that challenge was to look for people who did know what they were doing, who were I thought they knew what they were doing. and to kind of try and unwind what they did to backfill, to reverse engineer what they'd done and do the same thing. So I got all sorts of investment ideas through that, and obviously I was studying Warren Buffett, and I was also studying a guy called Tom Russo, and I can give examples of, for example,

Tom Russo was invested in Nestle, and I started, I kind of like, wow, brands, that's a really powerful way to place to look. Where else can I find consumer brands? So, you know, Freddie Mac and Fannie Mae at the time were these government-sponsored enterprises, kind of a duopoly slash monopoly, highly, highly profitable, enormous balance sheets, but were super successful at making money for their investors, but also for organizing the mortgage market in a way that made sense for everybody.

So there they are. And so I'm doing what I normally do, which it would normally do, which had made sense for me, is look for similar kinds of situation. Because Buffett was invested in Freddie and Fannie. Yeah, so he was invested there. You're looking at Buffett for ideas. So you're saying, what's similar to those?

And I actually had an investment in Freddie Mac and was making quite a bit of money in Freddie Mac. He was very, very happy with that investment. And so I'm saying, what other similar government-sponsored enterprises are there? And I uncover Farmer Mac. So Farmer Mac is also a government-sponsored enterprise, and their goal is in the same way that Freddie and Fannie are funding the mortgage market by buying these mortgage-backed securities, buying and issuing mortgage-backed securities. These guys were doing the same thing, but in farms, farm loans.

So they would buy up farm loans, package them up, and resell them with their guarantee. And the claim was that they were reducing the cost for farmers to borrow while at the same time creating valuable securities for investors to buy. And I thought, wow, this is incredible. This is really, really good. And it's minuscule. And I just freaking love this. And so I think I probably did present on Farmer Mac. And I kind of like sat down with the posse and said, hey, you guys, check this out.

This is the next Freddie Mac and Fannie Mae, except Freddie Mac and Fannie Mae are sort of like tens of billions, if not hundreds of billions of market cap. This thing's got a market cap of, I'm not mistaken, maybe one or two billion. And there's plenty of room to grow all. that jazz. Maybe two or three weeks later, Whitney says to me, you know that company you presented, well, I think Bill Ackman's either short it or he's about to take a massive short position and he wants to talk to you. So I'm like, okay. So I take the call from Bill and Bill says, look, I just feel like I need to tell you, I kind of got the idea indirectly from you, but I've just taken a massive short position in Farmer Mac.

And I feel like I need to tell you, I think that the company is borderline fraudulent. And I was like, okay, you've got my attention. You know, there's a saying, who's wise he who learns from every man? Who's wise, Guy Speer, who learns from Bill Ackman? And I kind of said, look, you know, this is important to me. Can I just come down to your office? He says, yeah, come on down. He says, prove me wrong.

Prove to me that I'm wrong. So I go down to his office. And I also remember the black files. He had like sort of huge, several meters worth of files where he had taken. So every time one of these government sponsored enterprises issues a mortgage-backed security, it's kind of like an IPO. They're publicly public filings available. You need to know, they're issuing debt on the one side to fund their.

asset purchases on the other. So what are their asset purchases? What are the terms of this mortgage-backed security? And so he downloaded, I have to confess, and I hate confessing this, but it's true, I hadn't downloaded one. I took them at their word. And, you know, he kind of said, look, when you look at the entities that are created by Freddie and Fannie, each one of these mortgage-backed securities has hundreds, not even hundreds, thousands of different individual mortgages and the individual mortgage sizes would be anywhere from $50,000, $100,000 to half a million. And they're kind of like their classes of mortgage and there's distribution across the country. So these might be from east and west coast, north and south, different income categories.

He said, I've downloaded, I don't know, he downloaded a number of the Farmer Mac ones. He said, like there's three mortgages inside. You said that doesn't create kind of the distribution, the risk spreading. It's like it's just three. It's like that's like a bank loan. It's those three different things that have gone into a kind of a bank loan. This is not, and the mortgage sizes were far larger in, and that maybe three was an exaggeration, but 100 or 200 rather than tens of thousands.

So much more risk. Yeah, and he just said, look, this is business lending. This isn't a mortgage-backed security. There's no way you can call this a mortgage-backed security. I debated him. I said, look, it's got a government guarantee behind it. And he said, yeah, it's got a government guarantee, but what they're doing is they're engaging in business-related lending. From his perspective, this was a lending against a business, not lending against real estate. And it just didn't deserve to be there. So was he right? I think he was right.

Absolutely. And look, what was clear to me in that moment was that I had not done the depth of analysis that he'd done. And I, first of all, I hadn't downloaded those documents. I could have downloaded them. I hadn't downloaded them. Or maybe they weren't, I could have located them and found them. It wasn't as easy to find as it was, would have been today, but I could have found them. And I'm kind of torn between wanting to stay and learn more and rush back to the office and put in a sell order. And literally, I mean, I got back to the office and I put in a sell order. I knew I didn't know it well enough. I knew that the points he made were good. And I sold it by the end of the day. Lucky enough, the fund was small. It felt super relieved that I'd sold it. And then either I or Bill or

Whitney got a meeting with the management. So what happened there was absolutely astounding to me, actually. The management came with its pre-prepared presentation, and they were ready to go through the presentation. And of course, it's very dangerous when a management does. that because they lead you in the direction. They may not even do it consciously. They're leading you in the direction. They want you to go. And Bill says, look, I know a lot about the company.

I prefer if we dispense with the presentation. We just go to the questions that I have for you. They were a little nonplussed by that, but they agreed to it. They didn't really have much choice. And then Bill came with the same kinds of questions that he posed to me that I didn't have good answers for. Like, why is this different to business lending? How can you call this a class when there's only a small number of loans inside and they're all inside and when they're all of different sizes?

Whereas a mortgage-backed security will have many, many, many single-family homes. And they didn't have any good answers. At some point, the CEO said, well, maybe this might not be the right investment for you, which is a pretty, pretty weak. I don't know if that makes it into my book, but that was a pretty weak thing to say. and I was kind of absolutely shocked, shocked. And it's one of three stocks that I've shorted in my life, actually. When presented with the counterargument, instead of simply, you know, they should know their business better, they should be able to answer those questions.

They just took their ball and said, okay, maybe don't play with us. Yeah, exactly. And look, Bill was way better at that point, a way better analyst than I was. I had all sorts of other things I needed to be doing just to keep my little business afloat. There are all sorts of good reasons as well. for why I was unable to dive that deep. But it showed how from time to time, if you don't do the analysis all the way,

especially when you're going to a place where other people haven't been, you're going to get it wrong. There's an example that comes to mind when you say that in my life, in an entrepreneurial sense, but I have a friend who is a good buddy of mine and a bit of a mentor to me.

We made a deal with one of my businesses for him to help me out. And so he says, okay, great, I'll help you out. I said, hey, can we meet on Friday? Friday. Friday comes around and I'm expecting, I just thought this is how business works. I thought we're going to meet on Friday. So Friday noon, that's when the video call will start. And then we will start to talk and we'll discuss some ideas. And then maybe after we discuss there'll be some actions. And basically in the like 72 hour period before, he just went to our site. We have an e-commerce site. And so he went to our site and just immediately opened up a Google Doc and started writing a bunch of bunch of like really hyper-tactical observations of things that were messed up in our own product. There's just weird thing that happens with your own product where you spend so much time at the back of your business.

