We Study Billionaires - The Investor’s Podcast Network - TIP414: Investing and Life Masterclass w/ Guy Spier

Starting point is 00:00:00 You're listening to TIP. Today's guest has had a profound impact on the value investing community. As we Warren Buffett, many investors, including myself, first find Guy Spir to learn how to invest. And learning from Guy Speer, you learn from one of the greatest. But while you might come for the investing lessons, you stay for the life lessons. Ladies and gentlemen, I hope you enjoy this episode as much as I did. It was a privilege to have this conversation with the always humble and kind, Guy Speer.

Starting point is 00:00:30 You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Welcome to The Investors Podcast. I'm your host, Stig Broderson, and I'm excited to welcome back Guy Speer to the show. Guy, thanks for taking the time out of your business schedule to speak with me and the TIP community here today. Well, Stig, your excitement is only exceeded by my excitement. and I'm super excited to come back on your show. It's been a long time.

Starting point is 00:01:15 And for the listener, I just want you to know that I just took a while to read through Stig's notes that he took, and he's got the most extraordinary set of notes. The reason why this podcast is so great is that Stig does the work. And so thank you for having me, Stig. Wow, what an introduction. I don't even know if I should edit that out. I think it's going to my head if people hear you say that guy. It's from the bottom of my heart for the listener or viewer.

Starting point is 00:01:44 I had missed the notes. So we were about to start the interview. And then Stig says, well, just before we go live, is there anything in the notes that you don't think you don't like or give a comment on? And then I didn't realize that there were the questions there. So we just took five minutes. Stig probably made himself a coffee. And I'm just really impressed.

Starting point is 00:02:05 So it's just genuine and from the bottom of my heart. And so don't cut it out. Give me an excuse. to do the humble break. So, Guy, yes, I won't take it out. But let's jump right into the first question here. So I've heard you say that envy can be a good feeling to have. And you used it actually whenever you set out your journey learning more about Warren Buffett. And I wanted to mention this, not just because of this cheeky comment I can now make about Warren Buffett who has said that you should not feel envy because it's the only sin you cannot have fun with. But I wanted to start this

Starting point is 00:02:37 interview by asking this question, since in investing and in every other walk of life, envy as an emotion we all experience, even though it's a feeling we might feel as people we shouldn't be feeling in the first place. How have you used envy as a positive force in your life? Thank you for a spectacular question, Stig. And, you know, I get really excited. So I feel like just about anything I can think of that I learn that's valuable, I realize at some point that Warren and Charlie already knew it. But I get excited when I think that I've discovered something or I've come across something that maybe Warren and Charlie don't know or have not expressed. And for me, I think that this might be one nugget. And so it starts from a really valuable psychological

Starting point is 00:03:25 idea for those of us who've sat and spent time with psychotherapists, which is that our emotions are a clue to action. And there's this famous case of Phineas Gage who has, this accident where a steel rod went through his head and it destroyed the part of his brain, it seems, that enabled him to feel emotion. And what happened is that he was pretty normal in spite of recovering from that pretty awful injury and with a certain part of his brain destroyed. But what they discovered over time is that the lack of emotion that he felt made it far more difficult to take important decisions in life. Our emotions are a guide to action. We have evolved, as we know, over millions of years. And so we can look at any particular aspect of our body

Starting point is 00:04:13 and say, why is it there? And just to give a mechanical example, I've discovered, because I'm here with a healing broken arm that there are many aspects to the design of our body, which are kind of like crumple zones. We have evolved to have crumple zones so that, you know, if something happens, your head is protected. So the emotions are not just something that sit there separate to our lives. and separate to our missions, they're actually central, and we can kind of discover what their purposes. So the easiest one to kind of talk about is the emotion of anger. The emotion of anger is in its core, as best I understand it, is my boundaries have been violated, and I need to do something to reset this. I either need to deter that violated my boundaries, or I have to protect myself,

Starting point is 00:05:03 or I have to do. So there's kind of like, so when we feel anger now in our complex world, we can do something stupid like punch the person back or engage in vindictive behavior. But if we interpret the emotion of anger right, then we're going to build our defenses, we're going to deter in an intelligent way. So envy. I don't think that it's, it's kind of shallow to just dismiss an emotion as a sin. The far better is to say, well, what is actually going on here? Let's try and understand and uncover this. And so, you know, I have a Mexican wife. And so she has often, in early in our marriage, experience the emotion of jealousy. And jealousy is far easier to understand in terms of people. It's like, that's the person I intend to mate with, or I am mating with. And I don't wore your jeans

Starting point is 00:05:55 mixing up and muddying the waters. I just want my own. genes and this person's genes to mix. Very, very protective emotion. I can't claim, and I certainly am not a qualified psychologist, but if I try and unpick the emotion of envy for myself, the emotion of envy says, that person has something that I deserve to have in my life. I don't think that we feel the emotion of envy for something that is unreachable. I don't think that the people who come into the presence of the queen, or people who come into the presence of Ronaldinho or another soccer player, they feel envy because the skills are just so great and are so unattainable, you feel awe. You feel awe to be in their presence. But if you're Jochovich and you're playing

Starting point is 00:06:46 Roger Federer or you see Federer, now Jochovic might feel envy for Federer. Why? Because he knows he has the capacity for the greatness that Federer has. And so it seems to me that what we need to do with envy, now if you take the Djokovic Federer rivalry, what does Jokovic do with that envy? Now, if he does what the ice skating woman did, I'm not going to remember the name, she went and stabbed her rival, Nancy Kerrigan. She went and stabbed Nancy Kerrigan. That is a terrible misdirection of the emotion of envy. But the emotion really says, wow, I'm feeling this envy actually, because I am a genuine arrival to this person, and I need to go to work on maybe making that a reality, I think that is a very useful use of envy. The point being that if we take our envy

Starting point is 00:07:37 and sweep it under the rug, we're not going to get the benefit. You know, as we all know, there's no point going to our angry spouse or an angry child and say, you're angry, but you shouldn't feel angry, sweep it under the rug. We're not dealing with it. But if we say, let's take the anger out. Let's unpack it. Let's understand why you're angry and let's try and think about what the best way to deal with your anger is. Is it writing a letter of complaint? Is it suing? Is it deciding not to have the person in your life ever again? Similar with envy. From starting your work and from listening to the interviews with you, it's always, it always amazes me how you can turn something that is seemingly bad into something that's good, that's help you, that helps you grow as a person.

Starting point is 00:08:22 When I used to live in Manhattan, I had a place on West 67th Street, and a time when Barnes and Noble still had stores all over New York City, there was a Barnes and Noble store at the end of my street, and I had made very good friends with the self-help section. I would just do a kind of a part B to that question. You know, I had the great privilege and opportunity to join a lecture, a group of students in a lecture that Charlie Munger was giving to the group of students. and he talked about adversity in the lecture and he said something so simple and so powerfully. He basically said, look, all of you, it is a given. There's no question you're going to have to deal with adversity. You're going to have terrible setbacks every single one of you.

Starting point is 00:09:07 But don't look on it badly because each one of those setbacks will be an opportunity for you to behave well and to engage in the behavior that will enable you later on to deserve your success. just such a kind of powerful. And it's this Carol Dweck idea of a growth mindset. And life isn't what happens to you. It's what you do with what happens to you. And we're very much in the driver's seat. And unfortunately, Stig, it still doesn't mean that tragedy and adversity won't

Starting point is 00:09:37 before us, but rather be in the driving seat. And we are in the driving seat if we can just see that. So if I can make a segue, if you allow me, Guy, I would say from one wise person to the next. because I wanted to talk about the essays of Warren Buffett. This is one of my favorite books. And what is really fascinating about the book is that you can really tell how much Warren Buffett has involved as an investor, whether it's his thoughts on investing, governance,

Starting point is 00:10:05 acquisitions, or whatever it might be. And if you continue on that train of thought, Warren Buffett and Childmonger have said that the difficulty lies not so much in developing new ideas, but escaping the all. So I can't help but wonder, guy, which ideas for you and perhaps more recently have been the hardest for you to escape as an investor? Just take me to the painful places, Stig. I came from a world of venture investment banking and not a very good end of it. And I discovered Warren Buffett and I just felt this. It's very few times I felt such a powerful motivation to want to become a part of a world that I was not a part of.

