We Study Billionaires - The Investor’s Podcast Network - RWH072: The Making of A Money Master w/ Rob Vinall

Episode Date: September 20, 2026

In this episode, William Green speaks with Rob Vinall, an English hedge fund manager with a terrific track record. Since launching his Business Owner Fund in 2008, he’s racked up stellar annualized returns of 15.5%. Rob almost never gives interviews but speaks in depth here about the principles & practices that have driven his success in the 20 years since he founded his firm, RV Capital—not least, his habit of betting on CEOs who view their business as their life’s work. IN THIS EPISODE YOU’LL LEARN: (00:00:00) Intro (00:03:54) How Rob Vinall vaulted himself out of humble circumstances (00:14:26) Why he disliked working at Goldman Sachs (00:17:12) How he taught himself to invest during the dotcom crash (00:24:20) How Berkshire Hathaway’s annual meeting changed his life (00:27:39) How he launched a fund with no staff, no office & no track record (00:41:22) What he learned from Warren Buffett’s relationship with Ajit Jain (00:50:19) What qualities Rob looks for in outlier CEOs (01:01:03) Why he admires Mark Zuckerberg & disagrees with Meta’s critics (01:03:21) How Rob’s thinking about business moats has evolved (01:04:47) Why he’s betting a third of his assets on out-of-favor Chinese stocks (01:20:41) Why today’s momentum-driven market is ideal for long-term investors (01:32:12) How he survived the most traumatic year of his life (01:42:07) What drives him after 20 years of investment success (01:48:54) How to handle being rich without wrecking your kids Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Inquire about William Green’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Richer, Wiser, Happier Masterclass⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Benjamin Graham’s book, The Intelligent Investor. Alice Schroeder’s book, The Snowball. William Green’s podcast episode with Chris Begg.  William Green’s podcast episode with Terry Smith. William Green’s book, “Richer, Wiser, Happier” – ⁠read the reviews of this book⁠. Follow William Green on ⁠X⁠. Related ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠books⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ mentioned in the podcast. Ad-free episodes on our ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Premium Feed⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. NEW TO THE SHOW? Get smarter about valuing businesses through ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Intrinsic Value Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Follow our official social media accounts: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠X⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ | ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ | ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Facebook⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Try our tool for picking stock winners and managing our portfolios: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠TIP Finance⁠⁠⁠⁠⁠⁠⁠⁠⁠. Enjoy exclusive perks from our ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠favorite Apps and Services⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. SPONSORS  Support our free podcast by supporting our ⁠sponsors⁠: Monarch Plus500 Netsuite Plaud References to any third-party products, services, or advertisers do not constitute endorsements, and The Investor’s Podcast Network is not responsible for any claims made by them. Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

You're listening to TIP. Hi there. It's wonderful to see you again here on the richer, wiser, happier podcast. I have a very special treat for you today, a really rare interview with a superb investor named Rob Vinyl. As you'll hear, I embarrassingly mispronounce his surname at the very beginning of our conversation. In any case, it's well worth listening to Rob's hard-earned insights on investing and business and studying how he's crushed the market in the 20 years since he founded his investment firm. But before we get to that conversation, I also wanted to let you know about an exciting opportunity that I hope will be of interest to you. Later this year, I'm going to be launching a new

richer, wiser, happier masterclass. If you're interested in studying with me over the course of a year in a very small, intimate group that's likely to be somewhere between 10 and 20 people, please contact my friend and fellow podcast host Kyle Greve to find out more about dates and prices and all that good stuff. His email address is Kyle, which is K-Y-L-E at the Investorspodcast.com. Who's the masterclass intended for? Well, based on the first two masterclass groups, I would say this is ideal if you're a fund manager, an asset allocator,

a wealth manager, a manager of a single-family office, a CEO, an entrepreneur, or simply a serious investor managing your own family's money. Essentially, the masterclass is designed for keen investors and passionate learners who liked the idea of studying with me and an amazingly accomplished and diverse group of people over Zoom each month and also in person at a couple of very special private events that we'll host in Omaha and New York. My current plan is to make this my third and final richer, wise, a happier masterclass. So if you're interested in this year-long exploration of how to build a life that's truly

richer, wiser, and happier, then please don't wait. It would be really great to spend some time with you. In any case, I hope the stars align and that I'll see you later this year. And now, as my friend Stig Broderson would say, on with the show. 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. This show is not investment advice, is intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investments in the securities discussed.

Now for your host, William Green. Hi folks, I'm absolutely delighted to welcome today's guest, Rob Van Al. Rob is the managing director of Avi Capital, an investment. fund that he founded almost exactly 20 years ago. He has a superb investment record as the manager of the business owner fund. Since launching the fund in 2008, he's racked up an annualized return of around 15.5% net of all fees, which is a cumulative return of more than 1,200% of the last 18 years. He's an exceptional investor and a delightful person, as I'm sure you'll see. And it's extremely rare for him to do an in-depth interview like this. So I'm particularly excited on

multiple fronts to be chatting with him today. And Rob is joining us from Switzerland, where he lives with his wife and three children in a village near the Zurich Lake that I gather is about 100 yards away from the famed lint chocolate factory. So welcome, Rob. It's really lovely to see you. Yeah. Thank you so much for doing this with me, William. It's been a few years since I started a podcast. So the downside of that is I'm maybe a little bit rusty, but the upside is that hopefully there's lots of stuff which is new for people. So I managed to whittle down my questions. about 15 or so pages. So we should be here for the next seven or eight hours, which is great news. So buckle in, everyone. We've got a lot to discuss. I wanted to start by asking you about your early

life and wondered if you can tell us a bit about where you grew up and what your parents were like, because it seems so different in a way from the life you've built for yourself as a fairly cosmopolitan globe-trotting fund manager in Switzerland with investments everywhere from Denmark to China. And when you and I spoke recently about your early life, I was just really struck that You know, there was nothing that really seemed to predestine you for a life with a successful globe-trusting investor. Yeah, so I grew up in a very small town called Seaford, which is on the south coast of the UK.

It quite literally is the end of the line. It's the final stop on the train. And if you get off the train, then it's sort of a few hundred yards in your, at the English channel and beyond that France and the rest of the world. So it was a small town. And, you know, I was reflecting on where things were started recently, as it is the 20th anniversary of my firm coming up. And, you know, I read once that people love to tell this sort of story about their lives about how they sort of started in this impossibly difficult sort of

situation and then against all of the odds sort of turn things around and had the success they had. And, you know, when I look back at my life, there's for sure in the early childhood, you know, things which were sort of tough. Mom and dad didn't have a whole lot of money at the time. And when dad got home, mom would go out to work and that kind of stuff. On the other hand, though it was a very sort of a loving environment. And I got early exposure to investing through my grandfather, who was a passionate stock picker. So overall, I think I was sort of pretty lucky. And there's nothing I would change about how things are gone. And your dad, if I remember rightly, had an office job in the local port and your mom was a stay-at-home

housewife. So there wasn't a big kind of financial, you know, urge in the family. It wasn't like everyone was working on Wall Street, right? And then you go off, you got kind of an unusual trajectory change, I think, because of your education at this extraordinary school, Christ's hospital. Can you talk about that? Yeah. So, you know, for people who aren't from the UK, the UK has this sort of dual system where you have the private schools, which are somewhat confusingly are called public schools, which are sort of for wealthier people. And then you have, you know, the kind of the state schools, which are not uniformly bad, but it's for sure a bit of a lottery. And when I was about 11, I took an entrance exam to go to the school Christ's hospital, you mentioned,

which is a sort of quite a special school in the sense that it's not for wealthy kids. It's means tested. And it's a school where the philosophy is very much to kind of give an opportunity to kids who otherwise wouldn't be able to afford to go to a public school. And I remember very clearly at the time working very hard for the entrance exam. And fortunately, I passed. And when I look back on it, I sometimes have a little bit mixed feelings about the experience. It was public schools in England 30 years ago were sort of closer to, or at least it

was closer to the age of Dickens than the Bond world we live in today, you know, corporal punishment and all that kind of stuff was very much a thing. Certainly predates mobile phones, that's for sure. So it was a tough environment, but it was one which ultimately gave me a great education, which culminated in getting a place at Cambridge University when I completed my A-level. So overall, I think it was a good start to have in life. Yeah, and quite an eccentric background, right? I was looking up the school yesterday. And I think was founded by King Edward 6th in the 1550s. And you wore these strange blue coats with these sort of brass buttons.

And I think yellow socks, if I remember rightly, like eccentric world that you got thrown into. Yes, yes, it was. The uniform was very unusual, as you mentioned, yellow stockings and breeches and a long blue coat. And the school then, and still to this day, always leads the Lord Mers show in London. And so, you know, the band would play. and then the people who weren't in the band would be tasked with sort of wandering around selling programs. And put it this way, we were definitely a target for the local London kids walking around like that. And as you said, you then went off to Cambridge.

And you studied modern and medieval languages. I think you were specializing in French and German and were studying literature and philosophy. Why counterintuitively was that actually a surprisingly good education for an investor to have? Yeah, well, you know, the philosophy in England, and I think generally it's a good one, is that studies are generally not vocational. So you will study something you're sort of interested and passionate about. And we tend to be finished with studying quite early in England. So typically when you're 21, 22 years old. And the idea is you study what you want. And then, you know, when you hit 21, 22, then kind of the real life sort of starts. But, you know, I was very interested in modern languages. And that's what I ended up studying at Cambridge. and, you know, a language degree at Cambridge isn't so much about the language per se. It's studying the literature and also the philosophy. And although it wasn't my plan at the time, that this would be sort of the great preparation for becoming an investor, in fact, when I started studying, I'm not even sure I realized I wanted to be an investor at that time. I do think, you know, fortunately,

it was a great preparation. It was, you know, very deeply analytical. In every week, we would sort of take on a new author or a new philosopher, starting effectively at zero and trying to get up to speed and understand their thinking and how they fit it into the wider social context. And then by the end of the week, presenter, you know, ready, written essay to our supervisors. And, you know, if you squid, that's not so different to the life of an investor where when you start analyzing a company, typically, you know, nothing about it at the beginning. And then, you know, Hopefully, by the end of the research process, you have a decent grasp of what's happening. It makes me kind of wonder what the impact of AI is going to be on our ability to think and work through these difficult problems.