You never like use it as a customer. Whereas he just went and used it as a customer. He went into our ad account. And he laid out this Google Doc that was like two pages, bullet point, no fluff words in between. It was just try adding this, remove this. This is missing. Hey, you wrote this here, but that doesn't, this link doesn't work in your ads.

Try this segmentation strategy. Try this, try this, try this. And he had laid out this two-page dock. And so by the time we showed up at the meeting, I was like, oh, well, I guess we don't really need to discuss. You already did an audit, basically, and told you dove so deep, deeper than I'm doing in my own business, which is embarrassing for me at the moment.

But it was so useful and it became a real eye-opener of like, oh, this is how the best people operate, which is that when they're going to do something, they just drill right in to the source of the issue. If we're trying to grow, the answer to how we grow, is going to be in the actual product mechanism. And he went right there. He found a bunch of opportunities.

And it was like, there's nothing to discuss. Like, make these changes. And then let's see, let's talk after that. You know, why would we talk before? And it was a real eye opener for me and how the best people operate. They go straight to the tactical stuff of like, what could we just simply be doing better in the funnel? What strikes me about that is that what extraordinary act of generosity? So he was giving you sort of like something that he was giving you.

you the best part of his brain. And he was giving it to you just out of the desire to give. And it feels to me, obviously I wasn't there, he's giving it without any agenda. And just maybe he loves to do it or because he really cares about you or because he knows a lot about the topic. And that seems a really special friend because there are people who know a lot, but they just don't have the time. They either don't want to have the time or generally don't have the time to talk to you about your stuff. And so that, that's pretty, pretty special, especially if he wasn't investor yet or he wasn't an employee yet. Yeah. I think we're both Tony Robbins, you know, I don't know, fans or, I noticed that. And he has a, you know, the secret to living is giving.

And he talks about, you know, almost like in the hierarchy of needs, eventually you get past yourself. Can you tell a couple of the lessons that you got from Tony or maybe that what shaped you out of that because you like me are a self-improvement, kind of infinite learner mindset person. I think a lot of the audience, because that's what I like to talk about, is also wired that way. I would love to hear maybe some stories

or some big takeaways for you. So I think that in total, I've done sort of like eight or nine Tony Robbins seminars in my life, including a big one in Hawaii. I'm just curious, what number are you on? I want to know if you're more of an expert than me or vice versa.

No, less than that. I've been to, two and as I bid to two or three two or three but they're all they were all the uh upyw at least the power within i didn't do his like kind of deeper stuff but then i just kind of devoured a lot of his old material specifically like if you go on youtube there's really great stuff of him when he was very young uh talking and you know not all of it is the stuff he talks about today but he has some really good stuff that actually for business people is useful about public speaking about um sales about marketing about persuasion yeah and so you

And he doesn't do a lot of that material now, but that was some of my favorite stuff that he did back then. So that's where I'm at. And I think that what comes up for me, as you say it, is, so you know, there's this moment where, in a way, my destiny is on a knife edge with this meeting with Monash Pabri. And because I took the decision to approach him without an agenda, I got a very different Monish to the person I would have gotten if I'd have approached him with an agenda. first meeting is always very important. And so the decision to go to my first Anthony Robbins seminar was a bit like that. I had this really good friend in New York City who she says to me, oh, you're in San Francisco. There's an Anthony Robbins seminar there.

You should go. It might change your life. And I remember at the time, because I had this weekend planned with friends, I was like, you know, I'm going to go. It's somewhere perhaps the deepest wisest part of me knew that just to go hang out with friends would be something like same old, same old, whereas going to the seminar might give me something new. So, you know, I show up with this seminar, Anthony Robbins is like six foot something tall and, you know, and he's getting us to jump up and down. There's a huge amount, you know,

as you've heard a thousand times anybody's done, Anthony Robbins, emotion has got motion in it. If you want to feel good about yourself, you need to look at your physiology and look at how you're moving and change the way you're moving in order to change your emotions. And I'm like this kind of snarky Brit at the back. You know, I'm just like sort of, what is this? And looking at my watch and thinking, why did I waste the money? Maybe I can still go out, hang out with my friends. But I did the firewall.

And once I'd done the firewall, I was in a different place. And so for those who don't know, he kind of whips those who want to be whipped up into a state in which you feel very confident to walk across a bed of hot coals and you walk across them and you don't get burned. And, you know, there's all sorts of spiritual or non-physical reasons. I think that the main thing is, is the state of mind that you're in and the firmness with which you walk, if you walk in that way anyway. It was like, it really did that metaphor of how if you have the right psychology and you have the right physiology, there are extraordinary things that you can do. as a human, that metaphor went in for me such that I now stayed the rest of the weekend.

And in my case, I was a guy who had my head up my rear end. I had achieved some early academic success in life and I was getting to be quite bitter because I wanted success, but the things that I'd learned, the routines that I'd learned to get success. And at this point, I'm age 27, 28, 29, they weren't working for me. And I'm sad that I see other people who are in kind of similar circumstances. And I think the younger you are when failure hits you or when difficulty hits you, the better it is because the more likely you are to develop strategies and to adjust and to try different things.

But I was at a point where I was kind of starting to get stuck in my ways. And I really needed a very powerful kick in order to, it wasn't enough that I knew things weren't working. And Anthony Robbins did that for me. And so after that firewalk, I was really quite enthusiastic about everything that came out after that. And I couldn't stop talking about Anthony Robbins when I got back to New York and started reading NLP and started neurolinguistic programming and started like really diving into the

self-help bookshelf to find more material that would help me in that way. And I think that in my case, I was so badly programmed for, for the kind of earlier part of my life that I needed. You probably did fine with one or two Anthony Robbins UPWs. I needed every single one. And I'm super grateful to him for giving me that. I mean, there was a point on that first night where he kind of said, and I bought it.

So there was the firewall. And he said, look, you think I'm here to make money out of you. And he kind of said, look, I'm definitely here because it's a business. and you guys have paid money to be here. And there's a lot of, yes, I definitely make money out of this, but it's not the true motivation. I really want to help you. I really, really want to help you guys in this stadium get a different result from your life.

And that actually, I mean, one of the books that Monish gave me to read when I first met him was this Power versus Force book by David Hawkins. And I went strong at that. He didn't strike me as just selling me a yarn. I was like, okay, I'm willing to open myself to this. He actually wants to, I don't know if he can help me, but that's the intention he's expressed and I believe him. Then what I knew was that I had an enormous amount of rewiring of myself that I had to do.

And so I started doing that rewiring. And it was that rewiring, the process of rewiring myself, and taking actions that I'd learned to do because I'd started doing, knee Robbins that got me in front of Monash Pabri. What would be an example of a rewiring? So like a before my brain thought this way or worked this way and after? So I had this awful attitude that I was smarter than most people that I met. And, you know, first of all, I was way less smart than I thought I was, you know?

