We Study Billionaires - The Investor’s Podcast Network - TIP 039 : The Great Minds of Investing Part II (Investing Podcast)

Starting point is 00:00:00 We study billionaires, and this is episode 39 of The Investors Podcast. Broadcasting from Bel Air, Maryland. This is the Investors Podcast. They'll read the books and summarize the lessons. They'll test the waters and tell you when it's cold. They'll give you actionable investing strategies. Your host, Preston Pish, and Sting Broderson. Hey, how's everybody doing out there?

Starting point is 00:00:30 This is Preston Pish, and I'm your host for the Investors podcast. And as usual, I'm accompanied by my co-host, Stig Broderson, out in Denmark. And this is our second part interview with William Green. So what we're going to do is we're just going to transition to the recording that we have for the second part. So both Presby and I, we are big fans of Monish. And he's really someone that we've been looking into. You know, he's kind of a private person, I'd say. I don't know what your impression is, but at least what the impression that we have.

Starting point is 00:00:57 but I would actually like to hear if you can give us any background information of Monash. I mean, he's obviously a smart guy. He's having 26% annually for 19 years, and soon he's going to launch his new company that's been listed here in the fall. That is at least what the rumors are saying. But could you give us any background information on Monish? Yeah, Monash is absolutely fascinating. I flew to Irvine, California, to meet Monish

Starting point is 00:01:24 and spent the best part of six hours interviewing. him. And I would say for the next couple of days, I was kind of buzzing, you know, because he's so, he's so large than life and so full of personality. He has such a brilliant mind that you kind of, you're almost on a high after talking to him. And one of the things that's really fascinating about Monash is that basically he started out as a tech guy, right? He started engineering, and he took a class at Clemson College. He was an immigrant. from India and he took a class at Clemson College, not a very well-known university, and in finance, and he said he just thought the finance students were idiots. And he said none of them would be

Starting point is 00:02:08 able to cope with his electrical engineering class. And so he totally dismissed the idea of an investing career. And his finance professor saw his grades and just, he was so off the chart, so he came taught by such a wide margin that his finance professor said, you know, no, you ought to become an investor. And Monich dismisses this, sets up a tech company. which ultimately he sold for about $6 million. And along the way, I think this is in about 1994, he reads about Buffett, really because he'd been in, I think Monash had been in an airport,

Starting point is 00:02:42 and he stumbles across a book by Peter Lynch, reads Peter Lynch talking about Buffett, starts to study Buffett, and starts to think, well, wait a second, how did this guy accumulate money at such high rates of return. And so he starts to sort of reverse engineer what Buffett did. And he said, basically, I figured out that the Buffett was laying down the laws of the investing universe. And so what's fascinating about Monash is that he has this idea that you really don't need any original

Starting point is 00:03:14 ideas in life at all to do brilliantly. And so Monash describes themselves as shameless copycat. And so he just dissects what Buffett does and later what Munger does. And he launches a 30-year game to turn $1 million into $1 billion by compounding 26% a year. And so what's fascinating to me is this idea that you can kind of reverse engineer the great minds and figure out, how do I apply this to my own life? And Monish has done this in this sort of maniacally focused way in every area of his life. So the structure of his fund is based on the limited. partnerships that Buffett had in the 1950s. So you have an annual hurdle where you have to make

Starting point is 00:04:03 6%, I think, and after the 6%, you just get 25% of all of the profits, and there's no management fee, no annual management fee. So if you do really, really well in your investment returns, you make an enormous profit as the money manager. But if you're a bad investor, you make nothing. And so it's a really nice alignment between the interests of the shareholder and the interest of the fund manager. And likewise, he looks at the degree of concentration in a small number of holdings that people like Buffett had. And he's like, yeah, I'm going to do that. Why would I want a portfolio of a hundred stocks? If I have a hundred stocks, there's no way I'm going to beat the market, because I'm going to really be matching the market. I'm just going to be a closet

Starting point is 00:04:44 indexer. So I think what's really fascinating about Monash is this very important fundamental idea of how you rip off other people's great ideas. And what Monish said to me is that we have this kind of obsession with being original thinkers. We all kind of feel like there's something almost holy and righteous about having our own ideas. And he's like, look, I have no shame at all about going through the portfolios of someone like Bill Miller or David Einhorn or Buffett and saying, why is this terrible company in this guy's portfolio?

Starting point is 00:05:21 and he said if you look at someone like Miller's portfolio, when you know that Miller's really smart and he's made an incredibly dumb bet on airlines, you've got to say, why the hell has he invested in airlines? He's got to have seen something that I haven't seen. And so part of what he does is to look for things that we know are terrible. Like Buffett and Munger had always said that airline stocks are terrible.

Starting point is 00:05:45 And here's Miller saying, you know, they're wrong. And I'm making a massive bet on airlines. And Miller, of course, made a fortune in a lot. few years betting on airlines. And so to me there's something very, very profound about this idea of copying and mimicking other people's best ideas. And so when I left Monash, part of what I was excited about was this idea of so how do I apply this to my own life? You know, and so when I, so one of the things that I did, which, you know, maybe I shouldn't say, but I thought, you know what, there's a certain poetic beauty and cloning the cloner.