Because you and I, last time we spoke, we were talking about, you know, the horrifying challenges of writing, where both of us, I think, have derived great joy and satisfaction from writing. You write these terrific shareholder letters. And at the same time, we talked about how agonizing it is. And I'm kind of, I'm curious what your view is, as you embrace AI more and more in the research process, because it's incredibly helpful, what your view is on, on kind of what we can lose as we do less of this kind of agonizing with a problem. I mean, I remember you saying to me when we spoke, I think back in June, that when you needed information when you were at Cambridge, you literally would cycle to the library. Yeah, I mean, I think there's two slightly different questions in there. The one is sort of the research process and the other is sort of, you know, the writing process, although of course the two are connected. You know, in terms of research, it kind of makes me feel a little bit old when you put it like that. But it was really the case that, you know, I was probably one of the luckiest people in the planet studying in Cambridge because I was close to one of one of the largest libraries in the world. But to get to information, I would still have to get on a bike and it was about a 15-minute ride to get to the university library. And from there, you would, you know, order. a book and it would probably take about an hour for it to find its way to you to the extent

someone else hadn't already sort of borrowed it before you. So it was a clunky process and still probably one of the best you could possibly get at that point in time. And you kind of fast forward that to say 10 years or maybe 15, 20 years ago when the internet came along and all of a sudden, you know, you didn't have to get on a bike to get to the information. You could just sort of, you know, Google it or look it up on the internet. But you still would have to sort of find the relevant document, you know, read it through and then, you know, get ultimately to the information you were looking for, which took a certain amount of time. And then if we fast forward to, you know, the last sort of couple of years and the LLM revolution, it's truly astonishing.

If there's something you're interested in, you put in the question and most of the time, of course, there is a little bit of hallucination, but most of the time you get the exact answer you're looking for and it takes a fraction of a second. So it's really an incredible time to be alive in that respect. You know, so that for sure makes the research angle easier. You also asked about writing and, you know, we did indeed speak a few weeks ago and I, I think we sort of cried on each other's shoulder about how agonizing the process is, at least for, for the two of us.

Not sure what's the case for everybody, but anyway. But, you know, I just actually, it's sort of propitious timing to discuss this now because I actually sort of press send on my most recent investor letter this morning. So I just sort of finished the process of doing that. And for the first time, I really used not just as a research tool, but as what I would describe as sort of an editor to help me sort of, you know, formulate my thoughts, sharpen up the text. And it's really an incredible tool for writers in that respect. You know, I was talking to my daughter about it earlier and encouraging her to use AI in a similar way. And she had some misgiving as this kind of cheating, is this sort of taking a shortcut on the thinking process?

process. But I don't think it is. I think what it effectively puts in your hands is a sort of this sort of very high quality editor, which, you know, professional writers and journalists have always had, but it's obviously prohibitively expensive for most people. Whereas now, you know, that sort of editor is available to anyone, you know, irrespective of how worth of the air. And, you know, I think it'd be madness not to use it because it really improves and sharpen the writing. Yeah, I feel kind of ambivalent about it all. I like you, I feel like you. I feel like. it would be madness not to use it. And at the same time, I worry about, you know, my brain becoming softer if I rely too much. Because I think most of the things that I've learned that are really deeply valuable are things that I agonized over for a long time where often there was a kind of cognitive dissonance. And I was trying to, I was trying to resolve something that seemed contradictory. And then at a certain point, you're like, oh, that's what it means. I mean, I think the ability to stay with a problem, you know, your friend of my mind,

Chris Begg, we've talked about this way, he talks about the ability to kind of linger longer, as he would put it, to keep out of problem. So I don't know. I think this is just going to unfold in an interesting way. Yeah, yeah. Well, it's a half year letter and the half year ended on the 30th of June. We're recording today on the 20th of August. So there was still two months of procrastination and what I prefer to tell. Would you much more generously describe as lingering? So there was no shortage of that either. Yeah, and it's a very good letter. You very kindly sent me a draft of it and we'll discuss it more as we go along.

Thank you. I'm curious, you graduated from Cambridge in 1996 and you began your career, I think, in 1997, Goldman Sachs asset management in their graduate trainee program. And then you end up joining this small German bank in Frankfurt, I think, in 1998 as a sell-side analyst covering the telecom sector. And I'm curious in some ways, you know, coming from this somewhat modest background, It wasn't particularly money oriented. You know, were you intensely driven to make money? Were you going into this business because it was intellectually engaging?

Were you going into it because you wanted to get a degree of independence and security? I'm just curious what was driving you because I think your views on what investing is, as we'll discuss, kind of evolved a great deal over the years. But what was your attitude towards money and investing in business when you started out? Yeah, I mean, I think I always latently had the ambition to be. financially independent, I still do for that matter. It was never my ambition to be super wealthy, but the idea of being independent was a very important one to me. So, you know, when I finished my studies, it was always completely clear to me that I was going to go out into the world and, you know,

and try and make money. Some people graduate with other ideas, but unfortunately, I didn't have anything more noble than that to offer. And I think when I meet some young people today, they're incredibly thoughtful about where they go to for their first job. And unfortunately, that wasn't me either. As a sort of an ambitious young person, Goldman Sachs was then, probably still is today, the number one brand on Wall Street. And so that's where I sort of set my sights on working and got a place there, which in hindsight was not the best outcome for me. I think I didn't get on particularly well there. It's what makes Goldman Sachs successful. It's an enormous machine and machines need cogs and not independent thinkers. And it was a complete mismatch. And so that was

is sort of an early punishment for not being thoughtful. So what happened? Nothing particularly bad. I mean, I think the way these sort of large investments banks work then, probably not all that different now is that when, you know, they sort of, they want to hire best people. But I think that's not because they have kind of high end work for them to do. It's because it sort of reflects positively on their brand.

But when these, you know, smart, young, ambitious people show up. There's, you know, the more senior people in the organization like to do the kind of the thinking and the interesting stuff. And so you start at the bottom of the food chain, sort of more like working the photocopier all hours of the night. And that was definitely not how I envisaged my life panning out. So it ended up being a sort of a clash between me and my superiors. And that was a battle where there was only ever going to be one winner.

I've never been very good either with superiors or with copying machines. So I think both of us ended up doing very independent, spirited stuff. So I think one of the early experiences that was very formative for you as well is that you kind of came of age as a young investor in the early 2000s amid the dot-com bubble burst in. And I'm wondering what you learned in those early years. Because for one thing, I mean, you did not start with a big nest egg that you were investing. Can you give us a sense of that early stage of your evolution as an investor? Because you were typically self-taught, really. Yeah, yeah.

It was an incredibly formative period for me, the sort of the dot-com crash for multiple reasons. So I was around 30 at the time that happened. So I'd been in the sort of financial services industry for a few years by then. And I would describe myself up until the dot-com crash as being a financial analyst. So I knew how to build a spreadsheet and analyze a company and work through the motions. But when the dot-com crash happened, that's when I would describe myself as becoming a value investor. And so what is the difference? When the sort of the dot-com crash happened, I had a lot of time on my hands. I was sort of sitting at my desk in the office and the phone was no longer ringing as no one was interested in the telecoms industry. So I had some time on my hands. And a lot of the companies that I'd previously been tasked with analyzing, you know, they lost, you know, 99% sometimes some of them went even to zero, but they all lost nearly all of their value. And as a sort of no-nothing sort of investor, I was sort of looking at these stocks and

many of them were trading at a small fraction of the cash that they had on their balance sheets. It wasn't unusual for something to have maybe a sort of 10 million market cap, but a 100 million of cash on its balance sheets. So even with the little knowledge I had at that time, I kind of could figure out if you could buy something for 10 million, which has 100 million of cash, then that's got to be a good deal. And so that's when I would say, you know, A, I really started to sort of get into value investing. But B, the returns in that period were really spectacular, not because of me being a particularly good investor, but just because the opportunities were just so incredibly rich. So even though I only

start probably at the time, a few thousand euros, if you were sort of doubling that, potentially more than once or twice a year, then that kind of starts moving things in the right direction very, very quickly. So you got really addicted pretty quickly, right? I mean, I also remember you telling me at one point that you read the intelligent investor and that was kind of revelatory to you. Yeah, that was revelatory from an analytical perspective, but also in terms of the importance of collaboration. So I shared the office at that time with two very good friends of mine, VDar and Wolfgang, with whom I'm still in close contact today. And at the time, I sort of thought I was onto something and was sort of keeping it to myself. And so they were like a little bit

confused at the time where there was no one had really had anything to do. I was working like an absolute ninja. And, you know, they asked me what I was up to. I said, oh, nothing, you know, don't worry, you know, don't pay any attention to me. And then they were a little bit persistent. They could see that I was clearly, he was doing something. So I sort of told them, and I had these incredible opportunities I'd come across. And, you know, of course, then started collaborating. And I remember one day, VDAR came bouncing into the office and said, Rob, I've just been given this book and I read it and you're not going to believe what it says. And he had a copy of the intelligent investor. And there's one chapter in the intelligent investor where Ben

Graham describes how, after the great crash of 1929, these sort of former high-flying companies were so despised by investors many times they would trade below their net cash. And so I just was completely blown away by, you know, reading something written, you know, 50 plus years before describing what I was experiencing this supposed sort of modern world with internet companies and stuff. So that really sort of got me fixed on to value investing as well. And of course, once you've read the intelligent investor, it doesn't take you too long to come across Warren Buffett. I think it's also striking that from a pretty early date, you were very concentrated. And even now, I think you typically only have about 10 stocks, right? Yeah. Tell me how you came almost accidentally,

but fortuitously to be a very focused, concentrated investor? Yeah, it came completely naturally as opposed to being sort of a top-down sort of idea. So, you know, I was concentrated in those days because, you know, A, I didn't have a whole lot of cash. So when I saw a really amazing opportunity, I wanted to sort of focus the cash I had on that opportunity. But B, you know, there's only so many hours in the day. And, you know, especially in the early years, I didn't have much of a sort of a mental network of or mental watch list of companies to follow. So, you know, it wasn't as if I had, you know, a thousand companies on my radar in any case. So if you combine having a few very good ideas with a

limited amount of capital, I think it comes very natural to invest in a concentrated way. And, you know, if we were to fast forward the story five or six years when I received the seat capital to start the fund, the one piece of advice I was given by my mental Norman rentrop at that time was just continue doing things the same way you do it. Don't change anything. And so, you know, it was great advice. And I'm sure most professional money managers thing read about diversification and how you have to have a nice big diversified portfolio and all that kind of stuff. But I never, I didn't have to unlearn that lesson because I never learned it in the first place.