And it's not important how smart you are. It's how smart you are relative to how smart you think you are. And I had this arrogant attitude that once I'd categorized somebody as not worth my time, I didn't really need to pay attention to them. And there's a moment, it's either in the seminar or one of the cassettes. And at the time, I was listening to cassettes of Anthony Robbins, by the way. I had a collection of the cassettes. And there's the story that Anthony Robbins tells about walking up to,

maybe it's Norman Vincent Peel or another of these health-help people. And Anthony Robbins says, look, I've read your book. And nothing's changed. And the guy says, how many times have you read my book? Antio Robinson says, well, once, he's like, go read it five more times and then come back to me. And so one of the books I'd picked up was Dale Carnegie's book, How to Win Friends and Influenced People. That came well before I discovered that Warren Buffett really learned a lot from Dale Carnegie. And Dale Carnegie sort of sits there and says, the most important sound in anybody's mind is their own name.

What a freaking concept. I was too busy trying to, you know, having studied law and economics and what have you, and I was not connected to that. But so that's just the awareness. Oh, my God, you don't bother to remember people's names. You don't remember bothered to address people by their name. Is it a surprise that you're not getting the results that you want? And so I then made an effort.

And it, especially to somebody who grew up in the UK, in the US people will do it a lot. they'll meet you and say, how do I pronounce your name, make sure it's pronounced correctly? And then they'll use your name a lot. And it struck me as being a little disingenuous. But actually, I started doing it. I made myself do it. I said, you know, wire this into yourself. And around that time, and this is not from Anthony Robbins, I'd read the psychology of influence.

And so I was like, reciprocation, recircation, I need to do reciprocation. I would buy bags of sweets and hand out sweets to like the doorman to the taxi drive. to whoever the hell it was. So I had all these big theories of how the world worked from these great professors and writers of textbooks and what have you. And I could spend hours writing essays about how the world worked. But I'd never really spent time understanding

how one-on-one interactions work and how do you get people to feel positively oriented towards you on a micro level in real life, you know? And it was like shocking. Look, I think in my case, there's a few things going on. I think that I'm just, that module is not very good. It's not very well developed in me. I take my wife, for example, we'll go to some social event.

She said, do you realize the guy was, you were standing too close to him? Or do you realize they wanted to go five minutes before you actually allowed them to go? And I'm like, no, please help me. And I think that I've made some progress, just not something I'm very good at. And yes, we should specialize in the things that we're really good at. But we need to bring a few things up to the bare minimum basics. And there were a few things with me that I was missing. They were just not the bare minimum basics.

It's funny. In your book, you talk about how when you were young, you were like this Gordon Gecko wannabe. I wrote that phrase down. You were like, I was a young Gordon Gecko wannabe. I wanted to be rich. I want to be powerful. I wanted to run Wall Street.

You join D.H. Blair, which basically was like modeled after, I think, Stratton, like the firm that's featured in Wolf of Wall Street, like the Petty Stock firm. And then D.H. Blair goes down a few years after you leave. And you're at this point where, you know, you've gone to Harvard Business School. You got the job on Wall Street. You wanted to have the slick back hair and all the money in the cars and the power. And then you have this kind of turning point, which is, you know, the Tony Robbins event, which starts to get you to think about other things.

You go study NLP. You study the Chialdini book about persuasion and, you know, how to win friends and influence people. You start working on other things. There's a great Tony Robbins line where he says, you know, school is great. but learning is more important. And this point is that it doesn't matter what you, what happens when you're in school. Like the point is to learn,

sometimes it happens in school and sometimes it happens out of school, but the learning is the thing, not the schooling. And so it's funny to me that it seems like you actually got your master's after you left Harvard Business School and started to pick up all these other traits that were important to you. Can you tell the story of the handwritten notes? Because I found this, you know, initially when I read this,

and I've heard this before, I kind of wrote it off as this sort of simple, cheesy idea. And it's now come into my life three or four times. So what did you read in that book? And then how did that lead to ultimately? I think you meeting Monish was from a handwritten note. Absolutely. So can you tell that little story? I think there's something I need to learn there because I've heard this three or four times, never implemented it. Maybe this is the time. So in the Chialdini book, there is a story of the person who was the most successful car sales person for the longest time. And the way, if I remember correctly, Childini writes about it.

He just wrote a thousand cards a year saying, I like you. And I don't know if he actually said, I like you. If you go and do an Anthony Robin seminar, you'll learn about matching and mirroring. And this idea that it's very interesting, the word like, like somebody and I like, we like people who are similar to us. And the idea is if you just match and mirror what they're doing, speak at the same speed, wear the same clothes, have the same hand gestures. They will, so I sort of say, I literally just said to myself, because I'm feeling raw and

angry in a way, because I want success and I'm not getting it. And so I'm willing to try things that I haven't tried before. And that's kind of key. And in a way, having gone to DH Blair, I've burned my bridges. I can't go back into all sorts of career choices where if I'd not gone to DH player, they would have had me. So in a way, I'm kind of desperate as well. And with this idea, well, you know, a thousand notes a year, that's more or less three notes a day, I'm not going to leave the office until I've written three notes that basically say, I like you. And so I realize that

saying I like you feels a little weird. And so, you know, but the thank you feels a lot better. So I think I can do that. And if I leave the office without having. done that, it means that I actually don't want success that badly. And somehow, if I'd written those three notes, I could forgive myself for not getting success if I did that thing. I think that in a way that was me showing up. And I, just as an aside, I see people often their children of friends where they're not showing up for themselves and they're not even trying. And I think the worst thing is to fail either an exam or some test that life gives you without having shown up. So if you're going to fail, fail fully and honorably by showing up and doing the best you can

because then the failure means something. That was my way of saying, I desperately want success. I'm even willing to spend the extra X amount of time at the office to write these notes. Because if that's what it takes to succeed, then I'll do it. And if I find something better to do, I'll do that. But for now, leaving the office, office, that's what I can do. And actually, funnily enough, I remember in one conversation with Whitney Tilsney, he was like, guy, all of my friends are telling me you're writing notes. It's like, you really think that's going to get you anywhere in life. It was kind of like, kind of ridiculous. And for some reason, again, I said to myself, I don't mind looking like I'm a fool. And I think

many people inhibit themselves because they're afraid of looking a fool. I really don't mind looking at least at the time I didn't. So I didn't stop me from doing it. And I just wrote endless thanky notes to people. And even better or often better is to send them something that you know will interest them. Now, you can end up spending a lot of money if you're sending them each an expensive book, for example, but it might have been a printout of a transcript. And I realized that actually often, whatever I'm sending them, I really didn't care genuinely about the people I was writing to. I was doing it because I was going through the motions. In a way, I was faking it. So then, you know, I'm writing no to XYZ person and I actually take the time to think about them a little bit.

And I realized that the act of writing the note changed my insides and made me care about them a little more. So I was actually becoming more caring through the act of writing the note. And this idea that sometimes you don't have to feel it to do it, do it and you'll feel it later. And that's absolutely fine. That's a huge point right there. I just want to add one thing, almost going back to the Tony Robinson. He tells the story when you're at the event. He's like, okay, we're going to play a game.

