YouSaid · the spoken record

Bill Nygren

lines on the record: 121
first: 2025-06-22
most recent: 2025-06-22
sittings or episodes: 1
sources: podcast

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“Lessen our patience with companies that aren't fundamentally performing the way we had expected to. Value investing is this tension between having eternal patients, which you need to be able to have if the business is performing well and the stock isn't, versus the other end of that spectrum where you become stubborn and you won't react to new information. We want to be very patient when the stock market isn't acting right and very impatient when the business isn't performing the way we expect it to.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Over five years. If we were exactly right on our forecasts, we should be beating the market by a thousand points a year, basis points a year. The reality has been more like two to three hundred basis points after you add back the cost to the expense ratio for the fund. So our correct ratio is something like 25-30%. And it makes it so important that we figure out as fast as we can the names that we're wrong on and get those out of the portfolio and get the capital recycled into the names where there's a better probability that we are successful, that our hypothesis is correct. And our devil's advocate reviews, again, modeled after Michael's variant perception is one of the ways that we have helped, I guess.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Because thesis just sounds like we have way too much certainty. But we try to challenge that by requiring a devil's advocate review after something's been on our approved list for more than a year that somebody comes to the table, basically presenting a short argument on that same security. And it helps us understand how we differ from the market in our expectations and helps us know what the signposts are to tell if we're right or the other side of the argument is right. I think sometimes we underestimate how wrong we can be in this business and still be successful. If you think about our basic approach, buying at 60 cents on the dollar, selling it 90 cents, and the business growing the same as the S&P during the five years we hold it, well, that's 60 to 90 should give us like an incremental 50 percentage point.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Somebody else takes the challenge of spending a couple days on that stock, reading the best short reports that they can find on it, and presenting to us why we shouldn't buy the stock. And we try to mimic that presentation of both sides of the equation in our meetings the same way Michael did. We also do that with names that have been on our approved list for multiple years. We're a very data-driven organization and we found out one of the areas over time we tended to get sloppy in was the names that had sat on our approved list for four or five years. Not quite achieving what we had hoped they would, but not performing poorly enough as businesses to make us think we didn't know that our thesis was wrong. And by the way, I listened to your podcast. With Chris Bagg, and I loved his statement that he likes hypothesis better than thesis.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“But Michael called it variant perception. He wanted to know any position he had long or short, how he differed from the strongest voice on the other side of that position. So he would seek this out for anything in his portfolio. Any long he had, he wanted somebody to come sit down, have lunch with him, tell him why he was wrong. Any short he had, he'd get the long to come in and say why he thinks he shouldn't be short the position. And I think the ability to take in all of that information, process it, and come to an investment conclusion was something he was unusually capable of. Michael's use of variant perception is why Harris Associates adopted a devil's advocate review. Whenever we have an analyst presenting a new idea to us.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Tell So order sandwiches for lunch. And it's like, Bill thinks I should buy American Airlines because it's got so much cash on the balance sheet. All of its debt is lined up specifically against aircraft. There being an ability to dividend a lot of this to shareholders. And then there's an airline analyst from one of the big Wall Street firms at the same table also eating lunch. I'm a generalist analyst. So it's not that I. One day I was looking at a steel company, one day an airline, another day a cable TV stock. And I'm sitting at the table with somebody who spent 30 years studying only airlines saying, here are the things I think are missing from this analysis. And I felt, Michael felt, I'm sure the analyst felt that it was pretty clear I hadn't won the debate that day.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“If I remember huge unbelievable redemption, really an unmatched record. And Michael was not only someone who had an incredible feel for the markets, but he would always challenge his own thinking. One of the things that he frequently did is if somebody was coming to him with an idea, he would also invite that person for lunch and then find the most bearish person on that same stock who was a Wall Street analyst and invite that person to lunch. And the three of you would just sit and talk during a lunch. That was an intimidating environment. I had an opportunity to do that once. And again, I learned how much opportunity there was for me to grow as an analyst.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Compound rate of return throughout its entire existence. I think it lasted maybe 20 years growing at 20 plus percent a year.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“And also back when I had first joined Harris Associates in the 1980s, we were also a brokerage firm. So we didn't have nearly enough capital to fully utilize the ideas that our analyst team was generating. So we would get opportunities occasionally to pitch Michael on ideas. And you think our stock selection group might be a challenging or intimidating environment where you've got 20 people sitting around the table trying to poke holes in your ideas because we want to identify our mistakes before we actually lose client money on them. One-on-one pitching an idea to Michael, that really taught me what I didn't know about ideas that I thought I had become an expert on. I think one of the things that made Michael great and his hedge fund record had like a mid-20s per year.