Can you tell us a little bit about Norman Rentrop? Because I've met him a bunch of times, both in Omaha, but also at Value X events and Closters. And he's, he's an intriguing guy. I don't know him well, but I know that he played a very, very important role in helping you, I guess you set up RV Capital in Switzerland in 2006 and then, and then the business of planned in 2008. That's right. So if we sort of, you know, fast forward to 2006 where, you know, I'd moved to Switzerland

and decided to set up RV Capital. The first call I made was to this gentleman. I'd met a few months prior called Norman Rentrop, whether he would like to become my first client. And, you know, fortunately, he said yes. And so that really set me off on the races, you know, when you, you know, at the time, I had two small children. And, you know, when you set up a company and you start with zero, then, you know, the biggest challenge is always getting the first client. So that was, that was an

incredible boost for me. But in terms of, you know, who Norman is, he's an entrepreneur based in Bonn, Germany. He started a professional publishing business, which is where most of his wealth came from. But when he was 40, he decided to step back from the business and become a sort of full-time value investor. And as he tells us the story, the first thing he did when he did, when he decide to do that was catch a train from Chicago to Omaha to go to the mecca of investing. And apart from being a great investor, he's been a great mentor to me, but also to many other people. He organizes a value investing conference for German speakers in Omaha around the time of the Berkshire Hathaway meeting and as probably the person more than any other who's, you know,

supported the growth of the value investing community in Germany. And around that time, I think in 2006, so exactly when you had. was starting to launch your own firm. You visited Omaha for the first time, and you've been many times. I think the first time we met was in Omaha this year when you came to an event that you were hosting there. Why was that first experience of Omaha and the Berkshire in your meeting

such a life-changing, formative experience for you? Yeah, I mean, life-changing is probably a term that gets overused, but for me it really was a life-changing experience. It was obviously May 2006 when I went and I set up RV capital in August 2006. And I think it's fair to say that probably wouldn't have happened if I hadn't been to Omaha that year. I think at the time I was in a job where I was learning a lot. I like the people I work with. But it had the one drawback that I didn't really have any agency.

Other people made the investment decisions. My job was to kind of do the analysis to put them in a position. where they could do that. And by this time, I'd had a considerable amount of success managing my own money, you know, had achieved a degree of financial independence by this time. But what I above all wanted to do was to be the decision maker, the person who was the one deciding which stocks to buy, buy and sell. And I couldn't do that where I was working at the time. And what really sort of gave me the nudge to set up my own company to be able to do that was going to Omaha, are seeing the incredible role model that Charlie Munger and Warren Buffett have given to people,

experiencing all these sort of like-minded people around the AGM who were also sort of passionate investors. So that really was what gave me the inspiration to go and do it. When you saw their emphasis, Warren and Charlie, on values and purpose and doing the right thing and all of that, and you had kind of come from this background where it was just like, I just want to make some money so I can live decently. Like, did it start to have a sort of slow burn effect on you? I mean, did you start to think, oh, actually there's a different way of operating, which is kind of, I remember Nick Sleep in case, Sakaria, Zach said to me,

for him going for the first time with Nick to Omaha, he just was like, oh, this is unbelievable. This isn't a casino. Here are these guys who actually own like real businesses. They're not just, you know, charlatans trying to get you, you know, to pick your pocket and to scrape off lots of fees. I'm wondering, did you start to see there was a different type of capitalism that you hadn't necessarily been aware of? Yeah, I think that was, you know, it's almost a religious type revelation in that respect. I really loved the sense of purpose, which Buffett, you know, and Munger have built Berkshire Hathaway and the sense that it's not just about, you know,

the financial returns, but, you know, helping people and, you know, creating a community. And, you know, for me, as financially motivated I was in the early years, it was really about independence as opposed to sort of building a huge nest egg. And so, you know, I think at some point, you know, I would have achieved that independence and, you know, probably, probably lost interest. And what I think opened my eyes in 2006 and what makes the investing challenge for me still interesting today is that sort of sense of that being a higher purpose to it than just simply sort of compounding capital. Let's take a quick break and hear from today's sponsors.

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And you were pretty much, I think, working out of your home with no Bloomberg terminal. And then almost immediately, I think, the market starts to implode. I mean, I think, if I remember right, you set it up on September 30th, 2008. And so a couple of weeks later, Lehman goes bankrupt. And so I'm wondering, you know, what that experience was like as a young fund manager, suddenly seeing the global economy collapsing, suddenly seeing all these firms collapsing, and in some way being totally detached from it all, because everyone else is sort of working in their big office buildings in New York and L.A. and, you know, city of London and like.

And you're just like sitting there with your wife and kids. Yeah, I mean, you know, I set things up in a very unconventional way when I started Rfi Capital. So, you know, as you mentioned, there was sort of no employees. there was no office, there was no Bloomberg terminal. And that wasn't because of any kind of master plan. That was simply because I wanted to keep my outgoings to an absolute bare minimum. So it was really just sort of a financial motivation. But a kind of interesting thing happened when the world imploded after the Lehman crisis in 2008.

And I was sort of just sort of sitting in my, you know, in our guest room, I think at the time, you know, reading any reports, comparing prices to value. And, you know, I was very much, you know, I very much imbued the thinking of Ben Graham and Warren Buffett and, you know, Ben Graham's core ideas, this idea of Mr. Market that sometimes Mr. Market gets very depressed and becomes very irrational and then prices get very cheap. And when that happens, you buy. And I found it very easy to remain sort of an even keel in this sort of home environment where there was no one really around me, apart from my sort of wife and kids who, of course, were oblivious to what was happening in the world and just sort of going about their sort of day. day to day. And so a lot of people were very phased in that environment. But to me, it's sort of made made total sense. It had been what Ben Graham had explained would happen, you know, every now and again. And so, you know, fast forward a few years later where, you know, the fund became bigger, you know, had I wanted to, I could have built more of a traditional infrastructure. But I kind of realized that it was an advantage being set up in that way. So what started more out of necessity became

a sort of setup that which I sort of had, you know, really out of conviction that it was the right way to do things. Yeah, it's really interesting. In some way, you kind of lucked into a lot of great truths about what works, right? I mean, having a little bit of emotional detachment, having this intellectual background in understanding Graham and how the market works and, you know, that you needed to use the market instead of just being whipsawed by it and, you know, having a good ecosystem, a good emotional ecosystem with a family that you loved. And it's interesting, right? Like, There was so many ingredients that you somehow got right almost more through luck than Yeah.

And there's another thing which was also really through luck in that period. So like, you know, when I started the fund, I thought, okay, well, now I'm a fun manager. I better go out and find some clients. And, you know, so for the first sort of, I don't know, half year or so, I would sort of cool people asking if I could, you know, if they would give me a meeting so I could sort of present my fun to them. And, you know, the funny thing happened is that a lot of the time people actually said yes. And why wouldn't they?

They found it entertaining to have a sort of a young, sort of enthusiastic young man, explain his best ideas to them. But invariably, or in fact, always after the meeting, I would say something along the lines of, oh, we can't invest because, you know, your track record is too short or the fund is too small. And I was like, did we really need to have a two-hour meeting to establish that my fund is only 10 million AUM or whatever? So really, I sort of like a small kid throwing their toys out of the pram, I was sort of like,

okay, I'm not doing any more marketing. This makes no sense on it. It doesn't work anyway. And, you know, in hindsight, that was exactly the right thing to do anyway because, you know, that allowed me to concentrate just on managing the fund and, you know, creating a great track record. And of course, that's ultimately not only the right thing to do, but also draws the right people into your ecosystem. But to your point, I sort of stumbled on that by luck as opposed to have.

a master plan. One thing that really struck me as I was going deep into my research over the last few days, one of the few really in-depth interviews you've ever done was with manual of ideas run by the great John Hilchewitch and this back in 2009, so very early on. And I was really struck that you said in that interview that your ambition from the start was to deliver a 15% annual return over a very long time period. And here we are 18 years later and you've done exactly that a little bit better than that. than that.

Should have aimed for 20. I know. What made you think that was possible as this young, slightly naive whippersnapper, like, why did you think that 15% was, I mean, partly this relates to hurdle rates and the like. So can you explain what actually was behind this idea? Yeah. So, I mean, I don't want to take any credit for this being my own original thinking, but I

can, you know, explain how I thought about things back then. And when I first started, you know, in that phase of the dot-com companies, I was sort of investing in a very sort of mechanical way based off of, you know, price to book, price to earnings with a sort of a kind of naive sort of thinking that, you know, the lower the P.E. or the lower the price to book, the better the value it is. And I recognize quite quickly that there was actually very little predictive power, you know, whether a company sort of trades at two times or five times earnings in both cases. They're very, very cheap. The crucial thing is actually actually whether those earnings are real and, you know, how good of a business it is subsequently

to when you're buying it. So I really wanted to sort of incorporate that into my sort of valuation framework and get away a little bit from this sort of more traditional value thinking around sort of peas and price to books and that kind of stuff. And what I sort of, you know, landed upon was this idea of what I call the owner return. And I targeted an owner return from investing in a company without there being any change in the multiple. So the thinking was, if I was to own 100% of a company, how would I think about the return I get on a year to year basis? And I think if you own 100% of a company, there's no market for that company because, you know, you own 100% of it. But the way you would think about its value is, A, obviously,

how much cash does that business return to each year if returns 5%? The end of the year, you're obviously 5% richer. And how much do the earnings power increase every year, you know, increasing longer term sort of cash return potential? And so I thought of the sum of those two as being the owner return. And what I targeted was always a 15% return. You know, that could have been a 15% dividend yield. That could have been 15% earnings growth or some more typically, you know, some kind of mixture of the two. You know, A, I thought that would be a very respectable return if I could achieve it. But B, it also got me a little bit out of this sort of idea of, you know, thinking too rigidly about sort of multiples and that kind of stuff.

You've written in the past about your evolution as an investor and how you went roughly through three big phases. And so the first phase, he said, was looking for great prices. And the second was looking for great businesses. And then I think what's really interesting, which I want to kind of home in on a lot in this conversation, is the third stage, which is the great manager stage, where you started to focus really intensively on managers you could trust and who you admire. who are talented and have integrity.

And I wanted to read a quote that I think it's just really valuable that comes, I think, from one of your Q&A sessions at your annual meeting, but I may have stolen it from somewhere else. I'm not sure. And I think this is a really valuable insight. So you said, I've discovered for myself a niche of managers where I think the odds are just massively stacked in my favor. And that's managers who've turned the business into their life work.