Look around the room. find everything red. Find as many red things as you can. Winner is whoever finds the most red things. Look around. Look for red. Look for red. And all of a sudden,

you're looking around. You see that the fire alarm is red. You see that the chair is red. You see that the screen has a little red thing on it. You see red everywhere. He says, all right, close your eyes. And tell me about something blue.

And everybody laughs. And it turns out we didn't see anything blue. We were so fixated on red. And he said, there's a part of your brain. He's like, there's a couple things there. Number one, when I told you to look for red, you suddenly saw so much red. When I told you to look for blue, when I asked you what was blue, you saw none because you were only looking for red.

Yeah. And he says there's a part of your brain called the reticular activating system, which is a, it's your heat seeking missile. It's the part of your brain that actually says, ignore everything. There's too much stimulus. Only pay attention to what matters. But what matters is you get to program that. Yes. And so when you're searching for, when you're looking at buying a car and you're thinking about maybe I'll buy BMW, suddenly on the road, you see that's that that's that BMW.

Oh, that's the one with the different wheels. That's the one with the trunk space. And you start to see it's not that the BMW suddenly appeared. They were always there, but your brain had called them white noise before. And now you've told your brain BMWs matter. Pay attention. How do you use this part of your brain to your advantage? And so what you're doing with the notes where you said, doing it will cause the feeling later,

which is if I'm going to write the thank you notes, that means I need to thank them for something. So I need to pay attention to something that I appreciate about them. Or I need to pay attention to what they're interested in in order to give them this note. and you become suddenly a more caring, interested person because of that. Gratitude works the same way. I know I had this practice where every night I would say, you know, just being my wife, we would say, give me three things. Three things you're grateful for today.

Moments of the day you were grateful for it. So not like I'm grateful for my family's health, this abstract concept, but like, what was a moment of the day? And at first it's really hard. And you realize, man, I'm such a jerk. I don't even pay attention to my life. You know, how could it be that? I just went through the emotions day.

It had nothing. You do that two or three days. And suddenly during the day, you start stashing it. You say, oh, that'll be one of my three things for the night. You train your brain to look for things to be grateful for, which makes you a more grateful person. And that was such a huge unlock for me. And what you're describing is essentially a similar phenomenon,

a similar pattern where the act of writing the notes caused you to then be more interested in other people and genuinely care about them. And you know what's interesting for me is there was a certain point at which I would get interns to do just that. I just say your job as an intern is just to get a list together of people that you care about because they're, and write notes to them. And, you know, I don't think that there's even one case, or none comes to my mind right now, where somebody really implemented it.

And it kind of like really frustrating for me because it's not a zero-sum game. It's not like if you do it and somebody else we know does it, it diminishes us. It actually enhances all of our lives. And it's not clear to me exactly why some people, end up doing it and some people don't. I would tell you that what just blows me away is that Warren Buffett gets this. Warren Buffett is giving gifts to me. He's writing the equivalent of thanks he notes to me. I'm a nothing in his life. And he's not doing it every day. He's not necessarily doing it every year, but every two or three years, he sends me something or does

something via his assistant. Like Warren Buffett is doing that, you know? Wait, really? So Warren Buffett sends you something like a thank you note or something like this? It's like a holiday card. But here's the, I mean, I don't know if we're doing video. I have one that I have to pull out. So let me step away for a second and pull it out. I can demonstrate it. Bear with me.

Because, of course, I have it up on my wall. Hang on a second. So Warren, this is, I don't know how many years after I've met him. Not right away, that's for sure. I get a holiday card from Warren in the post. And I'm just going to put it up for a second. And then we can talk about it because it is so clever. So let's see.

You can see that. I see Warren, Santa. I can't read the text, but I see Warren Buffett with Santa. So of course, I framed it. But the key there is that it's a card which is, I mean, I'm going to look at it now because I need to remember. So it's 2011. And he's crossed out Geico, Burlington, Northern, Santa Fe, and McLean. And then it's sort of like companies that he maybe would want to buy.

It's got ExxonMobil, Wells Fargo, Google, and there's Warren next to Father Christmas there. But here's the key. So he says either I finish this list by Christmas or I Occupy the North Pole. Probably it was around the time of Occupy Wall Street. But then what he's done is he's written, he's scrolled on it. And I don't know how many of these he does every guy. Happy holidays. I enjoyed your 2010 report, Warren.

And so, you know, what, you know, so the key there is, is like the other side's got nothing on it because who cares? Because, you know, maybe guys are going to frame it. You don't want to put anything on that side. And what makes it special is he's personalized it to me. And he's understood that that is an enormous gift to the people who receive it. And, you know, I literally, this is a monish expression. When I received that, you needed to peel me off the floor. I mean, I was sort of, you know.

And what am I to him? You know, really, of all the people that he knows, what am I to him? He's had dinner parties with Catherine Graham and Washington where he's met heads of state and head of the Commerce Department and the head of the Federal Reserve. And now he's sending that to me. And he's doing reciprocation. He's giving out the equivalent of sweets. He's given out the equivalent of a thank you note.

He's showing this individual that he in some way just cares about me as an individual. And he's doing it in a pretty efficient way for him. And in a way that allows me to get all excited and tell Sean Puri all about it in a podcast. I mean, so he understands this stuff. He freaking understands this stuff. Well, I think that's amazing. I did not know that he does that.

So that's very cool. We had a guy, Jesse Itzler, come on in the podcast. And he does this as well. I think he handwrites thousands of cards every year. And he talks about the value in this. But, you know, I need to hear ideas four or five times before I actually go implement them. I'll tell you another similar story that's like this. We met a guy who knew Kobe Bryant.

He trained Kobe's daughter before she passed away in the tragic accident. And I was like, tell me some Kobe stories. And if you read on the internet, all Kobe stories are like Nike Kobe. They're Black Mamba Kobe, which is basically about this ruthless competitor, hard work, kind of an asshole on the court, but like, you know, for the right reasons. And that was the brand there. But this guy who actually knew Kobe told me like a different side. He's like, and he's like Kobe would call my mom on her birthday.

He's like, and who am I? Same thing. Who am I to him? Unbelievable that he would face time my mom on her birthday. I don't know how he even knew her birthday. I don't know how he did it. But like from that day forth, you know, my mom was the biggest Kobe Bryant fan in the world. Another guy mentioned the same thing.

He said, he told this story. And I'll give you the short version, which is he goes to this pickup game. He plays with Kobe. And the guy plays terrible. And Kobe's like, come on, man. Are you going to make a shot? What's going on? He's joking with him.

And the guy says, hey man, hey man, I'm a volume shooter. I need to take lots of shots. Okay, it's not about making a high percentage. I'm a volume shooter. And so Kobe laughed. And a month later, the guy comes in the gym. Kobe's playing. And Kobe turns, sorry, Kobe's playing in his game.

This guy's helping out on the side. Eventually, this guy's leaving. And Kobe says, hey, man, volume. You're just going to leave without saying bye? And the guy's like, oh, I didn't even want to bother Kobe. That's why I didn't say bye. He's like, I couldn't believe that this guy, A, stopped me to say bye and B remembered that thing about me.

