We Study Billionaires - The Investor’s Podcast Network - RWH008: Playing to Win w/ Investing Guru Mohnish Pabrai

Episode Date: June 14, 2022

IN THIS EPISODE, YOU’LL LEARN 00:02:41 - How an introduction from Warren Buffett led to Mohnish’s friendship with Charlie Munger. 00:04:46 - What it’s been like to hang out with Charlie over the last 14 years.  00:15:45 - How Warren and Charlie have succeeded by being voracious “learning machines.” 00:18:59 - How Warren and Charlie differ from each other as investors. 00:22:12 - How Charlie figured out that Li Lu would be one of the greatest investors of our time. 00:42:34 - Why it’s helpful to know that even the best investors are wrong a third or half of the time. 00:43:18 - How a checklist and other “circuit breakers” can help you to reduce your error rate. 01:00:53 - Why Mohnish and Charlie believe it’s a huge competitive advantage to be ethical. 01:03:56 - How Mohnish decides whether or not to build a relationship with someone.  01:12:55 - How he’s changed, becoming more committed to serving others as selflessly as possible. 01:15:19 - What Mohnish figured out about how to parent his daughters. 01:24:01 - How the power principles he learned from David Hawkins have changed his life. 01:25:16 - Why it’s so valuable to be candid and to “bare your soul.” 01:39:52 - Where Mohnish wants his ashes to be scattered after he dies. *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members. Mohnish Pabrai’s website, Chai with Pabrai. Mohnish’s book, The Dhando Investor. Learn more about Mohnish’s Dakshana Foundation. Stig Brodersen’s latest interview with Mohnish about stock investing. William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book. Mohnish explains how “Richer, Wiser, Happier” transformed his investing approach. David Hawkins’ books “Power vs Force,” “Letting Go,” and “The Eye of the I.” William Green’s Twitter. Our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Check out our favorite Apps and Services. New to the show? Check out our We Study Billionaires Starter Packs. SPONSORS Support our free podcast by supporting our sponsors: Bluehost Fintool PrizePicks Vanta Onramp SimpleMining Fundrise TurboTax HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

You're listening to TIP. Hi there, I'm delighted to introduce today's guest, Monash Pabrai, who's not only one of the smartest investors of his generation, but also an incredible philanthropist. Monash's charitable foundation has lifted thousands of families out of poverty across India, which is where he grew up before he moved to America. When I started working on my book, Richer Ope Wieser Happier, the very first thing I did was travel to India with Monish

because I wanted to see up close how he thinks and operates. We ended up spending five days together there, and we even shared a bunk bed on an all-night train ride to Mumbai. Part of what fascinates me about Monash is that he treats everything in life as a game. His strategy is basically to study the people who are the very best at whatever game he's trying to win. He reverse engineers their winning approach and then replicates it with really ferocious attention to detail. When it came to investing, Monish started by studying Warren Buffett and then Charlie Munger, which makes a lot of sense, given that they're the most successful investment team that ever lived. But what I think Monash never imagined is that Buffett and Munger would actually become friends of his and would take him under their wing.

Munger in particular has become a really close friend and mentor to Monash. I think actually it says a lot about Monash's intellectual brilliance and also the quality of his character that Munger saw something special in him and welcomed him into his inner circle. As you can imagine, Munger is not an easy guy to impress. In this conversation, Monash talks in depth about what he's learned from hanging out with Munger and Buffett and observing them so closely. What I love about our conversation is that we get this really personal account of the values and principles that Buffett, Munger, and Monsish himself live by. All three of them are deeply committed to behaving ethically in business and investing in life, which is clearly one of the keys to their enormous success. The fact that Monish is determined to be honest and to tell the truth

also makes him a fabulous person to interview. I hope you enjoy our conversation. Thanks so much for joining us. You're listening to The Richer Wiser, Happier Podcast, where your host, William Green, interviews the world's greatest investors and explores how to win in markets and life. Hi, folks, I'm absolutely thrilled to be here with Monish Pabai. Monish, it's great to see you. Thanks so much for joining us. Well, William, it's always fun to hang out with you. So I wanted to start by asking you about Charlie Munger. You're obviously in a very unusual and privileged position of having Charlie as a close friend and mentor.

I think you've been friends with Charlie since Warren Buffett introduced you to him back in about 2008. And so I wondered if you could talk about just what it's been like to hang out with him over the last 14 years, whether there are any particularly memorable experiences you've had with him. And then maybe we can get to what you've learned from being in Charlie's orbit over all these years. Yeah, well, I mean, I have to pinch myself at all of this because, you know, I think on many fronts, I think we, all of us are very privileged to be living in the time of Warren and Charlie. I mean, you know, it'd be kind of like living in the time of Newton or Einstein or any of those luminaries we'd look up to. So that's wonderful.

And I think in my case, I would have never expected to have any kind of a, interaction directly with Warren or Charlie. I think that's, that was just not part of the equation. And then, of course, you know, Warren takes bribes. And if you bribe him enough, then he'll sit down and have a meal with you. And this year, actually, I think was the last year that he auctioned off the charity lunch. I'm not sure what it went for, but that's the last one. And so since he was willing to take the bribe and I had bid for a few years, but in 2007, Guy Speer and I prevailed and we won the lunch and we met Warren in 2008. And I pretty much just expected that to be it.

I wanted to just thank him in person. And I did not expect to end up with any type of an ongoing relationship. And what Warren did during the lunch is he kind of got competitive when my wife told him, my ex-wife told him that she was her true love in life really was Charlie. And Warren immediately told her that Charlie's a very boring guy. And I'm really the one or the two way more interesting. And then he told us that he would arrange lunch with Charlie just so we could see how boring Charlie is and we could compare who was a better lunch companion. And I thought he was joking.

But then the following week, his assistant sent a note to Charlie's assistant. And that led to actually in 2009 lunch with Charlie at the California club. Actually, the funny thing was I thought that Charlie Munger lunch was way better than the Buffett lunch. And it was kind of like buy one, get one free, which was great. And of course, you know, you get tongue tied and all of this. And I remember Charlie came to that lunch and then he reaches into his coat pocket and he pulls out this printout, which has like Google focus, you know, written on it. And it has my U.S. portfolio, you know, the 13Fs get filed. And he's looking at the portfolio.

And, you know, this is 2009. Everything has crashed and burned. And he looks at Sears Holdings, which was in my portfolio, and he just shakes his head like that. Quite extreme disapproval. And then I remember we probably had some brief discussion on Sears. And the markets were always already closed that day when we met. But the next day, I wiped Sears Holdings out of my portfolio, which was a great, I would say, instant take home value from the lunch. And then, of course, you know, what I also did not expect is that lunch would lead to additional

interactions and a friendship with Charlie. I never expected that. And then I think a few years after that, I became a substitute bridge partner of his. Every Friday afternoon, Charlie would play a bridge at the LA Country Club with his friends. And they started inviting me when one of the old guys couldn't make it, it couldn't get out of bed or something. So usually I'd get to know on Thursday night or Friday morning that we have a slot. And I'd say, yeah, you don't need to give me notice. I just drive over. Those afternoons were really amazing because we would start with lunch at the LA Country Club. And I'd be sitting there at this table for four. And just sitting across from me would be Charlie Munger and Rick Gourn. And, you know, I'm looking at these two guys, no historic

figures and all of this. And I would ask them all these questions about the deals in the 60s and the early days when they were working at the Pacific Stock Exchange. And any type of lunch or bridge or dinner with Charlie is always very entertaining. I mean, it's very educational, but it's very entertaining. One of the things that happened the first time I met him for lunch was as he was talking, I heard the F word. And I'm thinking in my head, did God just utter the F word? And as I'm processing that in my head, I hear another F word. Okay. And there were, were a number of F words during that meal. And then I realized after that that every time I met God, the F word just flowed freely. And I'm actually surprised that at the Berkshire meeting or the Daily

Journal meeting, there's no F word because it's so natural the way he speaks that I have never seen him on a interaction with me where there wasn't colorful language. That's never happened. Is it just him being emphatic or exuberant? I think he's with friends. and I think he's using it the way we use it. He uses it to make a point, you know. Is there something that's changed in the way you operate in the world from actually being up close with Charlie all these years? Like, has he changed the way that you think and behave? I would say that the greatest learnings I've had from Charlie have not come from, well, he said some pretty amazing things to me. So there'd be, it'd be up there. But I would say that besides some

of those things he said to me, which have been transformational for me, most of my learning from him, on the one-on-one interactions have come from observing him, not what he's saying, but observing how he functions and observing how he is kind of day structure and how he arranges his life and, you know, the interaction with his grandkids or interaction with his kids or his daughter-in-law or his man-servant and all of that. So I think that when I just observed Charlie with his friends and family, And just with himself, when he's reading or something, those have taught me a lot more. Is there stuff that you've consciously cloned from the things you've observed in the way he behaved? Because I remember years ago realizing that when you replied to emails, often you would write

a couple of words in pen at the top on a printout and have it facts. And I was like, that's what Charlie does. And actually, I probably took that from him because I had received notes like that from Charlie much before 2009. I'd send something to him or something. and Warren, Warren would sometimes send it to him and then I'd get a note back and that sort of thing. And Warren's notes back many times would be a letter and whatnot, but Charlie was always a scribble and whatever. But I think that the biggest thing I took away and it's just so daunting and I still daunted by it is he's set up in his parlor in this kind of lazy boy type easy chair.

And on both sides of him are high tables, relatively large tables. And there's a lot of high-powered lights behind him because his eyesight is not that great. But the best analogy I have is that there's a big stack of books on one side and other reading materials and Barrens and value line whatnot. And there's a big stack of books on the other side. And Charlie is like an assembly line devouring. I mean, there's an engine of these things running through from the unread pile to the red pile. And I would estimate that he's reading more than 500 books later.

I think it's more than one a day. Now, he doesn't read the way we read. He's skimming a lot. And he's especially skimming a lot when, you know, he's not, he finds the author rambling or whatever, you know. And so he's trying to get the nuggets he wants. And they are in such a wide range. And, you know, usually I'd sometimes I'd go in on a Saturday evening or something to

have dinner with him. And he'd be reading something about global warming, some book on global warming or climate change or something. And then there'd be a dissonable. discussion on that. And sometime he would be reading about the chief of staff for President Roosevelt. And then we'd have a discussion on that. And this, I forget the name of the guy, he was Navy Admiral. And this guy basically was, you know, Roosevelt really trusted him. And Roosevelt trusted very few people. I mean, he was very, very, you know, he had a lot of his cards

close to his chest. But with Lehi, yeah, Admiral Lehi, he had complete trust in Admiral Lehi. And Admiral Leahy was kind of like this guy who was like a frat boy. He liked to have his drinks and whatever. But Roosevelt knew that he didn't have another agenda and that he was loyal and that he could get candid opinions and such from him. So Leahy, which most people don't realize, wielded enormous power, this massive amounts of power in the Roosevelt administration. And so there was a book on Leahy and then, you know, I read that book later. these subjects would be all over the place. You know, sometimes that'd go in and he'd be designing the dorms, right?

