[00:03:04] Guy Spier: They would have been of given property in reward for a service to the monarch. But at the end of the day, underlying all of that, what is it? Karl Marx? All property is theft. So I’m not sure that we can, because now in the world of business, we’re playing according to rules. We’re not engaging in violence.

[00:03:24] Guy Spier: There are tools that we use, maybe it’s innovation, maybe it’s all sorts of ways that we try and get advantage in the business world. So, which I don’t think are particularly relevant for how royal families achieved their position. So let’s just get that out of the way. Nobody’s suggesting that one should learn from the ancestors of these royals through violence or other things to get where they are.

[00:03:46] Guy Spier: But if we think of these kind of like juggernaut blockbuster businesses like Coca Cola or an American Express or Nestle, and in a sense, those are kingdoms. And inside of those kingdoms, there are people who kind of like royal families, if you like. So what have I learned from trying to understand? So the first thing that happened to me, if I think of the royal family that I know the best, which is the British royal family, not personally, just through observing them is that I went through a period of being a sort of a strong Republican, where I kind of like enjoyed being on the subway on the tube in the UK and saying things like off with their heads.

[00:04:23] Guy Spier: And to every single member of the royal family, I deeply apologize for having said that because I don’t think it’s well, I can totally see why the British royal family is absolutely key to the functioning of British democracy and the British constitution. So I went through an evolution where I felt like I was a Republican and then I came to this grudging acceptance and understanding that the royal family was absolutely central and key to British public life.

[00:04:53] Guy Spier: And it was only in the last maybe three, four or five years that I discovered that I could actually learn from their behaviors. So I guess I hope that this comes to moats, but I would start with, I used to think that all the titles that the royal family can give out or the king can give out in the case of the UK.

[00:05:17] Guy Spier: We’re just very, very stupid. And then I realized that there’s quite a lot of discernment and care that goes into giving out knighthoods and there are various different kinds of knighthoods, various different degrees of exclusivity that I don’t know much about, like, Knight of the Garter and I don’t even know all the names.

[00:05:37] Guy Spier: And then there’s a basic SAR somebody, and then there’s titles like OB and CBE. But I started to realize that those titles are given out in subtle ways to adjust and to kind of like make quiet behind the scenes statements about what kind of society the Royal family wants to see. And I kind of looked at that and said, what can I do that’s similar?

[00:06:02] Guy Spier: Stop being angry at them and start thinking, what can I do that’s similar? And I realized that recognition. So these titles, they’re not anything physical. You’re not giving out a castle. You’re not giving compensation. You’re not giving stock options, you know, giving any of those things. Purely giving recognition to people is something that we can all do.

[00:06:24] Guy Spier: And that I realized that I did far too little of it. So we were just before this thing started, we had a very short time, for the listener, Stig you had a birthday card from me. And in a way that’s me saying, I recognize you. It’s a very, very simple recognition. So Warren Buffett understands this and it pisses me off that everything I’ve learned at Warren Buffett, I realized, but he sent me a letter and he kind of like, and what was the letter it was, he’d read my annual report and he liked it.

[00:06:54] Guy Spier: And so he wrote me a letter. I’m like, I was blown away. And of course what I did was put it on the wall. But how different is that from a Royal seal of approval? How different is that from granting an OBE or a SAR or something to somebody? It seems to me that it’s the same thing. So I wanted to try and like answer your question and make one very, very small point around.

[00:07:15] Guy Spier: The Royal family and the UK is that recognition is a way of exerting soft power and extending your moat. So the more people I can recognize in my life in a genuine way, and it can be as simple as writing them a note or a letter is going to actually enhance. Their loyalty to me, because you can imagine my loyalty to Warren Buffett is enormously increased through that letter.

[00:07:41] Guy Spier: It was high anyway, and you can imagine that the loyalty towards the royal family is severely enhanced and increased through those recognitions. And I think that many people go through life desperately hoping and wanting and desiring to be recognized themselves, you know, and here you have the monarch who actually has a whole administration that is dedicated towards the monarch, recognizing other people.

[00:08:08] Guy Spier: And one can say, yeah, well, they’re the monarch, but the fact of the matter is we can all do it. And would somebody in the business world prefer to get recognition from Warren Buffett? Absolutely. But they also don’t mind getting recognition from me. So, so that is one that’s sort of like minor way in which we can extend our moats through the royal family.

[00:08:28] Guy Spier: I’ll just give you a couple of other thoughts before I, I let you come back and maybe redirect me a little bit more precisely. So, if we think of Royals and we think of the history of royal families or kings and queens in Europe. It goes all the way back to emperors, it goes back to the Roman Emperor, the key of the about the Roman Emperor.

[00:08:48] Guy Spier: And if you go before that to, for example, the Egyptian emperors, what or pharaohs is that they were also considered to be gods. And there was a kind of an interesting split in European history where the emperor was no longer a god was a human and the kind of like there’s a period of confusion, but ultimately, the role of King.

[00:09:06] Guy Spier: The person who has access to physical and worldly power and the Pope or religious representatives who kind of had access to other world that eventually split, but the association that humans have in their minds with a royal family to association to kind of like the ethereal godliness stuff that we could never reach is still extraordinarily powerful.

[00:09:32] Guy Spier: And so obviously the royal seal of approval is an incredible thing. It kind of brings, it gives you an association with that. Royal families, it seems to me, use all sorts of tools to enhance that association, that sort of like other worldliness, that sense that you’ve gone through the looking glass and you’re in the world of the God, so to speak.

[00:09:50] Guy Spier: So if you take Buckingham palace, it’s a symbol, and it’s also a sort of an accessory for the royal family. It’s a statement about their power and their centrality in British life. If one actually looks closely at Buckingham palace, what you see is that it’s a massive facade. And actually, it’s quite kind of, I wouldn’t say small and cute, but it’s all about the facade.

[00:10:14] Guy Spier: And when you drive through the facade on the other side, it’s actually quite ordinary. And so it’s about presenting a face to the world and I think that we talk a lot in the value investing world about having an inner scorecard and about having the same being the same person in private as we are in public, but there’s I think that I’ve learned about that actually, and it’s not so much the facade.

[00:10:37] Guy Spier: It’s the way you create authenticity. So is the king of England also the king of England if he’s standing in the middle of the street somewhere? Yes, he is. But if he’s going to make a statement or if he’s going to make an award, or if he’s going to appear on his birthday, that symbolism of appearing on the balcony of Buckingham palace is really, really important.

[00:10:59] Guy Spier: It helps the British public to connect and feel a certain way in a way, you could say it’s a ritual. So, what I realize is that doesn’t mean that I have to inhabit Buckingham palace, so that I have to have some grand office building, but I need to be aware of the symbolism of what I’m doing. And you could even say of what your business is doing.

[00:11:21] Guy Spier: So to give one example, a very long time ago, I remember seeing, it was an interview with Warren Buffett in Fortune or Forbes or something like that, and apparently what I remember reading was that he insisted in being photographed at McDonald’s, he said you ‘re at a sort of a family burger place. And that symbolism for Warren Buffett was important.

[00:11:42] Guy Spier: He knew what he was trying to present to the world. And so it’s not that you have to be in Buckingham Palace, but I think that we are more effective in business when we kind of pay attention to that association. So I’ll give you an example that is just recent. I mean, it was a conversation yesterday. So I do this charity lunch now every year.

[00:12:01] Guy Spier: And the latest one that I’m going to meet is going to be in New York. So the person said, look, I’ll meet you anywhere. I really don’t care. As long as we spend the time, I’m really happy. And the person I was five years ago, the person who’d not studied the royal family in the same way as I have now, I would have just said, yeah, sure.

[00:12:17] Guy Spier: Well then let’s just meet anyway, somewhere that’s convenient to you or to me. And actually, I insisted, I said, no, we’re going to meet at somewhere that’s meaningful and symbolic. So in this case, we’re going to meet at Smith and Walensky’s, which is where I had my original launch with Warren Buffett.

[00:12:31] Guy Spier: Because even if we go back to the King of England, and we take, let’s say, Chris Han, who is a famous investor who was given a knighthood in recognition of his services, a huge amounts of money that he’s donated to charities. So let’s say Chris Han says, oh, that’s a great honor. I don’t need to come to the ceremony.

[00:12:51] Guy Spier: And actually, if you want to knight me, you can knight me anywhere. It’s okay. And let’s say the King’s not got much time. And he says, yeah, that would really suit me as well. Well, no, the formality of doing it in that way in front of people. At Buckingham palace with a sword with probably some kind of letter or seal or something.

[00:13:10] Guy Spier: It creates a symbolism that is important for every everybody around it. So the royal family is extremely aware or the people around them that they don’t want to desecrate that imagery. And on the one hand, the person I was more than five years ago would have said, who cares? But actually we all do better when we understand that pretty much not everything, but An enormous number of things we can do has a have a symbolic side to it, and the symbolism is important, and that doesn’t mean we have to ape the royal family.

[00:13:41] Guy Spier: So, I wanted a really good design for my annual report, and there’s this awesome woman called Cecilia Wong, who’s been helping me. She designed the cover of my book, and I met her through William Green, and so I’m with her and I’m saying, look, I’ll show you examples of any reports that I think are really, really good.

[00:14:00] Guy Spier: And you’re going to help me to do something. I said, look, Cecie, like the best example I have is the Berkshire Hathaway annual report, but it’s not designed. And I showed her the webpage and she’s a genius, I can tell you. She used to design the covers of Time Magazine for Asia. So she comes back to me and she says, Guy, you don’t realize, both the Berkshire Hathaway Annual Report and the website are extremely well designed.

[00:14:24] Guy Spier: And they, and, and there’s a design desire that I’m like, the website has got nothing there. And she says, no, this is what it’s saying. It’s saying we’re not about extraneous fluff. We’re about the words of Warren Buffett. We’re about letting you get to the key information easily and presenting it to you up front in a way that we’re no nonsense, no bells and whistles and no fluff kind of organization.

[00:14:46] Guy Spier: And that is a communication and that is a symbolism. Or if you think of the Berkshire Hathaway meeting. Where Warren and Charlie appear, well now it’s just Warren, but they would appear on that table with nothing else, just an ordinary backdrop that in a way is the symbolism that they want to create. But that doesn’t mean that I have to ape Warren and Charlie, I don’t, and I don’t have to ape the royal family.

[00:15:09] Guy Spier: So just give one example. In our company holiday card, we actually did a line drawing of my office building or the office building where I work. So what’s the point there? Well, it is where I work and on one hand, it’s kind of like completely irrelevant. What’s important is what’s going on in my mind. On the other hand, people deserve to know where I work and there is a kind of an association there.

[00:15:33] Guy Spier: It’s where I come into work every day. So on the back of the car, there’s a drawing of that. And so that’s me directly learning. I don’t want to live in Buckingham palace or working in a Buckingham palace. And I’ve chosen the environment that I work in and I want to give people a sense of where that is.

[00:15:46] Guy Spier: So I did a drawing. And so understanding that symbolism and that everything we do has a symbolic nature and we ought not to ignore it. So there are a few things I’ve learned from the Royal family.

[00:15:59] Stig Brodersen: Thank you guys. There’s so much to talk about here and in my preparation here for this interview with you, I listened to a bunch of the interviews you’ve done just in general and you, you mentioned Joseph Campbell quite a few times and I thought to myself, okay, I better order some books and get started.

[00:16:15] Stig Brodersen: Then you sent me this wonderful card with a quote by Joseph Campbell. So one example he comes up with is he’s talking about the, United States and he’s talking about how it’s very much a country that’s ruled by a lot of different laws, a lot of different systems, because that you have to do that because people come from so many backgrounds and, and then he compares it to American football and said, like the rules, there are very intricate and he compares it with rugby and says that the British board, that I’m no expert in rugby.

[00:16:44] Stig Brodersen: Yeah. And these Americans go there and they come up with a forward pass. And the British are like, that’s not how we do things here. And it was sort of like interesting. Like it’s not in the rule book. So some might say, if it’s not in the rule book, I can’t do it. I’ll just do it. And then the British are like, that’s just not how we do things.

[00:16:59] Stig Brodersen: So could you please not do that? How did that, if at all play along with this idea of the royal family, the idea of the myth and the shared history that we all have to various extent.

[00:17:12] Guy Spier: I’m so glad that you found your way to Joseph Campbell. I mean, I don’t know how I found my way to Joseph Campbell, but he just like blew me away.

[00:17:20] Guy Spier: He was the key that unlocked so many things for me. I think that there are writers that I’ve read that in a way have helped me to come home to myself. For example, there was a civil war going on inside me between my rational side and the side that had studied science and wanted to believe to exist just in the material world.

[00:17:38] Guy Spier: And then what do you do with this whole mythological side or with this like religious and spiritual side? And he gave me the key to understand that there’s like two sides of the same coin. So, and what you’re talking about there, if I understood it correctly, is the time that the British would understand.

[00:17:55] Guy Spier: So, well, if you don’t think you don’t understand rugby, I’ll take you into even more esoteric sport. And the famous phrase is, well, that’s just not cricket. And this idea that there are rules that are behind the rules and so the rule book doesn’t cover it all there’s plenty more and there’s a kind of a shared understanding of what this game is supposed to be about and that should modulate your behavior and in a way, I mean, not that’s just not cricket and it sort of come the things that you don’t do, even though they’re not in the rule book.

[00:18:28] Guy Spier: It comes down to understanding, perhaps, that people in that game are not playing to win, they’re playing to, or no, they’re not playing to win that game, they’re playing to win the infinite game, which is the game of victory. Continuing the relationship with these people and making them like you and want to play another game with you and displaying your personality as being willing to take the win when it’s acceptable to take the win, but also being willing to stand back and not push your advantage to the very limit, because it would be kind of not right to do so.

[00:18:58] Guy Spier: And actually, I just feel compelled to say it. I think that I don’t know if you’re following this women’s boxing at the Olympics. And if you take a very, very narrow reading of the rules as the Olympian international, so there’s this Imane Khelif woman, and I think that she is now in the finals with another person with XY chromosomes, which are kind of male chromosomes.

[00:19:22] Guy Spier: If you read clearly, according to the rule book that the International Olympic Committee has written on how you define female and male and what allows somebody to compete as a female. They meet the criteria, period, end of story. But there’s, when you see these boxing matches between somebody who’s an XY chromosome, which is effectively a functional male, versus an XX chromosome, which is a female, what you see is, even if they’re labeled female, that you see a man punching a woman, and it offends that basic sense of decency.

[00:19:57] Guy Spier: And that would be an example of, that’s just not cricket. It’s what the British would say. I think that just trying to tie that in with Joseph Campbell, actually, another person who comes up for me, as you say, that is Yuval Hariri, who he does it in a slightly different way, but I think that Joseph Campbell, anything by Joseph Campbell, what he woke me up to is so the title of one of the books is called myths to live by and so like mythological thinking, why would a rational person engage in mythological thinking.

[00:20:31] Guy Spier: Well, the reason why we engage in it is because it’s part of us, whether we like it or not, that there are motivations that we have and stories that we’re telling in a voices about the meaning of what we’re doing and why we’re doing it. That we are far better to be conscious of those stories that we’re telling about ourselves.

[00:20:53] Guy Spier: As about ourselves as individuals, as families, as societies, then not be conscious. And I think a bit like what I was talking about symbolism with the royal family, nobody’s telling somebody to live by one myth or another myth. I think that the exhortation is just be aware of the myth that you are living by, of that common understanding of what it is that you’re doing.