So oftentimes they're the founder, but sometimes they're just people that have spent our whole career there. Sometimes they might even be someone that arrived a little bit later, but clearly buys into the culture in a very powerful way. And that is the kind of pool that I fish in. I think it's a very, very rich pool, especially for a concentrated fund like me. And I just think this is a hugely important insight. I wonder if you could unpack it for us, because I think, I think this sort of lies at the heart of what it is you do. Yeah. Yeah. Well, you know, thank you for that quotation. I think the deeper point of that is, you know, people often will ask, you know, how do you judge a manager? You know, they're such good salespeople who, you know, very well practice in meeting

with investors like us. You know, how on earth could you kind of separate, you know, the, you know, the good from the bad, from the average? And I would argue you can't. You know, if you were to put 100 managers in front of me and say, you know, divide them into sort of the best versus the worst, I would be no better than average and quite possibly worse. But I do think there is a small cohort of managers, you know, who do make the business, their life work, you know, completely aligned, completely dedicated. And when you do find those, the odds are just massively, massively stacked in your favour. So I do think I've occasionally been able to spot that type of manager and when I do, you know, I would tend to bet on them. You gave a really interesting series of talks at the

Value Investor conference in Omaha, three different talks over probably from 2014, in 2017 and then probably 2024, I think. And so I've been going through through these quite carefully over the last few days. And one thing that really struck me was you quoted something from Snowball, the biography of Buffett, that I thought was really interesting where you said you quoted the book saying Buffett saw himself in Ajit Jane who quickly rose in his esteem to share Mrs. B's pinnacle. And you mentioned in that speech that Ajit had no background in insurance and that Warren said, I just liked the guy. Talk to us about the significance of that because I think there's actually something really quite profound going on that.

Yeah, I do think it's an incredibly profound idea, obviously because it's true, but more importantly when you're trying to beat the market is because it's overlooked. You know, there's a lot of investors are very reluctant to place any weight on something which isn't sort of based off of hard facts and quantifiable and obviously if you work in a large organization, that's essential because, you know, how else can you communicate your ideas to everybody else? But I do think, you know, certain emotional responses you have to certain situations can also be incredibly powerful indicators. And if you're working on your own in a very small team, I think you can lean into those insights, but obviously you can't if you're in a larger organization. And one of those is

simply that sort of visceral reaction of liking someone. It might sound a bit sort of hairy fairy, but to the extent you've spent your whole life sort of thinking about in business, you know, meeting with people, talking with people, having good experiences, having bad experiences, that immediate reaction of liking someone obviously is based off of patterns that have developed over, you know, decades. And, you know, it has to be an incredibly powerful, powerful indicator. And, you know, I thought it was very interesting that, you know, Buffett said the main reason that he hired Ajit Jane was simply because he liked him. At the one level, you could say, well, that's a very superficial reason to hire someone.

But I think at a deeper level, it is probably an incredibly powerful indicator that he saw in Ajid the same values and qualities that he knows he himself or has. It's so interesting to me because here I am covering this investing business that's supposed to be incredibly rational and full of objectivity and the like. When I think of the people who I invest with, there are people like Chris Beck. who I just really, really like. I mean, I think he's incredibly smart and thoughtful, but I also just really like him.

And Josh Tarasoff, a close friend of yours, who I just really like as a human being. I, you know, they're both people I want in my life. And, you know, I interviewed Neumashire on the podcast recently. And I'm just like, I spend so much time thinking, how am I going to rustle up cash from here for my wife? I can invest with Neumma. Because, again, I just like, I really like him.

And so it's interesting. I can echo all three are wonderful people and dear friends of mine as well. Yeah, they're quite. And look, if I had more money, I would want to invest with you too. And so I think in some weird way, I feel like I'm almost collecting people as much as investments. And then I think about this, there's a wonderful guy in the Rich Wies, Happier Masterclass, very talented French investor based in London, who I had dinner with recently. And he said to me that he would never invest with a friend. Like, it's just too dangerous because what if it goes wrong?

and he's a really, really smart, successful property investor. And so I sort of wonder about this. And then Chris Davis talked to me at one point where he said, he had some rule where he said, you should never do business with a friend before the age of 40. And after the age of 40, you should only do business with friends. You know, once you had enough pattern recognition. How do you unpack this? Because there is something about it that feels very soft and not objective in a business

that's supposed to be objective. And yet we were given these tools of VINGE, intuition and instinct. And I don't know. Unpack it for me because I can't really unpack it. Well, there's one really kind of crucial thing. And that is that you tend to like people who are similar to yourself. So it means you need to cultivate in yourself the qualities you're looking for in other people.

And, you know, you see that the whole time. You know, so, you know, some people and don't need to undervalue it or anything. But, you know, some people might think the coolest thing in the world if someone drives a Ferrari. So if they see someone sort of show up in a sort of shabby car, they're like, you know, who is this, this idiot? And they see someone else sharp in a nice, bright, red shining Ferrari. Like, wow, that's the guy. And so, you know, if you're the person that, you know, does deep down value more kind of superficial things, whether you like it or not, you're probably going to be drawn to those people that exhibit those qualities. And if you're someone like Warren Buffett,

who, you know, values integrity and, you know, obviously rationality. and investing acumen, you're naturally going to be drawn to people like Agi Jane. And so, you know, the big lesson that the people like us should take away from that is we really need to cultivate the values in ourselves that we're hoping to find in other people because we're automatically going to be drawn to them whether we wanted or not. Yeah, I think that's a really valuable insight. I, you know, my sort of scoring system before before I interview someone, you know, there are things that I have things in italics.

I'd have things in bold. I have things underlined. And then the trifectar is if it's in italics, bold it and underlined, which is the case with this quote from your speech in 2024, where you were talking about your 2017 talk. And you said exactly that. You said if you want to find managers that have the values which you think are important, you better live by those values because if you don't,

you won't be able to spot them. And I just wrote next to it, huge insight, discuss. sound like one of my university professors now. But I think once in a while, you know, I stumble upon something and I'm like, oh, this person figured out something that's actually deeply true and important and not necessarily obvious. And I think it's a curious thing that instead of just looking for, you know, people who are honorable and have integrity and they're like, who you're going to invest with you. You're like, well, I better actually work on that in myself.

It's very interesting insight. course, there's no, there's no, there's no, there's no, there's no, there's no, there's no, your initial impressions are, uh, uh, correct. You know, you mentioned the journey, though. There's one, one other sort of little anecdote I'd love to tell about how I sort of came to, to the focus on, on the management. So, you know, there were three stages to, to my investing, you know, the first was very much just sort of, you know, very mechanical, rigid quantitative focus. And I realized very quickly that there was more to investing in that. So the sort of understanding that it wasn't just about whether something was on a sort of two times P, it was also whether it was a good business.

That realization came about very quickly as some of the businesses I invested in those very early years. Most did very well, but some went to zero because there were kind of frauds or the business didn't work or whatever it might be. So that was a kind of a quick burn. But it was a much slower burn to kind of realize the importance of the people. I think initially the insight was, well, people can really damage a business in a negative way, you know, if it's a fraud or if they're incompetent or whatever it might be. So I realized, you know, early on in the journey that it should be something I should look at and I should try and avoid the bad people. But sort of really recognizing that it's not just that you have to avoid the bad people. It's not even that you should

be trying to find the good people. It's that the biggest priority should be the people. And what sort of led to that was the kind of the realization that we all have this sort of conceit that we're great analysts and we do more diligent work than everybody else and understand business better than everybody else. But the reality is when you analyze a company, no matter how diligent you are, you really, really see the tip of the iceberg, you know, that bit of the company which sort of poking its head above the water. But what really determines the investment success is what's going on beneath the surface. And, you know, my experience, was where you had sort of good people at the top, everything beneath the surface was, at the

very least, not terrible and oftentimes a lot better than you expected. And where the people weren't great, the surprises were always negative. So I came to realize that I better be betting on the right people rather than the wrong ones. And I think the reason it took a bit of time to come to that realization was because I had to get rid of the conceit that I could achieve everything just through sort of intellect and analysis. You're often asked how you identify these outlives with these exceptional qualities. And it's actually an incredibly difficult thing to answer in certain ways. And I remember Chris Davis saying to me at one point that Charlie said to him,

yeah, never invest in a company where the CEO has good hair, which reminded me of my experiences as young journalist interviewing John Mary Messier, I think it was from Vivendi, who had incredible. hair and Vivendi did not do well. What are you looking for that gives you a sense that the manager loves the business, is deeply, you know, when you look back at, you know, say the founder of Troupany or Mark Zuckerberg or, you know, so many of these CEOs that you admire, what are the sort of tells that they're giving you a sense that they're all in? Yeah, I mean, I think that you can narrow the universe down pretty quickly just through the kind of mechanical method of, you know,

just sort of basically rejecting all the companies where the management is a revolving door of MBAs, which is, you know, the rule rather than the exception. So I think that kind of whittles the universe down pretty quickly. But then once you get to the kind of the businesses, you know, which have either, which are either run by the founders or very tenured managers, often connected to the original founding team, you know, that's when it gets tricky because, you know, sometimes you see these sort of funds that will just say, oh, we just invest in founders or whatever as if that solves the problem. But, you know, not all founders are great. Some, you know, lose interest in the business or, you know, they sell their stock but still feel like they're entitled to the economics

or, you know, the world moves on and what made them successful originally is no longer what makes the company successful today. So I think you can whittle the universe down. pretty quickly just through mechanical sort of methods. But then there's no sort of substitute for sort of thought and analysis once you sort of get down to that sort of short list. I was really struck. I was listening to your Q&A session back in 2022 at your annual meeting. And Dennis Hong, who's very good fund manager in his own right, and very smart guy, asked you about your interactions with management and what you hope to get out of meeting with them. Because obviously, there are lots of fund managers who don't believe in meeting CEOs because that's such good

salesman and you disagree strongly with that. And there's this lovely quote where you said, you know, what I really want to do when I sit down with a CEO is try to figure out how they tick, what motivates them, how they think about the business, what their long-term plans are, what the story of the company is, how it came to be the way it is, because understanding the past is often the best way to understand what the future will look like. And then you said, you know, but often it would be going for a walk with them or meeting them at your home. so often in these non-business settings. And then you said, and the single most important thing I look for is whether I like the person.

And you mentioned that you actually like it when they're a little bit scruffy and introverted. You're not really looking for charisma. I thought that was really interesting that, you know, it's not necessarily the guy driving a Ferrari and wearing, you know, the $6,000 bespoke suit. Yeah. You know, I think some investors get frustrated that they don't get a whole lot out of a meeting with a CEO because they kind of ask, you know, about the market opportunity and the entry barriers and all that kind of stuff. And they, you know, they probably get the, you know, the same answers that have been given, you know, a million times before to that and nonetheless are at the end of the beating. You know, what I'll try and do is just sort of take a manager a little bit off-piece and, you know, try and hear about how they think about the world and, you know, above all what they're, what really their sort of their motivation is. And I do think people generally reveal themselves, not necessarily in a negative way. I mean, but, Sometimes just, you know, they have completely different interests in the business.