And then he'd be stuck on some subject and he'd say, what's the height of a pickup truck? And I'm like saying, well, let's go ask God Google. I don't know that because he was trying to figure out, you know, how high the parking lot should be and all this kind of stuff. So I'd get all these kind of, you know, weird questions from him on all of that. But there's also, they had so much fun, you know, Warren Charlie and Rick Goran. And I remember that one time Rick and Charlie was sitting across from me at the LA Country Club. And they started talking about, like I said, you know, tell me about one of your deals in the 60s, because they were buying whole companies as well then.

There was this kind of maverick entrepreneur in California who had come up with an additive that you could add to your engine in your car and it would plug any leak. if the engine developed a leak, this thing would basically kind of mush over it and your leak would go away, right? It was kind of this kind of magical. And this guy used to go to repair shops with his gun and shoot a hole in the engine block in front of the mechanic and then pour his liquid and then say, now put the oil in and nothing would come up. And that's how he built his sales with. So, anyway, Charlie and Rick Goran got kind of interested in this company, and the guy was a, you know, Scalibrian entrepreneur.

He passed away, kind of untimely passed away, and they were interested in acquiring the business. And the business had a lot of debt. So what they did was they pretty much bought off all the bank debt and all the debt on the business. In effect, they actually had controlled with the equity was worthless. But the guy had a widow and a mistress. and the widow did not know about the existence of the mistress till he died.

And he made the mistress, the executor of his will. And he gave some of the assets to the widow and some to the mistress. And of course, the mistress was, I mean, she was, you know, a range of emotions, you can imagine. And Charlie and Rick said that what they wanted to do was they wanted to make a small payment. to both the widow and the mistress for the business, even though they didn't have to, just to basically have their blessings that it's okay, you can take it. And the wife had absolutely no interest in cooperating on anything to do with the mistress. And so was a mistress.

They were like both on daggers drawn and Charlie wants to get this deal done and it's not happening. Charlie was telling me that he invited the mistress to the California club to have lunch with him. And he wanted to, you know, kind of smooth her feathers and just get her to be cooperative enough to just get this part taken care of. And she was a blonde nurse with a large, which large breasts. Okay. And she came to his lunch. Now, the California club is a very conservative place. And that's where I met Charlie for the first time.

Actually, it's an ornate dining room with all this etiquette, you know, your jacket and all that stuff and stuff is a private club. Anyway, so he invited her to lunch. She came straight from work. And so she's in her nurse's uniform, which is about three sizes too small for her. Okay. And so she sits down to lunch with Charlie and all the other members who are looking at Charlie think that he's having lunch with the porn star. So anyway, and you know, Rick and Charlie, you know, they're sitting in front of me, this is God and his first apostle. And, you know, this is the kind of, you know, stuff we're talking about.

Anyway, Charlie was able to calm her down, get her okay. Then he met the wife and got them to be just corporate enough to get that deal done. And they both got a little bit of money and they moved on from there. So anyway, these guys just had a blast on so many deals and so many things that they were doing. If I'm trying to draw some lessons and morals stretching myself to draw some lessons and morals from what we've just discussed, it seems like part of it from what you were saying before is he's an absolutely voracious learning machine. and that's not stopped even now at the age of 98, just consuming information on an industrial scale. And then second, there's a sense in which he's constructed his life in a way that's really true to him,

his family, his business, his hobbies, his bridge playing, his friendships, his partnerships, and there's a kind of joyfulness to that sense of alignment in his life, that he's done what he's loved. Is that a fair observation? Yeah, I mean, I think that's very fair. I mean, I think that I've tried to tell this to Charlie a number of times. I've told Charlie, actually, Charlie, without you, there's no Berkshire Hathaway. And he would always dismiss it. You know, he was very dismissive.

So the thing is that he is not looking for credit. I mean, I've also told him that I don't believe Costco would have done half as well if he wasn't on the boat. And he'd again dismiss. The thing is that I think he adds so much value. to so many humans and so many businesses and all of that and to humanity to all of us. And he discounts it all. I think there's no ego about it.

He doesn't look back. One of the biggest things, one of the biggest things I've learned about both of them, Warren and Charlie, is they don't look back. They look forward. When I look at them and look at the past what they've accomplished, it's a huge body of work that they've accomplished in their lives. But that's not how Charlie functions. He doesn't spend time looking back.

is all his energies are focused on the problem at hand. So, for example, I would meet him and he was wrestling with the succession at the daily journal, right? And it completely occupied, you know, and he wanted to do it well, wanted to do it correctly. And in the end, I think the way he got it done was incredibly. It's a brilliant solution and an amazing person he brought on board. And I observed all of his trials and tribulations as he was going through that process. And it was just brilliantly done because I think he understood that, for example, in that case, he had one silver bullet. Okay, his only silver bullet was who he hired, who he put in that role.

He could not after that. And in fact, the person they put in is the chairman and the seal. They made the person the chairman as well. And Munger has moved down to just a board now, right? It's an enormous amount of trust that they put. But like I said, and he turned down. I know he turned down some very, very good candidates from people. He really trusted and admired a lot.

And so just looking at that whole process. So, you know, like I said, they always, and then he always moan and grown saying, we've got so much money, we can't find any of it. Or sometimes he tells me Warren's not even excited about buying Berkshire stock at current prices and so on. So they just don't look back. You know, they look at the problems in front of them and they want to do the best job. That's another great learning for me, is that.

not to kind of rest on our laurels and say, oh, look, I've got Daxana, I've done this, I've done that. I say, you know, let's look forward. Let's keep chopping wood going forward. Do you feel that Charlie is a very different type of investor than Warren? Like, what's the difference between even something like Alibaba, right, or Costco that Charlie would own and that Warren wouldn't look at? Where do they diverge, do you think, in their approach to solving this game, this puzzle? I think they obviously have a lot of similarities. in how they invest, they used to talk a lot in their younger days. I think those conversations have become fewer now because part of it is they've had so much

interaction, almost know what the other guy is thinking and such. I think Charlie got to understanding the importance of better businesses, better to buy a good business and a fair business, a good price. I think he got that understanding well before war. And I think it took more time just because I think it's so successful. in the traditional Gramian approach. One of the things that has, I think, a difference between them is when Charlie sees a tremendous business, I mean, they're both chiefscape and they're both not willing to pay up.

But one of the areas, for example, where they diverged was Costco, right? And Charlie tried to have Berkshire take a much larger position than Costco. And Warren's perspective was it's too expensive, right? And Charlie would always say, well, for some things, you pay up, right? And so there was some divergence in a view there. There was also a divergence in B-Y-D. So I remember, you know, I think we may remember, like, I think Charlie told Warren that Chang Fu Wang is like Thomas Edison and you should invest with him.

And Warren just, and I ignored that. And he said, well, he's like Thomas Edison and Henry Ford, both in the same person. and Warren still ignored that. And then Charlie told him he's like Thomas Edison, Henry Ford, and Bill Gates, all in the same person. And at that point, what Charlie said to me is he went ahead after I made the third comment, putting three people in one person. But he didn't use his own money. So what he did was, it's kind of like these people like kids running a lemonade stand, the way they talk about it. He said he didn't use his own money.

He went to David Soko. and had mid-American energy used their money to buy the stake in BYD. And so the $250 million that Berkshire Hathaway invested in B-YD came for mid-American, which I think at that time, Berkshire owned 80% of it. And then he put David Sokol on the board of BYD. And so Charlie said to me, in the end, he didn't even use his own pot of cash, you know, went to another part somebody else controlled. said, okay, you do it from there. And of course, Berkshire would have done slightly better. I think now

they have like 91% or something of Berkshire Hathaway Energy. They're done a little bit better. It's been a major home, right? I mean, it's made billions of dollars, right, B.YD for Berks? Well, you know, they bought, they bought at eight Hong Kong dollars per share, and it's at 260 Hong Kong dollars per share right now. And so this is a 14 years and more than a 30x. And I think if I'm Right in saying, the idea originally came from Lee Lou, who invests a portion of Charlie's fortune and has become a billionaire in his own right. And I know that you and Lee Lu have become good friends over the years and that you think enormously highly of him. And I wonder if you could talk a bit about what Charlie saw in Lee Lou, because he's clearly an absolutely extraordinary

person. And at the same time, what you think is so remarkable about Lee Lou as an investor and a person. The funny thing is I asked Charlie that exact same question many years ago. You're a journalist of Hart, Manish. I'll get to your answer in a second. But one of the things Charlie told me many years ago, he said in the investing business, it's really important to have somebody to talk to you know, you're not in an echo chamber and so on. So I said, oh, you mean like you have worn? He said it wasn't always war, but I had somebody.

And he said, it's really important that you have somebody. talk to. And the person shouldn't be someone who reports to you. It should be kind of like a peer type relationship. And he told Lelu and me that he wanted us to get together for lunch once a month. He basically pretty much instructed us that the two of you, I want the two of you to meet once a month for lunch. And I told Charlie and Lilu, if Lidu wants to waste, you know, an afternoon or hour or month with me, I'm more than happy to do that. You know, Life is great. What's wrong?

What's not to like about that? Before Liliu moved to Seattle and, of course, I'm in Austin now. We used to get together once a month. And we finally settled on going to the same place every time, which works really well for me. And we'd go to, there's a Dintai Fung in Arcadia, which is the number one restaurant in Taiwan and really good food. We'd go to Dintai Fung, which used to be a little bit of a zoo, but the food is great. And then later, Lidu got this old Chinese lady as a shud. chef and he told me that she's actually better than Dintai Fong so we can meet at my place.

And so then I'd go to, he should have an apartment in Pasadena and I'd meet him over there and that was even better. Anyway, the food was great, but the conversation was really good too. And I remember one time, Lilo told me during one of these lunches, he said, you should look at and maybe you should buy Amor Pacific. And I said, Amor what? He said, Amor Pacific. He said, it's a Korean company.

And I said, okay. And, you know, I went back and I looked at this and everything's in Korea. And I figure out it's a cosmetics company. And then I also figure out that there's some of their products you can actually find in Southern California. But I could never really figure the business out. Okay. And I really couldn't really get my arms around in terms of like what was the secret sauce here or whatever. So I eventually just, you know, left it alone.

And that went up like something like ADX. after he told me that. I just watched it like go crazy. And they had this product with, you know, this extract from snails, which women would apply on their faces and it would make them younger, make them look younger, you know, the wrinkles kind of go away or whatever. And what Amor Pacific had been able to do, what they had been able to convince Chinese women. And I think now Korea is very well known for being kind of the state of the art for

Asian women's skin products and so on. And they had had a massive tailwind from Chinese women clamoring for their products and they don't really well. And I said, you know, well, such is life. And then, you know, after I think a year or something, he tells me you should buy Mao Tai. And I said, you know, Lili, and I used some colorful latch with him. I said, you know, you give me these names. Then I go and I can't fend, figure out head or tail.

