YouSaid · the spoken record

Christopher Begg

lines on the record: 99
first: 2023-05-28
most recent: 2023-05-28
sittings or episodes: 1
sources: podcast

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“I think constancy is such a brilliant ingredient for trust. And I think this when you deserve, I think, trust with your all of those counterparties, it just changes. I learned this from Buffett early on. He said, if you lose a shred of reputation for us, I'll be ruthless. And it's so true. I think it's something that when lost, it takes a while to get it back. And so I think to be constant and to be kind is you're building kind of the seamless web of deserved trust. And I think that's something that is incredibly valuable for any person or any organization.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Organizations treat the environment. And these are all just important. So we've always oriented ourselves from this margin of safety perspective. It felt really inauthentic to advertise ourselves in some way that we thought we were anything better than others. We were doing it from value investing principles and we were doing it with our own values at stake is do we feel good about aligning our capital with these companies and what they stand for so It's always been a key part of our approach for many, many years even before it became something that you had to articulate specifically around”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, thank you. That's a great framing of it. One of the principles of Ben Graham that has always been most important to how we orient ourselves is margin of safety. And that comes right from intelligent investor. You had Mr. Market and Margin of Safety, chapters 8 and 20. And when you have a win-lose dynamic with any counterparty as you're introducing this idea of potential for permanent loss. And so we always thought of that. And even something like Walmart. You know, Walmart for many years had a win-lose relationship with its suppliers. And it worked. You know, they'd squeezed their suppliers and it functioned okay until there was an alternative. And when there was an alternative to Amazon came along, you saw just there was a very quick supplier said, ah, okay, we have another source. Here we go. So the fragility was there. You see it with customers. You see it with how organized.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Make it easier for them. And certainly the customers, actually a seventh one that we kind of include in our essence of win-win framework is competition. Which sounds kind of strange, but it's not really because if you're taking a short-term tact, which is going to destroy the economics of your industry, well, that's win-lose for you and for your competitor. And that's not long-term sustainable to building and creating value. So we look at the win-win structure of competitive dynamics as well.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Completely, completely. And we have an internal framework that we think about with how you treat how a business interacts with its counterparties. And so we call this the essence of win-win. And we think that anything that's not win-win is unsustainable through time. So do you interact in a relationship of quality with every counterparty? That's your employees. It's your suppliers. It's your shareholders. It's your nature and community, which is becoming a bigger topic. And it's something that investors are demanding a relationship. It's with the regulators. Do you have a win-win relationship with regulators? Do you make it easy for the regulators to kind of do a hard job, which is to kind of find those actors that are not behaving?”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“It's hard to pinpoint it, but you know it's there. It's an experiential quality. It's an experiential observation that exists. And when it's not there, you also know it”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“World. Well, bureaucracy, the leadership wasn't driving change, and you had to reduce those layers of entropy that were created there. And luckily, because they have this cost advantage and uniqueness because of the ownership profile that they can be more long-term oriented, they can go back to being dynamic. But that delineation is everything. The way Nick talked about it and the way I think about it too is when you live a life of dynamic quality, everything you do, everything you touch is this opportunity to express dynamic quality in your life. It's the way you make a cup of coffee. It's the way that you, every interaction, being impeccable with your word, I think all of these things are contributions to a culture of quality, a culture of a rette. So that's how I think about it. And it's one of those things where it's hard to.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Brilliant, great lead in. So in Lila, which was the second book is where he started to delineate quality. There's two types of quality. You have static quality and dynamic quality. And the way I think about static quality is when we name something, we categorize it. It almost ceases to be dynamic. It's not on the horizon edge anymore. It's not on the leading edge of the train, which is something that Robert talked about. I think we have this notion that we know something. that we categorize, we put it in a block, we put a circle around it. When we do that, it ceases to become static. And when businesses start to create entropy in there because they have bureaucracies, I mean, Geico is a perfect example. When Todd took over Geichel, the CEO, it had ceased to become dynamic. It had become static. This is the Crown Jewel of Berkshire, and it had ceased to become dynamic. How is that possible? This is one of the best businesses in the world.