YouSaid · the spoken record

Christopher Tsai

lines on the record: 132
first: 2024-05-26
most recent: 2024-05-26
sittings or episodes: 1
sources: podcast

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“I graduated from Middlebury College in 1997, and just shortly, like after there, after that point, I came out to my father, told him I'm gay. His response was that nobody gay can be serious about money. And he refused to talk to me. And so, you know, I had met somebody at that time, roughly around that time. And I prioritized, you know, that person. That person's now my husband, Andre. And so we've been together for 25 years. We just celebrated our 25th year of anniversary, our time together.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“She got at a discount. He got it at a discount too. He was a value investor at heart. He got it at a discount because he was on the board of Sachs and Sachs offered discount to its board members. So he made sure he bought the ring through Sachs.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“And they talked about this relationship and President said, you know, there are two sides to a pancake. And apparently that was it. And he never heard from him again. But so he continued with this engagement, but it broke off for other reasons. I have so many crazy stories.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Captain says, you know, you have a visitor, and my father says, I don't take visitors at 5 a.m. And the captain says, apparently this visitor you want to take. And it was President Bush on Little Speedboat with a couple machine guns on there. And he said, come with me for a ride. And so they go, you know, about apparently Kenny Bunkport. My dad had bowed back and I guess President Bush made sure that the boat went as fast as possible and as bumpy as possible. And he said, you know, you're dating Sharon Bush and he wasn't very pleased about it. And he said to my father, looking at the boat, he says, you seem to have done very well for yourself. And when my father is, you know, learning from my grandmother how to think about things not as a square table, but to be around table, he quickly replied and not as well as you, sir.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Into you know, survive. And so I understand that as well, but I've always placed from the very, very beginning a huge importance on relationships and perhaps with the sacrifice of career in some way. But I have no complaints. But my story for you quickly So he had four wives. He was on his way to a fifth, who was Sharon Bush. Sharon, let me see. So Sharon and my father were engaged and President Bush was not happy about this. And so my dad was on his boat in Kenny Bonkourt, actually, and it was apparently like five or so in the morning. I'm not sure I should say this, but I'll do it anyway. So he gets a knock on the door at around five in the morning from his captain.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Watching my mother being so nervous trying to make dinner for us in the kitchen that she almost chops her finger off and there's blood everywhere and she has to go to the emergency room. And so I saw like how horrible and she would say like, you know, the first 10 years of her life were great with my father, but the last 10 were really miserable. And it was unfortunate. And I saw that and I, you know, I guess subconsciously, like I did not want to have that life. Family, friends, stability was more important to me. And to be fair, like, you know, I was also in a position where I could say that. And, you know, I wasn't struggling to get out of China into.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“But yes, you're totally right. And you know, unfortunately, like, you know, I was old enough. We were talking about being old enough to remember things earlier. I was old enough to know what was going on. Like when my mother was getting a divorce, well, they were separated for a while before they got divorced. But I was all enough to see what was going on. I was old enough to watch my mother just be in tears from time to time. Totally stressed out. having sciatica as a result of the stress with the relationship with my father.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“To be very transparent about our investment approach, which happens to be very similar to the investment approach of many of our friends, it's just maybe not aligned with what some other people might be thinking or what they might need.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Much as you can, like till you're blue in the face with a prospective investor. And it's only during a massive drawdown or maybe even a small drawdown that you realize that there's not an alignment. That has happened to me only twice in roughly 25 years, but I can say it was in both situations extremely unpleasant. and extremely stressful to deal with. And so now we have a letter on our website. It's a letter to investors, but it's not just to prospective investors. It's to current investors. And I encourage everybody to reread it who's invested and everybody who might want to invest to read it. And it's designed not to attract investors, but to discourage them.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Well, I forget who said that if you are exposed to a certain level of stress that becomes your baseline and it's no longer stressful. And while I have, I think done a fairly good job of structuring my life in a non-stressful manner. I can tell you that there have been periods of extreme stress over 25 years of running this business because there are always things that are unforeseen. I can give you an example like we talk, you know, our community, the value investing community, all of the mutual friends that we have, we all seem to talk about this importance of alignment, right, between client and investment approach. But sometimes you could communicate that as”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“I've tried to outsource as much of that as possible so that my day is as peaceful as it can be. So that's the goal, right? It doesn't always work out that way. And I'd be happy, like, you know, if you have any ideas of how to improve upon that, please share them with me.