YouSaid · the spoken record

Chris Davis

lines on the record: 183
first: 2024-03-05
most recent: 2024-03-05
sittings or episodes: 1
sources: podcast

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“Well, I like what Charlie said that money doesn't ruin kids, you know, parents do. And I would add genetics can too. I mean, you can look at siblings from the same family that make totally different choices. They've had roughly the same home life, roughly the same genetics. Something is different. Maybe it's peers. Maybe it's just some nuance in the one or the other. But I feel like... For me, that was an area that I get pretty emotional about it because there are a lot of people that I know who are very successful investors and their basic view was, thank God I married somebody that could. You know, raise my kids right.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“But I remember thinking, I'm not going to get out, like as long as he wants to sit at this breakfast table, I'm staying here. But it almost killed me. And so just over all the years, it's sort of amazing. I don't know what his trick was on that.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“I ran to the bathroom, but I kept thinking at the time he must have been, you know, he was probably only sixty now that I think about it, which is sort of hard to believe. Maybe he was a little older. Maybe he was probably 65.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And by the way There's one other thing which I never ever got to ask him about, but he never seems to go to the bathroom. Well, you'd be sitting with him, that breakfast when he got up at noon, because he said he had to go to a lunch.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Should have kept that one closed. After dinner, that is it. Yeah. But those are good. And so, I mean, I always had a glass of wine with Charlie. And I enjoyed that.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Where it's not an afterthought, where it's our mission. That stuff's amazing. I mean, what a great gift. And where we landed was we developed a very good low alcohol where it was basically making a Manhattan. Using fake bourbon, But real Amaro or Real Vermouth And then chilly bitters. And the chili gives it that bite that gives you the little burn. And there's some psychic connection with that. The Amaro has alcohol, so it gives you this. But the total cocktail probably has 20% of the alcohol of a Manhattan, but probably 80% of the. Satisfaction. But you know, you think about, I love what Hemingway said. It's not finishing the bottle that gets you in trouble. It's opening another one. And there's a lot to that too.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“beer, the athletic club. I mean, that, by the way, that's a company that probably worth over a billion dollars today or $2 billion. A couple guys in Connecticut. How do we make really great non-alcoholic beer?”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Where it was so easy to wine's the most dangerous of all because the portion sizes grow and the alcohol content has grown. So, you know, you end up with wine now that is being drunk out of much bigger glasses and the wine itself is 20 or 30 percent more potent than it was. That's a good example of something where you can do the opposite, which is smaller portions. Smaller glasses. I love cocktails. So, you know, I will craft some beautiful, spectacular work of art, but I serve them in very small glasses, which in the 50s was often how things like martinis were served was in these very much, much smaller glasses. Even recently, feel I've been trying to craft, I've not succeeded in a no-alcohol cocktail that's any good. I would say there is good no alcohol.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“A long time ago. I mean, you know, probably 20, let's see, probably in my, I was probably 40, I would say, somewhere in there. It was around that age where I started seeing it. Begin to take some people down. You know, the kids that have been college buddies and always a lot of fun and life of the party. And every time you're with them, you drink too much. And, you know, but it's always a great time. And there was somewhere in the late 30s or so where, you know, it stopped being so funny and you realized they couldn't stop. And that's when I was like, ooh, I don't want to be in that position. This can get away. And so.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Weight obsessed, as my children like to say, I'm sort of threatened by the shower drain, looks like a manhole cover. I've always been very skinny. But I do weigh myself probably once or twice a week so that if I end up a couple of pounds above where I was, I just try to deal with that right away. And where I can all be in sort of moderation, where I don't have to go to an extreme. So those are examples of some sort of self-manipulation as well.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Until they're too strong to be broken, I'm a believer it can absolutely take you by surprise. And so, you know, for me, just keeping track of the drinks I have over the course of a week is a way of ensuring it never gets out of hand.