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Looking at the world and how it's becoming, it's reducing entropy, it's creating intelligence. And so the fourth one, this comes around to your reference, is the Greek goddess of her name is Arete, and she's the Greek goddess of virtue. And what I define as virtue or arete is also quality. And dynamic quality specifically. And so when we think about arete, or we think about doing things with quality, I think about Robert Persig's two books Zen and the Art of Motorcycle Maintenance, which is a book that Nick Sleep loves and we talk about every year. And then his second book, which really was much more about the metaphysics of quality or the philosophy of quality. And he felt it was his best book. And that is just, when I read that, it just changed the way. It was like reading Nick Skeleton shared, like just the scales dropped from my eyes. I'm like, this.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“To kind of accompany my knowledge. So, this is that cloud of knowing. This is everything kind of looking backwards now. And then we get into this cloud of unknowing or this period of the next one is NOEA. She's the Greek goddess of intelligence. And so what is intelligence? Intelligence is taking something that's complicated and making it simpler. And the opposite, or I'd say something that is unintelligent, is taking something that simple and making it complicated. And you see that as pretty common in life. But what is genius in that same framework? Well, it's taking a question or a problem and it's solving it. It's actually taking, if you think of like alpha fold when deep mind and Demisisabis kind of solved protein folding, that was a form of genius. It was augmented intelligence that actually made the problem go away. So this idea of intelligence is forward-looking.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“I'll plant the seed, and you'll end up there someday, I think. There's a library there. It was probably called the Library of Celsus And all we know about Celsius, it was built shortly after, about 100 CE, and it was built as one of the biggest libraries of the time. And what we know of it today is this facade. And there's four Greek goddesses that sit in this facade. And kind of if you order them, I think the order of the goddesses actually is the way that I think about the order of your path to insight or your path to critical thinking. And so the first goddess is episteme. She's the Greek goddess of knowledge. And so we spend the big beginning part of our careers kind of gathering knowledge. We're reading lots of books. And then the second one is Sophia. So she's the Greek goddess of wisdom. And so what is wisdom? It's applied knowledge, right? Let's get experience. I got 20 years experience investing, studying businesses. Now I have Sophia, my wisdom to.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Interesting equation that looks like compound interest that's just been played out to the power of n. And that's pretty magical. And we are all fractals, right? We're fractals of these general principles and laws. So we are just in our most aligned way, in our most enlightened path, we are living the truth of competent interest. We're living in of evolution. And we're trying to remove these frictions that are getting in the way or getting in the way of our own improvement. I read something today as I was revisiting one of my favorite books here by Robert Persig where he said something like the realization that we're all enlightened. It's just the falling way of thinking that we're not. And I think that that's the secret of confident interest that's at work here.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“And I give full credit when I came up with the Piper mindset. I was doing something I do in regular learning as I was trying to create a memorable acronym or tool to remember Peter's dogged incremental improvement. I said, that's too long and clumsy. We can do better than that. So in my goal of reducing entropy, I came up with something a little bit more memorable, at least to me. But it is everything. One of the things about compound interest that I've just found so incredible over time, the more I work with it, the more magical I find it. And it's this thing that I don't think just lives in the world of investing. Compound interest is something so innate to the source code of the universe. It's driving everything. It's driving evolution. If you were to, you kind of follow the thread all the way back and you'd probably have some”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“100%. I'd love to return to that. I think we'll finish the layers of competitive advantage. I'd like to touch on another topic that I think Nick really understands well, which is quality. Yeah, so the after skeleton shared is network effects, which are quite obvious, but a very important layer, certainly MasterCard and Visa, enjoy those. The next one is customer mindshare. So the reputational trust aspect of a brand. And then finally, we have the high switching costs, which we see in software, particularly lots of software as a service businesses or software in general, enormous cost to kind of ripping that software out and bringing it in. That's why those businesses, once they're kind of built, installed based, they could be really incredible long-term free cash flow generated businesses. And then the last one, the eighth one, which is the one that we don't start with, which becomes really”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“And this scale economic shared is a very long term orientated culture that can actually do it. And very few people are willing to do that.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“It's a beautiful concept. And as a little aside, when I had Nick in this year, he was trying to communicate short-term versus long-term thinking to a business that he was helping evolve their culture. And he just started making a list of short-term versus long-term thinking. He's since published this to his foundation website. But it was so such a beautiful example of what that delayed gratification or long shelf life of a business looks like versus the norm. And it was one of my favorite exercises that As he articulated to the class, shared it with the class. I since had, and I actually touched on it today because it's open in my computer here, but I've made now 12 pages of notes on short-term versus long-term thinking.