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“The analyst diligently updating every quarter, making sure that the new cell target reflected all the growth that had exceeded our expectations. We didn't buy the stock thinking we'd make tens of times our capital on it. We bought it thinking it was selling at two-thirds of value. So, I mean, to me, the idea that you buy these high quality businesses and never, ever reassess and just hold them kind of turns you into a momentum investor that once something passes an estimate of business value, then either you haven't properly accounted for everything in that business value or you're playing somewhat of a greater fool game.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Is that have continued to grow at supernormal rates much longer than we had anticipated they would, but there are also companies that stop growing sooner than we thought they would. And I think it's really easy in hindsight to have some sellers remorse, those small handful of names that would have really continued to do well, as opposed to doing a deep dive into all the names you sold and looking at all the ones that you actually got out of on a pretty timely basis. Using cell targets didn't prevent us from owning Apple for 12 years. We first bought it, I think, in 2009. We sold it shortly into the pandemic, around 2021. Almost that entire time period, Apple was selling beneath a market multiple. We made 30 times our money on the stock.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“To 10% a year, so you're somewhere 50% or so higher on the cell target by the time you sell than you were at the time you bought it. One of the other things I think most value investors pride their self on conservatism. We try to discourage that and we prize accuracy. And the whole path of when we start buying a stock until we sell it is trying to squeeze out any conservatism in our numbers and make sure we're selling on our true best guess, most accurate estimate of value. And our belief is if a stock attains that, to continue owning that stock rather than recycling that capital into another at 60% of what we think it's worth would be hurting our expected return. And yes, it's true. There are companies.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Sure. When our analysts make a recommendation that they want us to buy something, they make their best estimate of what the company can earn over the next seven years. And then we discount that back and we're looking to buy at a discount. And we'll set a sell target that, depending on the riskiness of the business, the balance sheet, et cetera, be somewhere between 85 and 95% of our guess of what the true business value of the company is today. And during the time we own the stock, the analyst job is to respond to all new information and make sure their estimate of business value reflects everything we know up till that moment. Not just what we knew at the time when they recommended the stock. So again, I said our typical holding periods about five years. We would expect most of the companies we own to be growing business value, something like $8.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Valued more like cable TV subs. And one of the ways we looked at it was we said they grew subs 25 million in one year. We thought those subs could be worth close to $1,000 apiece. That's the equivalent of $25 billion of income. And the stock at the time, I don't think it was even making gap net income had a market cap of something like $150 billion. Most value investors thought that was ridiculous. We were looking at it saying it sells at about six times the annual increment of value that they're adding to their base business value. So to us, it was like a low PE stock.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Was selling at less than half of what HBO was. HBO is declining in subs and Netflix was growing subs rapidly. And our conclusion was, I remember when our analyst presented it, he said, if Netflix charged the same monthly price to subscribers that Spotify charged, it would sell at less than a market multiple. And surveys that we had done of employees and friends, I mean, nothing super scientific but anecdotal said people valued their Netflix subscription way more than any of their other monthly subscriptions. So they were effectively investing via price to grow, using that price as a customer acquisition weapon to grow much more rapidly than any of the other streamers. And we bought it on the belief that their subs should be”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“What's the enterprise value divided by pre RD cash flow? And it was cheaper than the traditional pharmaceutical companies on that metric, even though the patent life for its products was multiples the length of what it was for Merck, Bristol Myers, Pfizer. So we've been doing the same thing for the 40 years that I've been here. It's just as the economy has changed and we've moved to more of an information economy where intangibles are so much more valuable. It's getting to be a higher and higher percentage of our companies that we need to recast the income statement and balance sheet to better reflect real world economics. One of the companies that we had looked at and owned for some time Netflix, it struck us that on a per subscriber basis it”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Trying to grow your customer base immediately expensed, even though the average cable TV customer would be a customer for more than seven years. And we changed the accounting on those to more replicate real world decay of those assets. And when you did that, the earnings looked more consistent with the cash flows that the private equity firms and