[00:21:14] Guy Spier: And in a sense, what you have in that boxing fraca is that the myth or the, the kind of like the underlying ethos with which this Algerian boxer is approaching the women’s boxing tournament is the game that she is playing and her coaches and the, the Algerian Olympic team are. Study the rules and figure out if you can win according to the rules and the goal is to win according to the rules and life is a battle and there are winners and losers and we plan to be winners.

[00:21:47] Guy Spier: We plan to take home the most medals and that is a kind of like a myth, sort of like war, if you like the world that would be, you have been using the past is. Manichaeism, which is kind of like life is just a struggle between good and evil, and it’s just a constant battle, and we’re going to be the good ones, and we’re going to fight according to the rules, whereas the other side, the people are crying out, J. K. Rowling, for example, has been a big advocate for this, are crying out and says, first of all, this breaches a basic sense of unfairness and in an article that somebody wrote for the Daily Telegraph where I’d have to look her up where she wrote, even if, according to the rules, she had the right to compete, the fair thing to have done would have been to withhold, even if she was a functional or she was declared female at birth and met all these criteria to be female, knowing that she had X, Y, genes, the right thing to do would have been not to compete.

[00:22:44] Guy Spier: And that’s this kind of like the rules behind the rules. That’s just not cricket. Hey, the game we’re actually playing Algerian team is not a game of win at all costs. According to the rules, it’s a game of creating friendship amongst men and creating respect across athletes and across countries. And across time zones by allowing a fair fight.

[00:23:06] Guy Spier: And I was on the tennis court yesterday with my daughter and her boyfriend and my wife. I’ve played more tennis than them. I could have smashed the ball. I could have won six loves, six love if I’d have wanted to. Instead, I played at their level and we actually played the game and we modified the rules to try and get the rallies as long as possible.

[00:23:25] Guy Spier: What are we trying to do? We’re actually trying to have fun. And forgive me, I hope this is not too rambly, but what I would love to do with the Algerian team Imane Khelif is sit down and say, look, there is actually a different ethos by which you could play this. There’s an Olympic spirit here. And I’ll give you one, one example of that, which is a, I think he’s a Spanish runner that just came up on my Twitter feed recently at a competition about three years ago.

[00:23:54] Guy Spier: So he was running in a cross country race and the Kenyan runner was ahead of him and they ran a kind of as a duel between the two of them. They’re far ahead from the pack. And at the very end of the race, with about 20 meters to go, this man, Ivan Fernandez, I think is his name, this man, the Kenyan runner, who’s won the race at that point, thinks he’s crossed the finish line, and he’s starting to look at his watch, and he’s starting to look around, and he’s broken into a walk, and he’s just delighted that he’s finished.

[00:24:25] Guy Spier: He’s actually not crossed the finish line. And this runner comes up behind him and what he could have done is just sprinted across the finish line and taking the first place. And instead he grabs the Kenyan and he says, we’re not past the finish line. You need to keep running. There’s another 20 meters to go.

[00:24:41] Guy Spier: And runs behind him with his hands on the Kenyan runner’s shoulders. And in a split second, he made that decision. So many people would have just run across the finish line. And he was playing the infinite game. He was saying, there’s more to this than just winning this race. And when he was asked afterwards, why did you do that?

[00:25:00] Guy Spier: He said, look, the guy won the race. He beat me. We were dueling each other all the way through. And, but I just couldn’t keep up with him. He was a better runner. And so he won and I wasn’t, it would have been a violation of some of that myth for me to run ahead of him. And so what’s incredible about that, I don’t know what he’s doing right now is that he won in a much bigger sense.

[00:25:21] Guy Spier: So we talked about my office, Buckingham palace, the symbolism of that, just to bring it back to you and allow you to refocus where you’re going to go next with, with your next question is. It’s like there is a mythological dimension to so many things that we do, and nobody’s telling us what myth we should live by, but become aware of that myth, become aware of that story, be in a relationship with it, because it will make your decisions so much wiser and so much better.

[00:25:52] Guy Spier: And Joseph Campbell did that for me. And just, I brought up Yuval Harari, the reason why I did is because Yuval Harari talks about how so much of what creates modern civilizations are the stories that we tell as a common myth, as a common story, so he talks about the story of money. We all agree that money has value, and it’s only because we all agree that’s a kind of a myth.

[00:26:14] Guy Spier: That in a way is being challenged now by dare to say it. Bitcoin is being challenged. It’s challenging that it’s changing that myth. And they’d be like, no, no, no, no, that’s not the way it works. And actually Bitcoin is changing that potentially forever. And so again, like become aware of that. Don’t have to agree, but be aware.

[00:26:31] Stig Brodersen: Thank you, Guy. Sorry to make the transition so abrupt and talking about boring stuff like, like track records. But one thing that I’ve thought about a lot here recently, and I would be very curious to hear your thoughts on this is this idea of let’s run our track records a thousand times. And I’m looking here at your track record.

[00:26:50] Stig Brodersen: So since inception in September 97. You compounded better than the S&P 500. So 9.3 percent Kager compared to 8.7. And that is of June 30th, 2024. And so one thing that sticks out is you’ve been beating the S&P 500 for more than 26 years. That’s no easy task. And it also makes me think about, obviously it’s very, very tricky to do this.

[00:27:13] Stig Brodersen: What would happen if we took out the role of luck and what would your track record look like? I have a background as a poker player. So I can look at a poker database and then say, I play King, Queen from the cutoff seat. Sorry for the lingo this way. How often do I win or lose and by how much, like I’m going to analyze a lot.

[00:27:33] Stig Brodersen: And I get a very quick feedback too, if I got enough data points, but that’s not how investing works. And so if I were to ask you, what if we ran your portfolio a thousand times stripped out the element of luck as impossible as that would be knowing that you’re probably a much better investor today when, than whenever you started, but you know, we can’t pull that lever.

[00:27:55] Stig Brodersen: We have to run it a thousand times. What would it look like?

[00:27:59] Guy Spier: Yeah. So just for the listener, these are the kinds of incredibly thoughtful questions that Stig wrote to me and shows that you’ve got a few brain cells in there that are ticking over. So when I look at my track record, first of all, I’m proud that it’s in the S&P, although not in the last recent history, and I’m proud that it’s done that net of every single expense.

[00:28:21] Guy Spier: So it’s a real outperformance over those 26 years. And Chris Han, I’ve mentioned him once before, 6%, 7% outperformance versus the S&P, I believe. So that’s kind of like an astounding number. That’s an Omaha number, if you like. And do I wish that I had some very, very more significant outperformance?

[00:28:42] Guy Spier: Absolutely. And I can look back and see some, like some really humongous mistakes that I made that would have made a huge difference in, in the one case, the investment in horsehead and then doubling down on it at a point where they were ramping up their debt. We’re getting into a different technology that they didn’t understand is a pretty huge mistake.

[00:29:03] Guy Spier: So in my ideal world, I could have like cut that out. That would, that would count for a, for a huge difference in our performance. And I’d like to believe that in those thousand different reruns of my life, there’s a smaller proportion of those reruns where I made that mistake. And that there is a larger proportion of those reruns where I chose not to double down on the investment at the wrong time.

[00:29:28] Guy Spier: And where actually I didn’t make the investment or where I noticed that the debt levels were rising. So I at the same time, I can’t really evaluate the probability that I would have not made that mistake. And I would come out at a 50 50, for example, on that mistake. And to give one other example, that mistake arose during the time.

[00:29:46] Guy Spier: And there’s an interesting sort of feedback loops here that my book had been published. And I was determined to make the book a success. And so I had quite a bit of attention on doing things that helped make the book a success, but did not necessarily make me a better investor. And I’d like to believe that in a rerun, I would avoid that mistake.

[00:30:05] Guy Spier: And I think that you have to be clear with yourself. Am I going to be a journalist and try and get as many eyeballs as possible? Or am I going to be an investor? Those are two different things. And I don’t think you can do them as the same person. And that is clear to me. Now, it wasn’t clear then. So long story short, I’d love to cut out the mistakes and the majority of those thousand times.

[00:30:25] Guy Spier: But I don’t, I think that actually those mistakes, it’s a 50 50 that I would have done them. And so I would place my performance in the very middle of the distribution of those thousand times.

[00:30:36] Stig Brodersen: That’s wonderful that you would say that Guy, because if we continue with it, with the poker metaphor, I’ve, I’ve been around so many poker players in my life and every time they lose, it’s because they’re unlucky.

[00:30:45] Stig Brodersen: And every time the wind is because they’re fantastic. And I do see some pattern recognition in the world of investing. I have to say.

[00:30:52] Guy Spier: I’ve paid very little poker in my life, but it makes me think of the very little golf that I’ve played. And I don’t know if you’ve played any golf, but when, when I think I’ve actually succeeded in hitting one or two holes in one on a three part hole.

[00:31:05] Guy Spier: And boy, does your spirit saw, I mean, that is just one of the most incredible things. Of course, that’s like one in a thousand, one in 10,000 for me and I get a lot more. But yeah, it’s fascinating. It’s, it’s kind of an interesting. Exploration of that feeling of I’m a fricking genius, or I suck. I don’t think that I’m unlucky when I hit it into the weeds or into the long grass or whatever, but it’s such a powerful human reaction to go.

[00:31:32] Guy Spier: That was all me. And actually with my children, my son was saying, well, I’m a smart guy. I deserve this. And I’m like, wait, you didn’t do anything to get the genes that made you smart. So why do you deserve it? Actually, you own none of it. Yeah. Because, you know, what you can own is through your hard work and application, but your genes created the mind that you have, so it’s actually in a way, not yours.

[00:31:53] Guy Spier: And so, yeah, I mean, look, I, I think that that replaying. You know, imagine a thousand different replays of Guy Spier, Aquamarine Fund 26 years or whatever else, and trying to understand what that distribution looks like and how you might change it is a powerful way of looking at the world that really was switched on to me by Ole Peters, this guy from Ergodicity Economics and Luca Dellanna, which is a really, really smart way to think of the world, and I think that as we get more successful, then we want to run our lives, and I guess I said this in my annual letter, which is where you’re picking it up from, where all of those thousand different, the distribution of those thousand different reruns are all satisfactory, and I’m willing to give up the long tail on the upside, the possibility of becoming a billionaire or whatever, in order to avoid the worst outcomes on the downside.

[00:32:50] Guy Spier: That’s for sure. And I think we all ought to be able to do that. And thinking in the same way, if I just go back to your previous question, nobody’s telling you what myth to have, but be aware of the mythological dimension of what you’re doing. So in this case, nobody’s telling me what risk to take or not to take or anybody else for that matter.

[00:33:09] Guy Spier: But be aware, not just of your evaluation of the risk for the particular life path that you’re on. But imagine a thousand different life paths and think about how it plays out in each of those, because you don’t actually know which one you’re on and you need to be okay. And all of them is a kind of seems to me to be a very, very powerful model.

[00:33:26] Stig Brodersen: I think you’re very right. And there certainly is a very diminishing return to utility. Whenever it comes to money, you probably want to optimize a lot more for the first dollar than the last dollar.

[00:33:37] Guy Spier: Yeah, the first million, somebody wrote the first million is always the most difficult. And once you’ve got it, you don’t want to do it a second time.

[00:33:44] Stig Brodersen: Well said. Charlie Munger has emphasized the importance of a dollar weighted track record. And I almost feel a bit guilty asking this question, especially now. Also, whenever you just brought up that perhaps over the past few years, the performance hasn’t been as, as you wanted it to be. Whenever you look at asset on the management, there was something to be said about that as well, which is for good reasons going up on, on, on your end.

[00:34:07] Stig Brodersen: Do you think dollar weighted track records are the right way to look at it and how would that change your returns?

[00:34:14] Guy Spier: So just to be clear in, in Aquamarine Funds portfolio, it’s clearly dollar weighted. It’s a, it’s the, my returns are in proportion to the actual dollars invested in various different investments.

[00:34:24] Guy Spier: I guess what you’re suggesting is that one should say, no, what I want to do is just take my top 20 stock picks and just do the average of those and the returns of the averages of those. Okay. Cool. And I think that I agree with Charlie Munger. I find that complete anathema because it’s not, it doesn’t measure anything real unless I actually was equally weighted in each one of those of the different picks.

[00:34:47] Guy Spier: And if I, I guess that would have required a constant rebalancing, which was possible if I actually chose to do that. Then, yeah, I measure my dollar weighted, but then the dollar, the dollar weighted and the average actually would equal each other. I mean, I think that the decision to be in cash, not to be in cash, the decision of how much one allocates, I mean, the famous statement by George Soros, it’s not if you’re right or if you’re wrong, it’s how much you bet when you’re right and how much you bet when you’re wrong.

[00:35:12] Guy Spier: I mean, it has to be dollar average because otherwise you’re not actually measuring what the person actually did. And a key part of being a successful investor is committing big bucks to juicy opportunities. There’s no, it doesn’t seem to me that one should get any reward for saying, look, me and Duff & Phelps is the example you wrote.

[00:35:31] Guy Spier: And for the reader’s interest, it was something that went up seven times in the two or three years that I owned it before it was sold. It was a very successful investment, but I invested far too little in it relative to why I ought to have invested in it. And I don’t get any credit. I shouldn’t get any more credit.

[00:35:47] Guy Spier: I get credit for finding and investing in it, but I shouldn’t get any more credit for the fact that I didn’t put a huge proportion of my portfolio into that seems to me to be just a very important part in it. And it’s really, really hard. And of course, we have all this hindsight. So at the time, I didn’t feel like that was the right thing to do.

[00:36:03] Guy Spier: And I appreciate you bringing it up. It’s really, really important for anybody listening to this, whether you’re an individual investor, whether you have friends and family money, or you have, whether you have large pools of money, I was investing at that time for my father and one or two business partners of his.

[00:36:20] Guy Spier: They came from the agricultural chemicals industry. They understood very little about finance. They barely knew what a stock or a bond was. And it was just so, so well, Guy Spiers investing for us. And I had to take into account that they were my investors. And I had to take into account that a large drawdown in the first three or four years would potentially jeopardize my career and my little business that I was starting.

[00:36:44] Guy Spier: I couldn’t assume that they were sophisticated investors. And so that was part of my story. And that drove my decision to be extraordinarily conservative in my commitments to equities. So the vast majority of the portfolio was in laddered bonds. And I think that that’s just part of my story. And we’re kind of dumb if we don’t pay attention to that.

[00:37:05] Guy Spier: One of the things that comes up all the time when we see people making investment moves is that the investment move is taken out of context with, from that person’s. Financial background and you just can’t do it. You have to take into account all these things that are hidden from you when you look at whatever move it was.

[00:37:24] Guy Spier: So, and yeah, in my case, for some reason, early enough. Even before I’d met Mohnish Pabrai, and even before I’d read these books like Power vs. Force and the Mahatma Gandhi autobiography, I wanted to be truthful and honest. And that was more important to me than trying to present myself in the best possible light, if you like.

[00:37:47] Guy Spier: And a thought comes up for me, which I hope is not a kind of a rabbit hole, but I’m going to say it now. I would have maybe found an opportunity to say it later. If you’re living a boring life, Or then you’re probably not telling the truth and this beautiful phrase by Jordan Peterson. If you want an adventure, tell the truth.

[00:38:08] Guy Spier: And when we tell the truth, that’s where everything starts. Everything starts when we start telling the truth. The truth is often extremely painful. And we don’t want to own up to it and we don’t want to see it because we’d rather stick our heads in the sand. I tell you a few people that I think in the political world that we are in today, a kind of truth tellers.