Starting point is 00:06:20 And so I went off and bought one of the stocks that Monash's portfolio. You can see his 13F filings. And so I thought, well, that's really interesting. He's got 47% of his money and just two stocks. I'd be pretty smart to own one or two of his stocks. So I kind of cloned the cloner. I copied the copycat, which gave me sort of, it gave me sort of poetic pleasure.

Starting point is 00:06:43 But then I started also. to think, what do I learn from all of these people? If I apply this idea of copying the great ideas, what do I learn from, say, spending time with Tom Gaynor, who runs the Markle Corporation, or John Spears, who's a well-known value investor at Tweedy Brown? And, you know, you start to look at these questions like how they give away money, for example.

Starting point is 00:07:10 And you think, well, that's really interesting, because when I interview all of these great investors, the happiest ones seem to be more philanthropic. And maybe it's an absurd generalization, but I think actually to some degree it's really true. So I think you can apply this idea of reverse engineering and copying great ideas really in any area of your life. And it's a very, very powerful concept.

Starting point is 00:07:32 So whenever I see something about Monash, I don't have the same connection as you, so I had to watch him on YouTube. It's still pretty good there, right? But I always get the impression that he's very authentic. Like he would be saying, I really like to take a nap every day. So he has this couch where he can take a nap. And he's saying, I don't think I'm the,

Starting point is 00:07:55 I don't have the same brilliant mind as a lot of other billionaires. So I would just copy what they do. I mean, he's really, to me, he seems like the most powerful thing about Monash is that he's so authentic about what he can and can't do. Do you agree with that? That's a very perceptive observation on your part. I think part of the strength of Monish and also of Guy Speer, who's very, very close to Monich, so there's a sort of mind meld going on there.

Starting point is 00:08:25 They've discussed a lot of these ideas. Part of the strength comes from the fact that they're true to who they are. And I think it seems kind of paradoxical, right? This idea that you're cloning and copying other people's ideas, and yet you're having to be true to who you are. And I It's it's a nuance but it's an important nuance to understand that at some very deep level Monish believes that you need to be you need to be correctly aligned within yourself And so you need you he believes you know if you're a sociopath you need to be true true to

Starting point is 00:08:58 Your inner sociopaths which guy disagrees with guy Guy guy guy who's kind of a ball by that idea But but you know Monish Monish said to me that you know he wasn't a great CEO. He didn't really like to nurture young talent. And when he was running a tech company, you know, obviously he has a brilliant mind and he could do it very well.

Starting point is 00:09:20 But it didn't really play to his strengths. Whereas being a hedge fund manager, he's the consumer game player. You know, he has no emotion. He's totally brilliant at the sort of mathematical probabilistic side of it. So figuring out how to be true to who you are, how to play to your own strengths, I think is absolutely central to the brilliance of someone like Monage. So it sounds to me like his new holding company that he's getting ready to start. He's probably not going to be the CEO of it.

Starting point is 00:09:51 He'll probably just be the investment officer or something. Is he going to outsource or is he going to hire somebody to fill that role since he doesn't enjoy that piece of it? I think it's an interesting question. I think a big part of what you do in running a business like that, which will clearly be replicating what, what Buffett has done with Berkshire is you're allocating capital. And I think Monich is extraordinarily well suited to that. But I think I think he's trying to stretch. You know, he's not,

Starting point is 00:10:21 he's not comfortable just doing what he's always done. And so he realizes that there's this tremendous strength in having an insurance business because you, you know, as Buffett figured out, you get the float, right? You get the premiums from your insurance customers, but you don't have to pay out for quite a while on their claims. And so you get to invest that money. So it gives you a tremendous structural advantage.

Starting point is 00:10:45 So because he's a great game player, you know, he's stacking the deck in his favor by having captive capital investors who can't bail out at the worst possible moment and by having this ability to invest the float. So I think that trumps the fact that he's not someone who, you know, loves nurturing 22-year-old employees who are going through emotional crises. You know, I think it's, you know, the bigger picture is that it plays tremendously to his strengths. So, you know, Guy is very intrigued by the possibility that Monash could turn out sort of to be the Buffet of our generation. I'm not sure anyone can turn out to be the Buffet of our generation.

Starting point is 00:11:26 But I think, you know, Monish really stands out as an extraordinary middle-aged investor, I guess is about 50 now. Bill Ackman stands out as someone who's a very extreme. extraordinary. The book is sort of full of these very great older, older investors. You know, some of them in their 60s, 70s, 80s, and then Irving Khan at 108. But I think there's this newer generation of people like Akhmann and Monich, who are also pretty remarkable. So I got a question that wasn't on the questions that we plan on asking. And I've been studying Ray Dalio a lot. And I know that he wasn't in your book, but I'm curious to know your thoughts on Ray because whenever I look at somebody that could potentially

Starting point is 00:12:10 replace Buffett as far as being an investing genius for the years to come in the next 10 to 20 years, I think Ray Dalio could potentially be one of those guys. I find it very interesting that Dalio is a macro guy and he's also a hedge fund manager so he didn't take the same model that Buffett had, but yet his returns are just phenomenal. So I was curious if you knew anything about Ray Dalio or just from being in this circle. I think Dalio is a fascinating man, I actually have an interview, Dallio, but I've read a great deal about him as you have. And he's clearly fascinating. I mean, a real iconoclast as well, you know, this whole idea that he has of radical