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“On your RD, use care on advertising, you can sail on distribution logistics, information and data. So we kind of walk through those and see how scale advantages manifest in businesses. The next one, which is one of my favorite chapters that you wrote, I give full credit to Nick Sleep for the fourth one, which is scale economic share, businesses that have a scaled advantage, but instead of taking more profit, return those scale advantages in the way of lower prices or more goods and services available to the customer, which widens the moat and it delays gratification on the free cash flow perhaps in the short years or a bigger reward down the road. It was such a brilliant insight and epiphany for him. And in reading that, Time it helped me illuminate on this subject as well.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“We talked about trans time. They have soul source position in many of their markets, small monopolies. You have exclusive rights where you have an exclusive right to sell something over a period of time, which you could call a cornered resource. And then the fourth one, or fifth one, no, is we call Switzerland of X. So when you think of when Snowflake really came into the market in the data cloud, they sat on top of the three public clouds, which was AWS, Azure, GCP. And it allowed for a customer to say, I don't have to choose or do all of my data layer through one of the three, I can use Snowflake. They're the Switzerland of all my data. And I can unsilo my data through that. So certain industries, we like that Switzerland of exposition. Third layer of competitive advantage that we look for is scale. Scale is pretty obvious. You gain scale and you scale.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“So Evolve Mousetrap is the first one which we talked about, which really cuts down to entropy reduction. The second one is structural competitive advantages. So what are structural competitive advantages? We have four that we look, or five actually, duopolies. So when you think of MasterCard and Visa, you have this, the competition evolves to, you have two players that are acting rationally with each other, most of the time rationally. So duopolies, it's actually one of the first assignments that we do in the class is I ask the students to make a list of all the duopolies that exist in the world because it's a wonderful place to look for a place where value creation or you have two parties acting rationally splitting a large market. The second is oligopolies, which is also very similar to openies, but more than two. Generally three. When you get over three, it gets a little competitive. You have more chance for one player to act irrationally.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“As far as his heart, and if any of your listeners want to, you know, his book One for Many is one of my favorite books of all time.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“And it's great. So the entropy reduction also lends to just kind of our second pillar beyond competitive advantage, which is secular tailwinds. So with MasterCard and Visa, we're doing is they were doing something cheaper, better, faster, because you were taking cash and check and creating a means to transact through credit and debit, which had enormous entropy reduction, information flowed more easily through their network and therefore created enormous value, which could be attributed to the value creation of MasterCard and Visa, which is something that we've owned on and off for almost 20 years. And DHOC was a speaker in the class, by the way, William, who was one of the architects of the network, one of my favorite speakers of all time. He's since passed away, but I remember on his last years, he did a Zoom call with us. And one of the most special people I've ever encountered.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“We expand that and when they developed a 1P marketplace and then created a portal that was cheaper, better, faster, and then a bridge to third-party sellers. And then what I call a dome, which was prime, where you reduce search costs for people by giving them a place, a trusted place, to find things online that is going to be at or better price than anywhere else and have it available to your house in two days and now one day. enormous entropy reduction and what do you what's on the other side of entropy reduction enormous value creation so when we think about the eight layers of moat that a company might have we're looking for layers of competitive advantage the first one we look for is entropy reduction or a better or more evolved mousetrap and it's always the one that we're you know is this in the in the scheme of making”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“I just love the term entropy. So I'm glad you brought it up. And the way that I've thought about entropy, I think about as a coin, right? If you had a coin and you had entropy on one side and information on the other, these are two sides of the same coin. So when you reduce entropy, you increase information through a system. So while entropy is often defined as being this natural course of going from something beneficial to something average in this I think about differently, I think all value creation is the source of reducing entropy and actually increasing information and therefore creating value. And so how do you reduce entropy? Well, you do something cheaper, better, or faster. And so think of Amazon. Like when Amazon decided to sell books online, well, that was way cheaper, way better, and way faster in the vertical books.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“And we had him in order. And actually, as we looked at each seven, we dissected, what does this look like? What is the real risk of impairment here? And then we actually got comfortable with almost all of them. And as the year played out, almost all of them became, the clouds dissipated. But the one thought that didn't dissipate with meta was the size and cadence of the spending. And it was the third quarter of 2022 where I think investors have thrown the towel because it made no sense. When they came out that earnings report and they said that not only are they not lowering the spending, they were increasing it. The stock, I think, fell off another 15 or 20 percent.