Starting point is 00:10:46 and I gave an enormous amount of myself to make that happen in terms of energy and desire and willpower. And so, you know, I didn't realize that in doing that, I was pounding some stuff in that should be unlearned more quickly. I genuinely believed that all I had to do for the rest of my life was find one newspaper towns the way Warren Buffett had in the Washington Post and the Buffalo News and other places, and I'd sit and study Gannett, but I'd also study companies like Shibstead in Norway and Neutzerche Zeitung here in Switzerland, and I really thought I had I own shares in a company called Eddie Press, which was in the west of Switzerland, and then, just to go right to your point, I am going to the Berkshire meeting and there's this

Starting point is 00:11:35 wonderful, wonderful investor who's extraordinarily wealthy, I suspect, at this point, who lives on an island in Madison, Wisconsin called Steve Walman. Steve, I hope you don't mind that I've called your name out. I hope you're doing well. And he sits down with me quietly and he says, you know, I think that, and this is like in 2005, six, he says, you know, this company Apple is really interesting. Because Microsoft and Wintel, Windows and Intel, are all kind of focused on text and word processing and very simple email. And these guys are Apple. They're all about graphic design and they're all about this beautiful experience. And he said, if I think about it, where's the world going? The world is certainly going towards images and moving images and they keep bringing out these nice looking products. This was

Starting point is 00:12:27 way before the iPhone. And, you know, this was like many thousands of percentage points before now. And what do I do? I go, yeah, but that's tech and I don't do tech. And by the way, Warren and Charlie don't do tech. I wasn't willing to investigate. I mean, this is not sort of like me reading about in the newspapers or some guy who's not from the investing community that I respect who's talking to me about it. This happened at the Berkshire meeting. I saw Steve Wolman at the Berkshire meeting and he's sitting and talking to me about Apple and he's not a promotional guy. He's a quiet, thoughtful. And then there was the Berkshire meeting where we discovered that Berkshire had bought Apple. and it was a very painful meeting for me because Warren had demonstrated that he had unlearned the lessons of, for example, one newspaper towns, but I had not unlearned the lessons. I was still pursuing a kind of a dogma that was silly, and it took me another two or three years to get over it, and I think that I'm still getting over it. So it's kind of difficult. But, you know, we just said, it is going to be, nobody said that this is going to be easy. But for me, that's a huge, huge lesson. And,

Starting point is 00:13:37 I know that we're going to get onto it, but that's why I keep an extremely open mind to crypto. And I'm super curious and interested when members of your team or members of my conference become interested in something that supposedly is not a smart investment. Because where are the good ideas going to come from? They're not going to come from just continuously pounding out the old ideas. So that was extremely painful for me. I'm still in the process of unlearning those ideas. And, you know, when I came to the world of Berkshire Hathaway and, quote, value investing or intelligent

Starting point is 00:14:11 investing, it already had gone through a transition because there were people like, I forget his name, but the Mr. Geiger counter, a very successful investor, but who would only buy net nets. You know, the world had moved on from net nets, but the world was still in a place where you would look at cash flows and income statements. But I have not moved on or have a difficulty with moving on to a world in which you have to look at total addressable market, lifetime value of the customer, you know, businesses where you're going to invest a very high amount in your profitable and appear unprofitable while you're actually very profitable, but it's just hidden. So I'm still unlearning those ideas and I'm kind of, you know, I take my hat off to those

Starting point is 00:14:53 people, value investors, smart investors, who've learned that the cutting edge of smart investing is in that direction. Guy, let's talk perhaps a bit about Bitcoin and let's not. Because, and perhaps you can transition into that later. But you said that you do not agree with Chalemonger that Bitcoin is rat poison. And we also said that it's likely not an investable asset for you. I guess one part of the audience might be happy that we're not, at least not yet, talking about Bitcoin.

Starting point is 00:15:24 Your other one, say, yes, Guy is here and it's good. We can talk about real one newspaper towns. But I really wanted to add another layer of reflection on this question because I remember reading that Chalemonger didn't read fiction. And I remember how that made me rethink my own reading habits. I guess in a clumsy attempt to clone one of my great heroes, perhaps a bit too much. So then I think of you and I know you've been in the space for a long time. And like you mentioned before, you revere Chalemonger and Warren Bafel for that matter.

Starting point is 00:15:58 But I also heard you're talking about how reading fiction is right. right for you. So I guess my question is partly about the value of reading fiction, which I know you have a very interesting take on, but perhaps more importantly, about escaping your heroes and how do we know which habits we should clone? Yes, because we're not going to become good investors by eating peanut brittle and drinking Coca-Cola's or cherry coax all day long, even though it's fun to do. And I think that there is a natural progression when we get a hero. So in a certain way, when we get a hero, we don't really choose them. It's almost like they choose us, or there's this two-way thing that happens.

Starting point is 00:16:39 And then the first thing that happens is that we do want to clone everything that they do, because we don't know what we should and what we should not clone. So I think that the early stages of having a hero is that we wear the same clothes as them, we go to the same bars, same restaurants, eat the same food, you name it. And I think that there's nothing wrong with that. And there's almost like there's a period of figuring it out. And then at first, and maybe some of those habits, you know, you try Cherry Coke and realize you actually like it.

Starting point is 00:17:12 Whereas by contrast for me, when I had the charity lunch with Warren Buffett and, you know, and I'd ordered Coca-Cola, Diet Coke in my case, but I actually wish I'd ordered a bottle of wine and had a nice wine. But that's okay. But then that process, I think the process of figuring out, what is it that I should be cloning? and it starts off with discarding the things that are certainly not necessary, like eating the same food or, and then over time it becomes harder because there'll be some aspects. And I think that there's learning that takes place. So, wow, Warren Buffett invests in branded goods companies. I'm going to look at all

Starting point is 00:17:47 the branded goods companies in the world and I'm going to try and understand them as well as Warren Buffett. So that's way far away from, let's say, cloning what Warren Buffett wears or cloning his, his food habits. In my case, for example, insurance, I was looking carefully into insurance companies. I think that at some point I realized I am just not there and I'm not really going to understand the sector. And so maybe I should not try and clone Warren Buffett in insurance companies. So what am I trying to say? And then we get to a place, I think, where you just go, I'm not Warren Buffett. And actually, I've learned so much from him. So there's kind of the life cycle of the hero in the follower of the hero. Long story short, it's a complex growth process by which we acquire knowledge and then look

Starting point is 00:18:36 at the knowledge we've required and decide what is important and to keep and what parts are not important and to discard. And in the process, I think that what happens is that we discover that, you know, we wanted to be exactly like our hero. And then as we discard certain things, we realize actually it's okay not to be exactly like I hear and actually I'm a different person. So, you know, in the simple example, I do like red wine and I know that Warren's never going to be as interested in red wine as I do and that's okay. And that doesn't mean that I can't clone him in other ways. And, you know, I really respect the investors who say, yeah, we are huge fans of Warren Buffett, but he really doesn't get the tech space. He really doesn't get

Starting point is 00:19:26 cloud computing. And he doesn't realize that the GEICO of this generation is XYZ cloud computing company. And yes, it appears to have a high valuation in the same way that when he was buying GEICO, it appeared to have a high valuation. And that's okay because I'm kind of discarding that aspect of my hero. I was too slavishly following Warren Buffett to be able to engage in that kind of independence of thought. And so just to come to Charlie Munger in reading, I think again, there's, you know, I think that looking inside, there are clues. So what happened to me with Charlie on reading fiction is that that irked me. I can't say it really annoyed me.

Starting point is 00:20:09 I can't say I lost sleep over it. But I kind of just said, that does not sit well with me. Now, I think that Charlie's a far more voracious reader than probably pretty much every other person on the planet. And what I heard on the last call with him is that when he's a far more voracious reader than probably pretty much every other person on the planet. And what I heard on the last call with him is that when he was young, he read a lot of fiction. It's not like he's saying, I've never read fiction and I'm not interested in fiction. He's saying, I've got my fill of fiction. I've gone beyond. I know that when I took up swimming, there was this experience curve, like every time you double the distance you've swam,

Starting point is 00:20:44 you get that little bit better. And initially, when you swim a lot and you haven't swam very much, that you've got a lot of gains that you can get really quickly, then you get go down the experience curve. It's very possible that Charlie Munger says, I've read so much fiction that I just don't think there are a lot of gains I can get from it. And that's what I think he's saying. And I think that the reason why it irked me, in part, is there are many fiction books that I have just not read and I've actually decided that I don't want to end my life, but I don't want to get to the end of my life and not have read certain works of fiction, certain classics, which I set myself the task to read. For all I know, Charlie's read all of those.