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Well, there's the way I want to ideally structure my day and the way my day actually unfolds. And there could be a divergence between those two. Nevertheless, I try to be as conscious of where I want to go. For me, what gives me peace is pretty simple, actually. It's just exercise and meditation and good sleep. The three things. Exercise and meditation and good sleep. Those are the three things that give me peace. And I try to, I've tried to set up the business in such a way where a lot of the elements that are within the critical path of running a business don't fall on my shoulders. By that I mean I've tried to outsource a lot of the functions from portfolio accounting, clients and legal and all this stuff.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Just because the valuations were attractive. So I used that period to go from 12 to roughly 21 positions. And I think it was also, to your point, a reflection of not wanting to have to deal with so much pain when it wasn't necessary. And so today, like we're able to, in many ways, because of this bear market, we're able to withstand much rougher waters in the future. So it really was a period in which we could plant more seeds.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Partly, you know, it's interesting when I launched SciCapital more than two decades ago now, we started out with roughly 20 positions. And somehow over time we kind of pared that down to what was roughly 12, as you mentioned. And the bear market that you're referring to that we had a couple years ago, that bear market allowed me to buy companies that were on our wish list without sacrificing upside because there's so many companies that really got hammered during that period that were not at prices or values that I thought made sense in the past, but now all of a sudden were. So I said to myself, look, why not use this market sell-off not just to play defense, but to play offense? In other words, why not buy a few more companies, diversify the portfolio into names which have great ACP?”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“I try my very best, like, not to pay any attention to the stock price and just come up with my own idea of what I think the business is worth. And so the key is really to focus on the fundamentals. And if the fundamentals are moving in the right direction, then the stock price will take care of itself over time. The problem is that if you have all your money in one or even five companies or maybe even ten companies, it's really, really hard to deal with that emotionally. And it's even harder if you're managing money for other people. But if you have 20 companies or so, you know, and you get one position gets cut by a third and you might have 15% in it, then you're going to take four or five percent off of the portfolio. That's easily manageable.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Well, as I said in this paper, which was on our website about power and challenges of compounding, I totally focus on the business fundamentals. I really don't let the stock prices dictate like what I'm doing.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Like when I definitely like when I am very, it's not often that I feel uncomfortable. It's not often. But when I am uncomfortable about something or I get a lot of calls about a particular company that might be going down, I know that's very close to the bottom. It usually is. And so I force myself to buy more. And I remember sitting because COVID started COVID already broke out and Tesla was cratering when we bought it. And we were up in the Adirondacks because we left the city. And I remember sitting at this hotel and this little desk in the Adirondacks and pushing the buy button and doing that across 60 accounts or so. That was really, really hard”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“And that was so, I have to say, like that was so hard, like really, really hard because the stock was cratering at the time. It's just, it's, you just, my dad had this expression, like you have to reverse your head with your stomach. Easier said than done. So when your stomach says sell, you have to use your head and think about buying.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Transaction on the planet, except in China. So they're like, you know, a very acid light company that collects a fee on pretty much every transaction. So we own both of them.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Interestingly, like the tailwinds haven't really changed. We bought MasterCard pretty much at its IPO. And we bought Visa not too far after Visa went public. When MasterCard went public, some of these tailwinds were not as understood as they are today, but they were the same tailwinds. So when MasterCard went public, I think it went public probably like at 15 times or so earnings, maybe less, maybe like 12 times my estimate of earnings at the time. And now it's, much, much higher. But the tailwinds are the same. The tailwinds are the migration of as the world moves from a cash-based society to a cashless society. That's pretty much what it is. And they're essentially a toll operator, right? They get a piece of every single debit and credit card.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“So forth. That's why we own partly, just why, but it's partly why we own companies like Alphabet and Microsoft and Apple and so forth.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“During the time of Cornelius Vanderbilt and Rockefeller and so forth, the railroads were really the infrastructure of the economy. And today, the infrastructure of the economy, I believe, resides in some of these large tech companies because they are the backbone of the cloud. And that is where the world is moving. Frank Slutman had this short interview. I forget where it was, maybe it was on CNBC or somewhere, but he had mentioned how we're so in the infancy of the migration of data from server to cloud. And so we want to participate in that migration of data from server to cloud. We want to align ourselves with the infrastructure of the economy today as it was during the time of Jake Golden or Nelius Vanderbilt.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“It's at least for me, it's a lot easier just to hold on to them when the businesses might not be firing on all cylinders or when there might be a drawdown.