Starting point is 00:12:49 truthfulness, you know, that people in his office have to tell each other the truth. They have to be direct. They can't talk behind one another's backs. I think if you talk behind people's backs, you know, it's three strikes and you're out. You're literally fired. It's something like that. I mean, you know, it can sound. kind of like a crazy cult-like place where they sort of, they record your conversations and

Starting point is 00:13:11 everything. But I think actually at some level, he's dealing with the same ideas that people like Monash are dealing with, that you want total truthfulness. And, you know, I think he's also, he's also fascinating in this idea that he tests his hypotheses by getting other people to challenge his ideas. And so there's this sense that you don't really want to be an investor who just says, yeah, I know best. You need, you need people to come in and say, this is why you're wrong. And I think it's a fascinating aspect of value investing, right, is to be simultaneously to have this tremendous self-confidence to go against the crowd, but also to be humble enough and open enough to think, what if I'm wrong? And I think Dalio embodies that.

Starting point is 00:13:59 Nigrin, Bill Nigran told me a fascinating thing that he'd learned from Michael Steinhard, who he was friendly with, who also. There's another great hedge fund manager who's totally different from the type of money managers we're talking about. You know, Steinhart had amazing returns by trading, you know, he could turn over his whole portfolio in a couple of weeks, as I understand it. But Steinhart also had this idea that Nygrin learned from him that you needed to do devil's advocate reviews. And so there was this idea of devil's advocate reviews where you got the biggest bear and the biggest bull on a particular stock to come in and have lunch with you. and Nygren adopted this from Steinhart and any time he's about to buy a stock

Starting point is 00:14:39 he has someone on his staff literally doing a devil's advocate review saying here's why you're done, here's what can go wrong. So I think Dalio and a lot of these others embody that very powerful idea. I love that too. And William, I can't help by comparing Dalio and Moniz also because this is something Preston

Starting point is 00:14:59 I have really been digging into because the thing about Delio is he has this culture in this company. He has a lot of people around him that can tell him when he's wrong. But it's a much larger setup than someone like Monez, for instance. Like he basically doesn't have a set of, well, he has a secretary, but he doesn't have a team analyst. A part-time secretary, I think he has about two or three part-time secretaries.

Starting point is 00:15:24 Yeah, because, you know, he's been asked this. And again, William, I don't have your connections. Or it's not like my good friend, Haramachandra, has said next to him. I'm so enuous at the annual meeting this year, you know, I have to watch him on YouTube. But one of the things he did say on YouTube was that he didn't want to keep around him. I mean, he tried that. And that didn't work because there was too much noise. It's really hard to say no to someone who says, this is the analysis I spent three months on working on.

Starting point is 00:15:53 He would say, I don't think so. I don't feel it. And like a better words. So do you think it's like it's a question of having the best setup or again, do you think it's to inspect you who do you are as a as a person what's what fits you yeah i think it's a very profound and important point you you need to find a setup that's true to who you are so you know if if you know look if i if i if i'm investing i don't think even even though i'm quite contrarian and i'm quite good at buying stocks when other people are panicking i don't think i really have the patience

Starting point is 00:16:28 to um spend all my time doing spreadsheets and you know, I just don't want to do all the number related stuff. So I need to be self-aware enough to say, that's never going to be my strength. But I need to invest with someone like Guy or Monash who can do that stuff for me. And I think for each of us as an investor, knowing yourself is incredibly important. And so Monish has these sort of antisocial tendencies where he tells the truth. he doesn't couch anything in soft words. I mean, he's a very charming, very likable guy.

Starting point is 00:17:04 I smile as I talk about Monash because I like him very much. He's very large than life character. But, you know, he's rude and brash in a kind of very enjoyable, entertaining way. And he's not necessarily a team player. He's a brilliant game player who can sit there quietly in his room, in his office in Irvine, which is not in a fancy building. It's in a, you know, it's basically in an industrial park. He doesn't need to impress anyone with, with,

Starting point is 00:17:28 with how rich he is or how fancy it is. He's created his own setup where he's detached from the world. He's detached from Wall Street. And he's thinking very clearly. Guy Speer has done the same thing. He figured out that when he was in New York, it messed with his head. Because he's friends with people like Bill Ackman, who were managing billions of dollars and becoming multi-billionaires.

Starting point is 00:17:51 And there were all of these marketers around who were saying, you know, I think you should really be running a $5 billion fund. and it's very, very hard to be true to who you are. And so Guy figured out he needed to go to Zurich and be very quiet, very detached from the crowd. Guy has sort of, you know, this wandering mind where his mind is sort of all over the place because, you know, he's got a brilliant, brilliant intellect, but his mind is all over the place. And so he figured out, I need to create an environment where my mind can be like a calm pond, where I can really think.

Starting point is 00:18:23 And so I think for each of us as investors, you really have to say, think about your environment very, very carefully. And that includes who you work with, who you hang out with, how you set up your office. You know, we would, we had this discussion, um, Guy and I often about, you know, whether, whether you should have your Bloomberg terminal there, you know, whether, whether your Bloomberg helps you or not, or, you know, having, having this fire hose of information coming at you can be a tremendous benefit to some investors. know, who need to trade every three seconds or whatever. But for someone like Monish, who's investing for, you know, five years in a stock that's beaten down and he's hoping to quadruple or quintuple his money, why does he care what's happening in the next 10 seconds?