Starting point is 00:21:20 I'm not going to die without having read David Coppom. field, which is what I'm reading right now. I'm not going to die without having read the Magic Mountain. I don't know how helpful I've been, Stig. I think you've been immensely, immensely helpful. Guy, one thing we talked about before we started recording, and it seems like so many conversations are going in that direction these days, but that was talking about crypto and some of the struggles of having people like Chiala Lunga, who have been, I guess, even more vocal than the Warren Buffett about his dislike for that. And it was something I shared with you that it's been challenging for Preston and me and still is to some extent, making that shift. And I don't know if we're

Starting point is 00:22:02 making a shift. I don't necessarily think they're mutually exclusive, but a lot of people do see it as being multi-exclusive. If you do hold Bitcoin, you can't be a value investor, and vice versa. And one of the things to throw it over to you was that you said that you have these, the conferences, the value X, and you said that a lot of people are talking about it. So, I can't help but ask you, Guy, how do you think about it? And what about the community you surround yourself with? I think that I would be missing out on one of the biggest benefits of my Value X community if I did not pay attention to cryptocurrencies and Bitcoin. And I'm going to name three names that may not be famous, but they're big names for me

Starting point is 00:22:44 because they've taught me so much. And they're all members of my community. One is a guy called Chris Detweiler and another guy is called Vitaly Rubstein and the third one is called Ninad Shinde and we've had group calls on crypto and one of, you know, the earlier calls was simply what is crypto and then there've been subsequent calls which is kind of different strategies around crypto. These are some of the smartest members of my community, my community, of our community and they're all value investors and they're all intelligent investors and They're all thoughtful people. And, you know, I think you've heard me say it, but I feel like I want to say it with emphasis.

Starting point is 00:23:26 One of the dumbest things in the world would be to take somebody that I know is smart and not listen to them. And one of the dumbest things in the world would be to say, I'm not going to listen to them because I disagree with them. I have my preconceived idea. I have my idea about what this thing is. And therefore, their opinion doesn't have any validity. and it would be utterly destructive to say they no longer have, quote, a home in our community of intelligent investors. So now let's just go to the other end of it. Let's just sit for a second with Charlie Munger and Rat Poison Squares. And let's talk about, I don't know, one example would be

Starting point is 00:24:05 the California Gold Rush. Imagine that you and I Stig are members of the same family and we have, I don't know, some very successful farm or other traditional business that one might have had around the California gold rush. And vast numbers of our family are running off because they want to find gold in the gold rush. And let's just imagine that we're in our 80s and 90s and we have great grandchildren. I don't think it's irrational to say the gold rush is rat poison squared. You're going to, because if you're looking, I mean, Charlie must have 30, 40, 50 grandchildren. I don't know how many. And if you tell him, we got a world in which every single one of them is going to dabble in Bitcoin, or in crypto in general, I think you're going to have far more losses there

Starting point is 00:24:53 and far more broken lives than good lives. So who is the audience that Charlie Munger is addressing? Charlie Munger is addressing his own grandchildren for sure and a general public. And he's addressing a general public in which many people are approaching the world of crypto, probably a not a very smart way. And he's probably absolutely right for them that they're far more likely to lose a lot than they are to make their fortune on a hill. But I don't think that I'm certain that Charlie Munger has friends at Sequoia and at other of the leading venture firms, no doubt in my mind, although I can't confirm it. Would he turn to one of those people and say that actually your whole investment area in crypto, that's rat poison squared and don't do it?

Starting point is 00:25:42 and don't touch it? I don't think he would say that at all. And so let's just remember, the people in my community talking about crypto are not meme chasers. They are very, very smart people. They understand that many, many games are rigged. They understand the job of the poker player more than anything else is to a certain way play in the right table. And the world of crypto is throwing up so many tables to play at. And maybe there's only 1% of those tables that are worth playing at, but I think that the people that I know are very likely to find their place. And so it's completely consistent, I think, to say that Charlie Munger is right. For the vast majority of his audience, it is rat poison squared. But that for the people in my community, it's not rat poison squared. It's

Starting point is 00:26:32 an amazingly interesting place to learn and look. And, Actually, I would go one step further. It is Web 3.0. It is utterly revolutionary what crypto does. And so Charlie Munger's not wrong, but you and I, I think that and others would be very stupid not to pay close attention. For the audience, I feel like it's a sensitive issue for you because it's kind of dividing people.

Starting point is 00:27:01 I'm not saying to anyone in the audience, or to you Stig, that you need to go and find. the latest guy who's on a doge coin craze and debate with him the benefits or the disbenefits of doge coin or anything else. But when somebody you respect is saying something that's very, very different to what you think is true about the world, then that is a time to get very curious and to get very open-minded. And it's funny because let's just go back to my conversation with Steve Wallman about Apple. What did I do? I closed my mind to the idea that he was sharing with me. And just to be clear, I was not talking to some taxi driver in the street. He was giving me the tip to buy Apple because everybody's buying Apple. I was talking to a very, very intelligent, thoughtful guy at the Berkshire meeting.

Starting point is 00:27:55 And he's saying, I think that this company, Apple, is really interesting. In 2005, 6 is what I remember the time frame. I closed my mind because I had a very fixed idea about what smart investing was and I just said, yeah, but I don't do tech. So now we fast forward to today. In a similar way, you know, let's just name a name that you know well, a guy that I respect enormously for many reasons. Your partner, Preston Pish, says, Bitcoin. What do I do? Do I close my mind and say, this guy has gone off the deep end, or do I say, this is not some guy, some taxi driver, forgive me all taxi drivers, because now I'm lining taxi drivers. He's somebody who's friends with Stick Broderson. He's somebody who's interviewed some of the smartest people in the world.

Starting point is 00:28:48 He has led groups of people. He is a thoughtful, smart guy. What I need to do is drop my blinkers and pay attention. And I urge the audience to do that. And that does not mean that, that Preston and I tomorrow are going to see eye to eye and agree on everything about Bitcoin. But he is seeing a slice of reality that I am not seeing, and I need to get super curious to understand what he is seeing. And it shouldn't divide a community of intelligent investors. We should get super curious and interested in why we're seeing things from different angles. For me, crypto is uninvestable.

Starting point is 00:29:27 And, you know, I had one of our investors who asked me a question about whether he should invest in one big chunk or whether he should divide it up into four smaller chunks and time cost average. And best last time I checked, the evidence shows just put it all in one big chunk. But I said what that evidence does not take into account is the psychology of the investor doing it. So, you know, how do you define your circle of competence? How do you keep yourself on the straight and narrow? And for different people, it's different things. and I know more than one value investors that I deeply respect who have said around crypto, I am investing in Coinbase or I am putting 1% of my fund into Bitcoin. And they're kind of like have a different approach to how they want to assess risk and how they want to evaluate investments. And where I come from is I want to restrict myself to assets that generate some kind of cash return to the investment. And I'm only going to live in that world and I want to live in that world. So I say I pay close attention, have enormous respect for the people who are engaging in

Starting point is 00:30:38 crypto, because I think that if I allow myself to do that, there may be many things that are really quite stupid that I will also allow myself to do. So those are kind of the bowling with curtains that I put up for myself. And I don't think I'm inconsistent on the one hand saying crypto is utter revolutionary. There are people who are doing crypto who are doing very interesting things, but it's not investable for me, and I don't plan to invest any time soon

Starting point is 00:31:04 in the same way that I'm extraordinarily grateful for all the biotechnology research that takes place, for all the biotech companies that are taken public, for all the stuff that's going on there that I benefit from or people I know benefit from with new drugs and therapeutics, but it's not an investable area for me. And no problem.

Starting point is 00:31:20 And I don't think that those people who are heavily engaged in crypto should feel so upset Charlie Munger that he calls it Rat Poison Square or that he's not investing in it. In the same way that the guys who are doing biotech are not upset that those of us who want to invest in banking stocks are not looking at biotech. They understand that the world is big and there are plenty of different ways to approach it. 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.