[00:38:31] Guy Spier: John Elkann has talked about this. He’s talking about finding truth tellers and organizations, people who are willing to speak the truth as they see it without regard to the consequences. I think Jordan Peterson is one of those people. He could have kept his head down as a Canadian academic. And not told the truth of what he saw around him, or he could have had the courage, which he did have to point out what he saw and eventually got him fired from the university was teaching at, but he’s on an adventure, an incredible adventure.

[00:39:00] Guy Spier: Another guy that I’ve been tuned into recently is somebody called Gad Saad. Who’s written a book called The Parasitic Mind, and he’s actually an evolutionary psychologist. He’s got some other books. I really want to read about the evolutionary basis of marketing marketing within an understanding of our evolutionary psychology, but he’s got a book out called the parasitic mind, and he’s talking some very, very unpleasant truths in the Canadian environment.

[00:39:24] Guy Spier: And he’s got the courage to say it. But it actually starts with me having the courage to say, wow, you have an issue is called ADHD to start understanding yourself. And then even better to start talking about it to the world or somebody who says, wow, I have a problem with alcohol. I need to pay attention to that or wow, I’m arguing with my wife a lot.

[00:39:43] Guy Spier: I need to pay attention to that or, and to wow, I’ve outperformed the S& P by this minuscule sliver. And I really wish I had better performance. You know, that’s also being honest and truthful. And then the adventure begins.

[00:39:58] Stig Brodersen: And it’s no easy task. I, I can easily understand if someone is, is listening and saying, well, 9.

[00:40:05] Stig Brodersen: performance compared to the S&P 500. It’s not that much. 26 years is a, it’s a long time. I sort of like wanting to use that as a segue into my next question about, and again, my disclaimer will be, I, I’m not really out here to offend anyone. It’s really one of those, to your point about stop by telling the truth to go on a beautiful journey.

[00:40:24] Stig Brodersen: And, If you stop beating the S&P 500, because I have no reason that you won’t continue. I have no reason to believe that you won’t continue doing so, but have you considered then say, Hey, it’s just like being an athlete. You used to score. I don’t know how many points per game. Now you don’t do it anymore.

[00:40:38] Stig Brodersen: So it’s better for everyone that you stop. Have you thought about that in the context of being an asset manager?

[00:40:43] Guy Spier: The first time when that question came up for me was when I’d written my book and I’d gone, I’d been invited by Sarah Madan to give a talk at Google authors at Google. I was super nervous and excited.

[00:40:55] Guy Spier: I went and gave my talk Google full of very smart engineers and engineer says, look, you seem, you know, your, your results that you’ve put up show that you’ve outperformed the S&P. How do you know that it’s not luck and, uh, how do you know that it’ll continue? And the honest answer which I gave was I don’t know that it’s not luck.

[00:41:14] Guy Spier: It could be luck. How on earth should I know? I have one individual. We don’t have enough data points in a way. We’ll never have enough data points. And of course, the stress and the pressure that somebody in those shoes may well find themselves in is that. What if it’s actually luck and what if actually my destiny is going to turn around next year and I’m going to, if I outperform for the last five years, I’m now going to underperform for the next five years or 10 years or however long it is.

[00:41:39] Guy Spier: So if you take the particular provenance of Aquamarine fund with this kind of like investment from friends and family, I take the hit on the, on the, at the beginning that I had a huge amount of cash and I was making very, very tiny investments. But then I also get to take the benefit of the fact that I have performed.

[00:41:58] Guy Spier: I think a very, very powerful role or a transformation role, I would argue in my own family in that the single decision effectively to move from a fixed income portfolio to an equities portfolio and to get into some of the right equities, but it might have just been the S&P has been transformational because the difference in return between bonds and stocks is way more than my 50 or 60 basis points. It’s a way, way higher number. And so I kind of come back to saying, I’ve been a steward of the capital of the people who’ve entrusted it to me. And especially the first group, none of them had exposure to equities. Suddenly all of them had exposure to equities and that that’s turned into a very, very significant at nest egg suddenly for my own family, but for a number of other families as well.

[00:42:48] Guy Spier: So I actually, I don’t know if you saw my most recent letter and it was really scary for me to say it, but I felt like I had to say it. So what if right now, if somebody came to me, if God would say to me and say, guy, in order to outperform significantly, you’re going to have to massively change your strategy and you’re going to have to do all these different things.

[00:43:10] Guy Spier: What I do it, and I kind of said, actually, I wouldn’t because I don’t want to do things. I don’t understand. I don’t want to do things that are not in within the grain of my personality that would be a, well, first of all, I don’t think it’s likely to work out. It would be likely to work out if I were to take such a hypothetical decision.

[00:43:34] Guy Spier: I also wouldn’t sleep very well and I wouldn’t, I wouldn’t be a congruent person in the world. I wouldn’t be aligned. So I kind of came to the conclusion that I need, I need to do what I believe is right for my investors as a steward of their capital. That’s the most important thing for me, even if somebody is yelling at me, who’s knowledgeable is saying, well, if you do that, you’ll underperform.

[00:43:57] Guy Spier: I cannot give that up in order to launch for some kind of outperformance. And so, so I think that what comes down to me is if I was, well, I, sorry, I’m going to repeat myself cause I’m kind of thinking aloud being a trusted steward of my investor’s capital and acting in a, in a way that is consistent with my personality and my best understanding of what I should be doing with my investor’s capital is more important than outperforming. And yes, I would like to outperform, but if I have to choose between the two, I’ll choose that because in a way, if I behave that way of those thousand replays, I’m going to have satisfactory outcomes in both. And even if some, but some genius who sees the future is yelling at me, no, no guy, but if you follow the strategy.

[00:44:46] Guy Spier: In all thousand versions of the way the world unfolds, you will, you’ll outperform in all of them. It’s no good because I need to know that and I need to be comfortable with that, not them. So that’s a long way of saying that I’m willing to be truthful and honest about the possibility that I may underperform, and that may be the story of the rest of my investing career and, what my job is to be honest about that.

[00:45:09] Guy Spier: And I’m in the extraordinarily fortunate and lucky position that if that is the outcome, I can, I I’m still okay in my life. I’m still okay doing what I’m doing. If you like, I will still have been a good steward of that family nest egg because I’ll still be way outperforming what we would have had. If we would have been in some kind of fixed income securities, I would also add to you that this came up to me.

[00:45:32] Guy Spier: So when you understand this, anybody who’s been to the Berkshire Hathaway meeting understands this very well. We all know, those of us who are kind of like the diehard faithful, that the Berkshire Hathaway meeting is about so much more than just figuring out how to become better investors. We become better humans and we live better lives, better lives as a result. So people say, well, you could have just avoided all this effort pretty much and invested in the S&P. And my answer to them is the S&P is a pretty impersonal thing. And I’m not sure that if I didn’t been invested in the S&P, if I would have stayed in equities, so we have to be aware that what we invest in and the decisions we make, then how to have an influence back on ourselves.

[00:46:15] Guy Spier: So I understand that there are many people who won’t want to invest with me and I get emails and letters all the time and people say, hey, Guy, I’ve reviewed your fund and it all looks good, but I’m not going to send you my money for like that meager outperformance. I think I can do better, or I know people, somebody I know has got a significant investment from the Graham family that used to run the Washington post.

[00:46:38] Guy Spier: Would I love to have those people look me up and say, oh, we need to be invested with Guy Spier. Of course I would, but the, the honesty and the good steward of capital in a congruent and consistent and way is far more important than lunging for that stuff. I mean, obviously I spent a lot of time talking to Mohnish Pabrai.

[00:46:56] Guy Spier: He’s a very, very different mental makeup to me. I think that what’s key there is that I know that on some level I’m tapping into the core of who I am by saying that Mohnish Pabrai could not say those words. He’s a very, very different person, with a very, very different experience of the world and of his reality.

[00:47:16] Guy Spier: And so I think that actually his, his behavior or his, his makeup is far more consistent with the possibility of having very, very significant outperformance, but it comes at this cost of the tail on the downside is that I mean, the evaluation of the downside risk in, in a portfolio that Mohnish runs is, is, would be different in my case.

[00:47:37] Guy Spier: I would see differently to the way he sees it, but that’s why we, he and I are different. So yeah, am I answering the question?

[00:47:44] Stig Brodersen: I think you are. Yes, Guy. You definitely are. Or am I just waffling? Can I say both? Is that rude? No, just, just joking. I should just say for full disclaimers that to be aligned, sort of like, go, go back to what you were saying that I have an investment with, with minus, we didn’t plan to speak about it.

[00:48:02] Stig Brodersen: Now that we are talking about on the show, I think it’s only, it’s only fair to mention that now I’ve discussed track records with many asset managers and some of them underperform the, the benchmark. And whenever they do, they would typically tell me that’s because they take less risk. I have no reason to believe that any of those asset managers are lying or insincere by any means.

[00:48:23] Stig Brodersen: Whenever they say they take less risk, that’s not my point at all. And if I can just come up with a, with a generic example. So I’ll be meeting up with investors who say, look, I have gold in my portfolio. And because I have gold in my portfolio, I take less risk. And then I would meet up with another asset manager who would say, I do not have gold in my portfolio.

[00:48:41] Stig Brodersen: So that’s why I have lower risk. And so such is the irony of business and life. And it’s sort of like, whenever I speak with asset managers, it’s a bit like asking your friends if they’re above average drivers, like we all better than average, right? And everyone we know are better than average.

[00:48:58] Guy Spier: I thought that was a great analogy that you put there.

[00:49:00] Guy Spier: And nobody’s made that before. And I just want to pause on that before you actually ask the question, because I think it’s worth it if you haven’t said it before. So we all know everybody thinks they’re above average driver, and there are many tests that show that. And if you think that Stig and I are immune to that, we’re not.

[00:49:14] Guy Spier: We’re also feel like we’re above average drivers. And so why would that not apply in the world of investing? Every investor, especially those are professional investors, think they’re above average investors.

[00:49:25] Stig Brodersen: Yeah, I just want to make one slight correction. I am definitely below average driver. I never own a car.

[00:49:30] Stig Brodersen: But I think you generally right. And I think the investing industry is very much prone to that. It’s mainly men, men who have done well and probably have gotten good grades, nice degrees, and have been used to success to some extent. A lot of them have been doing competitive sports and whatnot.

[00:49:46] Stig Brodersen: And I think that there is a, okay, I see that in all walks of life that we all think we’re better than average, but I would say most definitely in the world of investing, there are a lot of people who feel that they’re better than average, which is probably also why we come up with this. I’m going to say myth here to go back to Joseph, Joseph Campbell, but this myth then, well, if we have a track record where we’re not beating the S&P 500.

[00:50:06] Stig Brodersen: And we still live by this myth that we’re better than average. It must be because we have lower than average risk.

[00:50:12] Guy Spier: IQ. Oh, I see.

[00:50:14] Stig Brodersen: Right. So then we sort of like, let me have the confirmation bias and we fit different, different information into that. But my question that I wanted to post is really that you’re like, you’re, obviously you have a very good track record.

[00:50:25] Stig Brodersen: You survive for more than 26 years, which is not an easy task, but how do you think about whether you take, yes, I’m just going to say above average, and then we can talk about whatever it is. How do you think about taking above or below average risk in your portfolio?

[00:50:39] Guy Spier: Yeah. And so what is risk? And we can all say, I think that most of the world, the people in the world that we live in understand that Myron Scholes capital asset pricing model risk is, is approximated by variance is we can throw that out the window.

[00:50:58] Guy Spier: But, you know, for what it’s worth, the reason why Myron and Charles picked that, I wasn’t in the room when they pick it, but they needed something that was scientifically objective or objective, period. And what they were able to do was, so I think that they wouldn’t say that that is a good approximation of risk.

[00:51:16] Guy Spier: They’d say, we need an approximation of risk. We need an approximation of risk that we can all agree upon and that nobody’s going to argue with us on. And that everybody can measure the variance of an asset or the price variance of an asset. So that was why they did it. They were not saying that it was great.

[00:51:33] Guy Spier: They’ve since been dumped upon by all these fundamental investors who say that’s just not a measure of risk, but once you get beyond that, finding something that you and I agree is, is the same in terms of risk is extraordinarily difficult. And I don’t have any good answers. I think that Myron Scholes and I can’t remember is the other guy.

[00:51:53] Guy Spier: They struggle with a really difficult question. How do we get an objective measure and an objective understanding? I don’t think that there is one. We’re all trying to take less risk in our portfolio relative to the returns that we expect to get. And once we move away from a very, very imperfect measure, who’s to decide what is more risk and what is less risk.

[00:52:13] Guy Spier: I really genuinely believe that I didn’t have much risk in my horsehead position until it blew up on me and how much risk I had. And, and there’s a, and, and there’s, there’s an argument people will look at me and I will say, I mean, a fascinating one is Berkshire Hathaway, which many listeners here will understand extremely well.

[00:52:31] Guy Spier: People say, well, how can you have such a concentrated position in that very, very big company? And that is a huge risk and I will say to them, well, if you study the businesses and you understand what’s going on inside the organization, then you’ll realize that it’s perhaps the least risky position in my portfolio and they just cannot see it.

[00:52:49] Guy Spier: They cannot see it. And so how do you have a conversation about that? Myron Charles would say, let’s just look at the variance. And that’s not a very good measure. And then we just, or you can just agree to disagree and say, and I’ll talk about things like, I want to believe that the business that I’m invested in would survive the apocalypse or an asteroid hitting the earth or some major, major event.

[00:53:14] Guy Spier: But how do I actually know I kind of say, well, I think Coca Cola will survive on the other side of such a major event. Do I really know? I don’t really know. And it’s like, these things are such one off things. Actually a name that comes to mind is just an incredible guy. His name is Richard Zeckhauser and he’s a very famous, I don’t know if he’s famous, but he’s a very, very good bridge player, a world class bridge player, but he gives a course.

[00:53:35] Guy Spier: We used to give a course at Harvard on investing and. He’s got this article called investing in the unknown and unknowable. And what do you do when there are no data and there’s no way to evaluate? First of all, it makes the distinction between risk and uncertainty. So you can have a variance, you can have an asset where you can measure what its variances and the way in which it moves around.

[00:54:00] Guy Spier: And so you can say, well, this asset is moving around in this way. And it’s within relatively well defined government bonds would be an example of that, of triple A rated countries. And then you have what’s going to turn out in the world after 9 11. And two planes have hit the world trade towers, and it’s the day after, and you’ve got no data.

[00:54:22] Guy Spier: And that is complete unknown and unknowable. You have no prior data, you have no prior experience, this is a new event, and what do you do? And now I’m being rambly. I’m not sure why was that important to me? Because risk is subjective and we only discover afterwards what it actually was.

[00:54:39] Guy Spier: And then what I would also add is two thoughts that come to my mind on taking risk. I actually think that I’ve been extremely suboptimal in terms of taking risks. So first of all, when you’re in your twenties, you should take a lot of risks, not with your life, but career risks, financial risks, because you have lots of time to recover from them.

[00:54:56] Guy Spier: So it is suboptimal. When you are young, not to go to work for that startup, not to invest in that speculative stock, because when you take a risk and it works out, you win, and when it doesn’t work out, there’s an enormous learning opportunity, and I think that Mohnish does in many ways, run his portfolio in this way.

[00:55:13] Guy Spier: If you are diversified in as few as 10, sort of like very asymmetric outcome type things, unknown and unknowable, but, but huge payoffs. If he works out. I guess I’m describing heads I win, tails I don’t lose much. You have 10 of those, you should do alright, even though you’ll have a pretty high error rate.