And, you know, their biggest dream is to, you know, to go off and do something else or whatever it might be. And that's absolutely nothing wrong with that. So, but I do think, you know, if you are fortunate enough to get to spend the time with the CEO of a company, that the time is better spent just sort of, you know, rambling a little bit and, you know, maybe going out of the meeting room and talking about completely unrelated topics to the company itself, just to get a sense of their values and how they think about the world. One thing that really interested me is your major investment in Carvana, which has been kind of a rollercoaster, I think, over the last eight years or so. And this is such an interesting example of a sort of divergence between what most people say about the management or at least not most people, but there's always been kind of controversy around the management and short sellers who were maligning management and the like.

And you actually, you know, you're pretty close to Ernie Garcia, the co-founder and CEO. And I was watching yesterday an interview that you did with him and was just really struck by his character and his intensity and his drive and sort of fierceness. And, you know, can you talk a little bit about that? Because in some ways, I think your relationship with him kind of is revealing about what it is you're looking for and what you're seeing. And also your independence of mind, the fact that you were able to see something in him that maybe the market and conventional opinion wasn't seeing. Yeah, I mean, to my dying day, I will never understand why, you know, Ernie Garcia is the polarizing figure he is. I mean, he is just so, to me, at any rate, so obviously the absolute epitome of the kind of founder building a business into his life's work that I just can't for life for life, me, understand how anyone could, could, could, reach a different conclusion. I understand you might not like the company. You might not think

the business model works, although I think that that particular bug bed has been put to bed by now, or bug bear rather, but that you could question his sort of his motivation and his integrity. That is just a complete and utter mystery to me. It was also a really interesting, revealing story about a chin-up contest that you thought, which I, you know, as a journalist, I'm always looking for these little antipsy. Can you, can you, can you, can you, can you talk about that story? Well, my, my dear friend Cliff Sosin should be the one to tell this story because it's really his story. But the way he told it to me, and maybe I'm embellishing the details a little bit, is that, you know, Cliff is someone who takes very good care of himself, as indeed is Ernie.

And they both being competitive types, they challenged each other to a chin-up competition. And, you know, Cliff did however many it was he did. Let's call it, call it 15. It may have been a different number. And the way he told me the story was, Ernie started strong by about the sort of of number five or six, he was clearly sort of struggling. And Cliff thought he had this very clearly in the bag, but, but only somehow managed to dig out another 10, another 10 chin-ups just to just to avoid losing. There was something lovely in your conversation that I wrote down where, as you re-tell this story, and he said, I'm not going to lose to Cliff.

And I think that gets at something, right? That sense that you're looking for people who are all in. right, who have like fierce commitment. And you told another story once, I think, about the growth rate at Carvanna and whether it would just be like 20% or more or whatever. And what did what did he say about that? Well, that's a story which I, which, well, I'm the protagonist for it. So in contrast to the other one.

So that's maybe a better one to tell. So, you know, I remember, you know, obviously Carvana went through a huge crisis in 2022. And then, you know, going into 2023, it was clear. that the business had sort of managed to turn a corner. But the question then on everyone's mind was, you know, when was it going to start growing at a meaningful rate again? And, you know, what would that growth rate be? And so, you know, the various analyst calls and investor meeting there, everyone peppering Ernie, you know, with questions about when it was, you're going to start growing again. And, you know, he's very disciplined sticking to the script of, you know, we're going to

wait until, you know, the economics are nailed down and then we're thinking about growing again. And I, you know, I wasn't trying to be to be particularly clever or catch him out, but I, in good faith, told him a story I once heard from a CEO who explained to me that there's sort of a, there's a right rate to grow. It shouldn't be too fast because then it sort of puts too much strain on the organization. But of course, it shouldn't also be too slow because that creates an opportunity for competitors. And the right growth rate, in his opinion, was 20%. You know, the Goldie looks growth rate, not too fast, not too slow. So I told this to Ernie. And he looked at me with a complete look of content. and said, the reason that guy only grew at 20% pattern was because he wanted to be home by 6 o'clock. That's great. So he gave away that it wasn't going to be 20%.

There was a moment, I think in a chapter that I wrote on high performance habits in my book, Richer Wieser Happier, where I said something like really, really simple after spending a lot of time, you know, interviewing people like Jeff Vinick and Peter Lynch

and Will Danoff, like these fiercely driven stars from that generation of fidelity. And I said something like, sometimes the secret of success is nothing more mysterious than the fervency of a person's desire. And I think it's one of those things that's so simple that it's really easy to overlook the importance of it.

Like just, you know, if you have someone who just has such fervent desire, you know, and if you combine that with talent, obviously you need the talent, but it's very hard to stop those people. Yeah, although I've, What I've come to realize is you can't sort of create some kind of theoretical laundry list of what the qualities needed for a sort of a great leader. You know, it tends to be the case that, you know, founders sort of form the companies and then the companies are form, you know, form the founder.

So what tends to make the company successful by definition, at least for those that are successful is the qualities the CEO exhibits. And then unnecessarily or uniform across all CEOs. So, you know, you might have a. you know, one extreme you might have someone like Steve Jobs who sort of, you know, by all accounts was, you know, treated people pretty, pretty shabbily, but where I guess deep down people must have realized it was coming from a place of passion rather than just wanted sort of to hurt people. And, you know, at the other end of the extreme, you have these sort of leaders who themselves are more or less without ego, but have this tremendous ability to kind of bring, bring people together. So, you know, it can work at both extremes. The key thing, as the leader is sort of suited to the organization and vice versa. Mark Zuckerberg has been a controversial figure and you've always been a huge admirer of his. And people are also always very critical of matter about, you know, the social ills that it's causing and the like. And I'm just curious how you view it because a lot of what you do seems to me about exploiting misperception, you know, looking at the facts in a somewhat dispassionate way and trying to exploit misperception. How do you, how do you view the world as having, having got Mark Zuckerberg

and meta wrong? Yeah, I mean, there also, to me, I mean, that's a rabbit hole. We probably, probably shouldn't go down in the interest of time. But there too, it's a kind of mystery to me, why, you know, someone like Mark Zuckerberg, who so obviously has almost an impossible job balancing all these sort of competing interests and, you know, clearly from a, you know, a wealth perspective doesn't need to do it, but still does. I would argue from a place of passion, it's kind of a mystery to me why, you know, he is the controversial figure he is, but I realize a lot of people would disagree with that, so no need to go down that rabbit hole. But the one observation I would make is I think generally people are quite negative about business

in general, and the bigger the businesses, the more negative they are about it. You know, so I remember when I was a kid and, you know, the big sort of bug bear at that time was Nesslay of companies. And, you know, Nestle, I suppose at the time as one of the largest and successful companies still is pretty successful today. And people convinced that the reason they were all these sort of starving children in, in Ethiopia and Africa was because, you know, Nestle was sort of sending, you know, powder milk there and the kids were losing the ability to, you know, to, you know, they're being weaned off their mother. And then Nestle was sort of withdrawing the milk or whatever the sort of the conspiracy theory was at the time in order to then make a profit.

And it's absolutely ridiculous even today. Nestle doesn't make a meaningful amount of its revenue from Africa certainly wouldn't have done back then. And to the extent it's sent powdered work, I'm sure it was with the best intentions. But there seems to be a readiness then of people to think the worst of the largest companies. And that is still the case today and probably always will be. You spent a lot of time thinking about and talking about moats and the nature of moats and what types of moats. and what types of moats are best and worst. And when you think about your big holdings like a Carvana,

which at one point you wrote down 98%, and then it's kind of good in the end, and you think about meta, what they embody in terms of moats. What are you thinking that's sort of a little bit iconoclastic in your view of what makes for a good moat? Yeah, I think my thinking around moat has evolved also over time. So I think if you'd asked me sort of 10 years ago,

I would have said, you know, moats are good, and the bigger the moat, the better. And today I have more of a kind of a nuanced thought of that. I think moats are not always good. They can create complacency, and especially in industries where there's rapid change, that could be an active disadvantage rather than an advantage. And also, you know, moats sort of prevent you from sort of adapting and, you know, changing as the world evolves. And so what I've sort of come down on is, you know, I'd rather actually accompany,

has a slightly narrower moat, but where it sort of keeps them on their toes and forces them to continue adapting. And, you know, more importantly, that moat should be expanding and moving in the right direction rather than narrowing. So I would much rather see a company with a smaller moat, which is we're getting wider as opposed to a sort of a larger mode that's getting smaller. Another really kind of controversial move of yours in recent years has been, I guess since 2024, this massive investment in China where there's been a little bit of churn in the companies that you've owned. But when I looked the other day, I think about four of your top 10 holdings, Chinese. It's about a third of the portfolio. Can you talk again about

the misperception there and the opportunity? And also something that's very distinctive about your approach, which is that you travel a lot. So you're going to these places and you're kind of seeing seeing with your own eyes what these places are like. What have you seen in China that makes you think, just people who've got this wrong? Yeah. I mean, as you point out, William, I've always been a passion about traveling

and a great thing about managing a global fund like I do is that I have an excuse to combine my passion for traveling with my passion for investing. And I've tried to get to most large international economies over the last 20-odd years. But the place that I went back to more than any other was China. I just find it an absolutely fascinating place like anywhere with its good sides and its bad sides. But where above all, it's a country where I feel it's sort of moving very rapidly in the right direction. And from an investing perspective, what makes it interesting is that the perception

for most of those last 20 years, perhaps even still today, has been very negative. So if you, you know, as an investor, if you see whether it's a company, economy, whatever it might be, if you're positive about it and the rest of the world is negative, then that's an exciting setup. You know, so I have been traveling to China every year for the last probably 15 or 15 or so years. And, but of course, there was a hiatus during COVID where you couldn't, you couldn't travel there for a few years because of the restrictions. And so I think I was one of the first investors to go back there as pretty much as soon as the travel restrictions were lifted. I I went there and wrote a postcard actually about the visit.

And what really sort of blew me away was just how rapidly that economy had developed. You know, I think there was a sort of perception that it was a good place to produce commodities cheaply, but some devoid of creativity, devoid of innovation, devoid of world beating companies. And when I went back there in 2023, it was completely clear to me that, you know, the complete opposite was the case. It was sort of, there was a lot of innovation. the society had moved along very quickly. The cities had become much more beautiful than they had beforehand.