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Starting point is 00:35:51 Guy, thank you for directing the issue on Bitcoin in the value investing community. And this was something a Guy and I started talking about before we recorded and decided to include in the outline. So let me give you a preface of the story of TAP and Bitcoin. So what happened was that back in 2015, Preston and I read a book about Bitcoin. None of us really understood what it was all about. It sounds so odd. And then what quickly happened around that time was we read this book about, I think it's called Money Master the Game by Tony Robbins, who I also know have been an inspiration for you and

Starting point is 00:36:26 someone who was also divisive to a lot of people. And he kept on talking about this guy named Redalio. And I'd never heard about the dude. And he kept on talking about how he was like the best investor who was fantastic. And the way he thought about money was just the all-weather portfolio. That's what you needed to do. And I listened to it and I was flying overseas, so I had a plane of time on my hands. And he had this long talk about how you should invest in gold.

Starting point is 00:36:51 A small portion we should invest in gold because monetary systems break down. They always have, all currencies have broken down at some part in time. And that's just what history would tell you. And I remember, and now we're talking about the heroes, I remember thinking it doesn't make any sense because I've learned from Warren Buffett himself that you should not invest in gold. And I couldn't understand how someone like Tony Robbins were endorsed Redalio. And then whenever I finally got Wi-Fi, I looked Redalio up and he seemed as legit as they come.

Starting point is 00:37:19 And so I was like, why are people talking about it? So the challenge the press and I were facing was that we became really, really interested in Bitcoin. We bought into it. And as soon as we started talking about it, we could just see like a cascade of bad reviews. And we could see some really, really bad things happening from the community. And I had many long talks with Preston about how do we do it. Because at that point in time, it wasn't just, like we used to say, it was just Preston and me sitting in the garage. We had people working for us.

Starting point is 00:37:52 And one of my big concerns was that I'm going too long on this. One of my concerns was that do we need to close down? If we believe in this thing and we both talk about that we invest in it, does it mean that we're going to blow up? Does it mean that people lose trust in us because we're taught that it's red poison? We can't talk about it. I remember, I was rereading the education of a value investor, and you talked a lot about authenticity in that book. I remember having discussions with Preston about it, myself, my wife, and like,

Starting point is 00:38:19 there was something that was very, very, it had a big impact on me in terms of you have to be transparent about you do. And I probably sat this 10 or 15 times on the show that I'm invested, even though I'm not a part of a Bitcoin show. How do you convey that? Could you compromise on being invested in something like that, running a business? Is it a bad business? to talk about it. Are your principles then for sale if you don't talk enough about it? It has been a

Starting point is 00:38:44 very troubling thing. So back to you. Now I actually started to cry my heart out. I appreciate those thoughts and I don't think that you should feel uncomfortable with them because I think that they are, you know, you are being authentic and you are being real with me. I just want to reassure you of that. And I think that when you do that, you come up against some more powerful constraints, which are the constraints of the way the world works. So, you know, and so those are, those are far more powerful and far more difficult, probably impossible to overcome. And I think that what comes up for me is that you were actually faced with a choice of whether you want to be in the investment business or in the publishing business. And it is natural that, you know, it is a problem for anyone who's an

Starting point is 00:39:28 investor who writes that the things that your readers want to read about are the ideas that are popular at the time. The things that make the best investments are the ideas that are not popular at the time. And so how do you square that circle? And I think it's very hard. I think that that's why, you know, many people who've dabbled in both have to at some point to decide, am I an investor or am I a publisher? You're not making a compromise. You're saying, look, we're publishers. We're publishing what will make our publication successful. And or alternative, you say we're investors. that's where we make our money and the publishing is a sideline

Starting point is 00:40:06 and we don't care if it's successful or not. So I think that you were faced with it. You cannot square that circle. You just have to look and say, which do I want to be? Thank you for your take on this guy. I think we needed to hear that and I think perhaps many in the value-investing community

Starting point is 00:40:22 needed that, especially if coming from a top authority in the community, Sotta yourself. And I guess this is also a good segue because as a teenager, I remember having my heroes, whether it was in sports or in business, and I distinctly remember that I naively thought that I would never have a care in the world if I were that person. And of course, as we grow up, we realize that everyone has their own problems.

Starting point is 00:40:47 Perhaps Radalia, we talked about him before. Perhaps he says it best with his quote, that the best thing you can hope for him in life is to struggle well. I can't help but ask you, Guy, how do you struggle well in life and in business? Exactly. It's a wonderful, wonderful question. And one of my children, she's about to join us late today. She told me that she has become a vegan. But at the same time, we're not a vegan family. And, you know, there's a kind of a Mexican mom expectation that you eat the food that the muller puts on the table for you. And so how is she going to square that circle? And something that I told, said to my daughter at the end of a long conversation, actually texting to each other. other because she's still at school on WhatsApp. As I said, if you're 100% vegan and alienate your family, you will have lost. If you drop the veganism and just make your family happy, family harmony, you will have also lost. And I think that the happy ground is to struggle with those two

Starting point is 00:41:50 contradictions and to find, just try and find that middle way. And, you know, I was kind of telling her, let's have the struggle. And then we continued in debates over whether animals are slaughtered in a humane way here in Switzerland. And I kind of came out and said, you know, I actually don't care if I agree with you or disagree with you. I just care that we continue to have the conversation. So there's one struggle. And I would tell you that I found it very interesting through almost 20 years of marriage to my wife, how I think that the places where we see the world differently are actually the places where we're the strongest because we have stereo vision, we have two different views of the same thing. And if I occupy one position and my

Starting point is 00:42:40 wife occupies another and now we seek to understand each other, not to move ourselves to the same point, they occupy our two different points, then there's a power in that. And actually, the biggest problems my wife and I faced is when we see things exactly the same way, because then there's no stereo vision. So in my relationship with my children, relationship with my wife, so in my family, I think that struggle is a key part. And what came up for me with my daughter as well in this conversation is there's this famous story in the Old Testament that Jacob struggles with the angel. And in a certain way, it's a metaphor with the life. If you're not struggling, you're not alive. And if you're not struggling, in this case, the angel or maybe a messenger

Starting point is 00:43:23 or representative of God or something like that. And so, as a matter of, I just think it's first of all, it's a reassurance because many people want to give the impression of effortless success or once you succeed, there is no struggle. And I think that, you know, to reassure the listeners of this program myself, if you're in a struggle, you're probably doing the right thing. That's where you should be. And that's where you get stronger and that's where your best life is lived. I think that, you know, just to me, myself, early on, I struggled a lot with, you know, sort of like pure absolute numbers as a measure of success, whether it's return numbers or assets under management or measures of net worth. And I think that, you know, again, the answer was not to sweep it under the rug and the answer was not to make it into an idol and worship it, but to struggle with that, to be able to bring up in conversation when people say, well, do you want to grow? And instead of saying, no, I don't want to grow, or yes, I do want to grow, say, well, I struggle with that. You know, if you're under the age of 48,

Starting point is 00:44:32 somebody, I think it was David Perel. He said that if you're under 48, then you're a second billionaire. In terms of the number of seconds you have left in your life, based on your life expectancy, you're a second billionaire. And I'm not a second billionaire. And so one of the things I struggle with is how do I make the most of my time left on the planet, which is probably less than half of my full lifespan, which is a scary thought. And there's no chance that I will die with the person with the highest rate of return on the planet. And those are stupid things to aim for, because you know the famous expression, this rich man died and how much money did he leave behind? Well, he left all of it behind is the answer. But I think that what really excites me is this

Starting point is 00:45:14 concept of social capital. A big financial balance sheet, but having everybody hate you is a terrible outcome. I'd like to get through the next 20, 30 years of my life, having many institutions and individuals who count feel like I've been a positive presence in the world. And that means paying my taxes, making sure the investments that I, the companies that I invest in, pay their taxes, investing in the communities around us. I get interestingly, Stig, I now get less inspired by businesses that earn super high returns. I was very influenced Stig by Milton Friedman, Freeman says, just maximize your profits. The world will take care of everything else. Adam Smith 2.0. And it's a beautiful thought. And the way I translated that was all I got to do is an investor

Starting point is 00:46:02 and all I have to do is an investor in CEOs is look for people who try to make the most money within the laws of the country that they're in. I'm obviously not looking for people to break the law. But they just just maximize their profits and the invisible hand takes care of everything else. And the first place I read it was with Klaus Schwabert, the Weft. where he said, no, that's not the way business works anymore. Businesses have to be, they have to look at stakeholder capitalism. Your shareholders are a stakeholder. Shareholders, capital's got to eat, as Tom Gaynor says. But your communities, of your employees, your suppliers, the places of business, all of those places have to benefit. And business has to