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Balance sheet. They had a small capital raise. We allocated 25% of our portfolio over the course of two weeks too aerospace parts names. And the reason I bring that up is just an example of how quick a portfolio can change based on events and clouds that are, if you have kind of done some work, understand it in the case of Transline, we had owned it in size in previous years based on different valuation profiles. And that's kind of what we try to do with this universe of companies where we do have a pretty thorough understanding. So you brought up, you know, we have had exposure to the two platform advertising businesses that we think have durable competitive advantages, Google and Meta, both have different, both macro and micro clouds associated with them. So when you look at the start of last year with Meta, I think we identified seven clouds and seven. Usually there's one or two.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and since you brought up that March 2020, because I think that was a really good example of what we look for and how we act. So in March of 2020, when we had the shutdowns escalating, everyone was fearful of travel. And we basically went through TSA visits dropped 96% very quickly. And all the aerospace stocks were being sold off. So trans time, I think, went from 650 to share to 206 intraday in March of 2020. And we're immediately on the phone with the investor relations. We're just working through the balance sheet because we really wanted to understand the duration of pain if this was a three-year shutdown. What was our exposure to maturities on debt? We just really wanted to understand and more or less in the course of a couple days, once we got more comfortable with the bank.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“That are, you know, in general, we're not seeing a lot of things that are above 15. We think we're in a middling period of valuation given the uncertainties that still exist. And that means we're just working off. I think some of the excesses that still are here from a period of very low interest rates or zero interest rates. There wasn't a lot of, I think, focus on free cash flow over that period of easy money. And so that's still unwinding in our opinion. If we were to ask us from a universe of businesses that we'd like to own, where do we think things are on a quality of IRR basis right now? We're kind of in that, you know, if it's zero to 10, we're kind of in a six as far as attractiveness on IRR for that universe. It doesn't mean that we can't own right now we own seven companies and we found seven companies.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Correct. Yeah, and I think there's two types of clouds that we're looking at today. It's, you know, we have macro clouds and we have microclouds. Macro clouds today are recession. China, Taiwan, Russia, Ukraine. You have potential of a stagflation. You have interest rates. How high would they rise? The persistency of inflation. And all of those things are contributing to volatility in markets as well as industries. The microclouds are all often business or industry specific. So if you look at the advertising businesses, they're thinking about what's the length of a recession. What does that look like for a business that's associated most of their revenue from advertising, housing related businesses? So these are all areas that are producing what we're seeing in our 10-year models is ticking up of those IR.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“And then what you derive from that equation is what is your compounded annual return from that purchase price to that future price based on the free cash flow growth? And that's basically your IRR, your internal rate of return of the holding period. And what we try to do at entry is buy things that are 15% or better, IRR. And if price gets bid up over time and now we're looking at a portfolio holding that may have a single digit IRR, that's going to be something that might suggest that it could be replaced, trimmed, and just something that could be brought in that we could improve on that. And that's kind of the process with which we are always upgrading the portfolio for higher IRRs that are going to lead to great or hopefully superior compound returns over time.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“And the significance Yeah, so when we look back at an investing holding period from the day we buy something to the day that we, you know, so I'll take the way that we actually build our IR assumptions. So what we're looking at in any business is we're kind of trying to assess what the 10 year free cash flow growth of the company is going to be. And if we understand if the company is, say, going to grow 15% free cash flow growth when top line assumptions to margin improvement, to financial leverage if they have any. And that's a 15% growth rate of free cash flow. What is today's price that we're paying for that? And what is our”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Than what you might have modeled from the existing businesses. And that's come from really, really good capital allocation among the team, the things they were able to buy, accrete value creation out of. And now you go from something that might have looked like a 15% IRR and something that ended up being a 25% IRR. Clouds of unknowing are”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“You kind of look forward at what might happen in the business as kind of a cloud unknowing. And I think those clouds of unknowing create asymmetry, you know, especially, and that's when you look at how we deconstruct setting ourselves up for a lot of asymmetry in a business or asymmetry in the IRR of an investment opportunity is we want to set ourselves up for a lot of inevitabilities in the unknowing that I think could present themselves. An example with that would be something like we've been longtime investors in a company called TransDime, and TransDime is aerospace parts company. They have sole source, often on most of their products. And if you were to underwrite that on what you know to be true, like