So I'm not going to do it that way. Please spend the next 20 minutes explaining Mao Tai to me. He said, why didn't you ask me that for A more percent? I was done that. I said, okay, you know, we are gradually learning. So then he proceeds to explain Mautai to me. And Mautai is now the most valued liquor company in the world. It's the most valuable company.

So basically just has one product, but it's more valuable than any of the other global liquor players. And it was depressed at the time, right? Because there was a corruption scandal and people could no longer give Boutai as a gift. Yeah. It's very heavily consumed by government officials who are being whined and dined by people in the private sector and all that. And of course, the Mautai is flowing freely. And then it became that if you were out at lunch and you were a government official and there was Mautai on the table, you wouldn't be seen after that.

You pretty much suddenly disappear off the face of the earth, never to be heard from again. Yeah, so when they were cracking down, it became synonymous because the government's perspective was nothing good is happening if there's Mauti on the table. One bottle, I don't know what the prices are now, but when I held the stock, it was over $1,200 for a bottle. And it might be a lot higher by now. And this time I was actually able to understand the business. They actually had English financials and it was pretty straightforward to figure out and made the investment and like everything else in my life, I sold too soon.

But anyway, those lunches were really good and Lidu and I became great friends. And actually there's one business that we actually then collaborated on, which was Micron. So that actually went from me to him. I mean, all these other ones were coming from him to be. And so we had a good interaction and exchange on that and then he took a position and I think he pulled that for a while. And to go back to that original question, what do you think Charlie saw in him? Because I remember Charlie once saying, I can't remember whether it was to you or Guy Speer,

It was lucky Liliu was a force for good because he's so unbelievably talented that if he wanted to rule the world, he could be. And if I remember rightly, I've met Lidu a few times, but I've never been able to interview him on the record, only kind of privately on background. When I was studying him, I think he was the first person at Columbia University to get a triple major, which he got while sleeping in an apartment in the living room that he shared with about eight people. And this wasn't even in his first language. I mean, he had just come from Tiananmen Square. It's not just a, it's not actually a triple major is three degrees. It's a MBA, it's a law degree, and it's an undergraduate, all at the same time. I mean, these are like a bachelor's degree with three majors, you know,

this is well beyond that. In a language, that's a foreign language to him, right? And he did really well, in all of them. But when I asked Charlie the question, he said, well, it was a complete no-brainer. And he said, I just had to look at the track record. So he said, here was a guy who was on student loan, he had no money, and on the float of the student loans, which is he would get the money in, you know, January, maybe he has to pay it in April or something. He said he would invest the float of the student loans. And when he graduated, he had a million dollars. Okay. So when Lilo finished at Columbia, with Columbia's loan money with the stuff he was doing. And then after that, he went into venture capital and he had an incredible record. You know, one of his early investments,

is a company now that we know as Capital IQ. And actually, a lot of what is Capital IQ, a lot of influence from Lilu. And Capital IQ basically is the closest thing you can get to Bloomberg. It's a really incredible product. I mean, we have a subscription. We pay them an arm and a leg, and we can't get around it. And so he's been an incredible investor. And I think what Charlie said was it was one of the easiest decisions to figure out that

that Lilo was amazing. He said that his track record was incredible. And then I think the other piece is that what Munger and Buffett are both extremely good at is they're an incredible judge of judges of humans. It was, you know, Ron Olson's wife, she worked for one of these human rights groups, which was protesting things happening in China. And they had helped Liliu when he came to the US because he was active Intimmon Square and all of that. And there was an event, I think, in Santa Barbara or something that she had hosted. And Lelu had come for that event and Charlie had gone there as well. And that's where they met for the first time.

So it was an accidental meeting. And then I think once Charlie started to talk to Lelu and understand how he invested, but I would also say the following, I think that Charlie made Lidu an even better investor. So they would meet once a week for breakfast. And of course, you know, Lelu will discuss different investments and whatever with Charlie. And I think Charlie's, I mean, what I've found with Charlie is sometimes I bring up businesses to him that I'm looking at. He may never have looked at the business. And he's able to in about five or ten seconds.

I mean, I've seen the brain working. It's kind of amazing how it just slices through all the models. and he's done with the business in about 10 seconds. And I've been looking at it for weeks and what he comes up with, I alluded to. So I'll give you an example. I've always admired this business called credit acceptance. And it shows up in some prominent investor portfolio. Then credit acceptance has done very well for a very long period of time.

I mean, they've compounded a not to 20% for a very long period of time. They make auto loans to people who have the worst credit histories. You have defaulted a number of times. You've not paid your bills a number of times. And the interest rates are very high. The interest rates might be in the 20-odd percent rate or 30-odd-percent rate. And also what they've done is that the cars, when credit acceptance gives you a car, they put a device in the car, which would basically allow them to stop the car from functioning remotely.

they could control remotely to basically turn off the vehicle. It could not be driven again. When their payment doesn't show up on time, the car stops working. And then the person calls and then they say, we didn't get your payment. The payment arrives and the car is working again. So credit acceptance has also got an interesting model where they work with car dealerships and they make them put skin in the game. So they own part of the note on the car.

Basically, the loan is made partially by the, by the, auto dealership and partially by credit acceptance. And they've been able to work this system where it's incredibly profitable. Now there's a side to credit acceptance, which is really good, which is these people would not even have a car and they wouldn't even be able to get to work. But when I brought it to Charlie, he just said, we don't want to own that kind of business. And it took him less than five seconds. He'd never heard of credit acceptance before.

I spent about exactly what I told you about five minutes on the business. And he'd already processed in his head. And I think what his perspective was is that one of the filters that he runs through is win, win, win. Everything has to be a win across the board. And I think what Charlie saw is that the high interest rates is not, even though you could justify it a hundred different ways, he just said it's not the kind of business we want to be in. So his bar is this high, right? And I had been looking at that for several weeks, and that particular point never made it through to me. And there are lots of really high quality investors who own credit acceptance. In many cases, it's their largest position. And it went

through their filters. It never went through Charlie's filters. You know, it's just an amazing brain. Just to see, I mean, so many times I've brought up questions to Charlie, I'm facing fork in the road issues at Daksana. And I'm kind of torn about what to do. And I explained the issue in about five minutes to Charlie. He's never been to India. He comes up with an answer. And it's always the perfect answer. And I said, why didn't I think of that? Why was I confused about it? I remember also when you decided years ago that you were going to set up an insurance business, and you decided that you were going to clone what Warren and Charlie had done in a G-chain, and you were going to use the float to become super, super, super rich, as opposed to just

super rich. And Charlie, if I remember rightly, just looked at you and kind of shook his head. And is that right? Like, was there something that he saw instantly, that he saw about you, that you were not wired to run that business as well as you were wired to run Daxana and to run Parai funds? Well, and I think he made a comment to me many years ago where he said in the very long run, insurance will be a small part of Berkshire. It's a very remarkable statement.

I mean, if you look at Berkshire today, insurance dominates. They just bought Allegheny and so on. And I think he may be right about that. If you go 20, 30 years out, who knows what the size of the insurance business is? I mean, basically, if you stop writing different lines over time, that float is going to go down and so on. Yeah, and actually, there are some very elementary things about the insurance business. that I missed when I decided to go down that path.

And I learned in a very expensive way that the Berkshire insurance operation is a completely different operation than anything else. And that insurance is a really tough way to make a living. It's a really difficult business. And you, they make it look simple, but it's really hard. You eventually sold the business to Francis Chu, right? And Francis, I mean, Francis had played an integral role in building Fairfax as well.

And you obviously know Francis and Prem Watson from Fairfax very well. Was there something that enabled them and Ajit Jane at Berkshire to do this stuff that's sort of a secret source that you didn't have and that Charlie could see that it didn't suit you? I think insurance inherently is a really difficult business. And I think even this year at the Berkshire meeting, Warren alluded to that. He said from 1970 to 1986 or 85 till Ajit Jane showed up, I think 86, the Leggie Jin showed up. He was struggling. He had multiple insurance companies that blew up on him, like really bad, like 140% combined ratios.

And such, it was pretty ugly. And when Warren entered the insurance business, he entered with a great business. National indemnity created by Jack Ringwald was an incredible insurance company because they were doing excess surplus lines that others were not doing. So they had a lot of margin and profitability because there wasn't that much competition. you know, kind of insuring taxi cabs and that sort of thing that most insurers are not willing to do. And he started with a great core. And then when he tried to expand, things blew up on him till Ajit showed up.

And then things started running better. Even at Fairfax, Fairfax has had a lot of indigestion with insurance. They've had a number of businesses that they bought, insurance companies they bought, that have given them huge problems. The combined ratios went crazy and the purchase. price turned out to be very, very high and so on, so forth. It's a difficult business, even for the best of them to run. Geico is unusual and they've run well, but even now you can see that on the underwriting side, they're having issues versus being as good as progressive and so on, just because they haven't invested in their telematics and all of that.

So the lesson I got from insurance, there were really two or three lessons that came out. One is that it's a really bizarre business because you sell a product who's real cost, who's real cost, you don't know until five or 10 years from. I decide to sell you a policy. And I don't really know if I'm going to make or lose money on that policy until five years are passed. And I'm basing the pricing based on models, but those models can be off. And the world can unfold in a different way. So one of the things that happened, which I'm really happy about, is that Francis is a much better operator for insurance than I am. So I think the company has sold him has done extremely well under Francis. I don't think of it had done as well under me. But also what happened that gave him

massive tailwinds is we had two years of pandemic and no one went to work and the workers call policies, the premiums already paid, there were no claims because nobody's at work. There's no workplace injuries. And so they had huge underwriting profits for the last couple of years which gave them a very nice cushion. And that will change now as people start spending more time work and so on. But that was partially a great tailwind, but he also got a great tailwind because he was sitting in Treasury bills in March 2000 when the world went upside down, March 2020. And then he went to work and bought bonds at crazy prices and did really well as well. Yeah, he once, he called me sometime after that and he took me through what he had done

just privately. And it was kind of extraordinary because I guess when I was interviewing him for Rich or Wiser Happier, he had said there was nothing he could find to buy. and he was like, yeah, I could just sit here doing nothing for 10 years. And then he sat around doing nothing for years and he looked kind of foolish because he was just sort of sitting on all of this dry gumpowder. And it was such a beautiful example of that kind of Charlie Munger approach of salmon fishing where you, you know, his beautiful image of the spearfishman waiting by the side of the stream doing nothing. And then once in a while, a fat juicy salmon swims by a new spirit. And here was Francis who looked like this kind of totally outmoded investor.

And in fact, he suddenly spears so many salmon in one fell swoop that it kind of makes him look like a genius again after 10 years lying fallow. Yeah. And actually, if you look at Berkshire Hathaway, you know, their core purchase, which is Berkshire Hathaway textile mills, turned out to be horrible. All their forays into insurance turned out to be horrible for 15 years. And the textile business was horrible for 20 years. they ran it for 20 years before we shut it down.