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“If I had all of my money, let's say you would go the opposite direction, all of my money in one stock, it's going to be a lot harder to not interrupt the compounding process than it would be if you had 21 companies. So that diversification across 21 companies is the key ingredient that has helped me hold on to compounding machines. And so if you think about Tesla, you know, our average price purchase price is around $41.66. It was much, much higher than it is now. And I've written through different periods already. But would I be able to do that had I had all of my money in one stock be a lot harder. But when you have 21 engines firing and building intrinsic value over time, I think that”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. So I think investing is a super, super personal journey. And you have to figure out the style that meshes or lines with your own personality and your own approach to investing. The way I have minimized the chance of selling great compounding machines too early is to have a fair number of positions. So yeah, I'm very concentrated with respect to how most people would think about the portfolio. But I'm also pretty diversified with respect to some other managers. So we have about 21 holdings today. I have found that having more holdings actually allows me, it allows me to be able”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“The longer you hold something, the more you're going to come across negative articles, you're going to come across friends who will try to influence you. But at the same time, you have to be totally open-minded, right? You don't want to get just in this commitment consistency bias. You don't want to have commitment consistency. You also don't want to interrupt the compounding process unnecessarily. So it's not easy, right? And Ms. Charlie said, why should it be easy?”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“The years, the three decades plus that I've been involved in equities. I've sold many companies prematurely. And what I came to realize that that's the real cost, these Peter Keefe, who I had this wonderful conversation with recently at Lattis Work, calls it the Silent Killer, selling great compounding machines too early. So I've made that mistake many, many, many times in my life. And I've come to the point where I realize that's a huge, huge, huge cost. So you don't want to interrupt the compounding process unnecessarily, but that's easier said than done. So like, how do you do that? And I have my own system for doing that and it's an evolving system, but that's not easy. And you're talking about all of the negative press regarding Tesla, but there's plenty of negative press regarding other holdings.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Well, I can tell you that I've made so many mistakes. I've been investing since I was 11 years old. And I use the term investing loosely, you know, when I was 11 years old. I invested like $100. But when I was in my late teens, I actually had a fairly sizable chunk of United Healthcare for whatever reason I was spent a lot of time on managed care companies, publicly traded managed care companies. put quite a bit of money for me at the time in United Healthcare. And they had this, they had a massive sell-off shortly thereafter. And I panicked and I sold everything. And that stock must be up hundreds of times. I decided not to look because I had too painful. But that stock must be up hundreds of times since I sold that. I've sold many other companies over my.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“In Tesla since its IPO. Like there's got to be a couple dozen, at least 40% drawdowns since its IPO or at least 30% drawdowns. And that's just part of investing in growth companies. No businesses, and I wrote a paper called Power and Challenges of Compounding, which is on our website. Growth companies just don't go in straight lines. They move more like in a step formation. And if you look at the kind of longer term chart of Tesla, Tesla's just kind of in a step formation, just like Amazon was and Microsoft was.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Well, first of all, we actually did buy more around current prices. And these arguments, most of them at least, except for the 50 billion compensation package, most of these arguments sound like the same arguments that you could go back and read since the company went public. There are probably less negative articles today than there were around 2011, 2012, 13, but they seem very similar and yet the stock continues to go higher up 15,000 or so percent since its IPO. And what's the case with pretty much every growth company from Amazon to Microsoft, any great growth company, there are always periods when the stock is not going up, right? There have been so many massive drawdowns.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“That they put up. What's that worth? What's the present value of that? So I think it's super important to understand that this, you know, when you think about Tesla as an electronic and software company, different things come into play, like rights law and second law of thermal dynamics is also super important to understanding this company.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Which means that they put up a factory for $7 billion in they're making their investment back in a year. Nobody else can do that. Ford is losing $36,000 or so on each EV sold while Tesla is making $7,200 or so gross profit per vehicle. And that's like the, I'm not a fan of looking at unity economics in terms of CAC and long-term value and blah, blah, blah, blah. But I am a huge fan of thinking about what are the unit economics of like what they're selling. If you're selling a soda can, how much is Coke making per can, right? If you have a McDonald's, how much is it making per restaurant if you're thinking about Tesla? Well, how much is it making for each factory, which really is its core product? Is it the factories? How much are they making perfect?”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Traditional auto catches up. Tesla just moves much further along the curve. And so the spread between the competitive advantage of Tesla, the other EV companies, and traditional auto is actually widening. It's not getting more narrow. It's widening because of its massive scale, which allows it to push itself out along the cost curve further than anybody else. And so one of the major competitive advantages that the company has is that it's a low cost producer. That is very important to understand. And the street sees that. The street sees that they spend $7 billion for a factory. A factory can produce a million vehicles. And the gross profit per vehicle right now is about $7,200.