the current businesses that they own, you may have a certain IRR profile. And over the years, the return profile of what has actually been about 10%”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Is there anything in there that is really attractive long term if we live through the uncomfortableness of this period? And so I call this, there's actually this wonderful Christian mystic book by an anonymous author called The Clouds of Unknowing. And it's a wonderful piece. I think it was written around 1375. And I think a lot about the clouds of knowing, right? the things that we know to be true or think we know to be true which is kind of based on our knowledge and our wisdom. You know, it's looking backwards at this pattern recognition of experience. And that's really valuable. I think most of what we're doing when we model a business out is we're taking all of those things that we know and those clouds of knowing and maybe we're getting an investment opportunity around the clouds that exist around the business at the time. When you look forward”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“This is actually something that's in the current letter that I'm trying to articulate right now. And internally with my team, my partner, Scott, with our analyst Jimmy, we kind of talk about this vernacular of clouds. Where are the clouds today? And clouds are just things that are obscuring that may obscure short-term vision, but is obscuring the long term really extraordinary parts of the business. And so the focus is on this thing and it's obscuring something about the business at the time, which gives us valuation opportunity. So when you think at any one time, you might just say, where's the fear today? Where's the anxiety today if we're going into a milder or severe recession? What are those things that would be uncomfortable to own? And you kind of look at that basket and you'd say, oh, okay, this area of the market's down 50% or down 40%. That makes sense. This is kind of a scary place.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Looking for that one or two exceptional ideas that may come along per year that you have completed enough work that you can act with some level of confidence when an opportunity presents itself.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“In a way that's intelligent by paying close attention to how much you pay, what the compound return would be or could be based on that price. And so all of these things were coming together that aligned me with, wow, my temperament was much more about finding a handful of great businesses, exceptional businesses that I could then kind of follow along that journey with them. and pay close attention to this basket of companies that I thought were exceptional in the world. And if I had an idea of what they were valued at, what the IRRs would be at a certain price, I could align a concentrated portfolio around the ones that I thought were going to be the most attractive compounders over time. And that's kind of what we've done now for the better part of 20 plus years. And that means not a lot of trade.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“What a great introductory question to that. Like you said, that 10-year apprenticeship that I had prior to launching East Coast, you know, I had this luxury of sitting in a place where I could read a lot. And I was hired as a research analyst, but I was hired by something that really was trying to figure out what the evolution of the firm might be. And I was able to contribute a lot. And so in my reading, The probably most lucky discovery of my career was discovering the letters of Warren and Charlie. And I say that because I looked at a lot of things. And when I read, when I read those letters, it just resonated that this wasn't something that was separate from building businesses, that this was very much about how do we find great businesses act in a business-like way, and then invest alongside these businesses.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Each of us are going to garner an insight that might be a little different. We may hear it differently from our own perspectives. And so one of the things that Todd always says, you can't outsource judgment. And so that has always resonated me. And as far as like what is effective at generating true insight into, you know, especially if you're running a concentrated portfolio that's going to lead to that one of those 10 or 20 punch card ideas that you might hopefully find in your lifetime.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, you know, one thing that comes to mind that always resonated with me when I think of team size. Todd, when he ran his fund, he said he had about five analysts. And during his opening interview with Charlie Munger, he had shared that Charlie had asked the question, you know, how many analysts do you think you would need at Berkshire? He said, I could probably do with three. He's like, how about none? And it was just very clear. And the more that he contemplated the importance of the team size, he realized that the more that he would separate himself from the actual source material, the more he was outsourcing judgment. And it's something that I've always come back to myself and with my team is that usually when we're coming up to speed on something that's really important, we all want to be touching the source material. We want to be reading the important things because”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“So he can appreciate, and I think empathize where the students are and what they're, how important it is to have this practical application of investing principles. And that's what the class has always stood for.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“I think it's the most wonderful calling card you could have to invite a lot of people that wouldn't naturally say yes to an invitation to at least contemplate it and hopefully say yes. Todd Combs has been a guest in a, you know, we've done a fireside chat now for 10 of the last 11 years, which is a wonderful streak given his schedule has only gotten more busier, but he looks forward to it every year. It's one of the few things that he does say yes to. And we have so much fun with the conversation and it's evolved so dynamically over time as he's kind of gone from investor to investor operator and a CEO of GEICO now. And it's a give back for him because he sat in the same seat. Warren sat in all the students sat when he graduated from Columbia Business School. And he actually took Michael Mobison's class in the spring of security analysis.