And in spite of all of that, we have this amazing business that came out of all of that. And I think what Munger told me repeatedly is we could not do what we did then now. He said the world is a lot more competitive. Markets are a lot more efficient. We could not do the kinds of stuff. He said, we were finding where we, you know, shooting fish in the barrel when the barrel is empty. He said, we just couldn't do that kind of, we can't do that kind of stuff now. And the other thing he said that our, which he also said publicly, he said that our record would be a shadow of itself if we were not learning machines.

So I think what happened is that Cs taught them a lot of lessons, blue chip stamps taught them a lot of lessons, Buffalo News taught them a lot of lessons, and diversified retailing taught them a lot of lessons. And even the textile mill and the insurance for it. So the important thing what these guys was, they were learning machines and they absorbed. I am actually really happy that I went into the insurance business. It did not work out. I didn't lose my shirt. I got my money back. If I make a mistake and I get my money back, I'm really happy.

But I learned a tremendous amount. And I know I won't go there again. You know, been there, done that, got the T-shirt. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You got long days of daylight, incredible food, floating saunas on the Oslo. Fjord, and every conversation you have is with people who are actually shaping the future.

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And we're all totally sold on it. And then a few months later, you're like, no, didn't work. And you're very unsentimental about it. And you change, I've seen you do it with things like Seretage that you owned or Alibaba or this insurance business. that you were running. And it strikes me actually as one of your great strengths. It is kind of strong opinions lightly held. There's this willingness to change. Can you talk a bit about that? Because it seems very fundamental to the way you operate. Yeah. So I think if we go back to John Templeton, he would say that the best analyst would be wrong one out of three times. And in fact, he was a

mentor to Pram Batson, Fairfax. And Pram would go to Bahamas once a year to spend time with John Templeton. John Templeton told him, he told Prim that if you're wrong half the time, you're going to end up with a tremendous track record. One of the things we have to remember about investing is that the error rate, even for the best of us, is going to be really high. And this was one of the reasons why Charlie told me to talk to Lilo. It was one of the reasons why. And in fact, you know, he said to me recently, he said, I remember one time he told me, He said, so you bought Mautai? I said, yeah.

He said, good. Okay? And then recently he said to me, you and Lee Liu collaborated on Micron? I said, yeah. He said, the idea came from you. I said, yeah. He said, it will do very well. Okay.

I said, it's great to have God give that kind of endorsement because I didn't get that in the insurance business. I think the thing is that this 50% error rate, we have to be really cognizant of and we have to be humble about it. And so you're right, you know, I get excited about things. And, you know, this is the nature of investing is that greed takes over our brains. We look at this company, we look at the upside, and the greed takes over. And we have to have artificial mechanisms to damp it down.

Talking to someone else is a way to damp it down. Having a checklist is another way to damp it down. having somebody who actually has a completely opposite point of view and talking to them is another way to dampen. So we need circuit breakers with all our investment ideas because the animal spirits will run wild because you would see. Today, in fact, I came across a business that I really like. I still have to drill down on it. But at this point, I can't see what would be wrong with it, but I haven't done the work yet. it will be really important for me before I do anything with it is to run the checklist, talk to others,

and just really try to get a rounded view and then see whether I still want to do something with it or not. So I think that there are two things that are important in investing. One is that we have to be very cognizant about the fact that this is not brain surgery, where people say error rate is bad news. You're going to have a high error rate. The second is that when you are right, you can be really right. and you could have a 10-bagger, 20-bagger or something, which would cover a lot of sins. And the other thing is to have the humility to realize when you have been wrong.

I mean, Seratage is a good example where I thought that I looked at it in Ways to Sunday and it was going to work. And then I finally came to the conclusion that, no, there was an error. There was an error in my analysis and that it was going to be some pretty heavy lifting to make it work the way I thought it should. Just because it was too difficult to do the redevelopment in different parts of the country? Yeah, I think it's like, you know, you've got like 150 Balkan states with 150, you know, rules and laws. And these, I mean, even if I look at a place like Austin, Texas, which has severe housing shortages and severe other real estate issues, the entitlement process and the process for allowing new housing to be created is excruciatingly slow. The wheels of government work very slow.

And they don't particularly care that we've got these crises and we need more housing and all of that. They've got their own set of criteria and conditions that they're looking at. The redevelopment of the portfolio at Saratage is very complicated. I think it's a lot more complicated than I had imagined or expected. And I realized that the time it would take them to get their arms around that whole thing and to actually get it done would be really difficult. And the second thing is, I didn't think they had the team.

The second conclusion I came to the CEO left and the new team, they had a lot of turnover. And the second concern I had was with a great team, they would find it challenging. With a questionable team, it was not going to happen at all. And so at that point, I said that we still had a gain. We bought it so cheap, we still had a gain. And like Stone Trust, I could sell and, I mean, Stone Trust, we have a small. gain, this is a little larger gain. I said, this is awesome. We can get out without a loss, and so we want to do that. So you're very unsentimental when you get to these moments where

you think, I made a mistake. I mean, I think you did it with horsehead as well, where guy held on for longer. I mean, I think, you know, you've talked to people like Howard Marks, and many times when I listen to Howard Marks, I think I'm listening to a robot. I don't mean that in a negative sense. I just think he's so monotone about things. And I cannot imagine someone like Howard getting crazily emotional. You know, I just don't have a picture that he's, he's that kind of guy. Yeah, I always say being with like Howard is like being with the most superior machine. You feel, you feel like he just has this really good rational engine. But at the same time, there's this real paradox, which is that he's super creative and that a lot of his process is

actually impressionistic and based on gut. None of this stuff is simple. And I had a similar conversation with Bill Miller the other day that it'll come out on the podcast soon, where he said, I was talking to him about being so unemotional. And he said, actually, I cry quite a lot. I can't remember whether he said it's in movies or in music, I think it was. I mean, I would say that when I talk to Charlie about stocks or different subjects, there's a very high degree of rationality, extremely high degree rationality. And I think rationality is a really important trait, I don't think you can do these things if you're not going to be objective. I think patience is really important in investing with one of the most

important skills. rationality is up there. So I think that when we realize, we have to be true to ourselves. When we realize we've made a mistake, you cannot lie to yourself. You have to be candid about the fact that you've made a mistake and you have to move on and go from there. On this subject of rationality, before I forget to ask you this, I was giving a talk about a year or so ago on Fire Island. And I remember, so there are a lot of money managers living out there. And I was talking about the book. And I said something about Charlie and how unemotional he is and how when he bought

Wells Fargo at the bottom tick in 2009, he just had no fear, no anxiety, nothing about it. And I was saying how unemotional he was and how that's the same with people like Bill Miller and Howard Marks, all of the best investors. And Chris Davis, who is close to Charlie and is now on the board of Berkshire and knows them both very well, sort of came up to me afterwards. And he's like, it's not entirely right. It's more nuanced than that. Because if I remember rightly, he was talking about how when things went horribly wrong for Charlie's hedge fund, his limited partnership back in the 70s, I guess, during that brutal period around 73, 74, he said it was extraordinarily painful for him to be letting down

shareholders. Can you talk about that nuance? Because I feel like I haven't quite. quite cracked this idea of how unemotional the great investors are? Yeah, I mean, I think I talked to Charlie about that period, and he said that basically when he wound up his partnership in 74, he distributed all the holdings in kind to his partners. He gave them the positions, and he told them, don't do anything, just keep them. And eventually a lot of those positions got converted to Berkshire stock and they were big home runs. I mean, like, you know, Blue Chip and different things got diverse by retailing and so on. They all got rolled into Berkshire.

And so he said in the end, all of them did really well, right? And I think he decided that at that point, he did not want to manage money. You know, I think he decided at the end of 74 that that wasn't a direction he wanted to go in. And so he made, he made that decision and got everyone actually to a good end point and moved on. When you judge his lack of emotion, like is it, how would you characterize him? Because he's clearly, I had this expectation before I went to interview him, for example, for the book. And I thought, God, he doesn't suffer fools and he's bruce and he can be really rude. It's sort of famously rude at times.

Like I remember Bill Miller telling me that he'd walked into him in New York once he'd run into him. and said, Charlie, hi. And Charlie turns him and says, who the hell are you? And then they end up walking together and chatting for an hour. And you told me, no, no, he's like this really soft, really sweet guy. And so there is something there where he's a much gentler and softer human being. So I'm wondering if, in addition to being this kind of hyper-rational thinker, there is this sort of soft emotional side or whether there's a kind of emotional stuntedness that comes with a lot of these great rational machines? Well, I think both Warren and Charlie, have beautiful souls.

And those souls are covered with a hard exterior. And the reason they're covered with the hard exterior is so they, I think, don't get hurt. They have a lot of people coming at them with all kinds of things. And so I think this exterior protects them. But I think when you get to their inner circle, the inner circle doesn't deal with the hard exterior. You're just dealing with the person. And that's why I find that Charlie is a very different person when I'm playing bridge with him or when I'm having dinner with him versus at the Berkshire meeting, for example, on stage and so on. There are two very different people.

He has a very high degree of emotions. I think he's able to control them. I have had a lot of great input into struggles I had in my personal life from Charlie, where I found that the empathy level was really high. So these were not investments, you know, discussions related to investments or money or any of those things. They were related to kind of human things. And, you know, when I was having trouble in my marriage and I discussed those things with him, he was amazing. It was just incredible and was able to see me through and gave me tremendous advice. And in the end, I think I'm in a much better place now than I used to be.

And so Charlie was very helpful. And that came from this really warm, soft person with a very high empathy and high emotional understanding and such. So that was beautiful. And it's interesting to me that you see this quality in him of having this kind of slightly tough, scary exterior, but a gentle interior. Because I actually think that's probably a pretty good description of you as well, because I sort of, you're always kind of slightly intimidating.

And actually, I think the more I've got to know you and become friends with you, over the years. I think there's a softness under the sort of bombast and opinion. So I suspect you, when you see that in him, you're also kind of seeing it in yourself. Well, I think so. One of the things that really was, I think, life-altering for me and enhanced my life a lot was my membership in YPO. So one of the things that happens YPO, which is young president's organization, is we get put into these groups of 8 to 12, which are forum. And the interesting thing about forum is that everything that goes on in forum is confidential. And because I cannot even share with my spouse what's going on, people are willing

to open up about things that they would never open up even with very good friends. And what I found is that in forum, magic happens when you open up. Like many times this has happened to me. I mean, I've been in YPO for 25 years. Many times I have a problem. And I've wrestled with this problem and had a hundred times and I can't really find a good solution. And I say, I'm going to take it to my forum, but I don't think these guys can help me because I've already thought about it. I'm pretty smart, et cetera. I take it to the group and about 30 minutes, they've solved it. Okay.

And this has happened so many times in my life that I'm just stunned. I'm stunned by it. And so what I've come to realize, which a lot of humans don't understand, what I realize is that in order for me to get the most value from Charlie, I have to put my cards on the table, the good, the bad, the ugly. I've got to put all the cards on the table. And I've got to have him see the whole picture. And that is not easy for the human being to do, for a human being to do.