[00:55:30] Guy Spier: And so, maybe when you’re young, not taking a risk is in a way the biggest risk of all. And so, I’ve actually have exhorted younger people, people in their 20s, like you must take risks. You’ll regret it. Don’t be the guy who doesn’t take risks till he’s 40. And then starts taking risks when you can’t recover from them.

[00:55:49] Guy Spier: So, that’s a long way of saying, I really don’t know if, well, just to go back to your question. The investor says, yeah, but I’ve taken less risk in my portfolio. And then they’ll show, they’ll maybe come with calculations like variance or sortino ratio or drawdowns or, and there’s no real way of deciding whether that’s the case or not.

[00:56:09] Guy Spier: Can you believe that was such a long non answer answer.

[00:56:12] Stig Brodersen: But that’s, that’s because it’s so, it’s so complex. I don’t, if you ask Warren Buffett, he’s going to say risk is opportunity cost, permanent loss of capital. But then you also have to ask, and then what, and then there are so many other things to unpack whenever you, you, you think of that.

[00:56:27] Stig Brodersen: And I think it’s so important also to understand where the other person is coming from. So we talk about when it’s pub ride, for example, and having 10 bets. Which I think to some probably seems very risky and perhaps not so much to others. I actually tried talking him into having a fund just with three bets, just with three stocks, because I felt like 10 stocks were way too diversified.

[00:56:50] Stig Brodersen: But then you’re sort of like, it acts a lot of complexities because you want to make sure that the asset manager that you potentially invest with. And so one way to do that is you want to make sure that they put all of their own money into it. But then we, as investors, so for example, for investors investing in your fund, like, I think it’s very noble and it’s the right thing that you have the vast majority of your wealth in that fund.

[00:57:14] Stig Brodersen: Now, me as an outside investor, if it were to invest, like, I have the privilege of saying, I want this investor’s best idea. And the other was this best idea and guys best idea. And then I construct my own. 10, 15, 20 stocks. Which is why I choose the ask money. Could you just set up a fund with like three stocks?

[00:57:30] Stig Brodersen: Cause I can, if I feel like 10, 10 positions or three positions are too few, I can just put in 3 percent of my portfolio or eight or whatever I feel comfortable with. But then at the same time, I want them to me to put all their own money in their own fund. And I can easily understand why would they put all their money into three different stocks.

[00:57:47] Stig Brodersen: And so that was just, there was just one thought.

[00:57:49] Guy Spier: You know, around 2006, I was approached by an American institution. And they were sort of following that strategy. And they said, look, we don’t want to invest in your fund. We’re going to take your two best ideas. And we’ll reward you for the way they perform.

[00:58:04] Guy Spier: And the relationship ended during the financial crisis. And they didn’t lose much money. I don’t think they lost any money. They lost, there were two positions. One was a gain. One was a loss. And I sent the money back to them. It was kind of like separately managed account and their compensation. They kind of said, look, we want to compensate you on each position.

[00:58:22] Guy Spier: So in theory, I could have gotten gotten compensation on the position that was up. And I kind of just said, what did I learn exactly to your point? I just couldn’t manage those positions in the same way as I did when it was all inside one portfolio. And I realized it became really important to me to just manage one portfolio.

[00:58:41] Guy Spier: And actually at that time, I had been managing an onshore and an offshore partnership in two separate vehicles. And it became imperative to me to create this kind of master feeder structure where they were all, it was just one account that we were managing and all of the investment was in that account.

[00:58:57] Guy Spier: And around that time, one of my investors, a lovely, lovely guy who was in the same building as me in Carnegie Hall tower, he just said, he said the same thing. He said, look, guy. I love the way you find these things. I love all of those. And I totally get why for family, thousand thousand different lifelines being okay.

[00:59:17] Guy Spier: And all of them, you also have these positions in places like Berkshire Hathaway, American express. He said, I just want your best ideas. I don’t want those kind of like, whatever you want to call them, core positions. And if I can’t get that, then I will redeem my investment. And He kind of was encouraging me to either take my family money, if you like, out of the fund and invest it separately or to create a separate fund.

[00:59:43] Guy Spier: And again, I just didn’t want the brain damage and the headache and realized at the time that that would give me a different life path because there would be many investors who choose not to do it. I think that what comes up for me as you say that is, it’s more important to be authentic and true, forgive me for citing Shakespear, Laertes and Hamlet, to thine own self be true, is more important than saying, yeah, but actually, yeah.

[01:00:09] Guy Spier: Let’s just optimize for XYZ marketability and returns, because if you give up being true to yourself in a way, it’s the loss of happiness. It’s the loss of one’s place in the world because you’re no longer you. So I think it just, you know, and that, that goes to so many, that goes to so many life decisions.

[01:00:27] Guy Spier: So, so we’re just going back to if somebody were to lay out for me what I had to do to beat the market by 20 percentage points, let’s say. But in order to do that, I would stop being Guy Spier. I’d be some distorted version of myself. I’m reasonably sure, or I think I’m a hundred percent sure that that’s not worth it.

[01:00:48] Guy Spier: And what’s really, really important. I’ve said this really, really important takeaway for me from the lunch with Warren Buffett is that he actually is that person, the person who’s this incredible investor. He’s not trying to be anything different to who he is. He’s not waking up saying, I need to take more risk, or I need to take less risk, or the way the relationship with my father resulted that I ended up holding too much cash.

[01:01:11] Guy Spier: The person he is, is actually optimized for investing. He didn’t have to try to make himself that way. And it was, it was a huge revelation to me because I was like, wow, stop trying to optimize yourself for something that for, for who you think you want to be and become who you’re destined to become and let that be your adventure.

[01:01:30] Guy Spier: If you like. So if we’re living in a facade, if we’re living in a projection of who we want to be, then we’ve actually given up our own autonomy. We’ve given up the most precious thing, which is actually what was written on your birthday card. Yeah.

[01:01:45] Stig Brodersen: Privilege of a lifetime is being who you are.

[01:01:47] Guy Spier: Right, exactly.

[01:01:48] Guy Spier: So that’s something we can never, we ought to never give up and no matter what returns you could get. And I, it actually is a decision, a realization that I came to along. Time ago, and I guess I’m just saying the same thing. I just remember a good friend of mine saying, but guy, are you trying to be the best investor in the universe?

[01:02:08] Guy Spier: I was like, no, I’m trying to be the best version of myself. And if that turns out the best version of myself turns out to be an incredible investor, one of the best investors on the planet, then I’ll celebrate and I’ll be grateful for it. But, and if I’m not, then that’s also okay. There’ll be other things that will be good for me.

[01:02:26] Guy Spier: So it’s scary. It requires courage. And I actually, I don’t think in comparison to many people I know, I don’t think I have that much courage. You actually don’t need that much of it to say. I have to give up on what I’d like my destiny to be in order to find out what my destiny actually is. And just to go back to kind of like what you kind of sort of talking around with this investing and saying, oh, yeah, but my risk adjusted returns are actually really, really good.

[01:02:56] Guy Spier: The myth that those people are living by is somehow, if I turn out to be the world’s gracious investor, or a very, very good investor with a very good track record. Therefore, I’m a good person. Therefore, I, my life on this planet is justified. Therefore, I deserve the respect and adulation and of people in society around me.

[01:03:18] Guy Spier: So they desperately want to be that person. And the minute you say, well, actually the only person who needs and deserves my respect is me, and that requires me to be true to myself. And yes. It would be nice to be a billionaire. It’d be nice to have the best track record. It’d be nice to go into the, into the pantheon of the gods of investing there with Warren Buffett and Charlie Munger and others of being the world’s greatest investor, but I can’t force that and I have to become who I’m going to become.

[01:03:49] Guy Spier: That’s not the most important thing. So, so what those investors really ought to do is realize that they have this. Myth that they’re trying to live by this myth that all those things I just said, and that’s actually not the real scorecard. That’s not the real measure of a life. It comes up to me Clayton Christensen.

[01:04:07] Guy Spier: How will you measure your life? Am I going to really measure my life by a number of the return that I had in my portfolio? I don’t think that’s a good Warren Buffett. He could have could have been the richest man on the planet But he’s giving money away. He realizes that’s not the right measure of his life.

[01:04:25] Stig Brodersen: Guy, I had the privilege of speaking with a mutual friend of ours, Thomas Miller Borgia here a few days ago.

[01:04:31] Stig Brodersen: And I hope he’ll, he’ll forgive me for saying this here and in public, but he asked me a question about investing. And he asked me about how I thought about investing yourself first and then find an asset manager or do it, do it the other way. Like how I was thinking about that dynamic. And I said to him that I felt it was really important to start investing yourself first, because you don’t know what kind of investor you are before you invested yourself and before you felt the pain.

[01:04:58] Stig Brodersen: But also before you invest and figure out which kind of investor you are, it’s really difficult to find. An asset manager you want to team up with. And you really have to understand where that asset manager is coming from. Just like you need to understand where you’re coming from. So in this case where I’m, for example, invested with money, it’s not a, it’s not that big a part of my portfolio, but I I’m doing it because it’s an insurance against my own ignorance.

[01:05:20] Stig Brodersen: Like I can look at my track record and say, Oh my God, how smart I am or whatnot. But I also have to factor in, let’s do this a thousand times. How would this go a thousand times? Can I find someone who I feel would do better than me? Oversee a thousand times and then just take a part of that portfolio.

[01:05:35] Stig Brodersen: And I think that the intention is not to talk too much about, about money’s here on, on, on this call, but like understanding where’s that other person coming from and where you’re coming from. And so I don’t necessarily think I’m the typical investor. Whenever I’m looking at interview, 500 asset managers, whatever I have and go in and figure out, okay, so this, and how does that work with that?

[01:05:53] Stig Brodersen: And that’s ready. That’s not how most people invest and probably luckily. So why is it that my parents asked me what they should invest in? That’s not because I’m the greatest investors because they trust me and they don’t really know too many other people who know how to invest. And so it’s also important to understand what kind of investor would like to invest in your fund.

[01:06:11] Stig Brodersen: And if the typical investor in your fund is, we’re a family office, we only trust guy, we want guy to invest 90 percent of our net worth. Then that strategy is quite different than, sorry to bring myself up here, like, Oh, I’m going to take this and put into, I don’t know, money’s this fund and this into Bitcoin or gold, or like, it’s a very, very different attitude. So whenever you’re talking about like, who is a great manager and who’s not a great manager, it’s very much depends on what is your goal. What is it that you want to achieve? And it’s complicated to have that discussion because you really need to understand where this person is coming from. So I can’t speak for you and I’m sort of trying to do it anyway.

[01:06:48] Stig Brodersen: So please forgive me. Like if you were to invest with guy, you should probably start by reading the education of value invest and then all his letters to understand where he’s coming from, perhaps even have a conversation with you.

[01:06:58] Guy Spier: I mean, I, I think that what, what comes off from me as you say that is that, and I think that we don’t talk about it actually.

[01:07:06] Guy Spier: I don’t, I don’t feel like it’s talked about as much, but I think it’s a really important part of the decision of any investment decision is that you’re creating your environment and it’s strange because these are just bits of paper. It’s just an entry in your bank statement, but somehow it creates the environment in which you live and what I get. Yeah. From the way you’re talking is that there’s a spice or something that having Mohnish Pabrai in your portfolio brings you that actually helps you in some way to live better, think more clearly, make better decisions. And, and I think that that’s probably idiosyncratic for many people.

[01:07:43] Guy Spier: So I, I think that there, I have a number of investors who are, they’re actually, they have high variance in their lives for various different reasons. And they want to have a bit of low variance. Now they could also do it through owning government bonds, or they could do it through maybe owning the S&P or Berkshire Hathaway.

[01:08:00] Guy Spier: But for one reason or another, it suits them, say, to have me with my personality there. So they have an investment with me because they want that kind of whatever that brings. And that is extraordinarily idiosyncratic to that particular individual. And I think that what I think is important to understand is we talked about the symbolic dimension.

[01:08:20] Guy Spier: We talked about the mythological dimension. So there’s, there’s the analysis of Is this a cheaper expensive company? What is the moat? Is it growing? Is it not growing? All of those things and then there’s the, then there’s, do I want to be in a relationship with this, with the group of people who control and run that company?

[01:08:40] Guy Spier: Are these people I want more of in my life or not? They could be. Extremely good investments that work out extraordinarily well, but you don’t actually want a relationship with the people that are the group of people who are running it, the CEO and the people who control that situation. And by contrast, they can be less good investments in terms of pure numbers because they’re not cheap because they don’t have an expected IRR.

[01:09:03] Guy Spier: This is great, but. But there’s something really special about that group of people that brings you something in your life. And it doesn’t necessarily just have to be that you attend Mohnish’s annual partnership meeting. It could be just reading those letters, having thinking, well, 10 percent of my portfolio, whatever it is with Mohnish.

[01:09:21] Guy Spier: Therefore what would Mohnish do in this situation? So understanding that that is also an element of why we’re making the decisions that we’re making is really, really important. Give one example. I was shaving today. I was actually shaving in preparation for this. I decided I wanted a clean face. I often show up.

[01:09:36] Guy Spier: So I’m using a Gillette razor, of course. And I’m thinking of Warren Buffett and his investment in Gillette. And I just remember him saying, well, it’s a good, good feeling to know that X million people are going to wake up today and there’s going to be an extra little bit of hair on their faces that they’re going to get off.

[01:09:51] Guy Spier: And some of them are going to use Gillette razors. And if you would have come to Warren and said, Warren, I can show you an investment that’s going to earn you 2 percent better. But it’s in not even like some technology thing that Warren doesn’t understand, but a product that Warren doesn’t like and use himself.

[01:10:07] Guy Spier: Let’s say, should Warren have taken that investment? I don’t know what he would have done, but I think there is an element in Warren’s investing, which is the way that furnishes your life. And he came up with bank of America, although he’s been selling it down a lot where he said, I just like the people he likes Brian Moynihan.

[01:10:24] Guy Spier: He’s just set it straight. I like Brian. So furnishing that and having those idiosyncratic reasons. And in your case, what I would want to say is, I think there’s a lot more to your investment with Mohnish Pabrai than just buying insurance. And I think that is, it’s interesting to explore that. So that’s one really interesting area to discuss and will make us better investors.

[01:10:46] Guy Spier: If you own the S&P you’ll get that return, but only if you continue to own it, maybe the S&P is so impersonal that market wiggles and various other things will convince you to leave the S&P whereas another investment has a slightly lower return. You will stay with it. And that’s actually will outweigh.

[01:11:04] Guy Spier: The app performance of the S&P that’s an interesting thing. Another place where I’d go, which is really fascinating for me because there’s, it was really brought home to me, but then I’m not going to mention the name because I’m not sure that they’d be happy with it. Conversation with the investment team of the extraordinarily famous investor.

[01:11:22] Guy Spier: And we had a summer in town here. I think it’s okay to mention his name, a guy called Aaron, former McKinsey guy, in between his first and second year at business school, did incredible work for us. And we did this presentation and. One of the analysts, he was like, you just said, that’s such top down garbage.

[01:11:40] Guy Spier: I can say the company, we did a presentation on BYD and he’s like, he’s like, and he said, you people don’t get that it’s the DNA of the CEO and the management team that is key to this investment. And so I think that this kind of analysis of what does he have in his portfolio? If we’re talking about funds, what is re returns?

[01:12:02] Guy Spier: What’s his Sortino ratio? What’s the variance? What’s the risk he’s taking? What’s an objective measure? That’s kind of all top down, but then you could go from a different place, which is to say, what is driving this person? What is, in this case, in what is Guy Spier’s, DNA? What does he get up for every day?