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Of our course, so you'll see that SSA, which is, I turn it tatas, is kind of an overwhelming mantra of kind of what we're trying to accomplish in this research laboratory is seeing the whole picture of investing, not just one piece of it, to try to understand business creation, value creation, and the evolution of what value investing means and how we define it.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Led in another, and Ben did offer him a position at Graham Newman. And that was the beginning of Warren's career and maybe a couple years, three years after that, Warren went back to Omaha. And then shortly after that, launched the Buffett partnership, which then became Berkshire Hathaway. 1951 inflection, I think Ben taught the class for another nine years. What I was appreciated about Ben, and I learned this in a video that the school put together on the 85th anniversary is he would open the class with a Spinoza quote. And the Spinoza, he said, if you already be successful on Wall Street, you must see things under the aspect of eternity. And when I heard that, I was like, oh, that is so brilliant. And what he meant by seeing things under the aspect of eternity, I believe, is seeing the whole picture, not just one piece of it. How do I see the whole picture? So I've taken that as a model.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. And the most famous, of course, in 1951, in the spring of 1951 was Warren Buffett. And Warren had recently read the intelligent investor. He had read the 1934 edition of security analysis, which Ben wrote. But that 1948 intelligent investor that he read in the Omaha Public Library really inspired Warren to kind of come to Columbia to apply to Columbia, to take the course from Ben, which was now his hero. And at the end of that class, which was, I believe, to be the only A plus that Ben had ever given a student. And he had asked Warren immediately asked, I want to work for you, Ben. Would you hire me? And at the time, the way I understand the story is, Ben was only taking Jewish students because they weren't getting the same opportunities. So he said, Warren, no, and Warren said, I'll work for free. And he said, that's still too expensive.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Practical examples of what he was working on real time. And that really inspired me because it made the classroom much more of a laboratory than me kind of communicating what I thought was truth. And so that's the way it's always been.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Not only the foundational principles that I could introduce them to in the beginning of the class, but they would get all this perspective. As if the class was a laboratory of Of different ways. And I think what has occurred since is these students have each one of them takes something from the class that's very unique to their temperament, the type of investor that they might be Best suited to Like you said, I use it as a, I kind of invert the classroom, use it as a laboratory. Back to your initial question of the history. Ben Graham taught the class from 1930 to 1960. Of come up from Wall Street, he would put a white Lab code on, so we didn't get.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“That first year, I was pretty nervous, kind of a little bit imposter syndrome, and you're just doing your best and really wanting the students to have a great experience. And then little by little, the class has evolved. And as you alluded to The class took a tact of really inviting in. The best, what I thought were the best investors. Not just the way I invested, but Had a Deep understanding of their niche in value investing. Well, as bringing in great operators, and great operators would be CEOs, great capital allocators. The third bucket would be great. Philosophers or thinkers or writers that were interdisciplinary and kind of bringing all of those three Types of speakers in. So, the students would This over the course of the semester, they would”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“At the end, I think the second one where I did this, he said, hey, would you like to do something with the With the school in the form of teaching. I said, me? What would I teach? He's like, just teach what you do. He's like, don't worry, I'll put you in front of just a handful of students in the beginning and we'll see how it goes. And then there was an opening for security analysis that came up. And this is now 11 years ago And that was my first year. Look to Michael Mobison's class in the spring and I said, I looked at his framework. And kind of developed something that really matched How we were implementing the art of investing and value investing and One thing led to another in the”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT
“Great place to start, William. Yeah, it was about 12 years ago, not about 14 years ago now, that we got involved with the Habran School of Value Investing at Columbia Business School, and we were there because some of the best students that were really passionate about this craft of investing were there. The value investing program takes about 40 students each year that are kind of self-selected and then they apply in. So those were the cream of the crop students that we felt in the world. And we wanted to invite them in to have internships into our organization. So we would take two a year and got to know Bruce Greenwald. Bruce asked me to be a professor, or he was the professor and I was the independent work study companion to what he didn't have the time. So we kind of worked together on a few students.”
2023-05-28 · We Study Billionaires · RWH027: High-Quality Investing w/ Christopher Begg · IDENTIFIED FROM THE TRANSCRIPT