I remember the first time, I think it was 2012 or 2013 when I was having issues in my relationship. And I had talked to Lidu about it. And he said, you really should talk to Charlie about this. Because he helped me through a few things. But he said, and so I met Charlie and I just laid my cards out. And I could not have laid my cards out if I had. I didn't have that very long history with YPO, where I understood that when you lay your cards out, magic happens.

And I was laying my cards out in front of God, who's like beyond human. Okay. And it took him like five minutes. It took him like less than five minutes to like sort through it and said, okay, this is how you're going to deal with this. Not only did he tell me how to deal with it. He told me what the outcome would. He said, listen, this is what you're going to do.

And this is what the outcome's going to be. And this is where we're going to ride off into the sunset. And it happened exactly the way he said. It's just beautiful. Is that from extraordinary pattern recognition or EQ? Where's that coming from? The funny thing is, you know, Charlie told me he doesn't read fiction. And I don't think he sees many movies.

I don't really want to go into this because a lot of this is very personal. But he gave me the name of a movie. He said, did you see this movie? I said, yeah. He said, go see it again. Okay. And I did. And this time I saw it from.

the context of what he was talking about. So it's like, you know, here's a guy who's bringing up Hollywood movie to help me with some issue that I'm having. And I didn't think he would even have ever watched a movie like that, for example. So I think he's seen so much. Even when he was talking to me about the issues, he brought up his friends who had had similar issues. And he's seen so much.

I mean, 98, you know, I mean, you've seen everything under the sun. He's got eight kids. He's got grandkids. He's got daughter-in-laws and son-in-laws and second wife and first wife and all of that. There's a lot of friends and business associates and people who have acted below the belt with them and all of that. They've seen all of that. And so what both of them are able to do, Warren and Charlie have been able to do, they're able to understand humans so well.

And they're like so good at understanding the human dynamic. If I thought Charlie was a great investor, I thought his ability to help me with my personal problems was off the charts. One thing that strikes me both about Warren and Charlie that you would have a much keener sense of than I do is I think they've both improved tremendously as human beings over the years. Like they've worked on themselves. And I was very struck by that. I've mentioned this before when I went to the Daily Journal meeting and I saw his kindness

in the way that he treated people around him, in the way that he treated these disciples. And even I remember as he was walking out of our interview, and I was, of course, trying to detain him and talk longer and asking more questions. And he said to me in this kind of plaintive way, these people are waiting for me. I can't keep them waiting. And there was a sense of courtesy and decency and kindness, and I would say actually love for the disciples who'd come to see him. that was really surprising to me, given his reputation for toughness. I think Charlie, you know, I think Lelu wrote an essay about this. They would meet for breakfast, and Lelu would show up 10 minutes before for breakfast,

and Munger would already be there. Then he started showing up 15 minutes before, Munger would already be there. Then he started showing up half an hour before, and Charlie was already there. And he's, you know, Rulu was wondering how much before our stated time. And then finally, Charlie told him, I come early to read my. paper, you don't need to come early, leave me alone. And then they would both arrive early to do their work and then they'd meet for breakfast, you know. I learned from Charlie that, and I actually made a change in the way I operate, is to show up early everywhere. If I have a coffee

with someone at 9 a.m., I'm going to make sure I'm there at 840 times. So I think for him, it's very uncourteous to be late. And I think one of his grandkids was telling me that They were all going to take a private jet to Omaha, and Mungers, I think the jet was supposed to take over 8 o'clock or something, and Munger's planning to get there at like 7.15 or something to the airport. And the Grand Kirsten explained to him that Jets are going to wait for us, that that's not going anywhere. It's not a scheduled flight.

But that didn't mean anything to Charlie. He was there before any other family member, you know, and he just sat there and he's just reading. I'll tell you a story about this actually that involves you, which is, as I think you I had this kind of wonderful two-hour Zoom breakfast with Charlie and a few other great investors back in, I think, July 2021. And crazily, they'd said the homework was to read my book and they were all wanted to discuss the book, which is, this is, you know, I mean, I can't tell you how inadequate I felt.

It's like, yeah, I'm going to teach Charlie something about how to invest. And it was Lou Simpson and people like that. And I knew that Charlie was going to arrive early because I read that introduction that Li Lu had had written to. I think the Chinese edition of. of poor Charles Almanac, where I think he talked about Charlie always being early. So I signed on five minutes early. And as a result, I'm on this call alone at the start before Lou Simpson and all these other guys, Mark Nelson get on just with Charlie. And so the very first thing I did,

actually, is I said to him, Monish and I are friends and speaks incredibly highly of you, obviously, and I interviewed you of my book, if you remember. And he said to me, he starts waxing lyrical about you. And he said, very specifically, he said, Monash is a very highly ethical person. And he said, he's so mathematical and he's so smart. And he said, he knows he can make more money by being ethical. And he said to me, people like Monash and me, we actually don't deserve nearly as much credit for our morality as we deserve if we were doing it against our own interests. He's like, we're both actually doing better in business and life because we're ethical. And I thought it's a really interesting insight into life and business and Charlie and you.

And I wonder if you could talk about that idea of being ethical as a competitive advantage, because I think many of us are taught as we're growing up and starting in the business world or watching succession or billions or whatever. We're taught that we need to be hard-aged and self-serving and selfish to succeed. And here's this kind of grand old man of business and investing saying, no, you should actually be decent and it's not a zero-sum game. And it strikes me as a hugely important insight. Yeah, and actually Charlie's absolutely right.

Probably a huge portion of why I am so ethical is because of self-interest, enlightened self-interest. So I think what people don't realize is most things in life function on trust. They don't function based on contracts. They function based on trust. So if you become very trustworthy, it gives you a massive competitive advantage, a huge leg up in life. And the thing is that this trustworthiness doesn't come overnight. But it's kind of like on a log scale.

It's like truthfulness, right? I mean, you sometimes use out small lies. But if you eliminate all lies, you know, the power versus force, we've talked about, what happens is that, you know, the tractor fields come into play. and humans feel they can trust you. And once humans feel they can trust you, the whole universe is at your disposal. We see that in spades in Berksha Hathaway.

You know, Bokshahathaway does all kinds of things where they just say something to someone and people will accept that. They don't need to have it in writing or anything like that. It just warrants word is enough. And so how do you get there? Well, you get there by having a consistent life where you have demonstrated repeatedly that you are playing the game very ethically,

playing the long game, and looking at things to make sure that your business partners and vendors and whoever you deal with is treated extremely well. You know, A. Croc used to say that there were three stools on which McDonald's stands. He says, my franchisees, my vendors, and my employees, right? The franchisees were entrepreneurs, right? They owned the, and he felt he had to make sure that they did really well. The people supplying the French fries and the cups and the plates and all of that at McDonald's, Ray Croc wanted to make sure they did really well.

So he's not trying to squeeze them for the last penny. He wants them to do well, right? Because he says that it's part of my ecosystem. And I have taken those lessons to heart. So, like, if I have a relationship with a printer for my business, I want those relationships to go on for decades. I want the printer to do well. I don't want to be squeezing him every time and get three quotes and take the lowest and all

of that. I don't want to do it that way. I want to make sure that it's fair and we don't need to go to multiple quotes. We just run our business on trust. And so what happens is that when you show trust in a company or a human being, they react really positively. My baseline, when I'm dealing with anyone, my baseline is that the other person is a very high quality person or a very high quality company and I can completely trust them. Then I wait to see if they do stuff which violates that trust. If it does violate the trust,

we'll move on, you know, we'll do something else. But I think when you upfront demonstrate the trust, a lot of good things happen. So I think this notion of being ethical, running things properly, gives you such a tailwind in life that it's, you know, like I think Peter Kaufman says, if crooks knew how much money you could make by not being crooked, they would stop being crooks, you know, because basically you make a whole lot more money by being honest. You make a very little bit of money by being crooked, you know, so it's a complete no-brainer to be ethical and honest. Guy has often said to me that you have an extraordinary ability to judge people and

whether it's a CEO of a company you're investing in or a friend or a business partner or a prospective investor in your fund or something. And I remember you saying to me before that, for example, if you have a lunch with someone and you don't think they're going to be good for you, you'll just cut them out. You get them out of your life because you're taking very much to heart what Warren said to you and Guy at your charity lunch where he said, hang out with people who are better than you and you can't help but improve. And I was wondering when you're trying to appraise someone's integrity, whether they're a high quality person or someone you actually want to get out of your life. What are you looking for? What are some of the tells? Because I feel like

I'm not very good at this. I tend to look for the best in people. And I think Guy looks at people and sees their flaws and is much gentler and more tolerant of their flaws. And he'll see mutual friends of yours and mine. And he'll see appalling ways in which they behave. And he'll say, yeah, they're a flawed individual. And so he's still okay with associating with them. Whereas you're kind of brutal in saying, no, person's out of my life. And so I wonder if you, I'm asking you about 12 different questions there, but if you could talk about A, what you're looking for, the tell of whether someone is not someone, is not a person you want to keep in your life, but B, why you're so extreme in sifting those people out. Yeah, I mean, I think that's a great

question. So my dad used to say that to have a great life, one needs one good wife and one good friend. Less is more. And I find with myself that I don't need a very large network of best friends or close friends. I find that if I spend time with myself reading and thinking and doing my thing, I'm very happy. I don't need a whole lot.

And when I'm interacting with someone, I just want to make it so that those interactions, when I look back at them, that I enjoy. them and those were good and whatever. And the thing is that I moved to Austin recently, right? I don't know very many people here. What I decided to do is I decided to lower the bar on meeting people. I said, look, I don't know anyone here when people reach out to me here and there, whatever. I'll meet them. I'm going to go through a process to see if I can find, I mean, it's kind of weird that one of my best friends is in Zurich thousands of miles away, you know. We're kind of nice to have a best friend next door.

for example, a little bit easier. So I said, I'm going to meet these people and I'm going to see, you know, like you say, I do my grading after I meet them. And so far no one has made the grade. You know, so that's okay. They're not bad people, but I just, I just asked myself a very simple question. I said, this person I met, do I want to meet them again? Do I want to interact with them some more and what do I want to do here?

And the answer just comes back naturally is that in some cases it comes back that, yes, I definitely want to increase. You know, there's a wonderful guy in Irvine. He and I used to bike every Saturday together. It was really about the coffee. The whole thing was about the coffee and the baguette. So the bike ride were all an excuse for the one hour coffee baguette in the middle. I think he was sitting at our table at dinner in Omaha.

He was, he was. He was. Yeah, he was. Yeah, he was so heartbroken when I was leaving Irvine. He tried so hard to convince me not to leave, you know, Because we had such a, and I have not found that in Austin. I genuinely loved the Saturday mornings with him. We got physical work done.

We had great coffee and everything was great. I have not been able to replicate that yet in Austin. And I miss that, you know. So now our interactions are over Zoom and so on. It's not the same. I wish he was in my geography and he wishes I was in his geography. I think that friendships are very important. I've seen with Charlie, I met some of Charlie's very best friends, and many of them have become my friends.