Starting point is 00:46:45 exercise far more leadership than it has in the past. So that's where those are the places where I struggle. if you like today. Just going back to your question, which is a question about struggle. But, you know, if you're Ronald Dino, play soccer, if you're, if you're Muhammad Ali box, but find the struggle that's worthy to you. Well said, guy. Please allow me to shift gears here. I had the privilege of speak with a good friend, Monis, Popri, from time to time. And I remember discussing Serity's growth properties with him, but my question is, it's not about the investment itself, but something Manus said about the investment and about you. I'll send the quote here. And so I'm trying to

Starting point is 00:47:27 be more like Guy. And the number one skill to be a great investor is extreme patience. If you can derive tremendous pleasure from watching paint dry, you'll be a very wealthy man. Just be in this meditative state watching that wide wall. And once you can do that, then you're ready to hold seretis for 20 years. So, you know, it's a, it's a, it's a, it's a, it's a amazing what Moniz can say. But I thought a lot about that, not just because I'm invested myself and with the volatility of serenitage, but what it really led me to was the more profound thing, to me at least, which was how much are you wired to be extremely patient and how much, if anything, is self-taught when it comes to patients? Well, obviously, you know, I very much

Starting point is 00:48:16 appreciate when anybody compliments me. And I think that he paid me a very nice compliment and I appreciate it very much because we all appreciate being complimented. So thank you, Monish. Monish is a very different personality to my father, but people who have run successful businesses, I think have a bias to action. You have to have a bias to action. If you don't have a bias to action, your business will most likely die. So Monish, who's been unlike me, who's had at least one very successful business before he came an investor, has had. had a more significant challenge. The very thing, the bias to action that you have in an operating business is one of the things you absolutely don't want. If you're thinking about the world,

Starting point is 00:49:03 the way Charlie and Warren think about the world. Just to take a second, form onish, I've never seen anybody who has a more powerful empirical set, meaning that there's somebody that we were trying to get to recently, and we happen to know that this person wasn't opening their emails. And so that's somebody who's kind of shying away from reality. They don't want to deal with whatever messages those emails have. And so some people, reality is there, but they just don't want to see it. They're in denial of one form or another. Or they may not be in denial. They just are not engaging with the reality that's in front of them. And what I've experienced with Monash time and again is that when he experiences ideas that are opposed to what he's doing, opposed to his

Starting point is 00:49:45 fervently held beliefs, he grasped them. There's a there's a there's this. There's this. this quick and aggressive avarice for knowledge and avarice for reality. And then when he sees a fact about the world or a fact about himself, he jumps on it. And so what you see there is Monash realizing that he has a bias towards action. And then when it comes to investing, he needs to expunge that bias for action. And that fact does not ignore that fact. It does not sit as an unopened email. It's opened and it's been digested.

Starting point is 00:50:18 and you see that it's been digested because he's talking to you about it. And so in a certain way, he's pounding that lesson in for himself. When it comes to me, I think that in that regard, I am extremely fortunate. In many ways, I am not the ideal mindset for an investor. And the reason why I say that is that I have strong emotions and strong emotions around investing far stronger than they they would have to be to be really, really good. And that's just, that's no problem. I am happy to deal with that and happy to have my own makeup. But, you know, we're far better when we recognize that. So that is a place. And and I don't think that I'm anywhere near as interested in games of chance as Warren and Charlie have been in their lives. And I think that actually still, if I would just play more bridge, I would become better as an

Starting point is 00:51:07 investor. Bridge is this fascinating combination of knowledge and chance that I don't play enough of. But I have a very natural bias towards inaction. I have a very natural bias towards inaction because I have a slightly academic mindset and I love perusing things and thinking about things and I like reading. And then also because I am in a, I have maybe ADHD. I'm personally disorganized. And so it's hard for me to get to action. There's a book that was written or at least it was an essay title.

Starting point is 00:51:38 It's hard to change the world if you can't find your keys. and that kind of describes me pretty well. And I feel very lucky because I've got a group of people around me who help me with all of those things. But so I think that I just, you know, a bit like Asterix and Obelix, where Obelix fell into the tank of the special potions. He definitely doesn't need any more.

Starting point is 00:51:58 In that narrow sense of having a strong bias towards inaction, it's kind of like just I fell into the pot of inaction in my life. And so it's definitely nature for me. And then if it comes to nurture, what part of patience or inaction and bias towards inaction in your portfolio can be cultivated and those people who have a bias towards action? Well, I think that we will see Monash succeed handsomely with that desire to develop a bias towards inaction. And I think that it's this strange thing in human psychology that a problem well defined is a problem

Starting point is 00:52:37 half-solved. And so what you see in that Monish example is that Monish has defined the problem. Now he's more than half-solved it because you know that you just to say, I have a bias for an action, for action because I have been an entrepreneur and that bias is not helpful to me in business. Now you're going to figure out when that biased action gets triggered and when it's an appropriate in action when it's not. Very insightful. Thank you, Guy. Thank you for sharing your insights. It's almost like you're too kind. Every time I or Monash would pay your compliment,

Starting point is 00:53:14 you always see how much you can send back. It's absolutely wonderful, and you make everyone feel so welcome in your presence. I know you've got another question, but I know I might forget this, and I know that it's valuable, so I'm going to tell it to you because I've learned this from observing,

Starting point is 00:53:31 I'm not friends with Charlie Munger. Monash has had many meals with Charlie. I'm deeply envious. of Monish for having those meals. Unfortunately, you know, and I think that the right way to play out that envy is Charlie Munger is not available to me. In observing Monash's close relationship with Charlie Munger, when Charlie Munger decides that you're his friend and Monash is his friend,

Starting point is 00:53:57 he builds you up. One most wonderful gifts we can give our friends is a sense of confidence that they're okay and they're doing okay in the world and they're they're making intelligent choices. And I've seen Charlie do that, not just with Monash, but with a couple of other people that he and I know in common. What's my point to you? I appreciate your thanking me for putting maybe you and Monash on a pedestal, but I'm actually trying to channel, you actually are great, and you're actually doing a spectacular job, and you're doing a spectacular job of interviewing me, and you're doing a spectacular job for the

Starting point is 00:54:34 audience, and why shouldn't I give you that gift? But it comes from Charlie Munger. And just like that, ladies and gentlemen, Guy did it once more. I'd like to transition into a new question. So in 1965, accidentally the same year that Warren Buffett took over

Starting point is 00:54:55 the management of Berksa Halloway, the average tenure of companies in the S&P 500 was 33 years. By 1990, it was 20 years. And if you run some of the newer numbers, it might be as low as 14 years by 20 years. Now, we all know that the mighty fall, but as the tenure has become shorter and shorter, has it made you rethink how you identify and invest in compounders? Yeah, you know, it's really interesting. It's a really good question. So two things come up

Starting point is 00:55:26 for me. The one is perhaps flippant, but might not be, and the other is quite serious. I'll do the perhaps flippant point first. Just because the tenure of, those top companies is becoming shorter and shorter. I mean, there's nothing that saying that that is an inexorable, you know, that we can extrapolate that down to, you know, the tenure will be one year at a time. It's quite possible that we're at an inflection point now and actually where it's going to go is that the tenure of the companies that are at the top of the S&P and the top of the return tables will still be there in 30 years. Well, we'll be tracing as a lengthening of that tenure. That's possible. We cannot rule it out.

Starting point is 00:56:06 if you ask me if that's the case, I think I tend to agree with what you probably think. Because if that is the possibility, just because a company is successful, even more than in the past, maybe in the past if you bought the nifty 50 and just stuck around, even if you'd bought it in the 70s, you'd do fine. So that's way less true today, is I think your point. And I think I tend to agree with it, even though I set up the other point that maybe actually is going to become more true. And then I would say, yes, I think that's probably true.