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“In most things, but I've watched addiction destroy people's lives and people that I love. And so that's an area where I keep a journal of every alcoholic drink I have a week because I love alcohol. You should be clear. I mean, I just think it's such a wonderful gift. I don't think it's a coincidence that Jesus' first miracle was turning water into wine. It is every culture on earth, you know, 152 countries or whatever it is, you know, invented alcohol independently of each other in many cases. I mean, it's just amazing. So I love alcohol. I would hate to have to give it up. And I'm such a believer that it will destroy your life if it gets out of control. And I'm a believer in what Charlie said about the bonds are too light to be felt.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Ways things that would normally sort of bring me down. And a big part of it is also the choice of friends. I don't mean you should choose opposites. I don't think that really works. Charlie once said, you know the saying opposites attract? They don't. I do think having colleagues especially that, you know, fill in the areas where you're weak and by understanding the areas you're weak, you don't keep sort of you don't end up in a Peter principle sort of effect. And it's a big part of how we try to manage the team is to keep people away from the areas they're weak in or at least take those away from being completely destructive. What did St. Augustine said for many abstinence is easier than perfect moderation? And, you know, for some people, that is the case. I'm very lucky that way. I'm very good at moderation.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Granny's rule, work before play. That's probably the strongest, I joke that is, you know, in our family, six kids, that people will say that over and over and over, work before play. That was my dad's favorite expression, work before play. Well, it suits me. And it suits me whether it's going to work or whether it's going to exercise. There's one thing on earth I love. I love a sauna. And so, you know, I only give myself a sauna after I work out. Like there's no other way I can get a sauna. And so it's amazing how effective that is in manipulating myself into doing something I don't really feel like doing, which is, you know, going and exercising. So there's all sorts of those sorts of influences of trying to look at.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And so, you know, for me, the question was, well, how do I structure my life in a way that allows me to make sure I get things done that I don't really want to do or that are easy to put out of my mind? And so for me, for example, physically being in the office matters hugely. I do not work well remotely. I don't do Zoom well. It just doesn't work for me. And knowing that, I really try to structure my life to avoid that. And I show up in person.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“If we've chosen not to own something and it's gone up a lot, it makes it so hard for us to revisit that if we own something and it's gone down, it makes it very hard for us to let go. What are the ways in which inertia? But anyway, all a digression back to this idea of framing that letter was, of course, from Charlie saying, you know, trying to avoid things that will lead you to fail. And I think at a personal level, really doing your best to try to figure out where those blind spots are. And so for me, I have the motherload of all ADD. I mean, you can probably tell. It's very hard to keep me on topic. And that's one of the reasons I love this business. Everything's interesting. Everything's relevant. No matter what article I read, it has some tentacles back that have investment implications.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Number two was the desire to conform your portfolio on policies to what other large, well-regarded firms are doing. Three was the asymmetry of risk and reward, obviously better to fail conventionally than succeed unconventionally. Four was over diversification, and five was inertia. And it's funny, we just did the reviews of our whole research team, which is one of my favorite times of the year just to really sit and go in depth with each person about how to help them get better. And how to be learning machines, how to, and every once in a while there's a theme that we'll run through each one and inertia was the theme that really ran through it. We just said as a firm, we really still struggle with being held captive by our past decisions. You know, we're held.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“I believe you, but it's such a good story, and it does get at this very deep truth. And you said it certainly was a Charlie truth about inversion. And, you know, so much of Charlie's mind was about, and think about the causes of failure and try to avoid them. And in fact, in our research department, we have a letter that Warren wrote in 1965, I think, or 66 that lists the reason that he believes most money managers, institutional managers tend to underperform. And we framed that letter and put it on the wall in the research department because we said what we should do is just try to avoid these five things. And to the extent that we avoid these five things, we will over time be above average. You know, one was group decisions. That was a number.