[01:12:20] Guy Spier: Why does he get up? Why does he make the decisions that he do? What is dry? What is he really driving for in life? And is that something I want to have? What is am I aligned with that in any way or not? I would tell you that so if I observe what I know about Chris Han who was a classmate of mine at business school. The drive that Chris Han has to generate returns for his investors is something that is just extraordinary to watch from a distance or to be in the same room with these extraordinary drive, extraordinary focus and attention.

[01:12:54] Guy Spier: And do you want to have that? It comes with certain costs. As well, enormous costs in all sorts of ways. We know of investors whose marriages have broken up all sorts of, maybe they don’t have many friends. Maybe they have children that are estranged to them, but you know, what is the DNA of this person?

[01:13:09] Guy Spier: And do I want to align with them? I think. But to go back to Mohnish, I think that you’ve maybe not consciously, and I hope you don’t mind that I’m coming back to him. You’ve done some, quite a bit of thinking about Mohnish, who he is in the world, what his life story is. And you like that DNA. You want that, you want that DNA in your life.

[01:13:28] Guy Spier: You want that decision making that out of that, the way Mohnish is in the world, sort of like very interesting things will unfold for you and the people around him. And so picking one’s investments, whether it’s in corporations, i. e. equity investments or funds. By analyzing the DNA of the people and saying, is this a DNA that I want in my life?

[01:13:47] Guy Spier: I think there’s also a valuable route of analysis, if you like, a dimension that we should keep in mind.

[01:13:54] Stig Brodersen: Yeah. Thanks for bringing that up. One very influential book was Annie Duke’s book Thinking and Bets. I think that’s, that’s such a, such a brilliant book about separating the process and the result. And it’s difficult in investing.

[01:14:08] Stig Brodersen: We’ve been doing this for more than 10 years and every investor that we get on the podcast says that they have a margin of safety, or they want to have a good mode. Like everyone sort of like says the same thing. So if you didn’t know anything about the track record or really had a chance to speak with them, it’s hard to separate.

[01:14:27] Stig Brodersen: I guess that’s what I’m trying to get at. You’re absolutely right, Guy. I take immensely joy in reading Mohnish’s letters. Ironically, I feel it gives me a lower volatility to invest with Mohnish. And I think most people would be like, wait, didn’t Guy just say he had like 10 stocks and then, and they’re very tilted where one position could be significantly more than 10%.

[01:14:48] Stig Brodersen: But again, like I come from this of a place that I’m already sizing going into the, into an investment in the first place. Then there’s a element of being. uncorrelated. And then it might sound a bit silly because I think a lot of investors probably like the idea of being able to redeem all the time. I really like, for example, with pipeline funds, I can only do that once a year and I never redeemed.

[01:15:06] Stig Brodersen: It gives me, I think naturally I have a tendency coming from the world of poker. I think I have a tendency to almost seek volatility at times. I remember there was a specific time in during the COVID crash and the market dropped like 12 percent like S&P 500 or 12, 12%. And it was a bit like, I want more action, which is probably not how you should be thinking about it.

[01:15:27] Stig Brodersen: And then I was next. I was like, no, no, no, that’s not the right way to think about family wealth. And so for me, sort of like to store away X percent of my portfolio into a different fund in as many as 10 picks, like it gives me some peace of mind. It gives me what I feel is lower. I have five stocks in my portfolio and only really meaningful positions in three of them.

[01:15:50] Stig Brodersen: So it’s a way for me not to put family wealth into three stocks. And so, so there, there are many different aspects of it for sure.

[01:15:59] Guy Spier: It’s complicated. And Mohnish is a very driven guy and a very, very unusual wiring, uh, wiring that’s extremely suited to investing he’s going to do. I can’t guarantee in every single one of the thousand different unfoldings of the world that we could have, but in the vast majority of them, he’s going to do extraordinarily well, probably in all of them.

[01:16:20] Guy Spier: Obviously, I don’t, I don’t really know. I don’t have full sight and full hindsight. But, um, and, and I’m impressed that you, you, you were at five and you want to go to three. What, what I’d also say is just the pure mathematics of if you own something that compounds a lot in the portfolio. You’ll end up having a concentrated portfolio.

[01:16:38] Guy Spier: So what I try to explain to many of my investors is that it’s not that I woke up one day and said, I want this huge position in Berkshire American Express or BYD, it’s that they went up 10 X and I didn’t sell any and I didn’t, I didn’t portfolio rebalance. It creates another difficulty, which is the investor coming in says, well, but I’m buying this unbalanced portfolio.

[01:17:02] Guy Spier: I kind of want to start with, with the balance of each of the 10 positions being the same. I don’t want 3 of them to have grown to be outsized positions. And that’s just the case that that’s the difficulty. I don’t know how to answer that without kind of creating other problems that we’ve already talked about, like creating multiple funds or something like that.

[01:17:20] Guy Spier: So it’s an unbalanced portfolio in a way, the same way that when you were buying into Berkshire Hathaway, there was a certain period where at one point American Express was 40 percent of the NAV. And at another point, Apple was a huge proportion of the NAV. So you’re also buying into, well, what’s fascinating about Berkshire Hathaway is that so many of the Berkshire investments, especially in the private businesses don’t work out at all, but we don’t notice them because they just, because they’re an rounding error in comparison to the ones that have worked out like mid American energy or Burlington Northern.

[01:17:53] Guy Spier: I mean, but who’s talked about quick up knives recently or about the pampered chef or various, but you have many, many, many businesses that world book, I’m not sure that world books doing all that well. But it’s okay. Brown shoes, whichever it was, not to mention the, the, the original Berkshire Hathaway textile mills.

[01:18:11] Guy Spier: So what’s my point. My point is that you can end up with the, what appears to be a highly concentrated portfolio just because you left it alone and did nothing basically.

[01:18:22] Stig Brodersen: Well said that. And just one, one more comment before transition to the next segment of the show here about service is also that really understanding where that investor is coming from.

[01:18:31] Stig Brodersen: So for example, whenever you’re listening to guy. Is his family wealth tied into Aquamarine and is it primarily equities? Whereas for others that might say they only have a handful of stocks, perhaps a bit more, and then they also have a huge real estate portfolio or whatever. I was about to say have a position in gold because they take less risk than the average, but I don’t think I want to paint myself into that corner.

[01:18:56] Guy Spier: I mean, the amazing thing about gold, I don’t understand it particularly well, but there are a certain proportion of investors who, if you just start mentioning, well, they’re different, different investors. It’s something different for some. It’s Bitcoin or crypto specifically Bitcoin. And they don’t want to do it themselves, but they want you to do it for them.

[01:19:15] Guy Spier: So in a way, if you want gold bugs to invest with you and you say, oh yeah, we always keep between 10 and 40 percent of our portfolio in gold. You got a whole bunch of people who don’t want to buy the gold themselves, and they love the fact that you’ve got the gold. So I think a very interesting question to ask, and it’s not often obvious is.

[01:19:36] Guy Spier: This is for the professional investors is what I’m doing. Am I doing it in order to generate returns? Am I, or am I doing it in order to gather assets? And the question, and I’m really not sure that I have the answer, and I know that there are some people with gold in their portfolios would be quite offended probably by me saying this.

[01:19:55] Guy Spier: So I apologize in advance, but can you really say that you’re owning the gold in order to, in order to get the best possible quote, risk adjusted returns? Are you doing it? Cause you’ll attract a bunch of gold bugs who love the fact that you own gold at all times. And it gives you something to talk about.

[01:20:10] Guy Spier: It’s like gold went up, gold went down, gold this, gold that, gold mine. And that also helps you, the gold bugs love talking about it. So, they don’t, it’s not just a shiny object that they like looking at. They like to talk about it. They like to talk about the end of currencies and the end of the world. But everything’s going to go to hell in the hand basket, but look, we’ve got our gold.

[01:20:28] Guy Spier: So, and it’s, it’s fascinating because I know Stig and I don’t know the full story, but I know that you guys have had to straddle these divides between people who, who either hate an asset or love an asset. And it seems that especially with gold, there are people, the world divides into people who love the asset.

[01:20:46] Guy Spier: I’ve got a very, very good friend here who showed me photographs of the gold bars in his gold bars, in his segregated safe. Somewhere on the ground in Zurich and so that it’s not like people who love it and people who just can’t stand it and and that’s true for gold is true for crypto and it’s like it’s almost like it’s impossible to it’s impossible to try and have a common language because because they see the world so differently.

[01:21:12] Guy Spier: That’s what makes the market.

[01:21:14] Stig Brodersen: That was makes the market and guy, let’s talk about a common language here. I want it to transition to the next segment here of the show about service. And specifically, I want to talk about ValueX it’s a nonprofit value investing conference. And I obviously I’m not explaining it to you because you were the one who, who founded it in 2011.

[01:21:34] Stig Brodersen: So my first question would be perhaps in the spirit of common language without It’s sort of like giving you too much of a primer, but why did your stock value expect in 2011?

[01:21:44] Guy Spier: It’s a great question. What I think is fun to try and do, and I hope this is the best way to answer it, is to, I can easily give the surface level reason, but, but there may be deeper reasons, which are kind of like worth exploring.

[01:21:56] Guy Spier: At least if I don’t do it with you, Stig, I’d have to do it with a psychotherapist. I don’t have a psychotherapist currently, but So, so the surface reason is. I wanted to move to Zurich, decided that was the right place for me. We moved with my family to Zurich, but all of my network was in, centered around New York.

[01:22:16] Guy Spier: And perhaps a little bit London, which are the two places that UK places where I’d studied. And I remember talking to John Mihaljevic, who’s the author of the Manual of Ideas and saying, he’d moved to Zurich a year after me. And I kind of like said, what if we could bring some of these investors, we used to meet at this dinner in a restaurant called Kolbeh organized by Shai Dardashti, there’d be 20 or 30 of us, all budding value investors.

[01:22:42] Guy Spier: And I said, what if we could recreate that here in Zurich? And I remember I said to John, look. Let’s try it and hey, if all that happens is that you and I are hanging out talking stocks in clusters, the ski resort, not far from Zurich, then that’s totally fine. So that was the surface level reason bring people to Zurich.

[01:23:01] Guy Spier: But I, but around that time, I, I was also. I guess fascinated by the creation of communities, communities that help you to succeed in life and Napoleon Hill talks about he has a name for it basically a forum, a group of people that helps you to succeed and Benjamin Franklin talks about having a group of people that you meet with regularly that kind of like help you to think through your problems in life and help you to kind of connect up to what you need in order to succeed in life. So I was fascinated by that. I was fascinated by organizations like not long before become a member of this organization called YPO young president’s organization that has forums.

[01:23:44] Guy Spier: I’d attended the Ted conference for the first time, and I’d seen what Ted had done and I’d attended a TEDx with a mini Ted conference. So Ted technology, entertainment, design, TEDx, mini Ted. I’d been a member of toastmasters for a while in New York city. I was a member of a chapter called paces toastmasters.

[01:24:02] Guy Spier: I’d been a member of a chapter called paces toastmasters. And here in Zurich or here in Switzerland, there was the world economic forum, and I found all those organizations fascinating. They’re all not for profit, all kind of community peer group, but very special communities. And so there was some part of me that wanted to explore that for myself, I guess.

[01:24:22] Guy Spier: So that’s kind of like the deeper reason of creating ValueX, but I think that looking back and thinking about it now, it was about creating something that would help me and the other people who participated in it to succeed, to live better lives as a vehicle, to help me to do that. And yeah, so that those are the reasons why.

[01:24:44] Guy Spier: And it’s been, it’s been a fun and incredible journey, actually really, really fun and incredible journey. I mean, ValueX Middle East is ValueX that happens in Dubai and actually, the person who runs that who’s PV Ramanathan, he is the guy who sat down with me in New York. And he said, you should join Toastmasters.

[01:25:02] Guy Spier: I think you’d get a lot of benefit out of it. That was like 15 years ago or more, maybe. And I was like, you know what? If that guy tells me I should join Toastmasters, who am I to second guess him? I’m going to just go see what it’s all about. And it was a, it was a fantastic journey for me. I learned so much at Toastmasters.

[01:25:22] Guy Spier: But ValueX now there’s ValueX clusters, which I’d say is the is the original one and people came to me and said, hey, I really like this format. Do you mind if I use the name? And I was like, sure, go ahead. So the first one I think was Vitaliy Katsenelson set up ValueX Vail. And then Ram did ValueX Middle East, and then there’s a character called Sophocles, Sophocles, and he calls it Value Cyprus, and I kind of like have fun with him, because I’m like, why don’t you just call it ValueX Cyprus, and he’s like, no, it’s Value Cyprus, and then you’re not part of the family.

[01:25:58] Guy Spier: Sophocles, I haven’t actually been to ValueX Cyprus yet. And there was a guy, there is a guy who did ValueX Kazakhstan a couple of times. And so it seems like the format is a good one. It’s one that works. And so we’ve grown, I didn’t want it to grow. We were originally 30 people. It’s now as large as 120, which is in a way too many, but it’s, it’s kind of hard because you don’t want to exclude people.

[01:26:22] Guy Spier: Once you’re a member of the community. Unless you do something like commit mass murder or something, you remember you, there’s the security you, you want to be in a community where when people who are way better than you join, you don’t get kicked out, you’d get to enjoy that company. And so we’re now 120 people and happens once a year in costas and the ski resort and you’ve been, you know what it’s all about.

[01:26:45] Stig Brodersen: Thank you for inviting me guy. It was like you mentioned, like 120 ish people and, and it was, it was in the arena, so the, the, the biggest venue in clusters, so it’s, it’s right next to, to Davos, would you consider, like, assuming that it continues to grow, would you, would you move the event? Would it, would it always be in that area?

[01:27:04] Stig Brodersen: How do you think about that?

[01:27:06] Guy Spier: Yeah, with difficulty, meaning that, so the tough choices and I can just share with you. Some of the thinking around that. So if you go to the website, you’ll see it, but I kind of drew on what I thought the ideas that most resonated for me from those different organizations I’ve described.

[01:27:22] Guy Spier: So from Ted, I sort of drew this idea of short talks and rather than the Ted motto at the time was ideas worth sharing, I was like investment ideas worth sharing. Drawing from Davos, the world economic forum in Davos, this idea of putting the group in the mountains in the middle of nowhere, effectively, not too far away from an international airport, but far away enough that people aren’t kind of distracted by other things.

[01:27:47] Guy Spier: And from YPO, I took confidentiality and speaking from experience and non solicitation. So you can’t go there and sort of like market your wares. So that it’s got a kind of a format to it. But then last year for the first time I went to something called Tulipamania organized by Chris Bloomstran. John Mihaljevic introduced me to him at the Zurich project.

[01:28:08] Guy Spier: I was so grateful John sat me next to him and the guy is a genius or more of a genius than I am for sure. I, I can’t measure whether he’s a genius or not. I just know he’s got way more brainpower than I do. But he had a something in his tulip mania that, that I think is really, really powerful that you can’t really do with more than 30 or 40 people in a room, which is the way Chris described it.

[01:28:29] Guy Spier: Bring us your worst idea. Don’t bring us your best idea. And what Chris described to me is He meant bring to the group, the idea that you most struggle with, that you is giving you the most difficulty that you’re just trying to work it out. And then rather than our talks at ValueX are very short. And the idea is you have that you do the talk two or three questions and then take it to the bar afterwards.

[01:28:53] Guy Spier: Instead, this is one hour seminar style where the presenter starts presenting the idea and within 10 minutes. You’ve got a discussion going on. Well, have you thought about this? Have you thought about that? What about this? I know somebody who can help you figure out that. And you get the hive mind of effectively 30 seminar participants in a seminar style environment, really trying to help you think through it.