Starting point is 00:56:36 And what that means is that, you know, those of us who are investing who are not the level of wealth of Elon Moss, Jeff Bezos, Warren Buffett and others are not going to do particularly well if we buy the already top companies. And we need to have a good strategy for identifying the future leaders. And it actually puts a, you know, it's kind of like screaming at us in the face. What that statement of yours says to me is, Guy, if all you're doing is looking at the leaders and the S&P or other kinds of leaders, you've already missed the boat more than ever before, more than in the nifty 50 times or other times, and you've got to start finding those future champions that have not been uncovered by the world that have a good chance of displacing the current companies. And I think that that's probably right. And I think that I'm coming to the slow and unfortunate and reluctant realization that that's the case. In part it was from listening to this Charlie Munger talk when Charlie says, I realize Stigig that Sequoia Fund, Andreson Horowitz, perhaps index ventures in Europe, four or five other of those top VC

Starting point is 00:57:47 firms, the concentration of talent insight, future returns that are emerging out of those firms, I mean, Charlie Munger said it. It's unprecedented historically that they're concentrated in such a small area. So what's my job? My job is not to keep looking anywhere but where those VC firms are. Instead, my job is to really try and understand the thinking of these incredibly smart people who are at these VC firms to try and understand how they see the world, why are they including certain investment themes, including crypto in their investment strategies, why they are including excluding other investment themes, because very likely that those future champions are going to come from somewhere in and around that stable of people and

Starting point is 00:58:31 companies. Even if you look at high-quality businesses, the more you look at them, every now and then you're going to find anomalies. And it's those anomalies that you want to check out on. And hopefully every now and then, the anomaly is going to generate an investable idea. And I have a suspicion that most of the time today, given the environment, the investable ideas, the good investment ideas, are going to look very expensive to the untrained eye. And it's only the person who's done the work to understand that actually they're very cheap. And that is not easy. work to do. And inevitably, every now and then, a soft bank is going to say that we work is very cheap. But it actually, and it's got many ways to grow and to multiply their investors' capital is going

Starting point is 00:59:14 to turn out to be a dud, you know? So I think somebody said, I don't remember who it was, but it was very compelling to me was the idea that, you know, and here's a different way of looking at the kind of like died in the wool value investors praying at the church of Warren and Charlie is that those of us who pray at the Church of Warren and Charlie are looking for something that's a 95% bet. But actually, it was Nanad Shinde, I'm going to interview him for my little mini podcast over here. Nanad, he said actually none of these things that he was talking about,

Starting point is 00:59:47 he's a participant in Value X, are 95% bets. But they're all 70% bets, and 70% is pretty damn good, and stop expecting 95%. if you expect 95% likelihood of success, you're narrowing your universe down too much. And 70% bets is still not kind of venture capital only 1 and 20 work out. It means that more than 1 in 2 works out, but not 9 out of 10. And actually, if you have more than 1 and 2 and they work out hugely, you're still going to do extraordinarily well.

Starting point is 01:00:20 Now that we talk about active investing, I can't help but ask you, if you could choose to expand your circle of competence and be an expert in a split second. So this is a very theoretical question. But you could be an expert just like that in a given sector, technology, country, whatever it might be. Where would you add to your circular competence? Very easy for me to answer that, Stig. I'd like to have talked to and understood the business models of every single one of Sequoias, Andrewson Horowitz, Index Ventures, and NFX, James, James Curry's investment farm, I would have wanted to have looked through and understood all of those. And I think that, you know, I have a friend who's a Google engineer who doesn't have that

Starting point is 01:01:06 experience, but I think that he has a deep insight into many of those companies' investments. And so that is where I'd want to expand my area of knowledge. And I think that the extent that you haven't, I urge you Stig and Preston, I actually bet that you have many times. anybody who hasn't find your way to University Avenue in Palo Alto, basically expressing the idea of software is eating the world. Silicon Valley, which is no long just Silicon Valley, it's Austin, Texas, it's Tel Aviv, it's many different places, really has the world in its sights. Everything is getting disrupted, and it's getting disrupted by technology, it's getting disrupted by very, very bright people sitting in that area. And so if I could go back 25 years, I would

Starting point is 01:01:49 want to avariciously grab all of that insight and knowledge. And if I didn't have a family and ties and all sorts of other things, I think, and all I cared about was generating the best financial investment results. I think that I would commit myself spending a lot of time in that area, attending conferences, meeting CEOs, understanding what was going on. Very, very simple. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. risk and regulation are ramping up, and customers now expect proof of security just to do business. That's why VANTA is a game changer. VANTA automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform.

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Starting point is 01:05:38 here with the next question. Before you're investing, I know that you're increasingly asking yourself, does the company have a noble mission to make society better off? I feel it's a very profound question you're asking. So could you please, together with the audience, walk us through your train of thought on this and why operating metrics like, say, return of capital and highest margins, which of course still important metrics, but they're no longer your main focus. It's possible that every company that has high margins is actually ripping somebody off. We just have to identify who it is. I think it's a rule.

Starting point is 01:06:16 If you cheat on your taxes, you're in, you're out. Sooner or later, they're going to find you, and sooner or later they're going to ding you. So don't do it. It kind of seems to me to be a universal rule that if you're kind of drawing more from your environment than you give, then sooner or later, sooner or later it's going to catch up with you, it seems. I don't think that people get that kind of like free pass or that get that easy pass forever. And then we go into the personal domain. And again, you know, the source of so much wisdom is Charlie Munger.

Starting point is 01:06:47 And I just love this. And I'm certain that he gets this from talking to his grandchildren. The best way to get successful is to deserve it. You know, and it's this beautiful idea that don't worry about how the universe will reward you. It will reward you if you really deserve that success. and you know, you want to, when you, if and when you get that success, you want people to say, well, he really deserves it. And then I think that you can extend that straight to companies. So I think that if you were somebody who loved Philip Morris's profitability, the enormous cash flow

Starting point is 01:07:22 generation they had, but you did not take into account the fact that they were giving people cancer, you were sitting with a giant unrecognized liability that, sooner or later, society might take it upon itself to make you pay for all the people that you're giving cancer to. And there was a tobacco settlement in which effectively they did that. And they kind of like, those companies' profitability was severely impacted. I used to have a fascination with the for-profit education sector and they had the opportunity for endless growth and they had a strong incentive to restrict on their investments in facilities like libraries and sports fields and student dorms and the like. But they were enormously profitable. And I was very,

Starting point is 01:08:09 very enamored with the profitability, of course. But then the Obama administration came along the United States and dinged them. And then, you know, not so long later, the Brazilian political system made it very, very hard for-profit education companies. And so how do you avoid those kinds of risks. And this concept of a noble mission is the ultimate way to avoid those kinds of risks. Why does Elon Musk get, I don't want to say he gets a free pass, but I think that many people would say that he gets a free pass for the Chinese, because he's actually on a noble mission. He's one of the most incredible noble missions, what one thinks of Tesla or of his, as him as an investment partner. So getting your noble mission, both as an individual and as a company, is one of the kind of surefire ways

Starting point is 01:08:56 to both get you on the path to success and to mitigate many, many risks. We're not going to mitigate risk by reading the risk factors in the 10K, although I'm not saying don't read it. That's what a narrow-minded lawyer decided was going to remove liability for you if these risk risk factors are mentioned. But no amount of intelligence and creative thinking and good analysis is going to enable the analyst or the investor to foresee all the risks in the business.

Starting point is 01:09:29 And so if you're not going to be able to foresee all the risks and the risk factors in the 10-Q don't help, what can you do? And I think that if you have a moral mission, then you're going to use that as you're a good foot forward when you come into adversity. And not that people will give that company that has that noble mission a free pass,

Starting point is 01:09:51 but they're far more likely to want to engage with it productively. And by the way, that's why, when I talked about charitable donations in my little investment firm here, in a certain way, it's long-term greedy. To be an investor in your community, for example, is actually just ensuring your survival over the years. Let me just get back to one of the things you said there about deserving success. I think it's very insightful. One of the things I remember reading from Warren Buffett whenever I was younger was, how do you get a good spouse, which is something, I I think a lot of young men are interested in.

Starting point is 01:10:28 And the advice was pretty simple. Be a good spouse. And it might sound silly because it's so simple, but it's so profound in all walks of life to think like that. I've been married 11 years. And of course, whenever my wife and I had disagreements, it's never my fault. It's always her fault.

Starting point is 01:10:44 But of course, you know how it is, guy. What's your wife's name, Stig? Sophie. Sophie, if you listen to this, I just want you to know in any dispute with Stig, I'm on your side. Right. Yes.