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“The story, which I believe is true, was about Tigerwood's first British open. I forget which course it was going to be held at, but whatever the course was, it was notorious for those deep pot bunkers. And apparently the weakest part of Tiger's game was his sand game coming out of bunkers. And so as the press was following him around, they kept badgering him about what is he doing to improve his sand game because that could really be the linchpin in the British Open. And he had said that he was working on his drives and his irons. And they said, why? And he said, because I want to avoid the sand. And then I believe played the entire British open without going into a bunker once in the whole open, which was at the time unprecedented. People talked about. Now, if you were to tell me that that's not true or it's a possibility,”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And so in the book, he says there are times he didn't need to do it. He just, you know, he was managing his brand, you know. But in a way that he felt it was important, and well, my grandfather had that. He felt, you know, interestingly, Charlie always talked about dressing conventionally, you know, wearing, he said he's so eccentric in other ways that by wearing a suit and tie, people assume that he's more conventional than he is, and that serves him. But yeah, it was my grandfather that would hold his jacket and shuffle. And whereas my father, there are ways that he doesn't care what anybody else thinks. And he is much more just dispositionally, much, much lower profile than his father.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And he says, you know, when you borrow money, it's very important that you do certain things. And one is that you need to reassure your creditors that you're trustworthy. And so he always advised paying them interest a day early. But another thing he said is he would load up these big printing blocks and type things and he'd have a wheelbarrow and he would be seen pushing this wheelbarrow. And he said, it's important that they know I'm industrious.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Grandfather I know. And it is an area where my dad and grandfather were so different. And again, both admirable but in very, very different ways. But yeah, my grandfather always sort of had this sense of, you know, he was a great man and it was important that he, and Ben Franklin did the same with a wheelbarrow in the streets of Philadelphia. In his autobiography, which is, you know, 80 pages, there's a section about borrowing money.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And his CS Lewis' point was well, we're animals. And boy, there is nothing like, you know, being on your knees with your head down to reinforce in your brain that you are very vulnerable. And that gesture changes your mindset. That's why I still, I'm going to be the last guy in New York wearing a tie. But I always felt it was respectful going all the way back to Steve Jobs and fiduciary trust and my dad thinking, who is this hippie in sandals with his long hair and won't even get a haircut? But, you know, we have clients, you know, who come to visit us. And, you know, if they're coming from the Midwest and I'm wearing a golf shirt, it feels disrespectful. So part of it is about communicating respect to them. But it's also, it makes me feel like I'm ready for work now. It's why I'm a believer in school uniforms.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Putting Charlie's bust behind me in my desk, you know, he just said, having physical reminders reminds me a little bit when I was doing my degree in theology that C.S. Lewis was somebody I admired a lot. And C.S. Lewis was very old fashioned in certain ways. And one of them is he believed it's a good idea to get on your knees when you pray. And that's, you know, I thought that was really sort of reactionary. I mean, you know, you can pray anywhere. You just sort of, you know, talk to the greater being.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“You know, that sort of investor like set their expectations, keep them out. Like, you don't want to be the biggest. You want to be the best. And so that means you're going to have to keep a lot of clients out. And your life will go better if you keep them out. He said it's one of the reasons he gave up being a lawyer because being a lawyer, he said it's tough because your best, your most profitable clients are going to be people that you don't respect very much because they're always operating right on the line. They always need a lawyer. They're always trying to get around it. But your best clients will be your worst customers. Well, that's a tough, that was part of Charlie giving up the law, you know. And so those are examples that had very personal impact on me in terms of how we structured our firm, how I think about businesses and think about that loss of sales, about having”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“To do lousy. And then you'll work harder. That's a good lesson. But, you know, have things that make it hard for people to trade in and out. Now, when we had the mutual fund trading and all of those scandals, we were in a wonderful position for that because we never let them in in the first place. He's like, well, why do you want?”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“government employees used to be a good shorthand, which of course was what Geico stood for, government employees insurance company. We'll just insure government employees and we don't need to know anything else, just your government employee, you have a lower risk. And so this ability to, Charlie's phrase was the intelligent loss of sales. He said you're young and you just think more is better. More is better, more is better. But more is not necessarily better. It's who do you keep out? Who do you keep out of your company? Who do you keep? And, you know, in running our own firm, there's so many lessons of Charlie's that were captured in, including having a board of directors made up of people that I don't want to disappoint. Well, in the mutual fund industry, that's very unusual. But we have a board of people that I really admire, and I don't want to disappoint. Well, Charlie said, you should because they're the face of your client. And so have people on that board where you would feel a little sheepish.