And it was also producing a lot of world-class companies, not just in sort of manufacturing, but in the consumer internet, in e-commerce, and really pretty much across the board. And so that was sort of what really got me interested in it. Let's take a quick break and hear from today's sponsors. One part of being an investor that I don't think it's enough attention is how hard it can be to continue to improve as an investment researcher. And for myself, I often find that when I finish a great conversation

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in the seven figures, get our free business guide aligning for the agenic era, how AI is changing everyday work at net suite.com slash t-ip. The guide is free to you at net suite.com slash t-ip. NetSuite.com slash T-I-P. All right. Back to the show. And why of all of the things that you've played with that all of the things you've explored over the years, have you ended up with Luckin Coffee, which is a pretty new position, I think. And 10 cent holdings, I think you used to own process as well, which is a way to invest in a discount. And I think H-World Group and Yum China Holdings, like, why are those four? You know, what's the common denominator that makes those four so appealing to you? Because I know you also sold D-D Global, I think, at some point in the last, in the last

few months. No, I still, I still have that, but it might have slipped out of the top 10, so maybe is why you're thinking that. No, you know, so I'm very conscious when I invest in China that I don't speak the language. I only go there once or twice a year. And so there's, you know, one and a half billion people on the planet who are better positioned to invest in China than, than I am. And, you know, the way I sort of compensate for that is really just sort of trying to keep a very simple, you know, I'm not trying to find any sort of under the radar companies, doing sort of complicated things. You know, I just applied the same criteria. I applied to any investment. I'm looking for sort of passionate founders and all of those companies are still run by their founder. I'm looking

for wide moats. I think all those companies very obviously have wide modes and I'm looking for attractive valuations. And, you know, that's, you know, the reason above any other why, you know, I feel confident investing China today is that, you know, it's still a market which is very much out of favor and you can get very obviously good companies growing nicely and, you know, incredibly attractive valuations. So all of those companies you mentioned, I would expect the earnings growth to be at the very least, you know, 10% in the coming years in many cases much more than that. And most of them are returning at least sort of 5% if not more of their capital in terms of dividends and share buybacks per year. So, you know, I get very comfortably to the, you know, the 15% owner return

that I target. I wonder if we could talk a bit about your business partner, Andreas Lechner, if I'm pronouncing this right, who's not a China fan, which I think gets to something really interesting that a few years ago, I think for regulatory reasons, because of FINRA, the regulators in Switzerland, you decided you needed two people. And so you have this really interesting relationship with this co-managing director of RV Capital, this German guy, Andreas. And I've been watching with great fascination, your conversations with him over the last few days because he's really brilliant and really profoundly eccentric. And your relationship

is very unusual and very central to you. Can you just start by telling us a little bit about him? Because, I mean, he's just a hugely impressive guy. I feel like he's like this big brain that just happens to be sitting on top of the body, but he doesn't really need the body at at all. Yeah. Yeah. Well, you know, RV has its own LLM, you know, Anthropic Clause, is Claude and we call ours Andreas. Wow. No, Andreas is a,

is a dear friend. You know, we met actually in Omaha, probably in 2006, that first time I went there and really hit it off and have, you know, remained in constant contact ever since then regularly, you know,

as guys do, probably talking mainly about, you know, business and stocks and that kind of stuff as opposed to maybe more touchy, touchy-feely topics, but that's, you know,

that's the level we really sort of connect on. And, you know, you mentioned in 2022, there was a change in the law in Switzerland, and as a result of which, we had to apply for a license. And the advice was, RV Capital had a much better chance of getting a license if it was two people rather than one. And so really, we just formalized what was happening in any case, which was, you know, we always collaborated and he joined RV Capital as co-managing director. But it really wasn't that much of a change. You know, we'd always work together,

you know, prior to that. And, you know, I think what makes our relationship or probably any relationship incredibly productive is that there's enough overlap that we, you know, have plenty to talk about. We have the same priors when we start a conversation. We agree broadly on what a good investment looks like and the type of things we want to do, the type of things we would avoid. But within that, there's enough difference that we can kind of constructively disagree on stuff. And, you know, China is one area where, you know, Andreas is certainly more, more negative than I am. I do think if you were to ask him, he's potentially coming more around to my point of view rather than vice versa.

It's kind of curious. There was a conversation you had with him where you were kind of interviewing him about his background. And I mean, he's clearly a brilliant guy, right? He was a brilliant mathematician very early and published a book at some absurdly, like 17, and basically only manages his own money. And from what I could understand at one point, he had two thirds of his money in one stock and later had like 28% in Facebook.

And so he's never worked for anyone and makes all his own decisions and has most of his money in like six stocks. And I thought one thing that was really interesting was that you guys were using each other as a sounding board over the last 20 years. And yet actually you would buy stuff for the fund without telling him what you were buying. And he would buy stuff without telling you. And so it's a really unusual relationship where you're collaborators and sounding boards,

but you actually have total independence. So you're sort of nominally co-managing directors, but actually you're sort of super independent. It's a very unusual relationship. And I wonder if you could talk about what that reflects about how you, how important it is to maintain independence, but why it's useful to have a partner. Yeah, yeah.

So, you know, we are the co-managing directors of RV Capital. And, you know, from a sort of an operational standpoint, we take care of the sort of more kind of administrative side together. But when it comes to investing, you know, I have the business owner fund, which is my sole responsibility. And then he, you know, he manages his own money. And in the meantime, has some external clients as well. And there, it's entirely his responsibility. And in terms of, you know, how that relationship works in practice, you know, I was sort of viewed it as there being sort of two stages or two, two parts to kind of making an investment or coming to an investment decision. The one is the kind of the research

stroke brainstorming phase. And there you just want as much input influence as you can possibly get. If you have an idea, you want to sort of run it by as many different people as possible, try and surface as much disconfirming information you can. And in that respect, you know, Andreas is an incredible person to kind of riff about a company with. But when it comes to actually making the investment decision, I think it's super important to make that by myself. And it's not because I don't trust Andreas or value his feedback. It's more that I actually in some respects don't trust myself. I don't want to be making a decision because I think other people think it's a good idea.

I wanted to be very clear in my mind that I'm making that decision because it makes sense in my own mind. And so by very deliberately not asking Andreas or anyone else for that matter, well, they think is a good or bad idea beforehand, it allows me to be, you know, very disciplined in making sure that it comes from an inner conviction rather than a sort of an outer one. There was a very interesting observation that he made in that Q&A that you did with him, where I'll call you a couple of lines from him that I just saw were a really helpful kind of revelation where he said, what I've increasingly flocked to was companies where I just

admire what they're doing. Excellent companies usually are excellent from all perspective. It's rare that I find a company is excellent from reading the reports, looking at the products, and so on, talking to potential customers and then meet management, and I'm disappointed by them. That's almost never happened. I can hardly think of any instance where this happened. I just sort of is a really interesting observation that when a business is high quality, you sort of see that quality in every part of it. What do you think? I mean, that's presumably something you've discussed a great deal with him over the years. Yeah, I mean, I would see that comment in the kind of the same spirit as, you know, the conversation we had a few moments ago about some management and liking managers. You know, Andreas is someone who's been investing primarily his own money for, you know, for 30 plus years. And when you do that, obviously, you see these patterns that resonate very strongly.

And for him, one of those patterns is, you know, when he sees excellence in a product or an aspect of the service of other company, then that sort of sets alarm bells. ringing in his head or positive alarm bells that, you know, that probably resonates with prior investments he made, which have done very well. And so I put that under the heading of where that intuition is an incredibly powerful indicator of a sort of a deeper truth. When we spoke back in June, you said to me, this is the weirdest market I think I've ever seen, apart from maybe the late 90s. And you said, because the S&P 500 makes a new high every day. And yet most of the things I look at are sort of 50% below their highs, in many cases, trading at very low valuations. And it's really just one small corner of the market with semiconductor hardware, which seems to be driving all of the

gains. It feels like actually quite a good market for me in place like software and internet space, places where you've traditionally been strong. And this is also something you wrote about in your half year letter that just came out this morning. Can you talk about this? Because I think it gets that's something really, really important about this kind of, as you frame it in your shareholder letter, this debate about value versus momentum. And this odd current reality of, as you put it in the letter, a momentum driven market that's hyperfocus on short-term sentiment. Yeah, maybe it was a little bit hyperbolic of me in June to describe it as the weirdest ever. I mean, after COVID or after the Lehman brothers, they were also pretty weird as well. So maybe temper that a little bit. But

Yeah, but the underlying message I would definitely stand by. It's kind of the weirdest market in the sense that, you know, most markets are up a little bit, not hugely, but, you know, it looks like a very sort of normal type of sort of stock market year, decent gains. But you kind of poke under the surface and you have like just a handful of stocks that have just gone to the moon and then everything else, which almost feels like, you know, sort of almost like we've had to some kind of financial crisis or something that the share prices are down so much.

So it is a strange one, but it's, you know, as a long-term owner of businesses, trying to buy great businesses when they're cheap, it's, you know, it's an ideal market where, you know, sometimes you're really scratching around for an idea. Whereas, you know, especially in March of this, this year in the software space, the question wasn't, you know, can I find a software company I went to own? It was like, you know, which of the 20 or 30, which are, you know, down 60, 70% from their previous highs should I be? buying now. And what was it that led you to consolation software, which also as I discussed with Chris Begg on the podcast recently, was also the thing that he bought in in the SaaSpocalypse, if I'm pronouncing that correctly. You, I think, bought it in in early March. How does, how does that embody what it is that you try to do? Yeah, I mean, you know, where to start. I think a theme that's run through our conversation today is really sort of trying to bet on people who are making a business, their lives work. And I really feel that that's very much the case

at Constellation Software. Now, obviously, the founder Mark Leonard was forced to step down for health reasons, but from what I understand is still very much a presence at the company. But above all, I think within the company, it's filled with leaders and in many respects filled with founders. So the new CEO, Mark Miller, he actually started the company, which was the first company that Mark Leonard bought when he started Constellation Software. So you could almost make the case that the current CEO is more of a founder than the actual founder. That would be an exaggeration because obviously what makes Constellation the company it is is the acquisition engine that Mark Leonard built and all the other stuff. But I think the point is, you know,

a valid one that it's really a company which is sort of full of owners and fill of people that deeply believe in what the company is doing and, you know, that's exactly what I look for and, you know, given, you know, for the benefit, all that makes software great, one of the drawbacks of it is, is a lot of the companies tend to have very egregious stock option programs, way too much stock-based compensation, way too little owner earnings. So that was also something that's made me lean towards consolation software as opposed to maybe some of the alternatives. I was very struck in reading your latest shareholder letter, where you were also talking about, I mean, it's very much related to this. You were saying it's never been my goal to hunt for

outsized winners. If the odds of picking one have lengthened from 100 to 1 to 200 to 1, so what? That was never the game I was playing. Instead, I aimed to find a small number of durable businesses that can grow their intrinsic value by 15% or more per year through earnings growth capital returns or a combination of both and buy them when they're cheap due to a temporary setback. I thought there's a really interesting kind of distillation of what it is you're trying to do and why actually in a weird way a momentum-driven market like we have at the moment may actually make life better for you. Can you unpack that a little?