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“It's super important to understand that because there are certain things that kind of like come into play. There was an aeronautical engineer by the name of Theodora Wright and Theodore Wright devised this concept called the Wright's Law, which states that for every doubling of cumulative production that costs fall by a constant percentage. And when you understand that Tesla is an electronic software company, you understand like where is this company along this rights law curve? Tesla is so much further along the curve than any of the ice vehicles that are constrained because they're not electronic in software companies. There are traditional auto companies. And it's Tesla's so much further along the curve with respect to other EV companies. And so as Ice Vehicle,”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“So I gave you the first kind of lens at which I'm looking at Tesla as competing as an EV company against ice vehicles and EV as a whole being much more efficient than ice. But the other lens I should share is that I don't think you can understand this company if you don't understand, assuming that I'm assuming that I'm right, right? It could be totally wrong. Assuming that I'm right, I don't believe you can understand the company if you don't understand that to me it's an advanced electronics manufacturer and software company competing against a traditional automobile manufacturing company. And so why is this important? And there's a reason why I believe that I can talk about that, but why is this important? This is super important. It's an electronics slash software company competing against traditional.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Penalizing all of your income statement now, your earnings are going to be lower and your multiples are going to be higher. So that's often why rapidly growing asset light in particular growth companies have a higher multiple than other companies do. And it's super important to understand that. And that was proofs to me, just understanding that you have to think about valuation with new eyes to align with the kind of world that we're living in, a world that has moved away from hacet heavy to acid light.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“And Adam Cecil, by the way, gets it. Adam Cecil totally gets that. And the thing to remember, like with asset-like growth companies, especially software companies, the investment is often hitting the income statement fully. So by that I mean that there's no capitalization of the expense. So if you have a, let's say, if you're talking about a drug company, a pharmaceutical company, the R&D is flowing through the income statement and hitting the income statement. When you have a software company, the same thing is happening. But if you have, let's say, a steel company or a very asset heavy company, you're capitalizing that expense over seven, ten, even 15 years, right? And so the consequence is like the multiple is going to be lower because you're going to have a higher earnings power today.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“I have this problem whenever I read fiction, I'm looking for a little anecdotes of what I can take from that fiction and apply it to the world of investing. I should stop doing that and just enjoy the fiction. But in this case, Proust, who was the monumental French author who wrote In Search of Lost Time, as you said, he wrote, I believe it was in, you'll know more better than I, the fourth or the fifth book within In Search of Lost Time. He said, The real voyage of discovery is not in seeking new landscapes, but in having new eyes. That is so, when I read that, I said, wow, this is Marcel Proust speaking about acid light growth businesses that are reinvesting now, penalizing their earning power now to create a higher intrinsic value later.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“And then there's a tipping point where this S curve formation really takes the exponential component of the S curve takes place. And there's just massive, very, very fast, widespread adoption. And our brains are not wired to think like that. And that's another reason why we can't understand the power of compounding. Like we have to sit down and actually take the calculator out and we can do the math and we can do the math and look at, look, what happens if you put $1 and you'd have $630 today. So you have $630 times your money in 66 years. And that's 10% compounded. So we just don't think like that. I think the same thing is happening with the adoption of electric vehicles.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“It's an evolutionary issue that we all have because evolutionarily our brains are wired to think in linear terms. They're not designed to think in exponential terms, which is how disruptive innovations and technologies take their form as an S-curve. And so there's typically in any disruptive technology, again, going back to the, you can go back to the printing press. You can look at the spinning wheel and the steam engine, the adoption of cable, the adoption of ice vehicles, the adoption of cable, the adoption of streaming. They've all happened within roughly a 20-year period. And by all happen, I mean they've gone to 90% adoption. So typically you start out pretty slowly.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Different. It was fundamentally different because it was a much more efficient process of getting you from point A to point B. And that is the lens from a kind of very high top-down level that I look at Tesla. And electric vehicles in general, they're just a much more efficient way to get you from point A to point B than ice vehicles. And what I mean by that is the cost of ownership and cost per mile is just much lower. And so then it's a question of what are the risks, what are the competitive advantages does Tesla have over the rest of the competition in EV? And how will Tesla survive and thrive against ice vehicles, which to me are going the way of the dinosaur? That is a big assumption that I believe is true because I think that EV adoption is following the two.