Starting point is 01:10:57 It's been ordained by a guy now. I can tell that to Sophie. It's such a valuable thing to think of whenever you become emotional. Like, emotions run high. Something is going on. Stop and ask yourself, why? Do I deserve this? Something as simple as that would just tell you how often you can stop yourself and be like,

Starting point is 01:11:17 oh, I deserve this. What my spouse said to me, that is well deserved, which can be really, really hard to see. the moment, of course. We got this place in the mountains to go skiing in. I did not want to spend money on the kitchen because I thought it was ridiculous because we had a perfectly decent kitchen. And then, you know, I kind of like somewhere those thoughts of Charlie Munger percolated in, how do I be a good husband? She wants a good kitchen. If you can afford it, give her a good kitchen. And sort of like, and then I discovered that by looking to see what my wife wanted and finding a way to

Starting point is 01:11:54 get it to her made me a lot happier, a lot happier and made my marriage a lot happier. So that idea of how do I make it so that my wife feels like I'm a good husband? What does she want? You know, I want of one of the big things my wife wants if you just show up on time for dinner and be attentive to the children. It's pretty basic. And you think that she should be able to take that for granted. And you think that I should give that for granted. But in my case, that actually takes a little bit of thoughtfulness and positive effort. I think true of what so many women do, and it's kind of like, and I'm kind of, I said this, nothing I'm saying to you, I haven't said to my wife, I feel slightly ashamed that I was a person who did not understand that I just needed to give her more

Starting point is 01:12:40 resources with which to create a beautiful life around us. And I'm extraordinarily grateful to her. She's, I feel very lucky to be married to her. Laurie, if you're listening to this, I love you. She likes hearing that. Yeah, I can understand why. There's this wonderful, wonderful quote, and this interview had been like highlights of quotes. Pain plus reflection equals progress. It's redelious quote,

Starting point is 01:13:06 and it's probably true both for marriage and investing. I think that pain plus reflection, it's easier to do in a parcel sense because you only got yourself to deal with. But this idea of pain plus reflection is, if you take the pain and you sweep it under the rug, you're not going to get much benefit out of it. It's that ability to take the pain and stick it in the back seat of the car with you and take it on a drive with you and just kind of like let it smolder there and learn the lessons of it.

Starting point is 01:13:35 I think that the minute you become a couple of husband and wife, that becomes more challenging. I think it's a bit more like perhaps riding a bicycle because you have to process that pain the two of you. And of course, processing pain in a couple is fraught with dangers. Like you might accuse, one member of the couple might accuse the other of being the cause of the pain. And I think that's sort of figuring out what part of this pain do I own in this? What part of the pain or causation do you own? What part of it is the external environment that we can't influence? That is really, really complex.

Starting point is 01:14:14 But I can tell you that to the extent that my wife and I have succeeded at any point, our lives in that process. I think it's one of the most rewarding things that I've done, actually. And I would tell you, Stig, with teenage children, that process, and we have three, it becomes ever so more complicated because you've got so many more personalities to deal with through in different places and thinking different things. You come across as so authentic and so genuine, which I think is very hard for a lot of us to make a self-vulnerable the same way. I remember speaking with Jesse Isler years back. And here are also on this show.

Starting point is 01:14:53 And Jesse Isler, he created an airline and founded it and sold it to Buffett, but I don't know if he might be even slightly more famous for being married to Sarah Blakely. Today, a wonderful person, and so is his wife. And I asked him about a piece of advice he would give to his 20-year-old self. And he said, you know, it's very simple. Make yourself vulnerable. That was the best piece of advice. he could give. Could you talk about your own journey about making yourself vulnerable,

Starting point is 01:15:24 making the decision to make yourself vulnerable also in public and perhaps some of the bruises, but also some of the wonders that it has carried with it? I'd never heard of Jesse Itzler, and I'd never heard of somebody who's well-known and successful in saying, make yourself vulnerable. in a sudden sense throwing me back because it's it's such a powerful idea and so, you know, so simple to describe and so hard

Starting point is 01:15:53 to do. I think that probably I know very little about Jesse other than his name that he said that. I suspect Stig that he is or was deeply loved by his parents and or is deeply

Starting point is 01:16:09 loved, meaning that he has no doubt in no doubt that it's not even a question that he asked that he is he is loved and that he loves himself the reason why I say that is that what gives us the strength to be vulnerable is I think the knowledge that when we become strawberry jam on the mass pike type of deal when when when life hits us sideways and feels like we've been destroyed we have the confidence to go out and conquer, even though we know that we're going to be dealt terrible, terrible setbacks. It's just a, I'm kind of like in awe of the power of that insight. And then I asked myself,

Starting point is 01:16:53 so I'm going to go better to how I've dealt with vulnerability, how I got to make myself more vulnerable, maybe some learnings from that. And you've really kind of stumped me in a certain way, stumped in a good way, because you've just thrown this, it's kind of a new thought to me that shouldn't be that new to me. As you were talking, what came up for me was Bray Brown, and she has talked a lot about, I think, the power of vulnerability. And in my case, it starts with having somebody who loves you deeply, no matter what. And I think that if many of us, some of us, are lucky enough to have gotten that from our parents.

Starting point is 01:17:34 And if we didn't get it from our parents, hopefully we had a soccer coach or, you know, maybe now a spouse or a significant other who provides that force for us. If we don't have that, we don't have something to go back to when life splats us in the face. The next thing I think that I go to, the idea that I go to is somebody is listening to this or I myself say to myself, I need to make myself vulnerable. I think that we need to titrate the vulnerability. So there are many different levels are vulnerable. There is standing out in the snow, there's going out in the snow and pointing your skis down the steepest slope in history. All of those are different levels of vulnerability. And they're sitting inside in the warmth and not even putting your skis on. And so, you know, I think that this

Starting point is 01:18:21 sort of injunction to be vulnerable and makes yourself vulnerable to get success, it's saying, get outside and think about putting your skis on. But it's not telling you where to point the skis. It's not telling you whether you should ski the blue slope, the red slope or the black slope. And so vulnerable is not on or off. And if you're a type that is very scared of making yourself vulnerable, make yourself a little bit vulnerable. And if you're already making yourself vulnerable, check if you're not, you shouldn't make yourself more or less vulnerable. So I think that in many ways, I would tell you, I mean, the opposite perhaps of making yourself vulnerable is sort of like staying in shelter out of fear. And I actually think that there are many aspects of my life stig that actually have been driven by fear.

Starting point is 01:19:06 I don't think that's a good thing. I think that fear does not help you get anywhere in life. Fear is a kind of not a helpful emotion. I think that fear is a helpful emotion when there's something to be scared of, you know? So if the avalanche is coming down the hill, then definitely be fearful. If you're walking down a dark alleyway and there's a guy in the corner with a knife, definitely be fearful. But to be chicken little and to be worried that the sky is going to fall on your head when actually it may never fall, that emotion is very unhelpful. And I think that my example perhaps

Starting point is 01:19:41 demonstrates that you can live actually quite a fearful life. And when I say fearful, that's been expressed in some very conservative investing, an unwillingness to take huge, risks for gain, or even small risks for gain. But the answer is that even if you do a bit right. You can have a pretty damn good life and enjoy a certain amount of success. And I do think that the success that I have had is not because I came out of a place of fear. It's because I came out of a place of being willing to be vulnerable, willing to fail. And then I guess I will just take you to the writing of the first chapter of my book. And so vulnerability comes with this desire of honesty. And I was very heavily influenced by two books. Both of them came to me by way of

Starting point is 01:20:29 Monash Pabrai in this amazing lunch that I had with him. One is power versus force by David Hawkins. The other is Mahatma Gandhi's autobiography. And this power versus force, David Hawkins talks about the power of being truthful and the power of authenticity. And authenticity is not some cute thing that you do to make the world like you because you're being authentic. Authenticity is power. It is power because people pay attention to authenticity. You know, a leader who is facing some enormously difficult task that he or she is trying to lead people in who stands up and says, I'm afraid. That's authenticity, which leads people, because now they say, that person is afraid, I'm afraid, I'm going to listen. Because they're identifying

Starting point is 01:21:19 with the emotion that I have. And then maybe they say, I'm afraid, here's what I'm doing about it. It's far better and real leadership than saying, don't be afraid. When everyone's thinking, yeah, yeah, yeah, easy for you to say, I'm absolutely very, very scared. So as I was writing the first chapter of the book, I understood the power of authenticity. I understood the power of truth. That actually, that capacity that I discovered to make myself vulnerable in the moment when I realized that that chapter was going to form a part of my book. book, I think, sent me on a fantastic path. And I'm really saying this not to teach, but to just act as a witness to one example of that, is that the decision to make oneself vulnerable,

Starting point is 01:22:00 I think I want to reassure the listener. That decision is not something that is forced on us. It's not like some part of my super ego says, you need to make yourself vulnerable. So now go and do it, as if it's some schoolmaster. It's something that wells up from inside. When the student is ready the teacher appears. So I think that the injunction, going back to Jesse Idsler, about success being, vulnerability being at the root of success, it's not about, okay, let me select one of 10 ways I can make myself vulnerable and find one that is really kind of out there. When I don't have anything better to do, Stig, I read poetry. I try to read poetry. And there's this poet T.S. Eliot, who is, I don't understand most of his poetry just to be clear.