Starting point is 00:19:13 And so I think figuring out who you are and what works for you is a very profoundly important aspect of investing. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo Freedom Forum is entering its 18th year, bringing together activists, technologists, journalists, investors, and builders from all over the world. many of them operating on the front lines of history. This is where you hear firsthand stories from people using Bitcoin to survive currency collapse, using AI to expose human rights abuses, and building technology under censorship and authoritarian pressures. These aren't abstract ideas. These are tools real people are using right now.

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Starting point is 00:23:32 Back to the show. So, William, we're big fans of Joel Greenblatt as well. And I know you've talked about him a little bit earlier. But I'm real curious to know if he has something new. What's really got his attention these days whenever you were interviewing? And for people out there, Joel Greenblatt has this magic formula. He's written two books, two fantastic books about more of a systematic way to invest like Warren Buffett. But I'm real curious to know what has his interest more recently.

Starting point is 00:24:04 You know, Joel is a really fascinating character because, you know, this goes back to the point that Bill Nygrim was making, that you need to be fully focused to be a great investor. Joel is kind of an aberration in that he has this tremendous mind that goes in mind. multiple different directions. And so if you look at Joel's career, he's had three or four different ways of investing over the years. You know, he started off as a focused investor, a very concentrated portfolio. Later he came up with this magic formula, which grew out of a, I think it was something like a $35 million research project that he and his partner funded, where they were trying

Starting point is 00:24:44 to figure out how do you systematize the way that we've been investing all these years of Gotham Capital. which is his hedge fund firm. And he came up with a couple of very simple measures such as high return on capital that sort of encapsulated what Buffett does and what Ben Graham did. So then he writes a book that sells more than 300,000 copies.

Starting point is 00:25:12 He's written multiple books. He's a superb writer. He's been a philanthropist in a really interesting way. So he's been an absolutely fundamentalist. kind of driving force in the charter school movement in New York. And he's, you know, he's, he's done all of these different things. So he kind of, and at the same time, he's been a professor at Columbia at business school for something like 19 years where I don't think he gets paid.

Starting point is 00:25:38 I think he does it just because he likes to, he likes to feel that he's passing on his knowledge to the next generation. And so, you know, he starts his class basically by saying, you know, this is not about the money. And if all it's going to be is about the money, you're going to have kind of a meaningless life. So you need to share the proceeds of what you make. And so he's a very, very multifaceted individual. The thing that I think is really fascinating, at least to me, is the kind of common denominator

Starting point is 00:26:05 in his approach to all of these different things, whether it's education, philanthropy, investing, writing. He's trying to figure out how you beat the system in a kind of replicable way. So this idea that there are ways of doing things better if you use your mind to solve the puzzle. And so he started off, as we mentioned before, at Wharton, where his professors insisted that markets were efficient. So then he spent much of his life figuring out, no, if I invest the way Buffett and Graham talk about, then I can prove that the market's not efficient. So that's one way in which he beat the system. Then he creates this new set of funds in 2012 that I was mentioning before with the 300 long, 300 short stocks, where it's again, it's a way of removing emotion from the process so that you systematize your investments so that your shareholders are less likely to sabotage themselves by becoming very emotional.

Starting point is 00:27:08 So then he's done a similar thing with education. He funded these charter schools that educate very underprivileged kids in different. areas of New York City. And he was trying to figure out how, once again, you beat the system by providing tremendous education to these kids with limited resources. And so I would say that in all of these areas of his life, he's looking for these replicable, systematic approaches to winning the game. So I think he's a really fascinating case. He's got this kind of relentless curiosity and intelligence to him. And it was interesting to me when he came into our meeting, I was sort of reading a book and because he was a little bit late. And he's immediately asked me, so what is the

Starting point is 00:27:53 book? What's it about? What do you learn from it? And I'd say a lot of the great investors were sort of inside their own heads. You know, they would talk. And he was very, very engaged with me. It's like he's trying to figure out, what can I learn from this? And so there's a kind of hungreness to his intellect, which I think is part of his brilliance. So it's really interesting the way that you described that because one of the things that Charlie Munger says whenever he's talking about Buffett is that Buffett is a total learning machine. And he says that that's his greatest quality. That's the thing that has made him his, it's really his essence. And you're really kind of describing the exact same thing as the way you were describing this with Joel

Starting point is 00:28:36 Greenblatt, where he's just, he's trying to find a complex problem, whether it's education or investing or whatever it is. He finds these complex problems. He tries to figure out how he can re-engineer some type of process that makes it more efficient and then not only does he figure that out but then he shares it with all these people and I think that's the part of it that I like the most

Starting point is 00:28:58 is that he's teaching the students for free he's putting all this stuff I know he has an online form and community I mean it's just totally amazing it's awesome I think for a lot of these guys they're not ultimately motivated by the money and I think they start off

Starting point is 00:29:14 very motivated by the money you know they think, you know, well, give me tremendous independence and maybe they want the toys and bibles that you get from money and the prestige and stuff. And then I think gradually, for a lot of them, the money becomes kind of uninteresting. And so I think for someone like Greenblatt, it's really about solving the puzzle. That's the thrill. It's how do I use my brain to figure out a better way to do this? And so I would say that for him, part of the pleasure of being a great investor is proving his professors at Wharton wrong again and again. So it's like not only did he do it with the concentrated portfolio hedge fund that he ran early in his career, but then he's done it about

Starting point is 00:29:57 three other times. And he even came up with a better way of indexing. And so there's a, there's a kind of restless brilliance to his intellect that I think you see with Charlie Munger, where Munger is, you know, Munger will not only give away money to, you know, Stanford, but he'll say, no, I want to design the dorms as well. Or he'll not only get a catamaran, but he'll say, I'm going to design the catamaran. And so I think some of these guys are very narrow, and some of them are intellectually kind of voracious.