other cable companies were using to say a cable sub tended to be worth about $1,000 because they were generating $100 of EBITDA. And we were able to utilize those metrics with public equities to make some pretty significant cable TV investments at a time where that was viewed as unusual for a value investor. We owned Amgen, one of the largest biotech companies in the early 80s, when we looked at”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Sales expenses for companies that were kind of at an emerging stage like the cable TV business. So way back in my early days, cable TV companies were routinely getting taken private at something like 10 times EBITDA. And yet they had negative book value, negative earnings. None of them paid a dividend. The value investing community generally shunned cable TV providers. And we went through the income statement and said, where's the disconnect? Why is private equity seeing value here when you can't see any of it reflected in net income? And we looked at a depreciation schedule for planting equipment, that cable in the ground that was probably going to last 50 years was getting depreciated over five. Customer acquisition cost, as you were saying,”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Of the first people to recognize in the very early 80s when he bought Coca Cola. And it was one of his first purchases that was above a market multiple. And lots of value investors, there's all this discussion back and forth of what in the world is going on. How can he justify this investment? And what a Warren's lines when he talked about it was to say that Coca-Cola's most valuable asset wasn't even on the balance sheet. It was its brand name and that had been built up through years and years of advertising, customary experience, the accounting world viewed it as worth zero. So we started thinking about that and how that might apply to other businesses and other expenses like R&D for pharmaceutical companies, advertising for consumer products companies.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Right. I don't like the description that it's less pure. I think what we do is very pure value investing. But we acknowledge that GAP accounting was really constructed for a tangible world. The basic principle of accounting is if you can't touch or feel something, it doesn't belong on the balance sheet. So if this desk got purchased, the accounting for it would be you estimate that it's going to last for 10 years. It's not going to be worth anything at the end of a decade. So you take the cost of this desk and 10% of it goes through the income statement as an expense item every year. That worked pretty well for a world that was primarily industrial. And if you go back to the start of my career, the correlation of stock prices to book value per share was pretty high. Today, that correlation is almost zero. And I don't think it's because investors have gone crazy or that the market today, prices bear no resemblance to business value. I think it's what Buffett was.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“And if you think about that timeframe, the important decisions a management team has that you really have no concept of how to model today. But it might be the opportunity to sell a division, buy a new division, maybe even sell the entire company, repurchase shares or make acquisitions. Those decisions are going to have a very, very meaningful impact on what our return is as an investor. And we want to make sure that management is aligned with us in at least what they're trying to accomplish. And that to us should be maximizing long-term per-share business value.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“A profit. We don't want to be buying those kinds of value traps because we want to take a very long-term time horizon and believe the more time that elapses from our purchase to our eventual sale, the greater the business value will be over that time period. And then thirdly, we want, like everybody, we want exceptional management. But to us that exceptional largely means that they are aligned with outside shareholders in having a goal of maximizing intermediate to long-term per share business value. And we want to avoid the companies that don't use a denominator and just are trying to grow their size. The reason that's important to us, our average holding period tends to be five to seven years.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Probably is expected to grow earnings at six or seven percent. We'd like companies where that combination is 8 or 9 percent at a minimum. So it could be an ultra that pays out a yield that's about 9% and isn't expected to grow earnings, or it could be an alphabet that doesn't pay much of a dividend but is expected to grow faster than that. We don't care which form the return comes in. The reason we want that is value investing can sometimes lead you to these structurally disadvantaged companies whose best days are in the rearview mirror. And you're kind of fighting a battle of will the business value decline rapidly enough that that's the way you'll get to fair value? Or will investors mark the value up quickly enough that you can sell?”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“We want a large discount to underlying business value. So we try to make a guess based on what we think the company could be worth seven years from now, discounted back to today. We'd like to buy at something in the 60s cents on the dollar what we think the business is actually worth. And to us worth means like what's the maximum price an all-cash buyer could pay to own the whole business and still earn an adequate return on investment. And if we can get it at 60% of that, we're very, very happy. The second thing is we want the combination of dividend income and expected per share value growth to at least match what we expect for the S&P 500. So if you say the S&P yields a little less than 2%.