It's very easy to make friends with Charlie's friends because they're really high-quality people. You meet some of these people. I say, wow, all I want to do is be friends with Charlie's friends because he's done all the filtering already. They're so high-quality. They're just wonderful people. I mean, I've just so impressed with them. I think that it is really easy to tell once you meet someone. whether it's someone you really are excited about meeting again or not.

And I think that if my situation is very simple, I have 22 years and four weeks left before I leave planet Earth. Okay, so there isn't much time left. That gets you to 80, does it? Yeah, 24, June 11, 24 is the departure date. So it might be 22 years and three weeks or something. Basically, I really don't want to waste time, other people's time and my time. I want to have deep relationships where there is a lot of candor and that are people I

really enjoy the banter with. I think humor is important, banter is important. So if we have a connection, the banter is there. Charlie and I, you know, we have such a big age difference. We have so many things that we have banter about. You know, I talked to them about all kinds of things under the sun. and it's a blast, you know. And so I'm looking for that.

I'm always on the quest for, and I recently, for example, recently I think I met a person, a couple of guys actually who are really high quality and I like interacting. They're not in my geography, but I know that we'll have a great time together. So that's wonderful. One of the things that really struck me in hanging out with you in Omaha, which was just a real delight. It was a real pleasure. It was wonderful to be back in humanity again after two years of

isolation in my own head, which is a pretty alien territory. It really struck me that I thought you had changed in the time since I first saw you in Omaha several years ago. I remember several years, it must have been about 2015, probably when I first was there with you. And you kind of, I remember you walking out at lunch, you had this kind of retinue of people who wanted to be seen with you. And there was a kind of swagger and a bombast to you. And you were great fun. I mean, I always loved hanging out with you. You were always funny and charming and tremendous company. And this time I saw you and there was a, you probably had much larger retinues of people coming up to you and wanting to take photos. But I would say it was striking to me that you'd become gentler

and softer over the years. And there was less of that kind of bombastic exterior. And I was wondering if that was something that you'd consciously worked on over the years, becoming a sort of gentler, softer being or whether it was just me looking for a different part of your personality or whether it was getting the crap kicked out of you by life and by divorce. But it seems like you've changed quite dramatically over the years. I don't think I changed, but I think if you're making that observation, then I'm very happy about that observation. And I think if I move down in that direction, I think that's a great direction for me to

move down. My take in Omaha has always been, and I think I thought about it very deliberately this year. I said, look, there's all these people who come to Omaha. They are never going to have any time before or charge. okay, that's just not going to happen because they've already cut back so many events and all that. So I said that if they want to get a picture with me or want to have a conversation with me or something, I just say, just like Warren and Charlie do, they just dedicate the weekend to the shareholder.

I say, I am here for humanity. Okay, anyone who wants to have anything, pictures, talk, whatever, I am here to serve, right? and I'm here to serve as selflessly as possible. And maybe it was more, and it's possible, it's become more reinforced because between 2015 and now I've had so much interaction with people like Charlie, et cetera, that that type of demeanor and that type of approach has become probably more hard-coded. It's a better way to live. You know, it's a better way to be low ego and a servant, you know, basically trying to serve the

people. So that's what I was trying to do. It's a profound shift and it was very noticeable to me. Someone recently asked me if I thought you were kind of a little melancholy recently. And so I was sort of watching, watching you in Amharana. It didn't seem like you were melancholy. It seemed like you were gentler and kinder and sort of softer. Yeah, I don't know. I'm actually very happy. I mean, I've been dealt in amazing, amazing hand in life. And I have no complaints about the hand I've been dealt. I mean, just, you know, to have Warren and Charlie as friends, I randomly picked up a book in 94 when I took a flight from London to Chicago, Peter Lynch's book.

That book basically led to a whole set of people coming into my life who are incredible people to have in my life. If I had not read that book, there's no way those people, you and I would not be talking, for example. And so I just look at that random event with that random book that I read and then what that led to. And I feel very blessed and I feel very grateful and thankful that this trajectory worked this way. Yeah, there's very little I can complain about in life. I think the divorce actually, you know, most people think of divorce in negative terms.

neither of us engaged in attorney. We split like a nine-figure sum between us in 30 minutes. And we are still very good friends. We have a group chat with the kids and everyone. And both of us are happy. And I'm in a great relationship. So I think that Charlie was very helpful to me in making this transition. Yeah, so I think I have no complaints about that at all.

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and expenses. This and other information can be found in the income fund's prospectus at fundrise.com slash income. This is a paid advertisement. All right. Back to the show. I also struck me, I haven't spent a lot of time with Momachi, your younger daughter, but I've seen Monsoon a lot over the years, both in Omaha, but also when we traveled in India for several days. And it also struck me that you and Harina, you clearly done something right as parents. And I mentioned to you, I think, when we were having dinner in Omaha, that Monsoon did something that I thought was really striking, which is where I went out, you know, during the sort of festivities

when everyone's kind of crowding into the main hall for the annual meeting, I obviously got panicked because I was like, I haven't had four vats of coffee yet this morning. So I went off to get coffee for me and Guy. And I came back in and my bag that was on my seat had been moved and I sort of lost my place and everyone's sitting down. And Monson, who's what, 20, 20 what now? She's about 26. 26. Looks and sees what's happening. And I'm of course a repressed, polite Englishman who's sort of slightly uncomfortable and doesn't know what to do. And she basically moves everyone so that there'll be a spot in between Guy and his wife Laurie are next to you. And it was just kind of a remarkable thing. It was like an act of kindness and sensitivity from a young person towards someone who's, what,

20, I have bad math skills, 36 years older than her, something like that. And it was just 26, you're a better mathematician than I am. And it was just a gentle and kind and thoughtful thing. And it made me think that again, for somebody in your position where you're obviously hyper-rational, very good thinker, but there's also something there where you did something right as parents. And I was wondering what you figured out as parents that kind of worked because so many of these families are very successful people. Actually, they've kind of wrecked their families. I would say that I'm incredibly proud of my daughters. They are amazing human beings. And of course, you know, a lot of people would say that about their kids, which is fine.

But I think that they, and I think Harina and I feel this quite strongly, that they are way better than we were at their age. Monson is a very high empathy person. They think what she did for you doesn't surprise me at all. I mean, I think she feels that somebody is not in a nirvana state and it's in her orbit. She's going to do a lot. She's kind of like I would think of, I think of her many ways like a mother hen. she kind of takes care of the whole kind of ecosystem around her. And many times when I talk to her, she'll get me up to date with extended family

and different things going on because she knows a lot more. And like keeps me updated what's going on and so on. So that's, I think she's got a number of great traits. It's wonderful. Yeah. Yeah. But I think I think in terms of when we raise kids, it's just like what happened with me and Charlie, it's not what we say to them. It's what they observe. So the thing is, we think we can tell them

this list of things. And you know, as a father, that doesn't work, okay? Like, you know, whatever, you know, whatever you're telling them. But I think they really pay attention. It would surprise you how many things, and Monson brings up things with me, Mamachi brings things up with me in their childhood observations they made, which I don't even think about. So how we act, not just with them, but with anyone that they can see and they see everything is really important. So I think one of the things that happened with me, which was really surprising in my childhood, is my father was a very stern kind of disciplinary type guy till I was 15 or 16. After I turned 15 or 16, something happened where he suddenly turned around and started

treating us like adults. And like, for example, he said to me, look, you know where my wallet is. Anytime you need any amount of money, just go to my wallet and take it. You don't need to tell me how much you took and you do not need to tell me how you spent it.

And I have the utmost confidence that you will spend it very well. So, you know, I used to go on dates and different things and I didn't have to go. I never had an allowance because I had like an infinite allowance basically. Just go pick money for my dad and then I'd go take a cab in Dubai and meet my girlfriend, whatever else. And it was fun.

What I did with my kids is I went a step further. When they turned 14, actually my kids have never had an allowance. So they've always had money and I never put them on that you have to do this chore to get this money. All that parenting stuff is alien to me. I never did any of that. What I did at 14 is I gave them Amex platinum cards. Okay. And I said, this has no spending limit.

And you can spend on anything you want. And you don't need to tell me or justify to me or anything. And you go with your friends, you do whatever, you've got this. Okay. All their friends would always complain, oh, I don't have allowance. My allowance is over. And they really couldn't understand this whole concept, that why are the parents putting you on this kind of leash type thing?

have no leash. And I never saw them spend in weird ways. I never saw, I mean, in the case of my dad, he had no visibility into what I was spending with. In the case of them, I can see the statement, right? I never saw anything on the statement that I ever had to question them about. And then I think at 15 or 16, I explained to them that there wasn't going to be an inheritance. And actually, even before that, when they were like 10 or 11 years old, I told them, listen, then we are, your mother and I are putting, like, the US government allows 15,000 a year tax free to go to anyone you want. We were putting 30,000 into the account.

It used to be 20,000 became 30,000. And I said, look, when you turn 18, there will be a large amount of money in this account. It will be more than enough to cover college. So if we are not doing well financially, your college is taken care of. But I told them it's for another purpose. I said the real reason I'm putting the money in is that I'm hoping. hoping we don't touch it for college, that we are able to pay for college. And I want you to choose professions and careers based on what you love to do, not based on

what pays the most money or what your friends think is the most sexy thing to do or whatever. Pursue things that you are passionate about, whether or not they pay anything. And so what ended up happening is they turned 18, we were doing well, we paid for college, that money never got touched. And even now, Horeen and I put $30,000 a year into that account. They have seven-figure numbers in both their accounts. And in both cases, they have taken unusual career paths. And they've taken career patches are very different from their friends.

And I think what happened is that they've never, they got full access to this money at 18. they could have gone on bought Ferraris or drugs or whatever they wanted. None of that happened. At 18, both of them gave me power of attorney to keep managing it. And I kept managing it. They had full access to look at it anytime, write checks against it, do whatever they wanted. That's still the case today. And I don't think even $10 got misused in that amount.

But what that amount gave them, it gave them freedom. Like my younger daughter, she's doing her PhD in psychology. She told us, I don't want you to pay for it. I'm going to pay for it. I'm going to take care of everything myself. And she used that pot of money as a backup to, she went down a path where she knew she could do her thing without having anything asking us for anything or anything.

And the older one, monsoon, she started a fund. And the fund will take some time until it scales up. But she's got backup. And so I was really thrilled. It actually worked out like a fairy tale. I had a little bit of a seed of an idea for my dad. that at 15, you treat them with adults. I said, no, let's move it to 14 or 13.