Starting point is 00:30:30 And the ones that interest me most are the ones who are intellectually voracious. So Munga has an incredible mind. I think Bill Miller has a really wonderful mind. And Miller is a great investor, but Miller's background is nothing like the sort of narrow background that a lot of these investors have. You know, a lot of them have have MBAs and went to, you know,

Starting point is 00:30:52 Columbia and Harvard and Stanford and Yale and stuff. Miller was studying philosophy at Johns Hopkins University and then went into military intelligence. And he is a total learning machine. You know, he's applied, he's applied lessons from, you know,

Starting point is 00:31:07 the Santa Fe Institute, chaos theory, all of these different things. And I, one of the reasons why I find him such a riveting character is that is that his brain is so alive. You know, he's constantly learning. And it was fascinating to me that when we were talking about the financial crisis,

Starting point is 00:31:24 you know, where he really got hit badly and was really going through the ringer, I was asking him, I was asking him, how did you deal with it emotionally? And what he was reading during the financial crisis was Seneca and Epictetus, and a book that Admiral, Vice Admiral Stockdale had written about being tortured as a POW during the Vietnam War. And so for Miller, there's this sense in which philosophy is very much alive, and it's something that you use to inform the way you invest to help you handle adversity, but also really to teach you how to analyze difficult situations. So he was always obsessed with people like Wittgenstein, William James, and it was one of the reasons why he made a fortune of Amazon, because he was fascinated by this idea of how people misperceive reality, which is something he'd learn. from William James, who is a psychology professor at Harvard, and from Wittgenstein.

Starting point is 00:32:21 So I think these people who, as manga would put it, have multiple mental models can have a tremendous advantage. So when reading your book, all of these 33 different characters that has very different personal traits, but still a lot of them had this philanthropic trait. So, and especially Mason Hawkins, he was someone that really impressed me. Could you tell me about your interview with him and specifically about the override culture he's talking about as his fund? Mason Hawkins is really interesting because he had a meeting early in his career with Sir John Templeton, who became a kind of friend and mentor to him. And Templeton emphasized to Mason that you, you know, if you're really just doing this for yourself,

Starting point is 00:33:09 it's of pretty limited usefulness. You know, if the goal basically is to buy yourself fancy planes and stuff like that, you really are you really having much of a life or making much of a contribution? And Mason Hawkins took this very much to heart. And he made philanthropy and this idea of sharing wealth, part of the corporate DNA of his firm, which is Southeastan asset management. And one of the things that was intriguing to me was when he was talking about who he hires at Southeastern, he said that one of the six or so main criteria is that the people should be generous.

Starting point is 00:33:45 And he said, unless you're willing to share your excess wealth, it's unlikely that you're actually going to be that successful as an investor because he said at a certain point, your passion is going to wane, your discipline, your drive is probably going to wane. And so to him it seems absolutely integral, this idea that you're making money not just for yourself, but so that you can do stuff philanthropically. And I think that's a really profound idea. You know, for a lot of these guys, we look at them and we kind of idolize them because they're rich and they're on the covers of Forbes and Fortune and Business Week and the like. But at the end of the day, you know, what have they really done?

Starting point is 00:34:24 Like, will we look at them because they were multi-billionaires when they were dead? Or will we admire them because they did extraordinary things philanthropically? You know, I think that that's such a strong point to really get through on this. interview. I know from my own, my own self, whenever I was just researching different people that have had large financial success, you look at Rockefeller. One of his biggest things that he talks about, and he pretty much goes down in the books as being the wealthiest person of all time. One of his biggest things was 10% tithing. He absolutely believed that he had to give away at least 10% of whatever it was that he was making. You saw the same thing with Carnegie.

Starting point is 00:35:03 In fact, between Rockefeller and Carnegie, they had this race, this filibular. This filibular. This philanthropic race. You look at Buffett. You look at Dahlia. You look at all these guys. And they are just giving away. Look at Bill Gates. I mean, the foundation that he said, him and his wife have set up is just amazing. And I think all these guys that are just really at the top, the guys that are really, you know, the true professionals in this field, they are enormous givers. And I think that that's just so important to highlight to people as they're trying to make their own contributions in life. I think it's a very profound and important idea. And I, I would say, say it works on a number of levels being generous.

Starting point is 00:35:41 You know, there's this, you know, we were talking before about a guy and Ken Schuvenstein discussing this idea of compounding goodwill. I think it works in a pragmatic way that if you're kinder and you're more sharing and you're more decent, you end up with better relationships. You have a better life. And so one of the things that was fascinating to me in the book is there are, there are certain people you look at who are just enormously rich and enormously good investment. and you're sort of awed by them initially.

Starting point is 00:36:12 And then there are people you look at who are really successful human beings. And you look at them and you think, wow, this is a guy I really, really admire. And with some of them, maybe it gets back to the point we're making before about intuition, as well as rational analysis. When you're sitting with someone and you're kind of looking in their eyes, you can sort of see, is there a glow there? Is this person alive? How happy are they?