And the trainer asked Kobe, he's like, Kobe, like, you're amazing with people's names or remembering like one thing about them. You know, why is that? And he said, well, you know, it feels good in the moment, right? But beyond that, he's like, look, this will be the only five seconds I maybe will ever interact with this person. But for the rest of their lives, they're going to tell everybody they know. They might tell 3,000 people over the next, you know, the rest of their life about Kobe Bryant.

And he's like, so it's so simple, so lightweight for me, it's nothing for me, right? It costs me almost nothing. And yet for them, it could be a huge payoff and that they will go and tell the world about, you know, this amazing interaction they had. So it's only five seconds for me, but it might last years down the road. And it's the same thing. Kobe got it. He understood that.

Well, and I think that what's fun about these things is that you want to make it yours. So you don't want to necessarily follow the Gai Spear formula. Well, I also want to ask you about investing because, you know, that's what you're known for. I want to start with a quote from you that I found interesting. I don't fully get it. So I want you to explain it to me. You said, investing is like being a drunk,

stumbling around at a bar, trying to find a drink. Yeah. And I think you were contrasting it to the idea of investing being you're like a fighter pilot. You just scanning. You lock your target and you just, you know, laser beam it. What do you mean by that? I don't fully understand.

Yeah. So another, I'm not going to get the terminology wrong because I'm not a big bowler. But if you go bowling, last time I went bowling, every single ball I bowled went into one of those. side channels. It was very upsetting to me. I mean, I was really bad. But then if you're a child, especially, you can get them to put up curtains so that it doesn't go into the side channel. And, you know, it's this idea that you get on when I've, the few times I've been bowling,

I want to hit the king pen or the pen at the front and knock them all over. And what a satisfying feeling. And that's what you're trying, that's what you think you're trying to do. But actually, you're just trying to keep it off the edges, you know, and anything that you can help, you can do to stop yourself from having it fall into those edges where you kind of lose everything is a good thing. And so spend less time aiming for the for the for the skittal at the very front and spend more time thinking just to keep it on the runway rather than in the sides and set myself up such that when I miss really, really badly, I'm still going to be okay. That is more important than actually hitting on the targets.

It's going to be more important for me or for many investors. is not the question of whether you select that winner. It's going to be about how you run your portfolio in such a way that you don't have massive, massive losses. You know, we spend a lot of time being impressed with success, impressed with people who seem to have succeeded, whether it's companies like Google, whether it's individuals like Jeff Bezos, and a large enough number of others. And this is this fooled by randomness idea of Nassim Telebs, that many of those people are

lottery winners. They were in the right place at the right time. And yes, they were working hard, and yes, they had all the attributes, but also they were lottery winners. And we need to be really, really careful when we study success, don't study lottery winners. And there's a well-known phenomenon that even the lottery winner subjectively thinks that they had some input into their success. The famous example there is that you get a room full of any number of people and you have them all flip coins and you keep them flipping coins, there will, after a certain number of flips, be somebody who managed to flip nine heads in a row, 20 heads in a row, depending on how many people there are and how lucky you are. And in interviews, and I wish I could actually cite the study,

they asked the person who threw the nine heads and they're convinced they had something to do with it. So this is just like a really, really important phenomenon to be aware of and stay away from. So how do I set my life up in such a way that given the enormous randomness, I succeed well enough no matter what? And that is a far more laudable goal than trying to ape the success of somebody who won a lottery ticket. You said something in your book that I like to go, I don't know what it is about me, but when an idea captures me, like I throw my all into it, like for better or for worse, like if somebody, you know, it's the handwritten note thing, right?

like, okay, that's the thing, then I'm going to do it. All, I'm all in on doing that. And it sounded like when you got interested in Buffett, you didn't just read about Buffett or study kind of like his high level philosophies. It sounded like you went and you ordered the annual reports of the companies that he bought in the years before he bought them to try to sit down as if you were Buffett and try to read them through his eyes. Can you describe this?

Because I thought that was pretty fascinating. I'd never heard somebody talk about something like that, but there was something in there that, to me, felt like a valuable practice or an impressive version of really throwing your all into something versus just tiptoeing around or surface level investigation of an idea. Unlike what I did with Farmer Mac, for example, just to get back to any part of the conversation where I did not do that.

That's what I should have done, but didn't. And there's been, I think it's been three times, maybe four times in my life where I've, lost sleep over something where I've sort of like I've stayed up saying I kind of want to do it now I want to I want to get my hands on anything related to it and that happened to me with Warren Buffett and Berkshire Hathaway sitting at this Strattanoct-Ockmont type place D.H. Blair and saying I want a life that looks more like that guys and I hate what my life is and then doing whatever the hell I can do to get closer to it in any in a way Sean in a in a sense of

desperation. So the idea of this, like, this masterful person who sort of orders up the annual reports and goes through them carefully, no, it's a sense of desperation. I'm so desperate, I'll do anything. Even order his annual reports, because that's the only thing I got, you know? And so, you know, my father kind of says to me, because I'm talking to him about this, he says, well, why didn't you go and apply to him for a job? Why don't you go visit him in Omaha?

I'm like, father, he's, yeah, I was a guy who was smiling and dialing, pounding the pavement, looking for deals for D.H. Blair. he wasn't going to be interested in Mr. Guy Speer showing up. So I felt like that was a dead end. But I was doing what I thought were not dead ends. And to understand everything I could about him was not a dead end. And it was absolutely instructive. And I remember the feeling of getting the, you know,

and you had to call up the company and say, I'd like to receive some copies of your annual report. Then they'd take your mailing address and then they'd mail it to you by snail mail. And now the annual reports arrive. And I'd never seen a company like this. Two years of business school, I hadn't seen the accounts of companies like these. And it's funny because it's a well-worn saying you want to buy companies that just drown in cash. I hadn't seen a Coca-Cola company drowning in cash.

I mean, just enormous amounts of money cash being generated way more than on the income statement. And it's kind of like an embarrassment of riches. To somebody who looks at the average of all American corporations, if you spend your time with most American corporations, not going to see the outliers like a company like Coca-Cola that really is just this extraordinary outlier. And so it really was an eye-opener to me. And I kind of like my, obviously, my jaw didn't actually draw it. I was like, wow, that's what this guy looks for. That's like insane. I didn't realize. I wonder what other companies like this exist. So this is 1995. And Warren already understood so much because he was just sitting on Coca-Cola.

And the story of Coca-Cola is, as I understand it, is that he'd bought Seas Candy. And Seas-Candy opened his mind up to these businesses with pricing power, with a powerful brand that people don't want to switch away from. But yeah, and so obviously I was going down a steeper learning curve than Warren Buffett had been down, if you like. And so you order these reports, you're reading them, you're trying to understand what he looks for. and then was there anything else that was formative at that time for you to develop the mindset of a value investor to sort of immerse yourself and speed run this education to try to really level up. So one formative thing sounds like, ordinary reports sitting down, I think you even described it, like sitting down like Buffett.

Like walking like him, talking like him, drinking the drink that he sit down with the diet Pepsi or whatever he drinks and really trying to sit in their shoes. for a minute. Was there anything else that was very formative in your development there? Just two things there. So one is that obviously drinking the Diet Coke is not necessary and eating steaks or whatever, but reading the early reports is for sure. And so when in doubt, do it all. And then maybe over time you'll figure out what's meaningful and what isn't. But drinking the diet coats really isn't that important. But also I think that, and I just get excited to think about this, doing that goes to the very, very core of our humanity as a species, because that's what we do.