Starting point is 01:22:48 I'm not some literary guy who understands everything, but there's a poem of his called The Love Song of Sir Alfred Prufrock. And then I want to go and say Stig that I don't understand the poem, but the poem evokes thoughts and feelings in me. And so there is a part of the poem where he says, do I, don't I, do I dare to ask the question, to ask that question? And I'm not quoting the poem entirely correctly. but he evokes this idea of a guy who's on the very tip of doing something.

Starting point is 01:23:21 He's on the very tip of asking perhaps a woman in his life whether she should marry him, although it's not clear that that's what the poem is about. But he says just on the cusp of, you know, you have the person standing in front of that on that cliff, and will he or won't he jump with the bungee jump, or will he he, is he ready to take that leap into the unknown? And I think that there's an instinctive sense that we need to get, around will get better at to say, yes, I'm never going to feel entirely safe, but this is something

Starting point is 01:23:52 where I'm willing to make myself vulnerable. And we've got to try and titrate the doses of vulnerability we give to ourselves. Shouldn't be so little that it doesn't have an impact. It shouldn't be so great that it could destroy ourselves. We're going to get it wrong. But what an amazing thought. And I've rambled a little bit, but you've given me something really to chew on. I mean, And that's going to, I'm going to probably dream about vulnerability now. I feel with you like I do with Warren Buffett that I originally found you because I wanted to learn to invest. And while you and Warren Buffett are among the very best when it comes to investing,

Starting point is 01:24:31 what really stays with me are the life lessons. So I just wanted to say thank you for that guy. Yeah, you're putting me on a pedestal now. So just let the record show that it wasn't just me putting Stig and Preston on a pedestal. It goes both ways. And how kind you put me on a pedestal there with Warren Buffett? I think it's a stretch to say that I am a great investor like Warren Buffett, but I really appreciate the attempt.

Starting point is 01:24:54 But when you go on an adventure and life is an adventure with many small sub-adventures in it, you get the treasure. But actually what is the most valuable is the journey that you got and the lessons that you learned along the way. And I'm more than halfway through my life. So, you know, in seconds I'm no longer a billionaire and have no chance of being a second billionaire, unless Ray Kurtzweil and the Singularity University, new health stuff, somehow extend our lifespans by another hundred years or 200 years. I guess I'm a skeptic that that's going to happen in my lifetime.

Starting point is 01:25:26 I know that I've been proven wrong with so many things and maybe in that as well. But in a certain way, would you not agree that if we don't devote ourselves to enriching ourselves not through the material wealth, but through the life lessons, then we're actually throwing the baby out with the bathwater. We're getting rid of the most valuable part. And I'm going to, I pause because I kind of really want to mention his name, but I'm not going to mention his name. I was in a bachelor party or kind of a bachelor dinner

Starting point is 01:25:56 for a guy who at the time was already a billionaire and is now a billionaire many times over. And I found him, he was a friend. of a friend, it was in a place in New York City, and I found this person to be an utterly shallow, uninteresting person to be around, not somebody that I would have wanted as a friend. And he was somebody who was extraordinarily focused on just the money. And he just wanted a very, very big number to his name, and he'd figured away how to do it. And I felt miserable around him. I really did. And so that is not the way you want to live your life. But hanging out,

Starting point is 01:26:37 out with Stiggin' Preston, figuring out wisdom for the world. That is freaking awesome. Wow. Thank you for saying so. We talked about the education of a value investor many times here on the show, which is a wonderful book. And I guess I'd like to put a few words to that for the listeners out there, because the journey I was personally on at the time was in some way similar to guys and what you did at the Es Blair. I think you described it as the wolf of Wall Street, even though that in that movie they just turned the volume up a bit compared to the environment you're in, but it was a very toxic environment. The reason why I'm mentioning it, it happened to me simultaneously, but I've met so many, so many people in the community who are fascinated by money or

Starting point is 01:27:24 that life, what they see, then they get into it and they realize what a horrible world it is with shallow, greedy, terrible people, truly. And they wanted to get out of it. And they wanted to get out of And they realize that it's not mutually exclusive to wanting to be successful, wanting to make money, but still be a good person and do good in the world. And I think that's one of the reasons why so many people are drawn to your book and learning from you, Guy. So having said that, can I send it over to you and give a handoff to where people can learn more about you? I'm sure after this conversation, people would like to get to know even more. Yeah, thank you. writing that book was the beginning of the most wonderful adventure and journey for me that obviously

Starting point is 01:28:09 I'm still on. I should say that I think I was, I did genuinely share valuable knowledge in the book, but I think that, you know, my career as somebody who can share, make a positive impact on the world to just use a kind of a phrase that seems to be around a lot. I mean, I'm at the very beginnings and I'm just scratching the surface. So I got a lot more to go. And just to be clear, I'm not doing it. out of some sense of complete altruism. It's fun, and I get so much reward and benefit from it. And so I'm on a path. I do like Twitter, and so you can find me on Twitter, and I do respond.

Starting point is 01:28:47 And I love Twitter as a serendipity machine, and what I learned very briefly Stig in a thousand of a way is be authentic, don't use links, don't post too many images, and very aggressively mute or block people who are, toxic. So when you, even though the people, you just get all of that out, and it's a tiny corner of Twitter that's really wonderful, but G. Speer, you're welcome to find me on Twitter. I work quite hard at an email newsletter, again inspired by David Perel, because I think that, and the idea stig that I'm going to pause and express, because I think it's so powerful is if we just browse the

Starting point is 01:29:28 internet or hang out on YouTube, we are the product and the algorithm is using. us. But the minute we create content of one form or another and put it out there, we can use the algorithm to connect to other people who have our very specific form of crazy. So I write an email newsletter and I have a podcast, very small podcast. I do it just for fun and just to interview people that I might not be able to otherwise interview and to kind of shine a spotlight on people I want to shine a spotlight on. It is a fraction of the audience of the investors' podcast, but it's kind of like a hobby that kind of supports my desire for a rich and fulfilled

Starting point is 01:30:13 life. And so you're extremely welcome to find that podcast. I hope you like some of the conversations I've had on it. I would also share that Stig is and Preston are incredible interviews. And I really should tell you that the plan and the research that Stig put into this interview is something that I hope to replicate in some of the future interviews that I do. But if you go to guy spear.com, www.gaispear.com, you can find the podcast and you can also get the opportunity to subscribe to my newsletter. I would tell you that I am prohibited by various

Starting point is 01:30:50 regulatory authorities by talking about talking about the fund that I manage. But if you find your way to those two places, you will certainly find your way to the fund that. I manage. I would tell you that, you know, there are all sorts of hoops that you have to jump it through if you ever decided that you wanted to invest. If you feel like you're like-minded and you feel like you want some more of me in your life and you're the right kind of person, I would be delighted to meet you. And I would say that I could have run the fund that I run, Josh, for friends and family, but I love the associations that I've gotten to have. And some of the investors that I've gotten to know who are invested with me are truly wonderful people

Starting point is 01:31:32 and I'm very grateful to have them as part of the fund. But yeah, thank you so much for having me. And just remember, if people are disparaging an idea, it might actually be pretty good. And I hope that Preston hears that in regards to his interest in crypto and your interest in cryptocurrencies. Guy, thank you so much for your time.

Starting point is 01:31:57 It's absolutely amazing to be able to learn directly from you. So thank you for once again joining us here on the Investors podcast. And thank you for having me. I have a sense that the Investors podcast is going to go from strength to strength. You're an incredible force for good yourselves. But I'll stop because then you're going to call me out for doing too much. I'm going to call you out and send it back to you guy here at the end to say, if that is indeed what's going to happen is because we speak to people like you. So I'll see if I can end the interview now. But thank you, thank you so much, Guy. It's been a privilege speaking with you today. And thank you, Stig. Thank you for listening to TIP. Make sure to subscribe to millennial

Starting point is 01:32:41 investing by the Investors Podcast Network and learn how to achieve financial independence. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision consult a professional. This show is copyrighted by the Investors Podcast Network. Written permission must be granted before syndication or rebroadcasting.

We Study Billionaires - The Investor’s Podcast Network - TIP414: Investing and Life Masterclass w/ Guy Spier

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