[01:29:16] Guy Spier: And it was, it was extremely powerful. And. It’s kind of hard for me to do ValueX is not an aircraft carrier, but it’s a big enough ship that you can’t, you can’t just go to everybody and say, okay, we’re changing the format. It’s going to be completely different. 60 of you won’t be able to come back. It wouldn’t be very nice.

[01:29:33] Guy Spier: So, so I, I’m just pointing that out because, because it’s interesting. You start something and, and then it develops its own momentum. It’s develops its own community and the community develops its expectations. And even if you. Yeah. There are some really good ideas that it would be impossible to implement without destroying it.

[01:29:50] Guy Spier: So we’ve decided because it’s run by the team that I’m a part of that we don’t want it to grow. And so we’re at capacity in this convention sports center and in clusters. And we kind of agree that there are a lot more space in Davos, which is not that far away. But it would change the nature of the event significantly that in a way it would destroy it.

[01:30:15] Guy Spier: So no, we’re not moving to Davos. And I would tell you that when you get a group of 120 people, what’s really fascinating is at 120 people, you start replicating the problems of society. So in a group of 120 people, you’ll have your, no matter how you try and do it. You’ll have your share of people who there, because over a period of 15 years of running ValueX, not every single person is somebody that I necessarily want to invite back or spend an enormous amount more time with for all sorts of good reasons.

[01:30:52] Guy Spier: But I can’t, I don’t believe that I can exclude them from the event because if you became a part of the community. Even if they’re not contributing value to me by their presence, they might be contributing value to somebody else. And even if they’re not contributing value to somebody else, they’re kind of like a former part of the social network.

[01:31:10] Guy Spier: Now, if you go and exclude somebody, which I think that the world economic forum does do, you get invited for a number of years and then they just say, no, we’re done with you. And there’s, there’s good reasons for doing it because in a way you kind of get rid of dry wood, but there’s this nervousness and this salesy aspect to the world economic forum where you’re kind of afraid you won’t be invited back.

[01:31:29] Guy Spier: And so you, you take away safety and that, that has an impact. So if, if I want to kind of like have more turnover in the group that’s there, I’ll destroy other things. And so it’s, it’s, there are difficult choices to be made if one thinks about where it goes, but. My expectation is that we’ll stay in clusters.

[01:31:49] Guy Spier: It’ll be around 120 people. I try to be inclusive and bring new people in, but there’s a constraining factor that I don’t want to exclude people who are already there. And the real measure, and I’ve said this a couple of times at the conference, is, and I’ll end with my rambly thoughts, that the mic’s about to come back to you, Stig, is that. And this is really, I’m genuinely, and this really does, it’s part of my, I think my DNA and it really does drive me, I don’t need to own a big yacht.

[01:32:19] Guy Spier: I don’t need to be a billionaire, but boy, would it be fun if a few of my friends own big yachts and a billionaires and they’re not kind of inviting me onto their yacht or whatever the hell else they’re doing because they’re trying to get something for me or because they owe me something because we’re genuine friends and they just want to have my company and it would be fun to do.

[01:32:37] Guy Spier: Yeah. And so the real measure for me is in 20 years, how many billionaires or how many extraordinarily successful people where I once read an article in New York Times about some group of guys who would meet once every week, or maybe once every month in New York City. And they’d all lived these extraordinary lives.

[01:32:57] Guy Spier: And the premise of the article was it had something to do with them getting together with each other once a week for these meetings. So I’d be a judge, an extraordinary success. And I would judge my life for success. If I could look back in 30 years, 20 years and say, wow, look at these amazing people and what they did in their lives.

[01:33:16] Guy Spier: And against that measure, there’s, we’re only just getting started. There’s a long way to go.

[01:33:21] Stig Brodersen: Well, guys, thank you for doing such a wonderful service to the value investing community. And, and I would also just mention that I’ll make sure to link to Ram’s event ValueX in the Middle East.

[01:33:32] Guy Spier: Which is superb, it’s absolutely superb, better than ValueX clusters, did I just say that?

[01:33:38] Guy Spier: No it isn’t, we’re better, we’re better, but Ram’s an incredible guy, he’s, he’s just, he’s got all the right models, he’s living by all the right myths, if you like, so that’s wonderful.

[01:33:48] Stig Brodersen: Fantastic. And I can only say very, very nice things about Ram. So I hope someone in the audience would would would make it to that event in November.

[01:33:56] Stig Brodersen: And again, I’ll make sure to link to the website and how to sign up and and all that good stuff.

[01:34:01] Guy Spier: So just for you, I don’t know how Ram runs it, but one of the ways I run ValueX is that you can’t just buy a ticket. You can’t just sign up because you need to be known to the community. So from running it the same way, which I suspect he is, you’ll have to find somebody who is already a part of that community and get them to recommend you.

[01:34:21] Guy Spier: Because then, and I have this rule that even when somebody is recommended to me and they’re very, very good person to add to the ValueX, I always make sure that I’ve met them at least by zoom. Well, before the conference that there are known entity into the group. So if you, if you want to join ValueX Middle East or ValueX, you’ll have to find a way to get to know the people who already already there and make yourself valuable to them.

[01:34:44] Guy Spier: I hope you don’t mind me sort of like.

[01:34:45] Stig Brodersen: No, no, no, please. Thank you for saying so. Cause I, I definitely don’t want to want to overpromise at all. I want you to share the love and make sure that more people in the value investing community knew about it. I, I hadn’t heard about that event before I went to clusters and sorry, I think it was very clumsy for me to sit in like, wait, just go ahead and sign up.

[01:35:04] Stig Brodersen: But I think I got too excited about, about that wonderful event.

[01:35:08] Guy Spier: I think that what’s really powerful, I mean, what are the things that seems to me, and this comes from a Toastmasters format meeting format called table topics. In which every person is required to give an impromptu speech of, say, two minutes long on a topic that they didn’t hear about three minutes beforehand, so it’s really about thinking on your feet.

[01:35:32] Guy Spier: And so on the one hand, that’s training and giving impromptu speeches, but there’s another aspect to it, which is that when, when you have a group of 10, 20 people in the room, and they each give a two minute speech is that they’re these really sort of like, there are these tells they talk about things that they didn’t expect to talk about and say things about themselves in the world that they didn’t expect to say.

[01:35:53] Guy Spier: And suddenly you get this community arising. And so at ValueX, we’re kind of like trying to push that everybody gets a chance to talk to the group. And what you get as a result of that is that the two minutes that you spent with the five or the 10 minutes, the person who you need to connect with, who’s in the room will, will read something about what you said.

[01:36:13] Guy Spier: And it may be completely unrelated to the topic that you’re discussing. Maybe your accent or a reference to something, and that creates the connection that, that creates something. And so. You know, you show up at ValueX Clusters and you hear about ValueX Middle East and you didn’t know it existed.

[01:36:27] Guy Spier: Somebody else shows up to ValueX Clusters and discovers something else or meets somebody they never expected to meet. It’s kind of fun when I see and track those things. Really, really interesting. So, I don’t know if that was an answer to you or if it’s just something that I wanted to say, but there we go.

[01:36:43] Stig Brodersen: Guy, before going to clusters, and this is probably going to come across as a bit of a, of a vain comment, but I, I sort of like wanted to want to turn the spotlight on you, but first the, the vein component here. So my, my father asked me if I was going as stick, I mean, the private individual or, or stick from TIP, and I wasn’t really sure how to answer.

[01:37:03] Stig Brodersen: And it’s, it’s kind of surprised me. And it also kind of like, bit me sad, but it’s also surprised me. And I think that there is this dilemma where I will go to different conferences, not only in. Not only just in, in, in clusters, but in say in Dubai or Omaha or whatnot, and, and perhaps, perhaps get a bit of attention, perhaps also more intention that I, that I like, and perhaps not feeling completely comfortable with that, but at the same time, also be worried that I would, I would miss it.

[01:37:32] Stig Brodersen: If I, if I didn’t have the option as ridiculous as it probably sounds and Guy, you’re obviously a lot more known in the value investing community than, than me. And I was, I was kind of curious to hear how you think about whenever you would go to different value investing events or settings, or just like the whole ecosystem we have around value investing.

[01:37:50] Stig Brodersen: Do you feel that you’re a Guy Spier or Guy, or do you feel that you’re Guy Spier the value investor?

[01:37:57] Guy Spier: I totally get the question and it’s a, it’s a spectacular question. And another way of putting it for me is that, and it happened for a while, somehow it’s dropped off now, is that, did they want to meet me or did they want to write, meet the guy who wrote the book?

[01:38:12] Guy Spier: And there was this, there was a certain point where people were disappointed because they realized that the person they were meeting was not the person who wrote the book, he’d moved, he’d grown since then, he’d changed his mind. And there are some things that I wrote in my book that I don’t agree with anymore, that I think are actually quite stupid.

[01:38:29] Guy Spier: And there’s this kind of like disappointment, if you like. And so how do you navigate between a, a public persona and the private individual, and it seems to me, and it’s a theme that just, it’s coming up for me. I don’t know if it’s coming up for you. It’s, it’s just this dimension that like it or not, if you become known to more people than you could ever meet in your lifetime, you’re just going to have to manage that.

[01:38:53] Guy Spier: And, and it seems to me that the key is to understand those two things. And to manage it in a way that is consistent with your personality, and it can be very different depending on what your personality is. And so, and I want to sort of like just bring up a few examples, going back to the royal family, and there’s lessons we can learn from the royals who do that well.

[01:39:18] Guy Spier: The reality is, is that we know absolutely nothing. About the private personality of any of the royals that are so carefully watched in the UK that the ones I am so familiar with and the ones who do it really well, it seems to me, don’t even attempt to project their actual personality when they’re in their public roles.

[01:39:41] Guy Spier: That’s not their job. That’s not why they’re there. Prince William is not there because he has a good or a bad sense of humor because he’s particularly intelligent and knows a lot about history or is he’s a good father or a bad father he’s there because he is used so rightly put, he came out of a certain womb.

[01:39:57] Guy Spier: And he’s that play a role and you play that role in the best possible way when you don’t interfere with it, when you don’t create noise in a way, it seems to me that and I’m, I think that I’m a fan of the younger brother and Megan, Megan Markle, but it’s. In order to do best as an employee of that firm, you need to separate your own personality from, from the way people see you.

[01:40:24] Guy Spier: And that comes down to selecting what you wear, because what you wear is again, the sense of decorum or the sense of symbolism that you’re using and, and exactly what you wear and the color that you wear and the color that you wear related to the other people around you and where the badge goes, or if you don’t wear a badge or all of that count.

[01:40:43] Guy Spier: So that is an example of an extremely. Dichotomized separated, but that’s not you and me, and we’re trying to be authentic in the real world. We’re trying to be, or at least speaking for myself, but I think you’re the same kind of person you want to be. I want to be the same person everywhere. I am. I don’t want to have a public persona.

[01:41:03] Guy Spier: And so my goal and I again, be aware of the dimension that it adds, but don’t apply it necessarily in the same way that other people you’ve seen apply it. So certainly I don’t want to, I don’t have to live my life like a royal. I can try and merge the public and the park private persona. And that is my goal.

[01:41:21] Guy Spier: And I think that that’s part of why people enjoy talking to me because they see that the private and the public persona, the same thing. So if I’d have been your father, I’d have said you’re going to Stig. And by the way, the stig that you are with your family and at home and personally is, should be, and is, the same stig that is appearing in ValueX and elsewhere in public.

[01:41:45] Guy Spier: But then, what’s happened to me? So that’s my goal, and I think that I’ve, I’ve done a reasonably good job of it, better than I would have before I read the autobiography of Mahatma Gandhi. But, and I don’t know if you, you might’ve actually, would have experienced it in ValueX because half the people at ValueX would like to go on your show.

[01:42:03] Guy Spier: So you’d have had a whole stream of people coming up to you and at Berkshire Hathaway, I end up having a whole stream of people coming up to me and there it’s only become sort of like top of mind for me recently where I see that Mohnish and I have very, very different personalities. So for Mohnish, as the best as I can see it, he’s, he’s energized by people coming up to him.

[01:42:27] Guy Spier: He kind of, he thinks it’s fun. He’s happy to take the photographs. He’s happy to banter a little bit and it’s only one day in the year. So he’s not doing it every day of the week. And, and the difficulty that I think that I have with that, and that perhaps you have with that is that it denudes. So when I go to Berkshire, and I am in that way at Berkshire, there’s no meaningful interaction.

[01:42:52] Guy Spier: So, so to be a celebrity is a very shallow experience because. Because people are, they’re just looking not, they’re not actually interacting with me as an individual, they’re interacting with their idea of who I am. And there’s not even the time to kind of like create any real connection because there’s another person and another person, another person.

[01:43:11] Guy Spier: And I personally find that exhausting and I also find it kind of meaningless. And so I’ve had conversations with William Green about this because he’s in a similar kind of boat. So, I don’t want to create too many situations where I have many, many people coming up to me. And because I, because unlike Mohnish, it drains me of energy.

[01:43:34] Guy Spier: It doesn’t fill me with energy. And I kind of find it a little bit meaningless. But at the same time, there’s a benefit to me of being at the Berkshire meeting. I don’t want to not go to the Berkshire meeting and I want to be kind to those people and I want to be a decent human being. So, so that’s just those are waters that I have to navigate trying to be myself as much as I can.

[01:43:55] Guy Spier: But I, I would say that, uh, I think that writing a book as personal as I did is a kind of loss of your virginity. You can’t ever go back. People now know things about me and they feel like they know me personally in many, many ways they do. And in a way that’s a loss of privacy and the people who’ve lot less privacy than I, what I understand, I mean, people like Barack Obama and many other people, they just yearn for the ability to walk around and not be noticed and not be known and just be themselves.

[01:44:27] Guy Spier: And not have anybody react any differently to them. And that is a gift if you’re not a public figure. So I’ve lost a little bit of that nowhere near, I’ve lost a little bit and learned enough to know that I don’t really want to lose any more of it. If I can avoid it, the privacy and anonymity is a good thing.

[01:44:46] Guy Spier: There’s also, I mean, okay, let’s be clear. So why have I become, I don’t know if I’m a celebrity at the Berkshire Hathaway, I’m a minor celebrity, and it’s in part because I wrote a book. The way that I wrote the book, it’s having these very, very open, honest conversations, and there’s a part of me that wanted it.

[01:45:04] Guy Spier: And why did I want it? Because I perceived that it was an important way to get the success that I craved. And I felt like if I’m well known, then I’ll have easier time researching investment opportunities, and I’ll have an easier time getting investors and all of those things. And I think that’s probably true.

[01:45:22] Guy Spier: And so I kind of, there’s a certain price to be paid for that. The yes, I do have better conversations and yes, people are more willing to pick up the phone to me and talk to me, but I, I think that I, I hope to manage it now. I don’t want any more celebrity. I don’t, I think I’ve got more than the optimal amount, actually.

[01:45:40] Guy Spier: And in your case and in my case, and it doesn’t help that I think there’s, I think you’re more of an introvert than me, but I’m also, I believe the end of the day, an introvert when I’m in spaces like the Berkshire Hathaway meeting, or when we’re at ValueX, then that’s just something I have to manage. But again, a long answer, a long and rambly answer to your question.

[01:46:00] Guy Spier: My word to you is be always be Stig Brodersen, always, always be Stig Brodersen.