Starting point is 00:36:35 And I would say there were several people who seemed totally alive and totally vibrant, had this kind of glow to them. And on the whole, they tended to be the people who were more generous, more philanthropic, kinder, more focused on their families. And I'm not trying to be sort of moralistic about this, you know, but it works. I mean, you look at people like Tom Gaynor or John Smith. These are very, very decent people. and there's a there's a sort of kindness to them.

Starting point is 00:37:08 And without wanting to get sort of mawkish or sentimental, you look in their eyes and they feel very alive. There's a kind of warmth to them and a humility to them. And so I think, you know, I had this discussion with my daughter where she said to me, of these two guys, who's more successful? One of them was Marty Whitman. And I said, well, you know, Marty Whitman came from nothing. and had nothing during, you know, during the 1920s.

Starting point is 00:37:38 You know, he was worried about buying a pretzel for one cent during the 1920s, you know. He really had nothing. And now he has all of these scholarships for underprivileged kids in really difficult neighborhoods. He does it in the Palestinian territories. He's done it for underprivileged African American kids. And so is he more successful or less successful than somebody who's worth $10 billion? I would argue that probably he's more successful. Yeah.

Starting point is 00:38:08 You look at Tony Robbins. I think he's a perfect example. And the thing that I really like about these people in the way that they're giving, Tony Robbins went through this experience in his life where he wasn't able to even pay for a meal. And there was this person that came up and paid for a meal for him. And now he's on this rampage where he's feeding the stick. Do you remember the number? How many people he feeds in a year with free meals?

Starting point is 00:38:31 I would say 50 million. Yeah, it's like 50 million mills a year, is how many mills he's paying. And so what I really like is how these people had such a negative experience early on in their life. And it shaped them and just transformed them. And they remember that. But then when they go back and then they use that negative experience to basically come full circle. And they just bring so much beauty into life with the way that they contribute using Tony Robbins as an example. And I think so many other people have similar.

Starting point is 00:39:02 similar experiences, maybe they weren't educated early on and then they found a way to contribute later on. And it's just, it's really neat to see that come full circle with some of these different people. But go ahead, Stig. Yeah, so William, I was thinking about Fentenberg. Yeah, so William, I was thinking about Fentenberg because he truly had a very, very difficult beginning, probably also compared to a lot of the other people that you have in your book. Could you perhaps tell us about his story and your experience interviewing him? Yeah, Arnold Vandenberg is a perfect example of what you guys were just talking about, of someone who comes from tremendously difficult circumstances and somehow transforms their life in an extraordinarily dramatic way.

Starting point is 00:39:44 So Arnold Vandenberg was born Jewish in 1939, not a very fortuitous time to be born into a Jewish family in Europe. He was born on the same street as Anne Frank in Amsterdam. And so for the first couple of years of his life, he was hidden. And the family was terrified that the Nazis would come into the house and would hear him cry and they'd all get killed. So at a certain point, his parents made this tremendously difficult decision and decided that they would split up. They would have him hidden away in an orphanage. And so a 19-year-old girl who didn't know the family comes and smuggles Arnold Van derbyrk out of the house across Amsterdam, takes him out of the city and hides him in an orphanage where he spends. the next few years. And Arnold said to me that one of the things he wrestled with later in life was

Starting point is 00:40:36 why on earth would this girl who didn't even know us risk her life to save mine? And he said it also astonished him that her father was prepared to risk his own daughter's life to save him to save him. And he said it tormented him this question for many years like what had motivated her and father. And he said he said that later in like he had a psychiatrist, who said to him, well, it's simple. He said, you know, some people, their life is more important than their values. And for other people, their values are more important than their life. And she was one of one of those people. And Arnold decided very early on that because he'd been saved by this girl, he wanted to be the sort of person who lived a kind of value-driven life. You know, he,

Starting point is 00:41:22 you know, the drama of his story just continued. He, his parents both were taken to Auschwitz. And they, they remarkably, they survived. and they came to pick him up from the orphanage when he was six. And he told me that he couldn't recognize them. And he said, I didn't care. He said, I was so desperate to get out of there that I would have gone with anyone. And he said he was so frail that his father couldn't even pick him up. His father was afraid to hold him.

Starting point is 00:41:47 And he was very malnourished. And he couldn't walk at the time. He was sort of crawling around on his hands and knees. And his parents actually thought he had brain damage because he was kind of slow and he'd been so malnourished for all those years. And they moved to, I think, East Los Angeles to a pretty rough, rough area. And Arnold, you know, is a skinny immigrant kid and he's getting beaten up and just having a terrible time. And at a certain point, he starts fighting back.

Starting point is 00:42:17 And he starts rope climbing, which apparently in those days was a kind of competitive gymnastic event. And he becomes incredibly strong by rope climbing. And he has this sort of total transformation in his. life where he realizes that he by visualizing, by visualizing how to do something in a way that this other champion, road climate had done it, he can kind of impersonate what they've done and he can kind of realize his own dreams through sort of the strength of his own self-belief and mirroring what they've done. And so he begins this extraordinary transformation. And at a certain point decides, you know, I'm going to try to become a money manager. And, you know, he said to me,

Starting point is 00:43:02 I have no innate skill as a money manager. You know, he's an incredibly truthful, honest, decent bloke. And so, you know, if there's something he can say that's negative about himself, like, no, I'm not that smart or I have no innate talent for this, he'll tell you it. So he literally, he takes a photograph of a well-known, prominent investor in Barron's, and he sort of pins this photograph to to his desk, I think, under the glass surface on his desk. And he sort of starts to visualize himself being a great money manager. And he becomes obsessed with hypnosis, with all of these ideas of sort of visualizing your dreams.