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“I think one of the reasons it's valuable is there is just so much information out there. And this is an even bigger issue today than it was in the 80s when I started my career. If you wanted to, you could spend months and months learning everything there is to know about a company. And you probably still wouldn't get everything that's available. So somehow you have to be able to filter down all that information to what's really going to matter to your investment decision. And when I started here in 1983, Peter Foreman said to me, when you buy a company, you get two things. You get the balance sheet and the guy who's running it and you better be happy with both of them. And the three things that we look at today aren't all that different than what Peter had Harris looking at more than 40 years ago. We say the three things we want.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Talk about what matters to you. Talk about how you're going to judge success or failure. Talk about how you motivate people. And all the numbers that you use to fill in your models, and we can get that from investor relations or maybe somebody in the finance department. We don't need to waste the CEO's time with that.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“I said, well, my grandma has one of those, and I don't even like it. It's not stable. If you put weight on any of the sides, it'll tip over. I can't imagine why anyone wants a three-legged stool. And getting him to defend something that no one had ever second guessed basically got him to close the presentation book and talk to us, like just a one-on-one discussion. And we find we learn so much more about why people think they're successful, what motivates them, what their goals are. If we can get them to close the pitch book and just talk to us. And that continues to be a goal in any management presentation that we're a management meeting that we're a part of today is let's just talk to each other. We don't want you making a presentation to”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“So by the time I'd become director of research, which I think was around 1990, so after seven years at Harris, my role in most of the management meetings was to try to get them off script. And I didn't want our analysts to be the ones doing that because sometimes that could harm the relationship. They could kind of apologize for the crazy uncle who is taking them down this other path. But I remember a chemical company coming in here, large cap company, very highly thought of, and they take out their pitch book. And one of the first things they started talking about was how they needed to make an acquisition because they needed to complete their three-legged stool. And I said, what's so great about a three-legged stool? And the guy just looked at me like,”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“To invest with you, you could do it backwards, figure out who the people are you really want to invest with, and then look to see if you can justify the stock as being cheap enough to invest with them. And I think the lesson that you need both is something that still drives Harris Associates, Oakmarks, investment philosophy today. It's not enough to have a cheap cheap stock. It's not enough to have great management. You really want that combination of a company that's undervalued and an exceptional management team that's focused on maximizing long-term per share value.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Peter is 100% right. After you've seen 100 management teams, you can start to tell who's the top death sile, which are the ones that are really side by side with the shareholders, only focusing on maximizing long-term per share value compared to those that on the other end of the spectrum are maybe more concerned about how valuable their career will be as CEO of the company. And if they make the company bigger, they'll make more money and they pursue growth paths that don't really add per share value. Later I became friends with Lou Simpson, who was running the investment portfolio for GEICO, and learned from Lou the approach that I was taking of identifying something that's really cheap and then try to figure out if the management team was good enough.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“If I could go to it and report back to him, don't even remember the company's name. It's not important to the story. But I came back and I said, Peter, this was a really impressive management team. And Peter stuck his cigar in his mouth, takes a big drag on the cigar, exhales, says, I don't ever want to hear you say another word about quality of management until you've seen a hundred of them. Of course, this guy's impressive. He's the CEO of his company. They get to be CEO because they've got good interpersonal skills. They can talk a great game. You think you can tell if he's impressive or not? Come back to me after you've seen a hundred of them. And I was so crestfallen. I thought I had made this important observation. And of course, in hindsight,”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“So Peter was an amazing mentor, just real old school in the investment business. He didn't have a great academic background, but his work ethic was second to none. His street smarts were amazing, his ability to form relationships with management teams was something I learned a tremendous amount from. I started out in as an overconfident kid. I thought because I had great quantitative skills that I could be a great investor. And I kind of wondered how this guy who was not that savvy quantitatively had amassed the track record that he had. And early on, there was a IPO roadshow that was coming through Chicago. And Peter asked me if”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“High net worth investments, mostly in the Chicagoland area for customers and also the Acorn Mutual Fund and their entire success or failure was based on how well they invested client money. And that was the challenge that I wanted. And one of the things that appealed to me of investing compared to the accounting world, in the accounting world, if you're 10% better than the partner sitting next to you, maybe you could make 10% more money. In the investing world, if you're 10% better, that's the difference between having a very, very successful career and being average and being replaced with an index fund. So that leveraged bet on myself was something that I really wanted and never felt I had at the insurance company.