We learn from generation to generation by modeling. I mean, this matching and modeling, matching and mirroring in Anthony Robbins case, cloning as Monash Pabry calls it, is a very, very human thing to do. That's what we do. That's how girls, daughters learn from their mothers, hunters learn from their elders. So I was doing something that was kind of natural, very, very natural. In a way, it's very unnatural for us to send people to university to have the model professors who don't know anything about business

if their plan is to go out and be business people. So there are two sort of insights that I had that I subsequently realized were good insights about what to do. The one was, you know, so I can't get Warren Buffett as a mentor for me, much as I would like him as a mentor for me. But if he was my mentor, what would he say? And this beautiful idea that we often, all of the time maybe, we don't actually need the real person.

We need to know enough about them to know what they would say if they were present. And so this idea of me asking, if Warren Buffett was here right now, if he was in my shoes, what would he do? And I think it's funny because I don't want to live a life like Jeff Bezos lived, actually, at the end of the day. So I've never asked myself the question, if I was Jeff Bezos, what would Jeff Bezos do in my shoes? But I think it's just an unbelievably powerful question and help me get going.

And this is this technology of success that I think that Tony Robbins would call it the technology of success that in a sense, I wish that we could teach it at school, you know, because in a way it's success by numbers. It's not that hard. You know, imagine that the person you admire is in your shoes. What would they do? Now try doing that. see if it's working for you, it might well work for you.

Can you give the, I think there's a Monish thing, I don't know, or maybe he'd got it from somebody else, the two gas stations across the street. I thought this was a great metaphor. So yeah, it comes from good to great. So it's a beautiful idea that I haven't thought about for an enormously long time. The idea is, and this is a story I think is in his book, Good to Great, two gas stations, both opposite sides of the road. And the guy in the one gas station, you know, when he gets a customer, he's made some money,

he paints the wall of the gas station, he puts out some flowers, he makes his gas slightly cheaper. And these are all actions that the guy on the other side of the road opposite him could do. Not only could he do, he's seeing the other guy do it right in front of him, right in front of him. And the fact of the matter is that in so many cases in life, the guy on the other side of the road who has all the opportunity to do exactly the same thing as the winning gas station just doesn't do it. And you come to this situation, Ennyas, down the road. And it's very hard to understand why one is so successful and the other isn't. And so, you know, the way I think I tell the story in my book is,

I'm sort of sitting with Monash and he's told this story a few times. now and I'm like, yeah, yeah, what a dumb guy on the other side of the road. He isn't copying any of the things that the one with the successful business is doing. And I don't know exactly what happens when I read is, actually, you're the other side of the road because here's Mr. Monash Pabari doing all these things. And you're not doing any of those things. Why the hell not? Don't be such a freaking idiot.

What was something Monish was doing that you should have been simply copying? Oh, that guy, you know, he comes out and washes the windshields of people getting gas and they love it. And that's why that little action is leading to success. What was something that was a little action you could have copied? You know, getting around the right people, so something, and it's taken a while for this to kind of seep into me. And now I kind of feel like I own this phrase, or I'm fully familiar with it. So Monash will talk about a sales engine or a marketing engine. And maybe for those, you know, in a sense, Sean, I've never built a big business. I just have a little investment shop with five people. I'm like the little watchmaker, you know, and I have a few people

helping me make watches. But, you know, the realization that what I need to do is break down the actions that I see need to be taken into repeatable steps and then build an engine around them. So that means enable people around me, not just me, to do those things, and then to scale them up and do them in a larger volume. So there's a limit, say, to how many thank you know, you can write. But if you kind of like decide that you're going to generate goodwill in a certain way, how can you scale that up? In what ways can you do it? In a way, this ValueX event that I do every year or this ValueX BRK is a way of scaling up goodwill and building an engine for creating the kind of good feelings that you want to create inside of people. And so that idea of

building an engine, what engines do you have, what engines are firing up inside your business, is certainly straight from Monash Pabri. Another huge thing, a huge, huge thing for me was the realization that I was investing enormous amounts of time talking to prospects and that in a certain way, that was an enormous waste of my time. And it just blew me away when I discovered that Monash didn't waste any time talking to prospects. Basically, if you weren't ready to invest with Monish, he didn't want to spend time with you.

And he had an engine of how people were going to find. find out about him. And then the first time I implemented that when I declined a meeting, I said, well, if you're not invested with me, I'm not going to meet with you. It was huge, actually. So I was going to say, you know, I'm there in my office. I'm reading the Coca-Cola on your reports. I'm saying, what would Warren Buffett do in my shoes? And then there's get around the right people. Just find a way to get around the right people, no matter how spurious you think that connection is. So for me, and it really was a great distinction for me, I was so desperate for success. I was so frustrated. I said, well, if I'm going to travel to the Berkshire Hathaway meeting every

year, and that's going to get me a little closer to Warren Buffett, I'm going to do that. But I actually think that my annual pilgrimage, and it's correct wording to call it a pilgrimage, and I can get into it, if you like, to go to the Berkshire Hathaway meeting every year has exerted a really, really powerful, positive gravitational pull for me in the right direction. And again, I that I get super excited about that because these are not genius moves. They're not like sort of, I had to be so capable, so smart, all of those things. It's something that anybody can do, you know, oh, I want to live a life that's more like the life of Warren Buffett. I'm going to start going to his annual meetings because that's going to rub off on me in some way. And what's interesting is

I could have in that moment, that time around 1995, said, oh, but I don't ever want to live in Omaha. I hate the coffee in Omaha. There are many things about Warren Buffett that I actually not big fan of. There are all sorts of things that I love doing that Warren Buffett has no interest in doing. And I see that stop people. And it's like the fact that I'm going out to Omaha doesn't mean I'm about to turn into Warren Buffett. It doesn't mean I'm about to live his life. It's still going to be my life. I'm still going to do the things that I like to do, but I'm going to have that rub off on me. And that's, in my view, what a real pilgrimage is all about. And it's about regularly getting together, getting around people who are the kind of tribe that you want to become more like. And that's just

destiny in there, you know? Right. You bumped into Buffett, right? You were a close reader of my book. It's a true story. It's just hilarious. So this was the meeting where they were voting in the B shares. There hadn't been B shares up to this date. And I don't remember the name of the location. It certainly wasn't where it is now the big stadium or the big convention center downtown. And I'm in the stalls. I'm getting to the toilet and out comes Warren Buffett. And he turns to me and says, he's just, He's clearly done a number two, because otherwise you wouldn't have been in the stores. He says, I always get a little nervous before these things before he goes off. And again, this was one of these moments where I just dropped to the floor as I couldn't believe it.

My hero was just standing there. And look, why did he talk to me? This was not, he was not in the streets, although I've heard stories of him showing up at people's parties in Omaha. I mean, it would be well-known around town, at least when he was younger. He was talking to me because he felt like he was amongst family. He was with the Berkshire shareholder. and therefore he was family. I was family to him.