Starting point is 00:43:40 And so his transformation from this kind of incredible hard luck story of a kid growing up with really no chance of success. It's just an extraordinary transformation. And these days he manages about $1.6 billion. He's beaten the market over 30 or so years. And he's just sort of a remarkable guy. And he talks a lot about mastering your own mind, the degree to which everything is possible

Starting point is 00:44:07 if you gain control over your own consciousness. And so there's a kind of practical wisdom to him that I think is very deep and fascinating. And, you know, he's also this very sharing person. So he's one of the things that I loved about him is his hobby is basically to give people books. And so since I've had my conversations with him, I must have about half a dozen conversations with him,

Starting point is 00:44:31 he keeps sending me books. He's just like this lovely, generous guy. And he said to me, you know, there's nothing that makes me feel better than when I've given somebody something or shared something that's changed their life. And he said, you know, as far as I'm concerned, that's why we're here.

Starting point is 00:44:47 And so I think there are people in this book who are really remarkable moneymakers. and then there are people in this book who are really remarkable human beings. And it's not mutually exclusive. You can be both. But I think Donald Fandberg is a really good example of someone who's a truly remarkable human being. Let's take a quick break and hear from today's sponsors. No, it's not your imagination.

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Starting point is 00:48:27 All right. Back to the show. William, speaking of Van Berg and the thing about giving books a way that they can change other people's life, which book would you give away to someone that was very dear to you that could change that person's life. That's a great question. There's one book that I read in the last year that had a big impact on me, that was something that had had a big impact on Monash Pabri,

Starting point is 00:48:51 also on Guy Spear, and actually also on Arnold Vandenberg, which is a book that you may or may not have read called Power v. Force, the hidden determinants of human behavior. And it's by this guy, David Hawkins. You know, one of the ideas in it is that you just want to be totally truthful and honest. And if you're totally truthful, really at a deep level, then you sort of resonate with people because they sense your integrity and they can tell when you're lying. And even if they don't really know rationally that you're lying, they sort of intuit it. And they sense that there's something misaligned about you.

Starting point is 00:49:33 And Monash has taken this idea very much on board. it's very integral in everything that he does, even the way that he communicates with shareholders. Same with Guy. Guy in his book, the educational value investor, just wants to tell the truth. You know, if he messed up in some way, he wants to tell the truth about it. And I think that's one reason why his book has sold 26,000 copies already, because it, you know, people, people want you not to lie. And I think so many people in the financial industry and business feel. this sense that they have to market themselves and they have to they have to kind of put their best foot forward and you know Arnold van derbyr called me after our interviews and said I need you to

Starting point is 00:50:18 understand something he said my returns have not been great in the last few years and the reason they've not been great is because I messed up I made these mistakes which I'm now going to explain to you and he said you need to understand um that this is not because the market has gone against me this is because I messed up. And there's something incredibly powerful about somebody who's prepared to tell you the truth in that way. And I think most people would say that that was a really dumb thing to do and that you should obscure any bad stuff about what you've done. But I think it resonates in a very deep way if you behave that way. I totally agree with you, a thousand percent.

Starting point is 00:51:01 And I think the reason that it works so well is because it's a medium. credibility. And I think people don't realize that I think everyone is so scared and they're actually being driven by their own fears of people then judging me in a negative light or whatever it might be. But I think what they're failing to look at is the positive piece to it of whenever you are truthful like that, you have immediate credence and immediate truth that I know I can trust you. And truth is and trust is what glues our entire society together. When you trust one another, that's what holds it all together. And amazing point.

Starting point is 00:51:39 And I think you sense it in your relationships with people. You know, I was reading something that Buffett said recently. Well, it was actually an old speech of his, and he said that in 41 years, I've never seen Charlie take advantage of anybody. And think of the power of that, to be partners with someone who you can say, this guy never tried to take advantage of them.

Starting point is 00:52:03 We never lied, never took advantage. That's an astonishingly powerful thing. Now, there must have been times in the short term where if Munger and Buffett had behaved immorally, they would have profited. And yet they chose not to. And I would argue that that's one reason why 40,000 or so people go to Omaha each year. It's not because Buffett is the greatest investor of all time, although he is. It's because he tells the truth.

Starting point is 00:52:33 And so I think however you come at this idea of telling the truth, whether it's through power versus force this book by David Hawkins, or it's through being a student of spirituality, or it's through studying Buffett. It doesn't really matter, but it's a very, very powerful idea. And we're all liars at some level. We all do things that we're not proud of and conceal stuff. So this is not to make out that any of us totally,

Starting point is 00:53:03 righteous. But I think when you see people like Buffett and Munger trying to tell the truth, it makes you want to move in that direction. I think realizing that you can become one of the richest men in the world while being truthful and honest is a very, very powerful lesson. And that's, that's probably the most important lesson that we get from Buffett and Munger. Fantastic. Just for our audience, And so William Green, as you can see, absolutely brilliant mind. The name of the book is The Great Minds of Investing. It is just amazing book.