[01:46:06] Stig Brodersen: That’s very kind of you to say, and, and sort of like to one of your previous points, whenever you’re a guy, no one’s a profit in his own country, people say different things whenever it’s guy compared to Guy, the value investor.

[01:46:18] Stig Brodersen: So whenever you will go to a place like ValueX, and you’re, you’re very kind whenever I went there and sort of like to ask how I was, how I was doing and everything. And. And so thank you for bringing it up. So it doesn’t sound like I’m complaining about going to ValueX because it was a wonderful, wonderful experience, but it was a bit like, yes, I’m going here as a private person, wanting to network.

[01:46:35] Stig Brodersen: And you went up on stage and you said like, no solicitation. We all here to, to learn together. And I was like, yes, this is, this is awesome. And then, then you get flocked with people and we, I roughly get like 2000 requests to be on the, on the, on the podcast annually. And then I went to a ValueX for my, for my time off.

[01:46:54] Stig Brodersen: And I just got flocked with people saying, let me go on your podcast. And I don’t think there’s anything wrong with, I also think it’s important. Not to judge anyone. I kind of feel like I’m complaining and coming from a bad place here.

[01:47:04] Guy Spier: You’re like, actually, what I, what I would say is that I, I wasn’t aware that you were that sort of like crowded because it’s a kind of a violation of ValueX says ethos to do that.

[01:47:15] Guy Spier: You, you can’t walk up to a stick brothers and say, please might be on your podcast that is soliciting business that is soliciting for yourself. You can’t do it. And to the extent that it was done is not appropriate. What they can do is say, I love your podcast. And if you’re ever looking, it’s hard. If you’re ever looking for guests, I’ll be happy to help you find some is a fine line.

[01:47:35] Guy Spier: But, but in a way, yeah. It’s hard because I would have preferred for that not to happen to you and I can tell you I was in a restaurant this summer believe it or not. My wife and I discovered this incredible restaurant in the South of France. They get to by boat. And so we went and and guess who comes and sits down. Elton John. Elton John is in this restaurant and we’re in this restaurant and it what’s really fascinating about this restaurant Very very hard to get a table very very hard to get a reservation and I have actually no doubt that if anyone in the restaurant would have walked up felt and John said, oh, can I get an autograph or something?

[01:48:12] Guy Spier: They would never have been able to get a table in that restaurant ever again. And so Elton John, we, we face a very, very minuscule fraction of what Elton John faces and in a way it’s the price of success and you, you have a kind of a media business, you have a very successful podcast and it’s natural. I mean, I always find it interesting that when I speak to journalists that have major.

[01:48:36] Guy Spier: Publication or I think I was on CNBC once and I was on CNN once like those people I’d be like, oh, we should go for a coffee sometime or, oh, can I send you a copy of my book? Or can I can I put you on my holiday card list? And they have no interest. They have 1000 people a day trying to do that with them.

[01:48:52] Guy Spier: And you can try, but it’s you’re not going to get very far. And so you, in a way have transitioned in your, when you’re around investors, it’s just inevitable that they’re going to want to be on your podcast and they’re going to be desperate to try and get on. And they’re going to do, try all sorts of ruses to try and get on.

[01:49:09] Guy Spier: And it’s a reflection of your success. And it’s just a price, part of the price you have to pay. You can’t really go back, can you?

[01:49:17] Stig Brodersen: No, and I, and I think just as an editing note Guy, I’m probably going to take out this point about me complaining about there was so many people wanted to on the podcast because I kind of feel like it comes across as very entitled.

[01:49:28] Stig Brodersen: That was not my intention.

[01:49:29] Guy Spier: No, no, I don’t think my personal views is not entitled. It’s just a reflection of reality. It’s reality that, that, look, I’ve discovered on YouTube that I can watch this British journalist whose name always escapes me, and he’s got a very, very successful YouTube show with millions of viewers, and he’s got endless number of people who want to get on to his show.

[01:49:50] Guy Spier: They’re desperate to get on. That’s just the way it is. And there’s, there’s a kind of a, it’s not an 80, 20 rules, 99, one rule. And you’ve, in terms of your podcast, have entered into that 1%. And that’s a natural consequence. What I’d say is that in a way, and I I’m kind of doing this in real time, because I’m realizing the problem.

[01:50:09] Guy Spier: And in a way you cannot go back to being private stig around investors. It’s just, the world has changed and there’s all sorts of benefits that you get. You run a very successful podcast. There’s also a price that you have to pay, and it’s that you can’t be private Stig when you’re anywhere around a group of investors, and that’s a shame because you want to be private stig, and I’d say that to empathize to you, the problem with being public Stig is that when all these people are coming at you, you can’t be natural, you can’t learn, you can’t discover, you can’t ask questions, you can’t evaluate.

[01:50:43] Guy Spier: You can’t have that random sort of thought or insight that helps you. And so that’s a real, uh, freaking shame, if you like. And, and I just think that, and it may segue into a question that I know you’d put on, on the preparation for this. We cannot be the same person that we were. We have to, we have to modify and adjust and become different to the person that we were.

[01:51:05] Guy Spier: And, and that’s in a way, I think what you’re being challenged to do. Certainly for places like the Berkshire meeting and maybe value acts and all the other gatherings where I just for people listening, I tell you, it comes up for me. So I’m at the Sequoia fund, Ruane Cunniff’s mutual funds, annual meeting in New York City.

[01:51:26] Guy Spier: This is like 2 decades ago, so I’m sitting there. Who sits down next to me, but Lou Simpson, there’s Lou Simpson. I mean, this guy is a hero. This guy is a God to me. I studied his investment decisions and it’s like a bit like that Elton John phenomenon. Of course, Elton John, he’s just a singer, Lou Simpson.

[01:51:45] Guy Spier: And there’s Q and A, there’s Jonathan Brandt on the stage. There’s, there’s Bill Ruane there at the time. There’s Carly Cunniff there. And what I want to do is turn to Lou Simpson given my business card and sometimes I’m impressed. I actually do the right thing. And I said, we’re at a meeting is Q and A just you’ve noticed him.

[01:52:07] Guy Spier: And then I saw that he was looking at me to find out, to see who the hell I was, maybe he recognized me from something. There’s a way before I written my book and I knew again, don’t turn and talk to him. Don’t let’s let him observe you quietly and let him see who you are. And I resisted the temptation.

[01:52:24] Guy Spier: I’m reasonably sure that if I would have tried to turn and talk to him, he would have me shut me down in no time. And then at the very end, as everybody was getting up, I said to him, Lou Simpson, obviously, I know who you are. I’m Guy Spier. Obviously, I’m a huge fan. I’d love to connect with you sometime.

[01:52:40] Guy Spier: And I’d won the credit with him because I hadn’t bugged him through the Q and A, cause we were both there to do the Q and A. And so what’s my point. There are better ways to behave around the stick brothersons of the world. And then Stig Brodersen may well notice you, and it’s always good, like, if you’re at a meeting like ValueX, and forgive me, I’m kind of, I hope you don’t edit this out, is like, be there for the purpose of the meeting.

[01:53:03] Guy Spier: The purpose of the meeting is to listen to people on the stage. So join Stig in listening to the people on the stage. Don’t try and interfere with his concentration as he’s trying to learn, just like you are. Am I making any sense?

[01:53:16] Stig Brodersen: You’re making a lot of sense, Guy. And I, I remember we met up in Omaha. I want to say it was, it was probably last year.

[01:53:21] Stig Brodersen: So it wasn’t this year, it was in 2023. And we met in the lobby at the hotel that we were, we were staying at and had a chance to sit down and chat. And. You’re just, you’re such a nice person. Like the, one of the first thing you talked about was how can I help? It’s just like, it’s just, it’s just so wonderful speaking with you guy.

[01:53:41] Guy Spier: Stig, I think that something else that I realized about that conversation was it was, it was in a way painful for me at Omaha because, because I realized that I just wanted to sit with you for two hours. Cause one of the, one of the qualities that you have is that you’re extraordinarily curious. And you’re curious in a very incisive way.

[01:53:58] Guy Spier: And that for you is a joy, actually trying to get to the bottom of something, trying to really understand it in a, in a thorough way. And that’s not something that happens when you’re having these shallow conversations. And so the way I want to, it’s a bit like what we’re doing right now, which is kind of a joy is to really try and understand and really try and, and that, that requires at least 20 minutes, if not two or three hours of really, I mean, even a retreat where you kind of have multiple opportunities to think through the thing. And actually what I, what I realized is that you set next to zero value at making people feel good at a cocktail party.

[01:54:37] Guy Spier: That is like, well, why, when I could be diving into some really important topic with somebody or on my own. And so that, that creates a particular challenge for you when you’re in kind of these kind of more shallow type environments. And what was painful for me is that I realized that if we would have met somewhere in a mountain lodge, where people go for hikes in the morning and hang out in the afternoon, we would have had a three hour conversation about something.

[01:55:01] Stig Brodersen: So we meet up in the lobby and I’m just excited to have a chance to hang out with you. And then this lovely, lovely couple comes up to us and wants to have our photo together. And I’m pretty sure they came for you and not for me. And so, there’s a lot, a lot of things happening here that were super, super nice.

[01:55:16] Stig Brodersen: I remember there were a lot of things happening at the time because you sort of like, sort of like wanted to pull me away until like this side of, of where, where nobody caught my eye. Exactly. I’m glad you remember that. And so, and you were like, you were like, you’re super, super nice. And I remember that I promised my wife I would give her a call at a specific time.

[01:55:35] Stig Brodersen: And I’m, this is something about being very much aligned. Like I do what I say and say what I do. And here I have the opportunity to speak with guy and that’s super, super exciting. Also, I made a commitment to my wife that we’ll give her a call a specific time. Cause you want to make sure everything was okay.

[01:55:48] Stig Brodersen: And I was across the pond and all of that. And that was like really, really tricky for me. I remember because it’s about being truthful, but at the same time, you’re also thinking whenever this lovely couple come up to you, you better damn sure, make sure to smile and give them a good experience. Yeah, you also really want to have a chance to hang out with guy because how wonderful is that well guy wants to hang out?

[01:56:09] Stig Brodersen: With stinkers how wonderful is that because both ways dude? So I I think it sort of like takes me takes me sort of like to something I wanted to ask you for a very long time And I I’m always want to apologize for a ramble because I kind of feel it’s a very very long question where I’m going to go in many different directions.

[01:56:25] Stig Brodersen: So I think it’s important not to judge other people. Let me, let me start that as the premise. We had someone come on the show the other day and he was like very, very kind. And he sent a note and he was like, he raised 10 million and he was just super excited about getting a chance to do that. And, and that’s amazing.

[01:56:41] Stig Brodersen: Like he, I only know him as a, as a very, very good person. Then I was thinking to myself, 10 million is not a lot of money for the guys, peers of the world. If you’re a young upcoming asset manager, you might manage, I don’t know, 15 million. It’s, it’s huge if you can like manage 10 million and that person probably read all the books about don’t take no for an answer and go for it.

[01:57:02] Stig Brodersen: And all of those things, like, I think it’s, it’s hard to judge other people for not taking no for an answer. And, and, and I’m thinking like 10 years back, 15 years back, whenever I first got started thinking, wouldn’t I have done the same thing? I unsolicited message you guy and said, famous person, please come on my podcast.

[01:57:22] Stig Brodersen: And you were so kind enough to, to respond. And so I think that there’s element of not be too harsh on other people whenever they do things that you might not do. Perhaps you’ve done the exact same thing if you’re in their situation. And then, then I also want to say that they say that heaven and hell are very similar.

[01:57:36] Stig Brodersen: They have long falls and plenty of food, but in heaven, they figured out that you can feed your neighbor. And it’s hard for me to think of anyone in the value investing community who is as well liked as you, Guy. And I could say, I could take on my investor hat and say, well, that’s because guy has 26 years of being the S&P 500.

[01:57:54] Stig Brodersen: But that’s, that’s not why there are a lot of people who’ve been, who’ve been having track records, who are not nice people. People like you because you’re so, so authentic and because you’re vulnerable and because you’re just a wonderful human being. And Grant has this framework of giver matchers and takers, which is just so inspiring.

[01:58:12] Stig Brodersen: And it’s very, very clear that you are a giver. Now, I think I hopefully I’m going to, to, to come to my question here, but yeah, but it is fascinating just to listen. So you’re on a good thought role. You know, I, I think I mentioned before that I might be getting roughly 2000 requests a year, just, just to be on the podcast.

[01:58:29] Stig Brodersen: And then there are all the favorites to ask. So let’s say that there. Let’s just say 50 messages on, on various platforms every day about different, different favors, 20, whatever it might be. And you want to be helpful. You want to respond to everyone. You want to be decent. You want to be kind. And then whenever you tried that for some time, you realize, let’s say that you have 20 requests, a big proportion of those 20 comes back and ask for another favor.

[01:58:52] Stig Brodersen: Plus you get another 20 in the next day. And so it doesn’t require a lot of math to figure out at some point in time, it’s just going to be too much. How do you handle that being a giver, but at the same time, you don’t want to surround yourself with matchers and takers, and you just really want to be guy, a very, very nice person.

[01:59:10] Stig Brodersen: How, how do you handle all of that?

[01:59:13] Guy Spier: It’s a, it’s a spectacular question and, and, and it’d be before I get to, I think I have some, some helpful answers is this idea of you kind of like earlier on, before you got to the question, you talked about the person who is, who is engaging in behaviors that are not ideal, but I, or you would have done maybe the same thing earlier on in our careers.

[01:59:36] Guy Spier: It’s so hard to get on one’s path in life and to get started and to make progress, and maybe we should give them the benefit of the doubt the same way that we would have liked to have been given the benefit of the doubt, all of those things, which race, they just raise really, really important issues that I’d like to come back to, but to go to go to the question.

[01:59:56] Guy Spier: I think that if I was, if Adam Grant, I’ve met him once, he hasn’t asked me, but I’d love to get into a sort of rewrite or an additional chapter of his book, where I, the, the give and take matches givers and takers a dynamic process. So when you start discerning in your behaviors between matching, giving and taking your environment changes.

[02:00:23] Guy Spier: And so it requires modifications of our behavior. And so you’re absolutely right. It’s a Hydra to use the Greek mythological idea that you cut off one head and two heads appear and you give to somebody and they come back with another request and yet another request. And so I like to think now of that Adam Grant framework as a sorting mechanism.

[02:00:50] Guy Spier: So some people will come back after you’ve met their request in a helpful way with a second request. And now I’ve just learned something really important about them. But there’s other people. If I meet their request, or I am helpful to them in some way, we’ll find a way to help me back. And so if somebody, if I help somebody in some way, and they come back with a second request, and they’re, they live in the world in such a way where they kind of go, well, I’ll try guy because he helped me once.

[02:01:23] Guy Spier: So maybe you’ll help me again, then, then, yes, so I, I, I’ll help them once, but I can’t help them a second time. Maybe I can help them two times, not a third time. I have to shut them out or I have to, I have to move them away or move them to a more distant setting where they can’t make those requests that often.

[02:01:39] Guy Spier: So what I’m actually doing is I’m sorting through people. I’m discovering by how they react. To my behavior and, and reassigning them and people can move categories and they can come, they can learn and come, come into a different category or for there may be some people who are takers, but for some reason we need them or want them in our lives and we’re willing to take the cost of having them as takers.

[02:02:03] Guy Spier: So, so I think there’s no, it’s not a sort of like the boundaries are malleable. People can move back across the boundaries and one can choose to have somebody. At a closer distance for one reason or another. And so the other thing that I would say, or part of that dynamic process is, so the set of people that I’m helping is not the same set all the time.