But that was a, you know, I'm there dressed in a suit. I'm Mr. New York investment banker. I've got an MBA. I mean, I'm still got all of that wiring going on inside of me. But that was kind of like a, what would Anthony Robbins, he broke my patent. Right, right. Well, I have a question.

So you have your fund and I think you own a budget of Berkby in your fund, right? It's like 20% of your fund. And Buffett doesn't take any. Buffett, Berkshire doesn't have any management fee or any carry, right? You're just buying a piece of Berkshire Hathaway if you do that. Why, this is kind of a silly question, a stupid question, but like, if all the fund managers sort of idolize Buffett, and I think most would say, I might not be better than him or as good as him, but I will, you know, I will try to learn from him as much as you can. Why would anybody buy anything besides Berkshire if you wanted to do value investing?

You know, people say, well, should I invest in Berkshire Hathaway or should I invest in the index? because they say, look, I think that Warren Buffett's getting older, Bork-Hathaway just hit a trillion in valuation, and I think the index might be better. And one of the things that I want to say to them is, look, realize that the index is impersonal, and you might get spooked out of the index. And I think that many people,

if they buy Berkshire shares and they attend the Berkshire meeting and they really kind of become closely connected to the company, they're more likely to be in for the long haul and be in for the ride. And so it's not just the choices whether to buy Berkshire or to buy the index, for example. It's how do I impact my own behavior through my investment actions and the realization that when we invest, if we buy Berkshire or we buy the index, we buy something else, we're also making our own bed and we're also creating the environment in which we'll be in.

And we're in a kind of a relationship with these things. What I discovered when I shorted a farmer Mac, just to go back to that one of those original stories, was that I became all twisted inside. I kind of didn't like my internal wiring when I was doing that. Berger Hathaway strengthens my internal wiring in the right way. And I think it's a really important question to ask, if I become a shareholder of this thing or if I buy this asset, what does that do to me as a person? How does it improve or deteriorate my thinking? And that's the reason to own Berkshire. And I actually tell people that's a reason not to own the index, because the index is unbelievably impartial. You'll get manipulated into all sorts of things. Well, the other thing I want to ask you about is just performance.

So I asked my guy, helps him his research. I said, okay, what's the performance, let's say, of your fund over the long haul? And it looks like you basically beat the SMP 500 by some amount. I don't know, the exact numbers. Sliver. By a sliver. 9.5% versus 8.5% or something along those lines. Is that right?

Like since you started? It's about 80 basis points at this point. Great. And is that, by the way, is that net? It's certainly net. It's net of everything. Net of everything. Cool.

So good job. That's something that's obviously very hard to do is to beat the index over a, you know, more than 25 year timeline. So that's super impressive. At the same time, in the last 10 years, I don't think you've, beat the SP 500 in most of those years. But that's a long time. I'm thinking, putting myself in your shoes, man, the psychology, I don't know what I would do.

I would just be running around with my head cut off. Like basically, if I over a 10-year period wasn't doing the main thing I wanted to be doing or, you know, and I felt this, by the way, in my 20s, I wanted to be a successful entrepreneur. And for eight straight years, I failed. Yeah. And I remember what that felt like at the time. It was crushing, soul crushing for me to be doing that.

I wonder, how do you manage your psychology in a period of time where your performance is not as good as you want? Because you seem like a really well-balanced, well-regulated, emotionally regulated guy, but at the same time, this is the game you're playing. And how do you manage your psychology during a window of time like that? So, yeah, it's absolutely a spectacular question. It's funny because I did a sort of dry run through. I'm going to be talking about the fund to our investors in a day. day or two's time.

And I think it's like, it's seven or eight years that I've underperformed the S&P index in this case. And so I don't know why it always comes up for me when I think of this is the question that was asked to me just after I'd published my book and I was invited to give a talk at Google. And the outperformance was looking better at that point than it was, it is right now. And a very smart engineer asked the question, how do you know that the outperformance you've gotten to date is not luck?

And my answer then, as it would have to be now, is we don't know. I'm just one data point and amongst thousands of data points. And so you'd argue that 25 years is a long period of time, but eight years of underperformance in that 25 years is also a long time. And so, you know, this was already a year or two ago where I said, in the face of underperformance, what am I going to do? Am I going to say, this sucks, this isn't working, I need to strain, change my strategy and risk everything that's dear to me potentially.

Or am I going to say, look, I understand what I'm doing. Somehow the market's not rewarding it the way I would like it to be rewarded, but I know that what I'm doing will, even in the worst possible cases, lead to a really, really good life, even if I am underperforming. And if I take for starters, you know, my first investors, friends and family had never invested in equities before. So in their case, even if they're underperforming the S&P, they've vastly outperformed what they would have gotten in fixed income and all the cash instruments that they have. They've won many, many, many times over. And I actually got to have, I like to call it courage, where I kind

of realized that the key is to compound and to make moves that I know will enable me to compound. and if I can end up beating an index, then that would be great. But I cannot jeopardize compounding for the sake of beating the index. I have to focus on compounding. And that leads – and if you step back, I mean, I think that, you know, this idea of playing the infinite game, so many people think they're playing a finite game, that they're playing an infinite game. Explain the difference, finite and infinite games? Yeah, yeah.

Sorry. So this clear distinction between finite and infinite games. A finite game is one which has a clear set of rules, a clear space in which it's played out, both in terms of time and physical locations. So an example would be chess. There's a set of rules. It's played across a board, and there's a winner and a loser according to the time controls, or a game of American football.

It's played in American football pitch. There are end players each side. The game starts. It ends. There's a winner. there's a loser declared according to the rules. But the thing is, the most important things in life are infinite games. What is an infinite game?

An infinite game has no clearly defined rules, no clearly defined game space, no clearly defined time when it begins and ends. And one of my favorite examples for an infinite game was the Cold War. The Cold War was fought across many battle fronts, whether it was the Southeast Asia or building nuclear missiles, or rivalry between the superpowers in all sorts of ways, it didn't not really clear exactly when it started. And here's the thing, and it played itself multiple rules, multiple places.

In the infinite game, you don't really win or lose. Usually one or more of the players just decides to drop out. In the case of Russia, Russia kind of in a way imploded and dropped out of it. What's the most important point? The key mistake that we make so often in life is we think we're playing a finite game, when we're playing an infinite game, life is an infinite game. Investing is an infinite game. So how many people, I would tell you out of, I don't know how many funds that were around at the time that I started, how many around today? And it's like less than 2%. Now, some of the

people left that game of investing because they actually were utterly superb, made enormous amounts of money, and decided to go and do something else. A famous example of that is that. Nick Sleep, he's in William Green's book. And so those people, there are those people. But I did a study of this about 10 years ago, and there was a lipper database where I could look up all the funds around at the time. They don't really give their reasons for dropping out. But in many cases, because they had an implosion of one kind or another.