Starting point is 00:53:41 The pictures in this book. The writing in this book, just fantastic. So, William, we cannot thank you enough for coming on the show. This was such a pleasure. I know that our audience is just going to eat this up and really enjoy the conversation. So thank you so much for joining us. Thank you. It's just been a real delight for me to chat with you both.

Starting point is 00:54:01 You're great. Your questions are terrific, and I love your show. So it's a real privilege for me. Thanks, William. Really appreciate it. All right, so this is a point in the show where we take a question from a member of our audience, and this question comes from Jack Lute, and he's from South Africa, and this is his question. Hi, Preston and Stig.

Starting point is 00:54:19 Thanks for the great podcast. When a company issues new shares, where exactly do these shares come from? If they split the current shares, show you that decreases the level of ownership and earnings all the current shareholders have. I don't fully understand how and why the shareholders do this. Thanks again, Jack, from South Africa. Hey, Jack, I love this question because I think a lot of other people have a similar question or concern. So let me first break it down for you by talking about a simple example of a company issuing more shares and why they would do that.

Starting point is 00:54:52 And then we'll talk about a stock split, which was kind of more where your question was going. So let's say that we have a small business on Main Street. And let's say it's an ice cream stand. And let's say that the ice cream stand is maybe worth like $100,000, we'll say. And the owners really don't have much money. And so they have to raise some money. And the bank does not want to give them a loan. So they have this decision that, hey, let's go out and see if we can find some family members to help give us some money to be able to buy whatever it is that they were trying to buy or increase for their store.

Starting point is 00:55:25 So let's say that they have five different family members. members that they could go to in order to do that. And each family member is going to donate $10,000 to the business. Okay. So that's our scenario. So they really want to raise $50,000. Their business is a $100,000 business. And they fully own that $100,000 business by themselves right now. So what would happen is each of those five family members would get a cut of the business. So what they'd have to do is they'd have to break out new shares of the business. Let's say that there was 100 shares, that they currently owned beforehand. Okay, 100.

Starting point is 00:56:01 So each person that would buy this $10,000 stake in the business, they would get 10 more additional shares, which the company, the people that own this small business would have to produce. So in the end, you'd have now 150 shares of the business. The people that originally owned it would now only own two-thirds of the business instead of owning 100% of the business, because before there was 100 shares and now there's 150 shares. shares. So you can see how by issuing more shares of the business, the original owners, the people

Starting point is 00:56:35 that previously owned 100% of the equity, have diluted their ownership of that business. That's probably the easiest way I can describe that scenario for you. So now when you talk about a stock split, typically you're dealing with a company that is wanting to reduce their market price in the stock exchange. So let's take Apple, for example. because they recently did this. They did a stock split where they split down the number of shares. Apple used to trade at, I think at the high, maybe like $700, $800 a share somewhere around in there. And then after they did a stock split, after they split all the shares up,

Starting point is 00:57:13 now it only trades for about $100 on the stock exchange. And so what they did is they didn't create any more value or they didn't add any more money into their bank account by selling or diluting their shares. What they did is if you owned one share of Apple, Apple before, now you might own five shares. But the thing is, is every single person and that entire group of shareholders got that same additional share. So it wasn't like you lost any money or gained any money. The only thing that happened was instead of having one share that represented $700, now you had seven shares that might have represented $700. So really no change there. So that's really the basics of stock splits and how companies use their share.

Starting point is 00:57:58 and their equity of the business to raise money. And that's really just kind of the basics of it. All right, Jack, so fantastic question. We really enjoy getting questions like these. So what we're going to do is we're going to send Jack a free signed copy of our book, the Warren Buffett Accounting Book. And for anybody else out there, if you want to ask a question and get it played on the show like Jack, go to AsktheInvesters.com.

Starting point is 00:58:19 You can record your question. And if it gets played on the air, you'll get a free book from us. So really, that's all we have for you this week. We really want to thank William Green for coming on the show. He just provided us such a fantastic interview. His book is amazing. The name of his book is The Great Minds of Investing. You can go to Amazon.com and check out his book.

Starting point is 00:58:37 I highly recommend it. The people that he has in there and the way that their profile is just really fantastic, and I think you'll really enjoy it. So we really appreciate everything that everyone's doing out there for us. If you're leaving reviews on iTunes, thank you so much. You have no idea how much that means to us. And if there's anything that we can do for you, just shoot us a message or go on to our forum, the warrenbuffetforum.com.

Starting point is 00:58:56 That's where Stig and I hang out all the time, and we'd love to chat with you. So thank you so much, and we'll see you guys next week. Thanks for listening to The Investors Podcast. To listen to more shows or access to the tools discussed on the show, be sure to visit www. www.theinvestorspodcast.com. Submit your questions or request a guest appearance to The Investors Podcast by going to www.org.org.com.

Starting point is 00:59:21 If your question is answered during the show, you will receive a free autographed copy of the Warren Buffett Accounting book. This podcast is for entertainment purposes only. This material is copyrighted by the TIP network and must have written approval before a commercial application.

We Study Billionaires - The Investor’s Podcast Network - TIP 039 : The Great Minds of Investing Part II (Investing Podcast)

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