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Stations. There was very little manufacturing capacity. Kind of sound familiar, right? Today in EV terms. But ice vehicles, Henry Ford disrupted the horse and carriage very quickly within 20 years, which happens to be pretty much the timeframe during which S-curves take formation as a 20 year disruption period with respect to pretty much all these transformational technologies going back to the Gutenberg printing press and the steam engine and the spinning wheel. It's all about 20 years. So my point is that there's all of this skepticism and you had force and carriage competing against this noisy ice vehicle. Both were forms of transportation. Both got you from point A to point B, but one was fundamentally”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Say it's not just a car company, it is very much an EV company, but it's not just a car company. So let me give you the framework. Let me explain the framework that I use at least to rationalize my decision to be invested, whether right or wrong. In the early 1900s, this ice vehicle, Henry Ford comes out in 1908 with the Model T and people were really, really skeptical about the Model T. There was a magazine called Carriage Monthly, and the editor-in-chief of Carriage Monthly, which was like this was a very popular magazine at the time. The editor-in-chief said that human beings had been carried by beasts for thousands of years. Why would the future look any different? Of course, it did. Why were people skeptical while there were no paved roads, supply chains were very limited? There were very few fuel.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“This company still remains misunderstood. But there's a reason why it's up, whatever, 15,000% or so since the IPO. And there is a reason why it continues to go higher over time because there are plenty of people that do get it, right? And that it's just getting more and more concentrated into what I would probably call hands of smart money. But again, I could be wrong. But the market seems to agree that this is something very special.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“It's such an interesting company and it's so misunderstood. And I think it's misunderstood for a few reasons. One, you have this kind of overarching personality where people start to formulate opinions based on what Elon has decided to say during the day. People think about it as a car company. And we can talk about that. think fundamentally that it is and that might seem like this crazy statement, but I'll get into that. And third, it is a most people haven't actually dived in, right? They've not spent the hundreds and hundreds of hours on this company and they haven't really gone through the financials to understand the economics of the business. So there are a few things coming together where I think that”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Well, I wish I were smart, smarter than I, you know, I wish I were smart in the sense that I think that I was late to Tesla. I started looking at the company in 2018 or so that had this huge, huge run-up as it turned profitable in 20 end of 2019. And so I missed this run up. It was interesting to me for a lot of reasons, which I'll get into. But then we had this COVID sell-off in February, or if we had a sell-off in the stock in February 2020, that's when we took our initial position. Our average, I think, is about $41.66 a share. So we've done very well since that time, but I think it's early innings, and I could totally be wrong, but I think that this company is definitely one of the most misunderstood companies that I've seen in my 25 years or so of managing money for others.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“They're screening and they will miss because the kind of any value in that area is going to get competed away. And so I'm more interested in businesses that might look expensive on the surface but actually aren't. And you have to be careful because a lot actually are expensive, right? And there's no margin safety there. But there is Peter Kaufman said there is margin where there's mystery. I think that's so true. There's margin where there's mystery. And so sometimes the best investments are those that are misunderstood and might appear expensive. And they're often quality kinds of businesses. So I gravitate toward quality partly as a result of that influence he had on me, if that makes sense.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Cigar butts in life, then you might be on buying the highest quality asset you can find and maybe paying up for. Somehow my father figured out that the real money is in the best businesses and the higher quality assets. And he instilled that in me very early. And sometimes these things look expensive. And so my point earlier is that he taught me very early not to dismiss something that might look expensive on the surface before you do the deep work and really understand what you're buying and what it's worth. And the problem that a lot of value investors have, I think, is that they all scream. They all screen for low P ratios, high dividend yields, low EV to cash flows, whatever.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“He made most of his money buying quality. Like quality was very, very important, his success. And that's something I've taken from him. And I truly believe the environment in which you grow up dictates the kind of person and mentality you will have in life. So let me just quickly expand on that. If you grow up during the Great Depression, I would presume your focus on saving every petty and looking for cheap, cheap, cheap. And I think I'm just taking a guess that you're going to be much more focused on”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT
“Like I said, people are full of contradictions. And so Ben Graham was, you know, preaches diversification to his students. And yet he's highly concentrated in GEICO personally. So the businesses that my father made money on were, again, the private ones that became public or in deal making. He made money there. But I learned and he made a lot of money. I mean, not relative to the whole pie, but he did very, very well in real estate and in art, incidentally, like really, really well in art. And what people, what I learned from all of that, if I look at his mistakes and successes, I learn a couple things. The first is most of the money he's made by holding on to things, not the momentum trading that he was known for in public equities in number two.”
2024-05-26 · We Study Billionaires · RWH045: Real Success w/ Christopher Tsai · IDENTIFIED FROM THE TRANSCRIPT