And so you don't want to be the guy who implodes. Well, I mean, I enjoy listening because I think what's cool about your mindset and is very different than the environment that I live in, which is, you know, I've lived in Silicon Valley here for the last 12, 13 years is everybody here wants to be Zuck. Everybody here wants to be Elon. Everybody here wants to be, in your case, it would be Buffett, right? And the venture capital game is a, you win and you get all the glory or most likely,

you, you know, you fizzle out and lose. And my life really improved when I asked myself, what game do I even want to be playing? and I moved basically an hour outside of Silicon Valley, which helped just to not be right in the center of it. And it seems like what you're trying to do is not be the next Warren Buffett, although if your performance actually happened to be the way, it's not you would be annoyed by it. But your goal is compound well and live well.

And I think that that is a much more achievable goal that you've been able to achieve versus putting your happiness or self-worth tied to some moon. shot type of outcome. And I really respect that about you because I think it's not going to get movies made. It's not going to get articles written about you. You're not going to be on the cover of Forbes with that attitude. But those are the people who, you know, the guy swimming in the lake happily, you know, with his kids who's living well and gets to do what they enjoy every day, reading and writing and

talking. To me, that is a life well lived. And I had to almost deprogram myself from the media I was consuming, which was kind of shaping me to want something that I didn't really want, especially once I knew the odds of success in that game. And so it really helped me to shift my thinking that way. So you're a good example of that for me. If I do the same contemplated action, given the same set of circumstances throughout the

rest of my life, how is it going to turn out? So there's this sort of like, just this once. Just this once do this. Just this once, get blind drunk. Just this once drop out of an airplane without a parachute because it'll be fun. And just to ask the question, and for me, for example, just take this meeting, just help this person, just give this person an internship. And I think that something that is helping me to say no more often to those things, to say, well, if I, in every time I'm faced with these circumstances, I say yes to this, how all my life look? And if every time I'm faced with these circumstances, I say no, how will my life look?

And it makes it far easier to come to a quick no and an understandable no where I can say to the other person, look, I'm sure you can understand, I can't say yes to this. And I'm sure you can understand because if I did, here would be the consequences. And so, and I think that that's a huge part of Warren Buffett's wisdom, never ever fall for the justice want. But another one of those is, if everybody in the world did this contemplated thing that I'm contemplating on doing, what would the world look like. And I think that a world in which everybody's trying to be Zuck is utterly miserable, really, really miserable. By contrast, a world where everybody is writing their own story, a world in which everybody is trying to discover a new scientific discovery, that is a really, really

beautiful world. And it's possible. It's really possible. So I'm doing part-time a history degree for fun. And so I've been thinking quite a bit about empires, you know? And we kind of like, I think the way that we feel today across the planet is that empires ought to be a thing of the past. There was a period when empires were built. We don't want to build empires like the Roman Empire or the Persian Empire or many different empires that were around. We could imagine a world where every man, every working person is doing the equivalent of being a watchmaker or a novelist. Why does it have to be on a grand scale, you know, so long as the work that you're doing is satisfying and you're creating

something that is of beauty, of as worth, it has its worth in itself. Isn't that a more beautiful world, actually? Yeah, that's an interesting point. Because also the other side is true, too, which is if nobody was Zuck, if nobody was Elon, then we would also have a problem. And so I think the answer isn't be one way or the other, but like you just said, what is the satisfying version of life for you. And if you could figure out that answer for yourself and then just act in accordance with that, that's really powerful. I think for somebody like Elon, this is the satisfying version of life for him.

I don't think he would be satisfied doing what I'm doing or what you're doing. And so I think we need that ecosystem has to have that diversity in order for it to work. I think it's a great point. You just said, like this is almost like this action in the limit. You know, if every time I was in the circumstance, I did this thing. If every time I was craving chips, I ate chips, where does that lead me? If everybody did this action, if everybody just took from the cookie jar, what happens? There's nothing left, right?

And so I think that there is a, that's a very powerful question that simplifies. I'm a big fan of single decisions or frameworks that simplify thousands of future decisions. Yeah. And that seems like one of them. We should wrap up with this. Can you just leave me with, I am a newbie on my, what I will call, the Buffett-Monger School of Thought, which is partially around investing, partially around how to conduct

oneself, how to avoid the trappings. What was the munger talk, like the 24 common? The cause of human misjudgment. Yeah, causes of human misjudgment. So things like that. What are the best essays that I should go read? If I was going to go read three things, what would you point me to?

The kind of the pinnacle, you know, either essays, letters, blog posts, could be books, but I'm looking for the shorter version if you have them. I'll give the answer that I think most people want to hear, and then I'll give a non-answer, which I think is more valuable. But I'll start with the actual answer. So, you know, I think you've got to go to the source. You've got to go to the Buffett letters.

You've got to go to the transcripts and all the recordings of the annual meetings, which are phenomenal. And obviously, as you brought up, I think that that poor Charlie's Almanac really is just an incredible collection of stuff that is, that's not too much. And some of it can just be listened to online. but it's an amazing start. So there's the answer, which is kind of pretty straightforward.

But then what I want to give is a non-answer, which I think is far more important, which is that I can't tell you or anybody else what to read because you're a different person in a different space. Your brain is different. So if you'll say, what can I read to learn about dot, dot, dot, dot. And the answer is, you know, pick up 20 books that you think might lead you in a good direction and go through them quickly and ask yourself with the question once you've kind of click through and read a few pages, is this getting me somewhere or not?

If it's getting you somewhere, keep reading it. And if it's not, put it down, maybe tomorrow will be a good day to read that book. And I really do believe that life is too short and our reading time is too short to force ourselves to read things that aren't giving us win after win after win. And so if you go to the Buffett letters and it's not speaking to you, put it down quick. Don't waste your time. Don't have that sense of obligation that you're supposed to be reading. go use up your valuable brain energy

on something that really works for you. So what I really want to say is, start with any reading list, but start iterating quickly, basically. Yeah, I like that. That is the answer I needed, not the answer I wanted, which is good. You have a good quote, by the way,

that stuck with me. You said, I treat my library like a cocktail party. You're going to mix and mingle and hop from one conversation to the other. And if it gets boring, go grab a drink. I love that.

because I also am a promiscuous reader and I just didn't have the right mental model or metaphor for how to treat, you know, this stack of books that's here in my room. But I think a cocktail party is a good one. Guy, thanks for doing this, man. This is a really fun conversation that I was looking forward to. And I got to say one thing about you that's really cool. Probably I'll leave you just with a compliment, which is I texted a few people before this that you were coming on. I said, give me what's a good story or nugget? And I was disappointed at first because they didn't give me like a specific, oh, you got to ask him about this, which is what I'm looking for. It's a shortcut for me in my research. But the way people talk about you is incredible. You're like a mensch, right? Like people just have such a high regard for your character and who you are as a person to them. Like what's a brand? It's what people say about you when you're not in the room. What's a reputation? It's what people say about you when you're not in the room. Your brand, your reputation is very, very strong amongst people I respect.

The way they think about you is that you are sort of, you know, just such a value giver. So, you know, congrats to you on that. That is, it showed me something that I can strive for. Like, oh, how would people talk about me if somebody asked them in this way? Would they, would they do this today? I don't think, honestly, no. That's the answer is no. They would not talk about it the same way.

But that became a bit of an aspiration. Well, I'm delighted. And that's an extraordinary kind of them. Whoever the hell said that, thank you so much. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off On the road, let's travel, never looking back