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Of knowing looks going on among them. And I didn't realize until after I'd been hired that the reason they were looking like that is almost every stock I was bringing up was something that they were currently working on or owned. And that was the reason they wanted to delve in so deeply to see they were not only trying to see how much I understood, but see if they could learn anything from me. To me, I took that as tremendously reassuring that they were actually caring about a lot of the same metrics that I was using to justify my investment recommendations and the similarity when they started talking about some of the other names they were working on. They were things that I had considered working on. So I was quite comfortable. We had a match in the way we thought about investing. Their firm, I mean, all it was was invest.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“How successful or unsuccessful. If it didn't meet the criteria that they wanted for their investments, it was just never going to work. So those were the things I was focused on when I went to this dinner at a country club in one of the northern suburbs of Chicago. They generously picked a spot that was kind of halfway for both of us, even though there were four of them driving up for dinner and just me driving down. But I was looking for Could I get comfort that they thought the same way I did and that their success was driven by how well they invested. And we started to talk about stocks. It wasn't a formal interview. It was discuss some of the things you've been working on. And I'd start talking about a stock and I could see these sideways glances.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“So at the insurance company, there were a couple things that I learned, partially about myself, but also about being a part of a business where the success or failure of the business was driven by something other than investments. Like any life insurance company, their success was going to be determined by how well they sold life insurance. And the investment side was more of a don't screw it up approach. And that was something I wanted to avoid, whatever my next job was. I wanted to be at a firm where the success or failure was driven by the investment results. The other thing I realized was that as an analyst, if I didn't share the same investment philosophy that the portfolio managers were using, my work wasn't going to be useful to them. Didn't matter how good it was.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“To consume our time other than school, I go talk to the kids that are now and we'll go out for a beer after the market closes. And then at 4.30, they're telling me they have to get home to their wives and kids. Anybody that came and spoke to us, we would try to keep out till two in the morning, first because it was a challenge, but also, you know, these were people that were successful investment people. We wanted to learn as much as we could from them. you know, it was this group of kids that spent so much time together and it's been an invaluable resource throughout my career to have friends that have succeeded in so many areas in the investment community.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“That all came out of that same program. And we all look at Steve reverentially as the reason that we were able to be as successful as we were. I think the other thing about the program, it kind of attracted these nerdy kids that were kind of off on their own. Again, not usually the most socially popular kids. And we thought we were kind of unicorns in being interested in investments. And then there'd be a group of 13 of us that spent the whole year together. And when I say spent the time together, this was before business schools had, you know, due two years at an investment banking firm, then three years in PE and then we'll consider taking you. We were all right out of school. So we were at a stage of life where we didn't really have anything.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“And didn't really have much of a feel for how to blend academic finance with what was going on in the real world. And Steve, unlike a Columbia and Bruce Greenwald, who's done a great job with the value investing class there, Madison wasn't known for a specific investment philosophy. And I think that was one of the things that really made Steve special was he would get to know us and have an idea of what might resonate with us, suggest books or other ways of furthering our education, kind of opening those doors that he thought might be appealing. And the students that I graduated with, most of whom are still close friends, they're very successful growth investors, hedge fund investors, mutual fund investors, bond investors.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“But when Wisconsin gave me an offer to join this class 12-month program, be in a group that actually got to buy and sell stocks in a portfolio that was too good to turn down. And Steve was an incredible teacher. He unfortunately passed away two years ago. But he ran the program single-handedly for about 15 years. And then was an advisor to it up through its 50th anniversary. And I think what made Steve so special was he had a foot in academic finance, but also a foot in the real world, advising and investment management firm on their portfolios, as opposed to the finance professors I'd been exposed to at the University of Minnesota that were very academically oriented.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Guy, this program sounds more. And so, about a week later, I had managed to get an appointment with Steve, went, drove down to Madison, met with him, and he told me that the class was limited to students that had taken his security analysis class. But if I would read Grandma and Dad's security analysis and submit a book review to him from that, he would consider that as a substitute for taking the class. that quickly became my project. I had anticipated going to school at Berkeley, which also had a 12-month program for business undergrads. And I was interested in what was going on there because the options theory professors like Richard Roll were largely from Berkeley. And I like that very quantitative approach to how to value security.