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“and 100 of your thieves. And now it'll also have most of your small tickets. And that cohort relative to the U.S. population will probably be shrinking as a percentage of GDP, relative to the people that are able to do the math, that are responsible enough. So going all the way back to insurance, somebody's credit rating is a great predictor of whether they'll crash their car. Well, because they're responsible and they tend not to cheat. So is being an army officer, right? USAA doesn't need to know anything else about you. Just that you're an officer in the United States Army and they can offer you a lower price because they know you're not going to cheat. And the difference in fraud, of course there's a lot of fraud in auto insurance. So if you don't have to charge for that fraud, you can charge a lower price. But the question is, how do you keep the fraudsters out? Well, Army officers is a good short.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“If you raised prices 2%, you would still be lower cost than anybody else. And yet you would have more customers. And because you had more customers, you'd have higher revenue. And so it would seem to me that keeping customers out of your store that would otherwise be there is a mistake. Charlie's insight, I mean, there's a long answer to that, but one of the shortest answers is he said, think about who you're keeping out. Think about that, the cohort that won't give you their license and their ID and get their picture taken. Or they aren't organized enough to do it, or can't do the math to realize how they're, he said, that cohort will have 100% of your shoplifters.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“You know, we were talking, we talked so much about Costco over the years, and we owned it for 14 years, I think. So we had a long run with it. And it just the valuation kept going up and up. And it was a mistake to have sold it not because the valuation went up, but because the reach of the business got so far beyond what we thought was possible. And so it was a real mistake. But Charlie made an interesting comment once because I was challenging him on this idea that there's a certain number of customers that would go to a Costco if they didn't have to be a member. And so I said, let's say the membership fee is 2% of revenue”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“That was something that I wouldn't know how to describe that in any other format. Was it an investment lesson per se, but it was one that was very, very helpful to me. The story now is out. It was something that he had said to me when I was asking him about his happiness and how he owed his debt of happiness. And he said he owed it to his wife's first husband. But I'll give you one, though, that was also amazing, which was around Costco.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“But you feel they're rooting for you. Like that's part of what makes them your favorite. I felt like that with Charlie, but at one point Charlie said, well, you know, it's very hard to be blamed for someone else's unhappiness. And that just those words, and in this moment that was for me, you know, quite a low point in my life and a time when it felt quite traumatic, just the grace of that phrase, you know, that it's very difficult to be blamed for someone else's unhappiness. And, you know, there can come a time when that's just too much. And he said, it's particularly hard if you're wired in a way that you love somebody and you want to help them. You know, you're trying to make them happy. You're doing, you know, and so he said it can get to a point where that's just too much.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Interesting about trying to be deserving of the partner that you would like to find and so on. Just in this moment where I could feel Charlie was a tough critic and he never held back telling me when he thought I was foolish or stupid, but I felt so deeply supportive too that, you know, that he was it was coming from the it was like the hardest teacher you've ever had. You know, the hardest teacher you ever had is a tough critic.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Well, it would be a book. If I was to think of like a couple of the things that mattered, there were things that mattered personally in a way that was very surprising, you know, in my personal life, I went through an unexpected divorce, and I was having dinner with Charlie, and he was saying, you know, I generally am not a fan of divorce because people don't tend to do better. You know, it tends to be about a fantasy and it tends to”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“The Venn diagram of what I admired about Charlie and what I admire about my father don't have a huge amount of overlap. They're very, very different. But there's something in my admiration of Charlie that has this real depth. And that was how I met. So I met Charlie quite a bit before I met Warren. But just the sheer breadth of his knowledge and the speed and the processing speed and what would come in and what would come out of left field, it was just breathtaking, a really incredible human being.