Because it seems kind of counterintuitive. It seems like a terrible time. to be doing what you do. And yet if you have the time horizon, maybe it's a great time. Yeah. I mean, you know, I think I, you know, I wrote in that letter when I, you know, I started investing. I thought you had to outthink and outweight everyone else. You know, out think because a lot of smart people out there all trying to find those great, great companies and outweigh because to the expense a mispricing comes along, it would be pretty, pretty infrequent. And if you look at the market today, I think both of the,

those things are inverted. You know, most obviously companies, you know, share prices go down 25% in a day in a heartbeat, you know, earnings are a little bit less than the market expects or, you know, some other sort of obviously temporary thing goes wrong, but things are so momentum driven that everyone sort of figures, oh, everyone's going to sell because this bad thing has happened. So I'd better try and get ahead of the crowd. And then everyone else is thinking that sort of spirals downward. So, you know, I think that sort of idea about waiting is no longer the case. And an And also on the outthinking, you know, A, you know, you can get up to speed much more quickly than you can in the past on companies, thanks to, you know, artificial intelligence and chatbots.

And in theory, that should be, that should be making it more difficult to do good fundamental research because, you know, these tools are available to everyone. But in practice, I almost get the sense that because it's sort of become a commodity, people are just sort of ignoring it because they feel, well, what's the point if everyone else has the same access. And the focus instead seems to be on trying to find those sort of those small number of companies which are going to be the next sort of Nvidia or the next, you know, Google or or the next micron to take a more kind of current example. And, you know, of course, there will be a handful of companies if we were to speak in five or 10 years time, which will have been the sort of,

you know, the outsized winners. And I'm pretty sure that I won't have owned any of those. but there are an awful lot of companies which don't have the potential to be a huge winner, but will still provide very satisfactory returns in the next five or 10 years. And those are the companies I'm focused on. And those are the ones which I think paradoxically it's getting a little bit easier to buy. How difficult is it actually to maintain that kind of valuation discipline at a time like this? I mean, you see you see people like Terry Smith, right, who I interviewed on the podcast at one point, who has been much derided for suddenly embracing momentum and the like.

And, you know, I kind of, it's a quandary often wrestle with, right? Because as you pointed out in the past, the market changes. And so what's worked for the last 10 years is not necessarily going to work for the next 10 years. So you're kind of having to adapt. And then, you know, as the game changes and at the same time sort of decide, well, actually, you know, is the value of a company always going to be the sum of its discounted future cash flows? Is that like a law of physics that you can live by or has something fundamentally

changed? How do you think about that? Yeah, I mean, I think about things in a slightly different way. I'm not sort of trying to observe the market and derive what I think will work based of sort of an empirical observation and then sort of adjust accordingly. I work more from a kind of first principles basis. And that first principle is, I deeply believe that a company is worth the cash it's going to produce over its lifetime. Obviously, it's not easy to predict what that cash is going to be. And that's where it becomes more of an art than a science. But as a basic rule, I think that's about as close as a lot of physics as investing will ever come. So I think that is sort of the load star irrespective of whether people are into ESG or not into ESG or into gross

stocks or not intergross or whatever, all that stuff. I leave that to other people to kind of do their thing in that respect. So it seems like in some ways, you know, obviously you need this intellectual framework to be a successful long-time investor, but you also need a very good temperament. And at the same time, you kind of need an ecosystem that's going to support you. Yeah. Operating in this slightly counter cultural way. Can you talk a little bit about how you've set up your ecosystem, whether it's with the type of shareholders you have, having your family around, having your friends being part of a community, but not so much a part of the community that you get swept along by everyone else's use?

How do you set up an ecosystem that actually supports this kind of rational, long-term patient approach? Yeah, I think that really goes back to the environment you sort of work in. And as we talked about what seems like quite a long time ago towards the beginning of this conversation, you know, I sort of stumbled into it rather than really by design. You know, when I started working, I was working from home and it really brought it home to me. And, you know, after the Lehman crisis, I went to this conference. So it must have been around sort of January, February 2009, so really at the height of the crisis. And I noticed people were actually really going up the wall with sort of fear. I was sitting at this around this table over dinner with a bunch of other investors. And as is normally the case when a bunch of investors sit down together, normally you would sort of throw stock ideas back and forth. So I sort of threw out a few ideas. And then people just sort of stopped me in my tracks and said, you know, I'd not seen the memo that the world is sort of about to end. Why on earth do I want to talk stocks when, you know, we should be talking about sort of filling up the larder with food and, you know, preparing for sort of economic breakdown. So the reason I think I kept a cool head.

in that period. It wasn't because I have a particularly stronger constitution and other people. It was just, I just wasn't exposed to all of the kind of insanity out there. And, you know, today I'm not as sort of insulated as I probably was then as, you know, I have a larger network, I'm probably a little bit better known than than I was then. But fundamentally, it's sort of, it's still the same. You know, you could see where I'm doing this call now today. It's, you know, it's the office I have at the top of our house. Once this cool finishes, I'll be going to have dinner with my family. So, You know, no one's going to be, no one's going to be sort of beating me up this evening over whether I should be owning more momentum stocks or anything like that.

And, you know, and I think that's the kind of secret. You have to, you know, work from first principles as opposed to, you know, sort of an empirical observation on what's working. And you have to create an environment where you're not being permanently harried by people to do things differently or in a way that doesn't make sense to you. In a way, I think the greatest trial by FI you've had in your years is that manager has been in 2022 when the fund was down 47.6 percent and Carvano was down about 98 percent was big holding and people were saying it was going to go bankrupt and the like. And then on top

of it, you had this medical emergency that July. And I'd love to talk a bit about that, about, you know, if you could take us through what happened, but also give us a sense of what you learn from the experience because it was such a, it was such a sort of surreal experience. Yeah, it was a traumatic year in many respects. And initially it was a traumatic year from an investing perspective. So I always knew there would be years where there'd be a big drawdown. The fund started in the wake of the Lehman crisis. So I seen firsthand multiple times actually in my investing career, how sometimes markets go completely haywire. So I wasn't shocked that the fund went down 50%. But what I was shocked by, was that the market overall, it was a bad market, but it wasn't a terrible market. And that drawdown was largely, well, in large part due to missteps that I'd made. And that was a tough, that was tough to realize. I knew it wasn't entirely the reason. I knew some of the stocks was really just the market going a little bit sort of haywire. But in others, I knew I'd kind of messed up. So that made it,

you know, that was something I hadn't prepared mentally for. And that was something that I certainly didn't enjoy. But then in July of that year, I had a medical emergency where, you know, unfortunately, I broke down, started to throwing up blood, apologies for the gory details for the, for the listeners, and, you know, rushed into hospital and, you know, received that information nobody ever wants to hear that they found a sort of a tumor in your stomach. When I heard that, you know, I assumed it was sort of more or less game over. Now, thankfully, it turned out it was a tumor that whilst cancerous was very treatable, so happy to report, it was less serious than what I initially thought and I've made a full recovery since then. But nevertheless, for a period of a

week or so, I really did think it was game over. And intuitively, you would think, you know, oh my goodness, you know, not only having a bad year investing, and that comes on top, you know, the one crisis must have compounded the other. But actually the kind of the one crisis really, helped to put the other one in perspective, you know, when faced, you know, as important as investing is and as important as building a great track record as, you know, life and family and friendships are much more important. And so, you know, when faced with the prospect of losing those, it really sort of helped to put the kind of the disappointing business development into perspective. Do you think it's changed you in an enduring way?

No, I don't. And you might be surprised to hear that. But, you know, in that week where I did think it was game over and I had the chance to obviously reflect on things from the perspective of, you know, them coming to an end. I realized how deeply I, you know, obviously I, above all, loved my, love my family and friends, but I really deeply enjoyed investing, the companies I was investing in, you know, and I had in my mind an idea of how they were going to develop over the years. You know, case of Carvano, I thought the market was wrong. I thought it was a great company which had great, great, great things ahead of it. And the biggest sense was, was one of sadness that I wasn't going to see how that played out. So what I kind of realized during those days was that I was

sort of sort of like in the middle of a movie and actually really enjoyed that movie. And I was like, sad that I, you know, had to, had to leave the theater just when it was sort of getting interesting. So when I did get a sort of second lease of life, there were a few things that I changed, obviously, with maybe a greater consciousness that time is not infinite. There was certain annoying things I tried to get rid of in my life. But the broad strokes, I realized that I was actually really enjoying the movie I had the privilege to be the starring actor in and was hoping that I could sort of get on with playing my role as the star of the Rob Vinyl life, as opposed to that being sort of confined to the archives of. of Hollywood, you know, older movies, which were the actor has long since passed. What did you get rid of? Just silly things. I mean, you know, for example, you know, there, it's a very trivial

thing, but as you ask, you know, my email inbox would always be filled with hundreds of completely pointless emails at the beginning of every day. And it would take me about 10 minutes just to kind of delete them also, you know, 10 minutes of deleting pointless emails, you know, a few times that times 30 years. That's an awful lot of math. days or even man months that you lose. And so one thing I did was create all these filters in Gmail that most emails don't land in my inbox anymore. They get immediately poked into a into a folder. So, you know, it was silly things like that as opposed to a really big sort of radical changes in my life. I was quite happy with the big stuff. Did it change your perspective at all on

what relationships to go big on and which to kind of filter out? Because you have a big circle. I mean, it's very interesting because there is a part of you that's super independent and kind of a loner and another part that's really, really sociable. And I wonder how it sort of clarified your sense of who you wanted in your life, how social to be, how available to other people you should be. Yeah, funnily enough, I had a different reaction in that respect to what I read or hear from other people. So I think a lot of people after an experience like that say, okay, there's this sort of core of. family and core of friends, that's where I want to put all of my focus and everything else is a distraction. I want to sort of get rid of it. For me, that was not the reaction. Clearly, I value my family and my closest friends more than anything else. But what I found was also I really enjoy

actually some of these sort of looser connections, people that I perhaps only see once a year, but always enjoy it or, or sometimes just sort of, you know, like someone providing service, our gardener or whatever. I enjoy those friendships and those interactions as well. We always ask each other how everyone's doing it. It's probably not the deepest conversation in the world, but it's all part of the tapestry that makes life rich for me. And for me, the conclusion was also to, you know, not to go into a shell and just close off those sort of maybe more peripheral relationships, but also to lean into those as well because they also make life rich. It's interesting to me that such a central part of your life in a way is this annual meeting,

this gathering that you have every January in Engelberg in Switzerland where obviously all of your shareholders, the limited partners will come, but then also a couple of hundred other people will come up and the tickets sell out within seconds. Not that there's a sale price, but they just get up. Yeah, I was going to say sell out is a slight exaggeration when it costs zero, but I appreciate the sentiment. And I'm curious because you mentioned on your website even, you describe RV capital as a purpose-driven company. And you say it aims to make its investors, companies and fellow investment managers more successful by being a thoughtful and an engaged partner.