And let's actually amp it up where we give them, you know, Amexes and all that. And then I also set up this fund for them and all of that. I mean, we have a beautiful relationship. I think their careers are unfolding really well. And they talk to me about their friends. Friends are miserable in different jobs they have and they can't leave those jobs because they are tied into that lifestyle

and all this stuff. None of that is an issue for them. When you look back and you think about what you learned from getting really serious about David Hawkins and power versus force and this idea of building your life on truthfulness and integrity and the like, do you feel like that kind of set a lot of this stuff up, both the friendship with Warren and Charlie, the kind of partners you've got, the kind of children you've got? Because it seems like everything is built on trust and truthfulness and integrity. And in some ways, the idea that Hawkins had that these very,

high levels of virtue and consciousness, the idea that this actually kind of radiates out in every level of your life. I think it's kind of been borne out in some ways. Is it a sort of experiment in power versus force, this whole journey of Monage Power, right? I would say that what might have started an experiment, I think the experiment has proved itself a long time ago. So it became very obvious to me. It became obvious to me when I was reading the book that that was going to work, because he was giving examples of like Jesus and Matma Gandhi, etc. That it worked for. We are not at that level.

Warren Buffett's not at that level, but 40,000 people show up every year. And I think with Warren and Charlie would really surprise me, and it's really credit to them that they can see through people. I think they were genuinely able to see through that, or they must have seen through that I'm a good person to hang out with. And Charlie is very, you know, he has a, both of them have very high standards of especially the people that they spend time with.

I still am in disbelief about that because the range of high quality people that they deal with is really high. I mean, they get the best of the best coming to them from all over the place. And so it's been really good. I think part of it is not just the ethics. I think the ethics is important. It's also extreme candor. So there will be a lot of ethical people, but they may be reserved, right? And then I think if you're reserved, you can't build a deep friendship.

You've got to be able to bear your soul. I think that's been part of it where I have found that with a few people, close people around me, I have learned the power of bearing my soul. And I've learned the power of candor. And I find sometimes that when I am very candid with, it happened the other day with a guy, I don't know so well, but he's having a lot of struggles with his team. age son. And I wasn't sure if what I would say to him would get received properly or not. And I tried it. So I gave him some very direct pointers on what might be a good way to deal with his

issues of the son. And he immediately became defensive. And I said, okay, this isn't going to look. The receiver is not ready. And the receiver cannot deal with the truth. So I just, I just knew that that person on so many levels would not be able to get to where I was. wanted to get to. It was interesting to me because I went deep down the David Hawkins rabbit hole and I ended up reading multiple books of his multiple times. And so Powell versus Force had a big impact on me. And I think letting go is also a very important and very practical and grounded book. But then I got really into the sort of more esoteric stuff like the eye of the eye and things like that. I love that stuff because I'm a bit more of a mystic than you are. And I think you struggled with this stuff

that was less logical and rational. I was interested in that because I sort of feel like you took one idea from Hawkins that was immensely powerful about the importance of truthfulness. And I mean, I think it's a superpower to be truthful and candid. But I think you missed some of the other stuff that was really profound. And I also thought it was really interesting. I'm not saying this in any way. It's a criticism. I thought it was interesting. And there also, it always struck me that you took truthfulness as the virtue you wanted to develop. Because when I read Hawkins, one of the things that struck me above all was actually kindness strikes me as one of the most powerful things he talks about, where there's something where he said, I think the line is simple

kindness to oneself and all that lives is the most transformational force of all. And I started to think, well, so he's talking about all of these different virtues that if you go big on truthfulness, kindness, compassion, stuff like that, it just changes your life because it changes your consciousness, and so you're going to draw different people into your life. And so for me, truthfulness is really important, although I do still sort of lie and prevaricate and distort stuff and particularly lie to myself. But kindness kind of became a very clarifying, I'm not saying that I'm kind the whole time. If you talk to my wife, you'd get a good sense of how irritating I can be an irksome. But that to me was almost the most powerful idea

from Hawkins, was if I just used that as my guiding light, of trying to become kinder, and not to other people, but to myself, which was hard, that would change my life. And so I was just curious how you thought about the other stuff that you'd learned from Hawkins. Yeah. So, you know, in 1999, I had these two industrial psychologists who basically gave me a bunch of tests, did 316 interviews with all kinds of people around me, and they finally gave me what I think of as my owner's manager. It sounds like somebody is getting whipped in the background in the room next to you. Is someone doing construction or something there, Monish?

Yeah, so actually we've got some lines and shades that are going through. So I'm sorry about that. No, that's fine. I was just curious now. I thought that this mic would not pick up the distant sound. It's a good mic. But yeah, sorry, keep going. So, yeah, you mentioned these industrial psychologists.

So the thing is that I had heard about Warren Buffett about five years before that. And I saw that many of the things that made up Buffett's kind of what I thought were Buffett's temperament. and aptitudes and all of that seemed to fit well for me. And I was trying to mirror a lot of stuff. These two guys said to me that, look, here's the problem. He said

that you don't know who you are. You have no idea. They said, we don't know exactly what went on in your childhood. But what we do know is the outcome of that is that you really don't know who you are. And they said that you have a desperate need to know who you are.

And so what you're doing is he says, you are trying on different gloves. And you try on this Buffett glove. And it fits, it looks like it fits really well. And you say, this is it. So then I can just look at Buffett and just clone everything about him. And then that's me. And now I'm in a Nirvana state. And they said that doesn't work.

They said it's almost for sure that the template that makes up Buffett and the template that makes up Monash are not the same. It may be similar on the number of traits, but it's not the same. So, like, for example, what I found in, when I heard about Buffett in 94, is I had been playing bridge for six or seven years before I heard about. I love bridge. Even now, I play many hours of bridge. And I said, look, there's a similarity with bridge. There's a similarity with analyzing businesses.

There's a similarity with investing. I seem to like all of that. Everything seems to fit. And they said, it's not there. And they said what really needs to happen is that you need to understand who you are and to be true to yourself. And part of that owner's manual helped me look inside to see who I was. And I read that, we read that many times. And what I've realized over the years is that, yes, they were absolutely right.

It took me a long time to see this. That Warren Buffett is a very different person. There may be some areas of similarity, but they are vast. terial differences. And those vast regional differences are not easy for me to bridge if I were to try to do that. First of all, it would be a distortion to try to do that because I wouldn't be true to myself. So it wouldn't even work. I think this notion you bring up

about the kindness and so on is I, even when I read Hawkins, I took the stuff that was easy for me. Right. I mean, I'm always looking for low-hanging fruit. I'm always looking was the shortcuts. And I said, okay, this, you know, being ethical and truthful, I can do this in my sleep. It's easy. The kindness is a much harder to do.

I have learned over the years to become kinder and to be kinder. But I think I have a long ways to go. I think I have a lot of wood to chop over there. Since there's 22 years and three weeks left, maybe I'll pick up Hawkins again and give that another world. I think you should. I think some of the stuff in there is really profoundly important. And I suspect that Hawkins, if you believe in this stuff, was kind of enlightened.

And he's telling you how things work from the perspective of enlightenment. And what's interesting to me is when you see someone on one particular path coming up with the same ideas of people on other paths, that has tremendous credibility for me. So when I saw that Hawkins figured out the same things that the Kabbalists figured out and the same things that these Tibetan Buddhists figured out, I just look at that and I'm like, ah, okay, that's truth. And there's nothing I've seen in Hawkins yet, even in those really esoteric books that I've thought, no, that's not true. The Kabbalists see it a totally different way. My default has always been, every time I see someone differ from the Kabbalist, my default was always like, no, those guys figured it out. And then you would look deeper and you'd be like, nope, they actually came to exactly the same. same conclusion. And so I think you can go really deep on the Hawkins stuff. And I'll be interested to see what you come up with as you look at it with a different vantage point now than you had when you first looked at it. But I think what he's basically saying is that the more you kind of elevate your consciousness and sort of purify your consciousness, the more you draw good things into your life and good people into your orbit. But you can take any of these virtues

and do it. And so I sort of think you went 120% on this one virtue of truthfulness. And I think it's been a really fascinating experiment to see just how powerfully it works. And I see it sometimes when I watch you give interviews. And I can see that there's no gap between your thought and what you say, because you're not kind of trying to spin and think how to serve yourself. So there's a removal of distortion in a way when you're not trying to protect yourself. So there's something very powerful. I remember once interviewing someone for the Great Mind's Investing book that I wrote, and I said to you afterwards, I really didn't like that guy.

It was some billionaire that I'd been sort of forced to interview. And you said to me, he's misaligned. He's not telling the truth to you or himself. And his career went kind of pretty ugly afterwards, his career in his life. And you said, you smell it. You smell that there's something wrong. that resonates to me. I think we somehow sense whether someone has integrity and truthfulness. And it's not like a zero, 100 or a yes or a no thing. You know, it's like there's lots of shades

of gray here. But I think the further you move up that scale, the more powerful it is. Well, I think this may be the biggest take home value for me all month or maybe all year for me. I think that I will dig deeper. And I agree with you. I think the kind of the kind of kindness variable is very powerful. Well, think of Warren recently. I think it was in March, right? He wrote you this letter that you very kindly shared with me at that time where he said, I read from it.

He said, Dear Monash, I remain incredibly impressed by what you have done, are doing and will do at Daxana. It's simply terrific, far more impressive than what business titans, investment gurus and famous politicians ever accomplished. I'm glad my annual report doesn't get compared to the Daxana annual report. It's an honor even to be quoted in it with admiration Warren E. Buffett. it. And I was thinking about that, like, why would a 91-year-old guy with a fortune of over a hundred billion dollars bother to write that letter to you? Like, what do you think? It's kindness,

right? I wonder about the same thing. But, yeah, I mean, I think the thing is that Warren has been reading the Dukshana annual report since the first one came out. He's, many times I'd get scribbled notes from him saying, send me 20 copies for my kids and board members or whatever. And sometimes you'd say, you're getting tremendous bang for the buck. Congratulations. He'd these chicken scratch notes and send it back to me, probably one out of three reports or something, right? And for him to send that letter, because I know that if I sit down to write a formal letter to someone, there's a process, I have to get Debbie involved and all of that and, you know, make sure it's done. And Debbie email me saying, Warren wants to send your letter. What's the

correct address we should use, right? And so there's a, it takes time to do that. And I think that that letter shows a couple of things. One is the way Warren and Charlie think about themselves is they genuinely think they are the same as us, even though they've accomplished so much and they've done so much, they really don't have an ego about it. And so they really think it's a human-to-human connection, right? And so I think Warren sees that there's a guy doing some good work and I can take 10 minutes of my time and I can encourage him. And maybe that'll lead to some better work by him in the future. And also the other thing is that I think for him, the philanthropic side is really important because his whole fortune, everything is going.

And I think he genuinely respects because he has the Gates Foundation. He's got the three kids that I'm getting money from him. And I think he genuinely appreciated the purity of the way Daxana operates. And I think it's very hard to find that in a nonprofit. I've looked for it because I wanted to just give someone a check. I don't want to create a nonprofit. And so I think he wanted to recognize that this is something someone is doing that is interesting and maybe my letter will encourage him. And I think when he says that I'm glad it doesn't get compared to the Berkshire report, you know, he's being facetious.