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“A back office, slightly shady operation. And he said, but I'm very curious about how you picked Berkshire and how you got where you are and what are you doing. And we got talking about the insurance letter and this, my grandfather. And we stayed at that table until lunchtime, which is almost four hours. changed everything for me. I mean, it was, and at the end he said, you know, young man, anytime you want to, I'll make time to see you. Anytime you come to Los Angeles and I enjoyed our conversation. And so I just started ginning up an excuse to go there all the time and would call on him. And I just can't even put into words how much I just admired his incredible depth and breadth. And, you know, it's fun.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“In New York, who is a friend of Sandy Goddessman's, I think, and he knew Charlie. And so I said to him, hey, do you, you know, do you think you can put me in touch with Berkshire? And he said, sure. So he put me in touch with Charlie. And Charlie said, well, I'm going to be in New York for, I think, either Costco or a Solomon meeting, and I'll have breakfast with you. So I show up at 8 o'clock at the Millennium Hotel downtown in New York. And I pitch this stock loan business. Like I throw it right out there. I have no idea. And Charlie stops me after like four minutes. And he goes, I have no desire to own a business run by seven guys named Vinny. And of course, it was the perfect. We literally had seven guys named Vinny. I mean, it might have been Vinnie, Tony Mikey, but it was really...”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Was 80s, or said, Jesus Chris, I don't know what to do. I said, You got to get out of this business. I mean, we're doing a couple of billion of footings a day, and I don't even know some of these counterparties. There's this one here I've never heard of, you know, in Greenwich, long-term capital. I mean, I don't miracle. So I'm like, I'm going to get us out of this thing. So I decide I'm going to try to sell it. I'll try to sell this operation because we're going to have to close it down when he dies anyway because the charity couldn't operate that business. So I was thinking of who would be a good buyer? It needs to be somebody with a really strong balance sheet, a big portfolio of appreciated securities, you know, great credit and credit rating. And so I thought Berkshire. Now I'm like 26 years old. And a guy named Bob Lensner, who was somebody I knew.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“That they're right, even you think of the Tesla short sellers over the years. They just didn't want to look at the facts. And so my grandfather loved this because he could make an extra 1 or 2% a year by lending out Berkshire to these crazy short sellers. And it sort of delighted him because he thought that they were completely wrong and yet they were going to pay him. So anyway, he had a guy who ran that operation. And the guy gradually said, well, how about if you pay me 20% of the profits that I make lending out stocks? And my grandfather said, great. Well, next thing you know, he's got, you know, 10 or 15 employees in the securities lending operation, and they're acting not just lending out his own securities, but acting as what's called a broker finder. And it was sort of out of control. And so my grandfather...”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Few shares were held in street name. And because there were very few shares in StreetName, if you wanted to short Berkshire Hathaway, it was really hard to find any shares to borrow. And so my grandfather, having a brokerage firm, having a big position in Berkshire, and all of these people that wanted to short Berkshire, well, there was a big thing in the 80s particularly that this argument, oh, Berkshire is just a closed-end fund selling at a premium. So there was an obvious trade that all these really smart people would talk about, which was basically short Berkshire, buy some Coke, some cap cities, some Freddie Mac, you know, by the public companies and you pick up a nice risk-free arbitrage. Well, of course, the shorts got killed for decades. But, of course, they still wanted to keep doing it. You know, short sellers are often convinced.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Tied to the relative credit of the borrower versus the lender, and you make a tiny little crumbs of spread. So my grandfather's firm had this portfolio of appreciated stocks. A best example of all is Berkshire. And Berkshire for many, many years had a charity program where if you owned a share of Berkshire each year, you were given a dollar amount per share that you could assign to any charity of your choice. And companies have this tax incentive, and usually the CEO decides and gives it to whatever his or her favorite charity is. But at Berkshire, they said it's much more democratic to let each person vote. In order to be able to do that, you had to own the shares in your own name, right? It had to say your name on the stock certificate. So very little.