[02:02:27] Guy Spier: There are people who coming into that set and then they’d be moving. They move themselves out potentially. And I’ll give you an example. I, people have asked me so many times, what’s your relationship to Warren Buffett? And I have moved myself out very intelligently, and the only option available to me is out of the set of people who would call up Warren Buffett to see if he’s got time for a coffee when I’m in Omaha, because that is a request for his time that would very quickly get me out of his good books and into the far periphery of his universe.

[02:03:01] Guy Spier: The only way I can be in any way a part of his universe is to not make any requests. So I moved myself out of that set. But there are some people, and unfortunately there are a lot of them, where one has to actually move them out, and they don’t even realize that they’re not being helpful to you, where one just, so I guess it’s a dynamic process, somebody comes back with two or three requests and doesn’t try to help you, you just have to see them as matchers or takers, and one has to develop systems, so I would tell you that an engine is the way Mohnish would describe it. So rather than being as a reciprocating person or being a giving person, which you certainly want to be to the extent that you’re successful, you need to teach those systems to the people around you and create gatekeepers and create sort of like rules as to how to approach all the different kinds of requests that come in, for example.

[02:03:53] Guy Spier: So you might find that there are, I might find as talk about me because I know me and I don’t know, we used to give internships to a lot of people. And we discovered that it was just a huge drain and very, very hard for us. So we had to develop rules. Or I used to be the guy who offered internships. Now I’ve had to discipline myself when I’m anywhere in the world.

[02:04:12] Guy Spier: I outside of the office, I have to say, wow, I can’t offer the internship. The only thing I can do is propose you to the team. And the only time that we offer an internship, if the team is unanimous, but I can certainly propose you to the team. And that even goes for family members. And so I created a process.

[02:04:29] Guy Spier: And now, and, and what I, what I find really interesting to do is if I’ve had an intern, for example, and I got an enormous number of internship requests, often the intern might be a good gatekeeper. We’re a good facilitator. So I literally I’ll say the only way you can become an intern is first of all, by getting the approval of these prior interns who were there because they know what the environment is like.

[02:04:55] Guy Spier: And then you need to go to my staff. And if there’s unanimous approval there, then yeah, then you can come be my intern. So best of luck. I’d love to help you with that process. And the way you need to it. So that’s about as much as you can do. So the point to Adam Grant is the point that the chapter that I would have Adam Grant, right, is how do you manage it as a dynamic process so that the bad doesn’t drive out the good in a certain way that you don’t end up investing all your time in giving to people who are not, there’s, there’s something else that can happen is these people are not asking for more.

[02:05:32] Guy Spier: And they’re not coming back with multiple requests, but it’s, they’re just not the right people to be helping in, in your case. So I’ll tell you something that I’ve done in a way far of, well, maybe I haven’t done too much of it, but I need to shift the focus of my attention of my team’s attention. I love seeing people who are just out of college, just out of business schools, people who are budding analysts, people who want to start their funds.

[02:05:56] Guy Spier: I want to help them to succeed. I think that’s lovely. And I want them all to become billionaires. I’ll send them all bottles of champagne when they have more AUM than I do, or when they have higher returns, and I want to be able to be invited onto their yachts, but I also have to focus on what’s going to move the needle for me, and I’ve helped a certain number of people, I would have liked to have helped more.

[02:06:18] Guy Spier: And I hope I do help more, but that’s not going to move the needle for me to, to have helped. I know if we take the ValueX community in total current and past ValueX has called it 200, 250 helping another 50 people get set up in business or to progress their careers as analysts. That’s not going to help me progress in my life.

[02:06:38] Guy Spier: So I can spend all of my time helping those people, or my staff, my organization can spend all of its time helping those people, but it’s not going to get me, it’s not going to help me to progress in my life. So I have to decide what I want to do with my life. If I just want to help people, that’s fine, but if I want the business to progress, Interesting enough, and I know this because I run a minuscule podcast, but you can take many, what do you call it?

[02:07:02] Guy Spier: Startup emerging managers, new blood managers, and it’s helping them, but it’s not helping your podcast. And I suspect that for the investors podcast, I just put it out to you. Have you thought about interviewing Larry Summers? Interviewing Jerome Powell, interviewing Janet Yellen. So that’s probably where you have to go.

[02:07:25] Guy Spier: And none of those guys, none of the guys at ValueX can help you with that. So it’s not just about sorting through people. It’s about directing your helping energies in a direction that can be actually help you to progress your life. So that’s kind of a long rambly answer. But the short answer is apply the apply it in a dynamic way and apply it intelligently.

[02:07:46] Guy Spier: And with, in a way, actually, the word that comes to my mind is malice. So we have to na say no, have to set up barriers, have to set up gatekeepers, have to set up processes that protect you. You cannot, you will not be effective. And, and here’s what I would, it’s easy for me enough to say it to you, Stig, but I am extremely guilty of it.

[02:08:07] Guy Spier: So and so I will not say it about you. I’ll say it about me. It is an enormous betrayal of ourselves, and we have to be true to ourselves to lose ourselves in helping other people. That is actually a kind of a sin. It’s a grievous sin. Put on your own life jacket before helping somebody else. Your most important job is to live the most meaningful life.

[02:08:32] Guy Spier: And yes, you want to be helpful to people along the way. But unless your goal is to be Mother Teresa, you cannot allow all the people who want help to drag you into what is not the most important thing for you. If I’m, if I’m Roger Federer, there’s a point at which I have to say to all the school kids, it’s been great talking to you, now I’m gonna go and train some real tennis with my one coach who can help me.

[02:08:58] Guy Spier: And yes, I know you want me to spend another three days playing tennis with you and inspiring you and talking to you about tennis. so much. I got my life mission is to go in Wimbledon is not to be a tennis coach and to go in Wimbledon. I have to go and play with my coach. I have to do a structured regime and you guys aren’t part of it.

[02:09:14] Guy Spier: That’s just it. And it’s so funny because I’m, I’m saying with such clarity and confidence, but you know, in a way, the person who really needs to take that advice is me. Well, actually two people that I want in the room debating on it is William Green and Mohnish Pabrai. So, because William is like, because I, because I can remember at that Berkshire meeting, I do remember that, like, I’m in the middle of conversation.

[02:09:38] Guy Spier: Now we have to stand up for a photograph. And those people were so happy for the photograph. And I was like, because William’s really cool. I was like, that sucked William. Because it happened with William as well. Or maybe William was somewhere in the area. I don’t know. It was like, no, no, you, you’ve got to be kind, you’ve, you’ve got to be kind, but then there’s another, so, so, so where it also happens is I say to Mohnish, Mohnish, I know that this person might not work out as a good intern, but I really want to give them a chance.

[02:10:07] Guy Spier: And yes, they haven’t come at me in the right way, but you know what I mean, would not have come at guys to be in the right way when I, and, and, and there’s another model that Mohnish has, which is the cost of a false positive. So. The person that we hire that doesn’t work out is very expensive to get rid of.

[02:10:26] Guy Spier: Whereas the person that we never hired, even if they would have worked out, it doesn’t cost us much. So we should, we ought to grade very, very harshly and if in doubt, say no, rather than saying yes. But how do you balance that with being fair? And being kind, so I’d want to see William Green and Mohnish Pabrai talk about those two things.

[02:10:46] Guy Spier: I’d like to put the case to William Green and to Mohnish Pabrai and say, okay, so here’s the situation. I’m talking to Stig, Stig’s talking to me. We want to dive into a deep conversation, we’re having so much fun, and then two very kind, nice people want to get a photograph, but it interrupts our conversation.

[02:11:01] Guy Spier: And part of me wants to say goodbye. Thank you. Not right now. And the other part says, interrupt the conversation, see what Mohnish and William do and the short and sorry for the rambly answer. I’m actually landing this plane right now and giving the mic back to you. And the short answer is be intelligent about it.

[02:11:19] Guy Spier: Don’t be blind and applying the Adam Grant framework. Don’t be blind in, in, in applying the false negatives, false positives framework, and do the intelligent thing, evolve your thinking to the circumstances as they unfold and look to see people who’ve already solved that problem. You and I are not the first person, people who needed to solve that problem.

[02:11:40] Guy Spier: And so we can look and see how Warren Buffett solves it. And I, very briefly, I haven’t, how does Warren Buffett solve it? Well, first of all, Warren Buffett is in private, except for one day of the year. One day of the year, he’s public Warren Buffett. And certainly Warren Buffett doesn’t have any meaningful conversations on the Berkshire Hathaway meeting day.

[02:11:58] Guy Spier: And he’s totally into it and accepts it because it’s one day of his life. So there’s one lesson right there is. Limit and frame the times when you’re a public guy. And actually, if I want to be private guy with private Stig, all I need to do is say, Stig, I’m on my way to Aarhus. And if you have time for coffee, I’d be delighted to entertain you.

[02:12:16] Guy Spier: And, and just don’t do it at a time when you’re being public guy.

[02:12:20] Stig Brodersen: So I know what Mohnish would say because he told me, and I’m, I’m kind of like sad that it wasn’t recorded. It’s also fair that it’s not being recorded, but I think, I think he would forgive me for bringing that up because he was asking me, I think it was.

[02:12:34] Stig Brodersen: Probably before the last Berkshire meeting. And I was like, I was a bit, I went there in 2023 where I met you. Yeah, it was a lot of fun. And it wasn’t the best experience meeting. You was sorry. I want to clarify that meeting you was a great experience, but the Berkshire meeting wasn’t, wasn’t the best experience.

[02:12:49] Stig Brodersen: And, and there was a few things that was probably flattering, but to me, it was just, just a bit too much. And I like to stand there in the corner with my phone and not speak to anyone. And so money’s asked me like whether I was going and I said like, no, I, I kind of felt like after 2023 and we have members on our team now who absolutely love going there.

[02:13:07] Stig Brodersen: And I kind of felt why, why would I go there when others from the team can go and, and have fun and meet up with you, which they also did. And so I was just saying no to money. And then, then he looked at me and he was like, but you owe it to the, to the community. And it’s, it’s one day or a few days, like this is what you’re supposed to do.

[02:13:23] Stig Brodersen: And then he mentioned Warren Buffett and he talked about like, so I guess we can conclude a few things. Point one minus is a better person than me. I’m going, I’m going to, I’m going to, to preface that. But the other thing I wanted to, to mention to this is, and I should probably say, I’m really sorry that I hope the guy doesn’t invoice me for, he probably should invoice me for a bill for whining about all my, all my problems here by the end of the end of the call.

[02:13:47] Stig Brodersen: It’s a sorry mistake.

[02:13:48] Guy Spier: You’re not whining about your problems. You’re exploring really important issues that come up for you and they come up for many people. And so what you’re struggling with other people are struggling with. So you’re not whining at all. You’re trying to understand you’re trying to test off a part.

[02:14:00] Guy Spier: So you just want to make that point as you now back to you.

[02:14:05] Stig Brodersen: And I sort of like wanted to, to make it about the listener and not about me in the sense of, of course, we all have unique circumstances, but I think a lot of people listening to this can resonate with. Not having enough time to please as many people as you want to please.

[02:14:20] Stig Brodersen: And I hope that this conversation is sort of like in that light and it’s not stick complaining about things. He probably shouldn’t be complaining about. So I just wanted to preface.

[02:14:29] Guy Spier: Yeah. I hope that the following helps is everyone. Some of the best personalities are introverts. What does that mean? That doesn’t mean they don’t like people.

[02:14:38] Guy Spier: Doesn’t mean they don’t, they mind being in crowds. But it means that the way I see it, because I think that I’m similar is my social battery gets drained down faster. So I can maybe do it for an hour or 2, but then I’m kind of done and I need to go and rest. And some people can continue like my wife for 5, 6, 7 hours.

[02:14:57] Guy Spier: And they, they just love it. So don’t apologize for that attribute of yours. It’s an attribute that you have. You’re, you’re naturally an introvert, but that gives you other qualities. And Mohnish is also, I would argue an introvert, but is, but he can make a social battery last longer on days like the Berkshire meeting.

[02:15:13] Guy Spier: And it’s exactly what he said to me. You owe it to the community. Take care of the community. And the answer I think for you and me, and I’m not saying that we’re the same. We each have to work it out for our own personal attributes as yeah. I’ll be there for the community in a way that takes care of me.

[02:15:27] Guy Spier: And maybe you can be there all day, but I’ll be there for a couple of hours and then I’ll go to my room. I actually at the meeting this year in the afternoon, I went and listen to it in my room in part because I could just be there and not interact with people. And so we do as much as we can. And that’s okay.

[02:15:43] Guy Spier: And far better to be in one’s room. Or not at the meeting, I would argue then to be in a place where one’s not generous and giving to those people coming up to you. And, and I think that there are so many ways to manage it intelligently. One way is to only go to the overflow room, a place where you’re less likely to be recognized.

[02:16:01] Guy Spier: Another way is to say, I’m going to be there in the morning and then in the afternoon, I’ll go to my room or you’re not obligated to go to the Berkshire meeting. So all good. But I actually think that in your case, you ought to go. Even though we wouldn’t, wouldn’t get much time together. And you manage yourself in a different way.

[02:16:18] Stig Brodersen: Guy, thank you for all the advice and thank you for the inspiration. Just in, can I just say just in general, I sort of like wanted to, to say something nicer and more eloquent, but just thank you.

[02:16:28] Guy Spier: Yeah. But I think that it’s very kind of you to call it advice. I think that what we’ve been doing is exploring and sort of kicking a football around and trying to understand.

[02:16:37] Guy Spier: And it’s not like, I know what I can do is I can say, oh, I think that I’ve had this problem as well, and I’ve tried to solve it in this way. Okay. And so I’m actually not giving advice. I’m trying to just share with you in this case, how I’m trying to solve problems that many of us face. And you’re also trying to solve those problems.

[02:16:54] Guy Spier: And by the way, I don’t know that I have the right answer just to go back to, well, I to go back to Jordan Peterson, but it all goes all the way back to the height of Greek civilization and of the Renaissance is that the answers don’t lie. In sitting in a room and thinking about it, although that’s probably important, they lie in in coming with your perspective and having it bounce off somebody else’s perspective and having them react to what you’re saying and learning from what they’re saying and disagreeing with them.

[02:17:25] Guy Spier: And, and so that’s what we’re doing with, we’re wrestling with issues that come up and we’re trying to figure it out. And it’s so much fun to do. So don’t call it advice. It’s just a conversation.

[02:17:35] Stig Brodersen: The journey is the best part guy. How can we best end this interview? Any concluding remarks?

[02:17:43] Guy Spier: I think I probably need to make plans to come visit you in Aarhus.

[02:17:46] Guy Spier: I think that would be good. We could do an offline conversation even. It’s really been fun talking to you, Stig, and I think that for me as a kind of like a mini podcast to anybody else, I think that the most fun is when, and this has been an enormous amount of fun is when you’re coming out of a genuine sense of curiosity, trying to figure stuff out, you’re asking real questions, challenging questions, and I’ve been learning all the way through this.

[02:18:10] Guy Spier: I’m a better person at the end of this than I was at the beginning of this. So, you don’t have to thank me for my time. I thank you for giving us the opportunity to have this conversation.

[02:18:20] Stig Brodersen: Thank you. I have no better way to, to end this interview. So I’ll just say, thank you. Oh, you just said I shouldn’t thank you, but I’m going to do it anyway.

[02:18:28] Stig Brodersen: Thank you so much.

[02:18:29] Guy Spier: Always good. Thank you, Stig. You’re never wrong to say thank you. So thank you.

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