Berkshire reports are the gold standard. I mean, you know, there's nothing you can say with Daxna report or better than the Berkshire report. That's not the case. But I think it's his way of, it's the same George Storer's a fluxology idea. He thinks, and I think it changes the future of that. Daksana in a positive way when a letter like that shows up for me. Because what it does for me, it reinforces the mission. I already am on a mission and I've got principles I'm following. Once I got the letter, I said, there is no way I can even deviate. I got to just go keep banging

on this, on this path. And I think that led it exactly what he wanted it to do. So when you look back now, is Daxana the thing you're proudest of? I mean, you've You've been extraordinarily successful as an investor, but Daxana, do you sense that that's going to be your real legacy? Well, you know, the way I think about it, William, is that I like to play games. We've talked about that. I'm a game player, right? You know, Blackjack and Bridge and Daxana has a game.

Everything's a game, right? O'Brien's a game and so on. And I think as a game player, the other thing I've, which actually resonates me a lot is look at the future. Don't look at the past. What we talked about with Charlie. Basically, my goal is to play these games

that I love play. I want to get better at Bridge. I want to get better at investing. I want to get better at Dachshana. I want to get better at being a grandfather at some point and so on. So these are games I like to play. And I'm not focused on

legacy. I've never really thought about legacy. My my ex-wife always said that, look, when I die, I want to be cremated. And then you just find the nearest toilet and you flush the ashes down the toilet, which is a little bit kind of alarming to Hindus. Because like in my case, my father and my mother, the ashes were put into the ganges, which is where the Hindus want to put their ashes and then they go into ganges. And that's the other kosher way of doing it.

I actually was telling my kids that when I die, I want to be reunited with my parents. And so the only thing I ask is put me back in that same river. So I want to be with my parents again. And so I just said, that's the only thing I ask of you. But my ex-wife has no sentimental. She just said, you know, this is how I want it done. I don't think in terms of legacy. After we are gone, one theory is we're gone.

There's nothing, period. End of story. And another theory is that the soul lives on and all kinds of things and whatever. I am not at all focused on what people think or what people say or whatever, whatever happens after I'm gone. What I want to do in the next 22 years and three weeks is maximize the output from this body and mind. That's all I'm focused on in a way that makes the world back. Monish, I have about six pages more questions. And instead of exhausting you by going to discuss things like Turkey and China and the like

and Tencent and all of these things that I still want to discuss, would you come back in a couple of months and we'll do this again and we'll focus on different areas? Because I could do a double episode and split it up. But actually, I'm really happy to leave it, leave it here. We've discussed some wonderful stuff. And if you'll promise to come back, then I'll let you go now. Oh, yeah, that's great. No, William, I enjoy talking to you, but I also think we shouldn't overstay our welcome

with others. So less is more. We should do another. We already failed on that front, Mnisha. We should do another session, but we should give people some more time. But definitely, I enjoy the sessions. And I think this was a wonderful discussion for me. I think I got a lot out of it.

It's been a great delight for me. And you've been a great force in my life. You've taught me a lot of stuff over the last few years. through cloning and many other things. And it's been really fun to be on this journey with you. And I'm looking forward to the next, how many years? 22. 22 years and three weeks.

And what's the origin of this number? Why have you picked this number? The thing is that most humans, almost all humans, never think about their death. They don't think about when they're going to die and they don't think about kind of, let's say, planning. Okay? I did an exercise at part of a YPO retreat where they said to us, okay, you're 80 years old and yesterday you died and your best friend is going to deliver a eulogy. So write your eulogy as if you're your best friend and deliver it in five minutes to the other members. So I was 40 years old when I did the exercise.

So I had 40 years to make up because I've been to extrapolate how many grandkids I have and what's going on in my life the next 40 years. Then the second part of the exercise after we did all of this is they said that if something did not make your eulich in that five minutes, why are you spending time on it? And that was very profound. So basically it inverted where you look back and say, what's important? That exercise did a couple of things to me. One is the framing. Once you know that you have a certain amount of time, then it makes a lot of things clear. Like, for example, my designer year was telling me that our kitchen should get redone.

You know, this home is like 16 years old or something. And if we have to redo the kitchen, we probably have to move out for six months or something with all the stuff. And to me, it was really simple. I'm not willing to disrupt six months of my life when there's 22 years left. That ratio makes no sense to me. So I know the kitchen is not going to get rid of. Period.

End of story. Okay. if by some accident I'm away for six months, which is not planned because of the kitchen, maybe we'll think about it. It made that decision really easy. If I had not had that kind of framing, I might have said, oh, yeah, you know, this would be nice to have and this would be better at whatever else, but it just made the decision a no-brainer. It also made it very clear to me that I won't move again.

I said, I have 22 years left. I don't want to spend time moving. It's just a waste of time. And so the 22 years makes a lot of things really simple. It also makes it simple when you meet some yo-yo for lunch that you're not going to meet them again. Because there's only 22 years left. How many yo-yos do you want to tolerate? And I talked to Guy about this.

And Guy has an infinite number of tolerance for yo-yo's. And I'm trying to work on that with him, but I haven't made much progress yet. So I think the framing, the 22 years, makes a lot of decisions easy. It's very interesting. So it's very similar to what Nick Sleep is doing with destination analysis. Nick said to me recently that he's in the same way that with Nomad with the hedge fund, he used to think about if I'm sitting on a veranda, sharing a glass of chilled white wine with a limited partner from the fund in 10 years time or 20 years time, will I know that I've treated this person equitably and decently? And so he's like, how do I get to that desirable destination?

What sort of behavior? What sort of input? And he said to me recently, I'm doing the same thing with giving away my money. I'm thinking, in 20 years time, will I look back and think, I gave that money away well? And he's thinking, what are the inputs to get to that point? And he also said a beautiful thing that you all approve of, which is he said, the toughest thing is that I'm doing it based entirely on an inner scorecard. And he said, but the greatest thing is that I'm doing it entirely based on an inner scorecard. I'm not looking to please anyone else. I'm looking to get to this destination in a way that I can look back and be like, yeah, I did that well. Yeah, and you know, I think you had asked about the legacy and Daxana and so on.

The thing I feel about Daxana is that it's actually the outcome of very strong adherence to a few principles. Nothing else. That's it. It's like four principles and being dogged about. Like, you know, the idea came from somebody else. It's not my idea. It's way beyond my pay grade to come up with something like Daxana. Somebody else had the idea.

I just had to clone it. So the core of what Daksana is, is I cannot take credit for it. Somebody else did that. And the other thing is that these principles that I'm following, these are very basic Buffet principles on giving money away. He's talked about it from time to time. I just absorbed them, right? And what I find magical about Daxana is that we adhered to these principles.

And magic happened on the other end. It's amazing that the way the magic happened. And because it has such a massive, multiplier effect because when we affect one life, we affect the life of a whole extended family and we affect the life of a whole extended family forever into the future. And we've affected the lives of thousands of families in a very positive way already. And I hope in the future, the thousands turn into millions. I don't know how we'll do that, but I hope it's some way we make it even stronger. So that's why I want to look forward. I don't want to look back. Just that and all of

that is a game. You know, at the core of it, it's a game. I'm a game player. And I just want to play this game the best I can play. And that's the end of it. And I don't really care what other people think or say. The inner scorecard exactly what Nick Sleep says. I couldn't care less what people say or do about Daxna.

You know, people come up to me and, I mean, people write letters all the time and saying, you know, I like Daxna, but would you please also do this? Or would you please also do that? Or would you do this? You know, my kindness kind of goes out the window at that. point. And my response, which is a very unkind response you might say is, I say that Mahatma Gandhi said, be the change you wish to see. Be the change. And I tell them, I leave it to you to do that, all the best. So I say, don't put a gun on my shoulder and fire it. Go fire that gun yourself. So

if you feel that Taksana should do X, Y, Z, you go do X, Z and take it from there. And I know usually you're back from those people. So who knows what they're thinking. Yeah, you're playing the right game for you. And part of your superpower of the years, I think, has been your refusal to diverge from your game. For example, even the fact that one of your principles with Daxana was, we're never going to pay a bribe, whatever.

Once you just decide, this is the way I'm playing the game, it's kind of like saying, I'm just going to tell the truth. It's so clarifying. It removes so much distortion. And so I feel like we were talking before about how. you were willing to change your mind, but there's also this incredible stubbornness in just sticking to the right game and the right way to play it for you? Well, some things are not negotiable for Warren Buffett and Charlie Munger.

They're not negotiable for me. I mean, it's may and actually our team adductions, I think half of them would quit when we play the first bribe. Okay, so I think that, I mean, self-interest. I would implode the organization if I did that. basically another good reason not to pay a bribe is I'm going to have like a lot of hundred other problems of my hand after that. Yeah.

You also got incredibly lucky having the colonel who I. Oh, yeah. I mean, like I said, I think the universe conspires to help you. Yeah. And you're doing the right thing. The right people show up. Yeah. This is what I suspect Hawkins has right.

Is that when you get your inner life right and you start to behave in a particular way, magical things start to happen. And I have no rational basis for this mystical belief except that I watch it happen. I see it happen to you. I see it happen to Arnold Vanneberg. I see all of the pieces kind of shifting when people change the way they behave and they think. That's correct. Well, William, it was such a pleasure.

It's always a joy. Monish, I'm going to enjoy being on this journey with you. I hope for the next 22 years and possibly even more. Who knows? It's going to be fun to watch. I'm hoping it becomes a little more, but then that's bonus time, which is awesome. Okay. Good. Excellent. Monish, it's been a great pleasure. Take care. All right, all of that.

Talk to later. Bye. Bye. Bye. All right, folks. Thank you so much for joining us today. It's always a blast chatting with Monash, and I hope you enjoyed our conversation as much as I did. If you'd like to learn more from him, you may want to check out chapter one of my book, Richer, Wyser Happier. It really distills a lot of the most valuable lessons that Monish has shared with me over the years about investing and life. I'd also really encourage you to read Power versus Force by David Hawkins, which had a life-changing effect on Monish and Me, to be honest. If that book resonates with you, you may want to do a deep dive and read some of Hawkins' other books, including Letting Go, which is one of my personal

favorites. I also love some of his more esoteric spiritual books, which have slightly mystifying titles, like The Eye of the Eye. I'll list some of his books in the show notes for this episode, in case you're ready to follow me down this particular rabbit hole. In the meantime, many thanks to all of you who've written to me over Twitter with questions and comments. I'm always delighted to hear from you. If you'd like to follow me on Twitter, my tagline is William Green 72. I'm happy to say that I'll be back in a couple of weeks for a really special episode with Guy Speer, who's a renowned hedge fund manager, author of The Education or Value Investor, and a very close friend, not only of mine,

but also of Monishers. So until then, stay well and thanks so much for listening. Take care. Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by the Investors Podcast Network. Every Wednesday, we teach you about Bitcoin, and every Saturday we study billionaires and the financial markets. To access our show notes, transcripts or courses, go to the Investorspodcast.com. This show is for entertainment purposes only, before making any. Decision Consult a professional.

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