And you say RV hosts all three constituencies at its annual gathering. Why is this gathering that you've done now for more than a decade such a profoundly important thing to you? Yeah, so, you know, I do work on my own, or I did at least until Andreas joined, but we still work in separate offices. But I'm not, you know, sometimes people will perhaps assume I'm a sort of a hermit or, you know, a misanthrop. The opposite is really the case. I love friendships. I love interacting people. I love the close friends, but I also love some of the looser friends, as we just discussed. The reason I set things up the way I do is because I realize that I couldn't be successful as an investor if I was surrounded by a bunch of other people. I'm a strong character but not an alpha character. I describe myself as beta plus rather than alpha. So if I'm surrounded by a bunch of other people who've got very strong ideas at what should be in the portfolio, I would probably let them sort of overrule me. So to the extent I am a good investor, that would probably not be a particularly good outcome.

But at the same time, I do think it is valuable to have a wide network and especially when you're in more of that kind of sparring phase of either generating new ideas. or running existing ideas by people. So I have always had a very wide network and I am a very sociable person. And parallel to this, I wrote a memo about 15 years ago just providing advice to young investment managers

on how I set up RV Capital and some of the lessons I learned and some of the traps I think they should attempt to avoid. And because of that combination of writing that memo, which meant a lot of young folks started reaching out to me about advice on starting a fund plus the wider network as a whole. What I found 15 odd years ago was I was sort of getting almost overwhelmed by the amount of people reaching out to me, you know, wanting to

meet and hear my story and, you know, talk and get advice and all this kind of stuff. And so a good friend of mine, Michael Beagle, gave me some advice at that time, you know, why don't you just do a meeting and get everyone together in one place? And, you know, it was incredible advice because, you know, I love the meeting. It's become a great event in our family. family calendar, all the family participate, as we don't have a whole lot of employees, as you probably gathered at this point. And, you know, I love meeting with people. I get to tell my story once rather than individually to everyone. But more importantly, I think the connections people make there are probably more valuable than whatever they hear from me.

So it really has become, or really is, I think, a win-win type event where, you know, the people that go there are just incredibly passionate about it. And there's an amazing energy about about the event and yeah, I wouldn't miss it for the world. It's also lovely that you make it available on YouTube. So you have quite a lot of group here who you don't even know personally. I think you are just quietly learning from you. So there's a there's a generosity of spirit, I think, that infuses it. But I think also what really strikes me, I really enjoyed watching the videos because

I think if people watch them, there's a kindness that you exude and there's a sort of, you know, you're very inclusive, you're very humble in the way that you take the questions and sort of open, but very inclusive when people ask a stupid question, you sort of say, you know, I'm probably not understanding this correctly. You know, there's a, there's a real generosity of spirit that infuses the whole thing. It's lovely to what. Well, I appreciate you saying that. You know, I think part part of the reason that is the case is I've always viewed investing as a, as a journey of trying to learn. And, you know, that might sound like a, you know, someone, it might sound like a bit of a cliche, but if you think about, you know, the first five or six years, I wasn't

managing an external fund. I wasn't managing external money. I was managing the little amount of savings I had and doing my absolute best to, you know, to find good investments and avoid bad ones. And in that kind of situation, why on earth would you not want to learn? It's like, you know, there was absolutely zero ego at that point. If I thought I'd made a mistake, I wanted to hear it immediately, not, you know, a month later after I, you know, lost money on it. And And, you know, so that sort of spirit very much is carried forward to today. And I don't think it's because I'm a particularly or an unusually humbled person or anything like that. It's simply because the spirit the fund is run at is just trying to learn and avoid doing dumb stuff.

And so I'm just really acting in my own best interest. When you looked back over the last few days as you started to jot down notes for your upcoming letter that you're right about what you've learned over the last 20 years since you're, now coming up to that anniversary or just past that anniversary since you you founded the company in 2006. Is there any particular lesson that has sort of hit you with some force that we haven't discussed that you'd like to give a sneak preview here? Oh, you put a lot of pressure on me now. Be profound right now, Rob. No, to the extent it exists, maybe I'll, if you don't mind, hold it back for the 20-year letter.

really all right so you're playing hard to get i mean it's interesting to me that you know in terms of your own trajectory right this has been a journey of discovery of you as you've described it and you're now i think 53 right and so you've come a long way since those early days that we we started off by discussing you know when you were in this sort of small town on the coast of england when you look forward you know to the next hopefully 20 years of the fund or the next 20 years of the fund. What's your sense of what the vision is now for the future? Because you've never really been maximizing for assets under management. That wasn't your measure of success. You wanted independence. You wanted to be wealthy. You got wealthy.

You got independent. You're following all of these entrepreneurs and managers who make their business, their life's work. And this sort of is your life's work in many ways. How does that apply to you? How do you see your life's work and the future of it and what it is you're trying to build and create? Yeah, I mean, I view it in sort of two ways, the sort of the performance side and, you know, what it may be term more the purpose side. And, you know, from a performance perspective, I feel like I'm in an incredibly privileged seat. I'm sort of reminded of, I think, the early Olympics, you know, a century ago and, you know, the person that won, you know, the 100 meter dash or whatever it was called then, probably won not because they were particularly fast,

but because 99.999% of the population, you know, weren't financially in a situation where they could be an amateur and, you know, train for athletics and that kind of stuff. So, you know, they won more because of the position they're in as opposed to their ability without wanting to take anything away from their achievements. You can only beat what's in front of you. But I do see a strong analogy to the situation I'm in today where, you know, how many people get to run, you know, a fund of my size and, you know, have an opportunity to put down a long-term track record. It's maybe hundreds, but it's probably not thousands. So, you know, to the extent, you know, I'm given this opportunity to put together something really exceptional. I'm sort of

conscious that it's an incredible privilege and, you know, I don't want to blow it. You know, that would be the part on the sort of the, I would say, the performance side of things. But then there's a sort of the purpose side of things. And what I've realized is there's this sort of incredible opportunity to help people. And that's what kind of, you know, makes it, I would say, more meaningful. Because if it was just about, you know, being the one with the best performance, that would be a very sort of egotistical sort of thing of, oh, look how great I am and how much better I am and everybody else. And, you know, that's definitely not the way I want to live my life. And, you know, where I see the purpose is, you know, the three constituencies I

mentioned on the website, you know, I have a lot of young people that reach out to me that want to, you know, want to become investment managers. I love helping them and giving some pointers on the way to go down. I have a lot of investors who, you know, unlike you, William, you know, lots of great investors. If you weren't invested with, with me or Josh or anybody else, you would have 10 other good options. For most people, that isn't the case. If they weren't with me, they would be in the clutches of some private banker trying to sell them structured projects, products. And so what I love about the relationships, especially with my less sophisticated investors, is not only have they had a great performance, but they've also had peace of mind that their money

is sort of working for them and they're not going to sort of wake up one day and find that, you know, all of their money has landed in the bonus of some private banker. And, you know, the third, the constituency is the companies. I don't want to overstate. my influence of the companies. I'm certainly not an activist, but what I do, what I do, what I would view myself as a fan and I'm a fan of the way they, they do things, which obviously I consider to be the right way of doing things. Otherwise, I wouldn't be invested. And, you know, so I actively encourage them to stay the way they are, to continue doing things the way they do. And, you know, I like to think that on the margins, that also, you know, moves them in the right direction.

And Rob, one final question. I know you've thought a lot about this question of how not to let the money bend your kids out of shape. You have, I think, two daughters and a slightly younger son. And I know this is something you discussed with Charlie Munger at one point. And my sense is that you didn't really agree with Charlie's perception, Charles' view of this. Can you just talk a little bit about what he said when you had dinner with him about the issue of money and children and how you think of it yourself.

Yeah, well, actually it wasn't at the dinner. I think it was at the shareholder meeting, so I'd encourage people to look up the clip as I think it's online now, but there's this sort of, you know, Indian gentleman who sort of stands up, you know, in front of 20,000 people

and in Berkshire Hathaway and sort of explains how, you know, when he came to the US, he had nothing and, you know, study during the day and then clean dishes in the evening. And then he does the spirit of the story. And then, you know,

he sort of managed to get enough money together to start a company and the company became successful. And now, you know, he's this, you know, wealthy, wealthy entrepreneur. And then the question, you know, how do I instill the same hunger I had in my kids? And that's sort of the audience collectively holds its breath. You know, this is an impossible question. What possible wisdom can Charlie have to share? And then it's classically deadpan where Charlie says, you're just going to have to learn to fail gracefully.

That's great. And what are you planning to do? How do you not screw up your kid? Well, my post script to that story is, you know, well, let's see how my kids turn out. It's still a little bit early for that. But what I have observed at other families is that you can have a, you can be in a very wealthy family and still have incredibly driven and balanced kids. And, you know, the two examples I would draw to to that, you know, only Garcia at Carvana,

his family was already, you know, very, very wealthy before he set up Carvana. And, you know, as we discussed, you couldn't imagine a more driven person than him. And then also I've had the privilege to meet Will Lundeene, the Lundee family. It's an under-radar family, one of the wealthiest in the world. They have lots of publicly listed holdings. So it's a secret hiding in plain sight in various commodity and energy companies around the world. And yet Will too, he's a younger guy, probably early 30s. But you couldn't imagine a more humble, but at the same time a more driven person.

So I dearly love Charlie, but I would respectfully disagree. with his assessment that you have to fail gracefully. Ah, on that note, Rob, it's been such a great pleasure. And I have to apologize also because I mispronounced your surname at the very start. And so as I said to you before we started, I always leave in my mistakes and haplessness displays of haplessness. But I should have said, Rob vinyl, not for now, right? Yes, but you're entirely forgiven. Ever since I've lived in Germany,

I tended to pronounce it myself, Vinal, as it's much easier phonetically for people to understand it here. But yeah, the correct pronunciation is vital. So thank you for that. All right. Well, it's been a great pleasure. And one of these days, I hope to convince you guys to let me into your annual meeting. It sounds like great fun. But come see me in New York.

It would be lovely, lovely to chat soon. You're very, very welcome. All right. Take care. Great pleasure. Okay. Thank you really. Bye-bye.

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