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“He said, you know, you're never going to rise to the level you want to be at in this company if you stay in the investment side and work in the pension fund. He said, I've got a friend who's a professor at Madison. General Mills had had a problem. They were a diversified company back then. It wasn't just a food stock like it is today. They owned Kenner Toys, shipping shore apparel. And the shippinshore business, like most apparel businesses, was very cyclical and they'd had some problems in that business. And this particular executive, his daughter was in school at Madison, so he was going down to see her. And he said his friend Steve asked if he would speak to this investment club that formed a class that Steve was teaching because they had happened to pick General Mills in their portfolio. And he said, it's a bunch of really smart kids. Steve's a good kid.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“So at General Mills, at the end of the internship, the final week, the students that they were hoping they could then hire after they finished their senior year, we had consecutive lunches with a different executive from General Mills for an entire week. And their job was to recruit. And I was lucky enough to have lunch with someone who happened to be a friend of Steve Hawkes, who I didn't know I had never heard of Steve Hawk. And he was asking me what I thought I wanted to do at General Mills. And I told him my real interest was investing. And General Mills, like most companies back then, had a defined benefit pension plan. And I thought maybe working in that area would be an important enough tie to the investment world that I'd be satisfied with it. And he said to me,”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“You then had this very lucky break and got advised by, I think, someone from General Mills to apply to this one-year master's degree program at the University of Wisconsin that you graduated from in 1981. And you met a remarkable guy there who I think really has remained a close friend of yours, Steve Hawke, who is a money manager who had also, I think, set up this program. That back in 1970 with something like 12 students It for about 15 years, where you would get to manage money as a student, the applied security. Can you talk about why that was such a formative experience for you? Why it helped you to understand who you were, what your strengths were going to be. And how it's set you on the path.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Inside of a company, I thought public accounting seemed more interesting where you got to focus outward on lots of different companies. And as you mentioned earlier, I thought accounting was important to know kind of as the language of finance. And I didn't know how you could be a fundamental investor if you didn't understand accounting. So it is what I majored in in undergraduate. I didn't internships at both General Mills and Pete Marwick and Mitchell both in corporate accounting and public accounting spent enough time knowing that wasn't what I wanted to do for my entire career. But I think it was a really important foundation for me.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Auto body decorative decals to Chrysler. And my dad ended up on the Creditors Committee when Chrysler went through bankruptcy. And he was involved when W. Grant went out of business, the old five and dime store. And I like the fact that his job kind of gave him things that were interesting to talk about. They were things that were in current events. And I had an uncle who also worked at 3M and he was in charge of all the forms that 3M used. He knew more about the depth of 3M than anyone else I had ever met. But to me, once you got to a certain level there, that ceased to be exciting. And my interest in accounting, rather than working.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Probably somewhat, but the big thing that that did for me was I could contrast my dad's job to those of other equally successful people inside and outside of 3M. And what I loved about my dad's job was that it was outward focus. And the companies that were in the news were usually companies that in one way or another he was involved with because they were frequently customers of 3M. And you mentioned Chrysler. 3M sold”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“We were always trying to win at anything we did. And both parents always instilled in me that if you do something to the best of your ability and you fail, so be it. But it's never acceptable to fail because you didn't try hard enough.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Think it's probably from my dad. And we were a family of games players and it didn't matter, ping pong cards. We turn anything into a challenge. And my dad would never let us win. He might play left-handed so that the game would be competitive, but he would always try to win. And like the old wide world of sports, the thrill of victory and the agony of defeat. We knew when we beat my dad that we should be thrilled because it was a real accomplishment. And I remember for years playing ping pong against him left-handed. And then finally winning enough that he switched to right-handed. And it put me back down at the bottom again and working my way up till I could finally beat him when we were both playing right-handed. But everything was competitive.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT
“Just said hello to him, didn't say anything further. But he was still there in the same job that he had a decade earlier. And it did put a smile on my face.”
2025-06-22 · We Study Billionaires · RWH058: Winning Ways w/ Bill Nygren · IDENTIFIED FROM THE TRANSCRIPT