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“It was clear that the capital of his firm was all going to go to charity, and so it couldn't function as an operating business anymore. And he had this business that was called a stock loan business. I don't know how familiar you are with securities lending. In its simplest form, it would be if you were a short”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Oh God, it's such a great story. My grandfather built this fortune. I mean, it was amazing. He started, borrowed $100,000 when he died. It was eight hundred million. It was held in a trust as long as my grandmother, his wife, was alive, and when she died, it was $2 billion. But 100% of that money, 100% was marked for charity. That was his belief he told us all from the beginning. My father's done the same thing, unfortunately. So they've really sort of followed what I would call the Carnegie Buffett school versus the Munger School, where I think Charlie said on that same podcast that half of his net worth had already been transferred to his kids, and he has fabulous kids. I was working for my grandfather.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“So I'm torn. I'm not sure I really welcomed it for companies like Google and Meta. I didn't like it. I didn't like the way venture capital firms were convincing founders to do this. And at the same time, I mean, I actually had this argument with a very prominent venture capitalist publicly at a conference where I said, have you ever invested in any company where you haven't asked for a seat on the board and the answer was no? So why do you think that somehow your equity is more valuable, that you should have a seat, but no other owner should? And especially after you've sold out. So they would go and sort of create this view that, oh, well, let us be your backer because we'll ensure you're always in control. And what drove me crazy, but that's okay. They made a lot of money, so hats off to them.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“you know you could argue that it was a good thing that meta had that people you know mark did not have to worry about you know being forced out because he controlled the company so but i do tend to like when control is simply because you own more shares rather than you somehow have a separation of your economic interest from your controlling interest but i'm not certain i've got there's so many good examples on both sides there are examples of you know hershey was an example where controlling you know shareholders you know force them to do absolutely suboptimal things for long periods of time and there are lots of examples of family businesses that have that you know second or third generation really screwing it up but there's so many success stories too and you look at some of the graham family and things like that and so”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“An answer on whether control stock is good or not. Obviously, before the creation of the B-shares, there was no super voting stock at Berkshire or anything like that. You could argue there still isn't. The A shares have more vote, but anybody can own them. But it is a...”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And so, but it would have been easy if theoretically for some sort of private equity firm to jump in and say, hey, we'll bid 34 for the whole thing. And people say, hey, well, that sounds good. The stock's at 27. You know, 34 sounds good. So that idea of private equity being able to take advantage of volatility means that you create, if you want to represent long-term shareholders, you may have an obligation not to have negative surprises. And if you have a negative obligation not to produce, you know, you're going to have negative surprises. So what means is you're creating an incentive system of hiding those or smoothing them out. And so I do not have.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Amazingly bought 17 million shares that day. It was one of the great trades of my whole career. And you could talk about how much I screwed it up that we still don't own those shares, which we don't. And so that was a terrible mistake selling it over time. And when the Charlie was always willing to point out, but when we bought it, we had high conviction that it was worth over 40.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“By and large, as investors, we don't love that sort of poison pill. We think it, however, in the case of Costco, we really supported it. And we supported it because we said Costco, we want them to have an incentive to report earnings exactly as they are, or put differently. We don't want them to have a disincentive for doing that. And so, you know, one day in, I forget what year it was, probably 15 or more years ago now, maybe 20 years ago, Costco closed at 41, had been come down from 45. It was a momentum growth stock, darling. They reported a bad quarter that stock opened at 27.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And I have mixed feelings about that. You know, to me, it is curious that Amazon never needed that. They didn't create super voting shares where you could own a tiny economic interest and yet. So I have mixed feelings about controlling stock, but on the other hand, I do not have mixed feelings about the idea of how long-term investors get screwed by short-termism creeping in. And I'll give you a good example. Costco had a classified board, which meant that only a certain number of directors could be elected each year. And that operates as a fairly effective poison pill. Because what it means is if you wanted to get control of that board, it would take you three years.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT