YouSaid · the spoken record

Guy Spier

lines on the record: 138
first: 2024-08-18
most recent: 2024-08-18
sittings or episodes: 1
sources: podcast

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“Called tulipomania organized by Chris Bloomstrand. John Mill Javek introduced me to him at the Zurich project. I was so grateful John sat me next to him. And the guy is a genius or more of a genius than I am for sure. I can't measure whether he's a genius or not. I just know he's got way more brain power than I do. But he had something in his tulipomania that I think is really, really powerful that you can't really do with more than 30 or 40 people in a room, which is the way Chris described it, bring us your worst idea. Don't bring us your best idea. And what Chris described to me is he meant bring to the group the idea that you most struggle with, that you is giving you the most difficulty, that you're just trying to work it out. And then rather than our talks at Value X are very short. And the idea is that you do the talk two or three questions and then take it to the bar afterwards. Instead, this is one hour seminar style where the present...”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, with difficulty, meaning that the tough choices, and I can just share with you some of the thinking around that. So if you go to the website, you'll see it. But I kind of drew on what I thought the ideas that most resonated for me from those different organizations that I've described. So from Ted, I sort of drew this idea of short talks. And rather than the TED motto at the time was ideas worth sharing, I was like investment ideas worth sharing. Drawing from Davos, the World Economic Forum in Davos, this idea of pulling the group in the mountains in the middle of nowhere effectively not too far away from an international airport, but far away enough that people aren't kind of distracted by other things and from YPO I took confidentiality in speaking from experience and non-solicitation. So you can't go there and sort of like market your wares. So it's got a kind of format to it. But then last year for the first time, I went to something.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“And get kicked out, you'd get to enjoy their company. And so we're now 120 people and happens once a year in clusters and a ski resort. And you've been. You know what it's all about.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Veil and then RAM did value X Middle East and then there's a character called Sophocles Sophoclos and he calls it Value Cypress and I've kind of like have fun with him because I'm like why don't you just call it value X cypress and he's like no it's value cypress then you're not part of the family Sophocles I haven't actually been to value X Cypress yet and there was a guy there is a guy who did value Xakhstan a couple of times And so it seems like the format is a good one. It's one that works. And so we've grown. I didn't want it to grow. We were originally 30 people. It's now as large as 120, which is in a way too many, but it's kind of hard because you don't want to exclude people. Once you're a member of the community, unless you do something like commit mass murder or something, you remember, there's security. You want to be in a community where when people who are way better than you join, you don't.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“It was about creating something that would help me and the other people who participated in it to succeed, to live a better lives. It's been a fun and incredible journey, actually. Really, really fun and incredible journey. I mean, Value X Middle East is value X that happens in Dubai. And actually, the person who runs that who's P. V. Ramanathan, he is the guy who sat down with me in New York and he said, you should join Toastmasters. I think you'd get a lot of benefit out of it. That was like 15 years ago or more, maybe. And I was like, you know what? If that guy tells me I should join Toastmasters, who am I to second guess him? I'm going to just go see what it's all about. And it was a fantastic journey for me. I learned so much at Toastmasters. But value X now, there's value X clusters, which I'd say is the original one. And people came to me and said, hey, I really like this format. Do you mind if I use the name? And I was like, sure, go ahead. So the first one I think was Vitaly Catzlin set up value.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“I was fascinated by organizations like and not long before become a member of this organization called YPO, Young Presidents Organization that has forums. I'd attended the TED conference for the first time and I'd seen what TED had done and I'd attended a TEDx, which is a mini TED conference. So TED Technology Entertainment Design, TEDx Mini TED. I'd been a member of Toastmasters for a while in New York City. I was a member of a chapter called PACE, Toastmasters. And here in Zurich or here in Switzerland, there was the World Economic Forum. And I found all those organizations fascinating. They were all not-for-profit, all kind of community peer group, but very special communities. And so there was some part of me that wanted to explore that for myself, I guess. So that's kind of like the deeper reason of creating value X. But I think that looking back and thinking about it now,”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Or 30 of us all buzzing value investors. And I said, what if we could recreate that here in Zurich? And I remember I said to John, look, let's try it. And hey, if all that happens is that you and I are hanging out talking stocks in clusters with ski resort not far from Zurich, then that's totally fine. So that was the surface level reason. Bring people to Zurich. But around that time, I was also, I guess, fascinated by the creation of communities, communities that help you to succeed in life. And Napoleon Hill talks about, he has a name for it, basically a forum, a group of people that helps you to succeed. And Benjamin Franklin talks about having a group of people that you meet with regularly. They're kind of like help you to think through your problems in life and help you to kind of connect up to what you need in order to succeed in life. So I was fascinated by that.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“A great question. What I think is fun to try and do, and I hope this is the best way to answer it, is to I can easily give the surface level reason, but there may be deeper reasons, which are kind of like worth exploring, at least. If I don't do it with USDIG, I'd have to do it with a psychotherapist. I don't have a psychotherapist currently. So the surface reason is I wanted to move to Zurich side of that was the right place for me. We moved with my family to Zurich, but all of my network was in centered around New York and perhaps a little bit London which are the two places that UK places where I'd studied. And I remember talking to John Miljevik, who's the author of the manual of ideas and saying he'd moved to Zurich a year after me. And I kind of like said, what if we could bring some of these investors? We used to meet at this dinner in a restaurant called Kolbej organized by Shidar Dashti. There'd be 20.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“A very, very good friend here who showed me photographs of the gold bars in his gold bars, in his segregated safe somewhere underground in Zurich. And so it's not like people who love it and people who just can't stand it. And that's true for gold. It's true for crypto. And it's almost like it's impossible to try and have a common language because they see the world so differently. That's what makes the market.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Portfolios would be quite offended, probably by me saying this, so I apologize in advance, but can you really say that you're owning the gold in order to get the best possible, quote, risk adjusted returns? Are you doing it? Because you'll attract a bunch of gold bugs. We love the fact that you own gold at all times. And it gives you something to talk about. It's like gold went up, gold went down, gold this, gold that, gold mine. And that also helps you. If the gold bugs love talking about it, so they don't, it's not just a shiny object that they like looking at. They like to talk about it. They like to talk about the end of currencies and the end of the world and that everything's going to go to Helena Hun basket. But look, we've got our gold. It's fascinating because I know Stig and I don't know the full story, but I know that you guys have had to straddle these divides between people who either hate an asset or love an asset. It seems that especially with gold, there are people the world divides into people who love the asset.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“I mean, the amazing thing about gold, I don't understand it particularly well, but there are a certain proportion of investors, if you just start mentioning, well, different investors, it's something different. For some, it's Bitcoin or crypto, specifically Bitcoin. And they don't want to do it themselves, but they want you to do it for them. So in a way, if you want gold bugs to invest with you and you say, oh yeah, we always keep between 10 and 40% of our portfolio in gold, you've got a whole bunch of people who don't want to buy the gold themselves and they love the fact that you've got the gold. So I think a very interesting question to ask, and it's not often obvious, is this is for the professional investors, is what I'm doing, am I doing it in order to generate returns, or am I doing it in order to gather assets? And the question, and I'm really not sure that I have the answer, and I know that there are some people with gold in their”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Brown shoes, whichever it was. Not to mention the original puksha halfway textile mills. So what's my point? My point is that you can end up with what appears to be a highly concentrated portfolio just because you left it alone and did nothing, basically.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“And that's just the case. That's the difficulty. I don't know how to answer that without kind of creating other problems that we've already talked about, like creating multiple funds or something like that. So it's an unbalanced portfolio in a way the same way that when you were buying into Berkshire Hathaway, there was a certain period where at one point American Express was 40% of the NAV and at another point Apple was a huge proportion of the NAV. So you're also buying into, well, what's fascinating about Berkshire Hathaway is that So many of the Berkshire investments, especially in the private businesses, don't work out at all. But we don't notice them because they're rounding error in comparison to the ones that have worked out, like Mid-American Energy or Burlington Northern, I mean, but who's talked about quick art knives recently or about the pampered chef or various many, many, many businesses that are just like World Book. I'm not sure that World Books doing all that well, but it's okay.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Rebalance. It creates another difficulty, which is the investor coming in says, well, but I'm buying this unbalanced portfolio. I kind of want to start with the balance of each of the 10 positions being the same. I don't want three of them to have grown to be.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's complicated. And Monish is a very driven guy and a very, very unusual wiring that's extremely suited to investing. He's going to do, I can't guarantee that every single one of the thousand different unfoldings of the world that we could have, but in the vast majority of them, he's going to do extraordinarily well, probably in all of them. Obviously, I don't really know. I don't have full foresight and full hindsight. And I'm impressed that you're at five and you want to go to three. What I'd also say is just the pure mathematics of if you own something that compounds a lot in the portfolio, you'll end up having a concentrated portfolio. So what I try to explain to many of my investors is that it's not that I woke up one day and said I want this huge position in Berkshire American Express or BYD. It's that they went up 10x and I didn't sell any and I didn't portfolio.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Decision making out of that, the way monishes in the world sort of like very interesting things will not unfold for you and the people around him. And so picking one's investments, whether it's in corporations, i.e. equity investments or funds, by analyzing the DNA of the people and saying, is this a DNA that I want in my life I think is also a valuable route of analysis, if you like, a dimension that we should keep in mind.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“I know about Chris Hahn, who was a classmate of mine at business school. The drive that Chris Hahn has to generate returns for his investors is something that is just extraordinary to watch from a distance or to be in the same room with. The extraordinary drive, extraordinary focus and attention. And do you want to have that? It comes with certain costs as well, enormous costs in all sorts of ways. We know of investors whose marriages have broken up, all sorts of, maybe they don't have many friends. maybe they have children that are estranged to them. But, you know, what is the DNA of this person and do I, can I, do I want to align with them? I think to go back to Monish, I think that you maybe not consciously, and I hope you don't mind that, I'm coming back to him, you've done some quite a bit of thinking about Monish, who he is in the world, what his life story is, and you like that DNA. You want that DNA in your life. You want that.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“And we did this presentation, and one of the analysts, he was like, you just said, that's such top-down garbage. Say the company, we did a presentation on BYD, and he's like, he's like, and he said, you people don't get that it's the DNA of the CEO and the management team that is key to this investment. And so I think that this kind of analysis of what does he have in his portfolio if we're talking about funds? What does returns? What is his sortino ratio? What's the variance? What's the risk he's taking? What's an objective measure? That's kind of all top down. But then you could go from a different place, which is to say, what is driving this person? What is, in this case, what is Guy Spears' DNA? What does he get up for every day? Why does he get up? Why does he make the decisions that he do? What is he really driving for in life? And is that something I want to have? Am I aligned with that in any way or not? I would tell you that, so if I observe what...”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“And I think it's interesting to explore that. So that's one really interesting area to discuss and will make us better investors. If you own the S&P, you'll get that return. But only if you continue to own it. Maybe the S&P is so impersonal that market wiggles and various other things will convince you to leave the S&P, whereas another investment has a slightly lower return, you will stay with it. And that actually will outweigh the outperformance of the S&P. That's an interesting thing. Another place where I'd go, which is really fascinating for me because it was really brought home to me, I'm not going to mention the name because I'm not sure they'd be happy with it. Conversation with the investment team of an extraordinarily famous investor and we had a summer in town here. I think it's okay to mention his name, a guy called Aaron Zess, former McKinsey guy in between his first and second year at business school did incredible work for us.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Him saying, well, it's a good feeling to know that X million people are going to wake up today and there's going to be an extra little bit of hair on their faces that they're going to get off. And some of them are going to use Gillette razors. And if you would have come to Warren and said, Warren, I can show you an investment that's going to earn you 2% better, but it's in not even like some technology thing that Warren doesn't understand, but a product that Warren doesn't like and use himself, let's say. Should Warren have taken that investment? I don't know what he would have done, but I think there is an element in Warren's investing, which is the way that furnishes your life. And he came up with Bank of America, though he's been selling it down a lot, where he said, I just like the people. He likes Brian Monadan. He's just said it straight. I like Brian. So furnishing that and having those idiocratic reasons. And in your case, what I would want to say is I think there's a lot more to your investment with Monish Pabri than just buying insurance.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“With the people that are the group of people who are running it, the CEO and the people who control that situation. And by contrast, there can be less good investments in terms of pure numbers because they're not cheap, because they don't have an expected IRR. This is great. But there's something really special about that group of people that brings you something in your life. And it doesn't necessarily just have to be that you attend Monisha's annual partnership meeting. It could be just reading those letters, having thinking, well, 10% of my portfolio, whatever it is with Monash, therefore, what would Monish do in this situation? So understanding that that is also an element of why we're making the decisions that we're making is really, really important. Give one example. I was shaving today. I was actually shaving in preparation for this, I decided I wanted a clean face. I often show up. So I'm using a Gillette razor, of course. And I'm thinking of Warren Boffet and his investment in Gillette. And I just remember.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Variants now they could also do it through owning government bonds or they could do it through maybe owning the SP or Berkshire Hathaway but for one reason or another it suits them say to have me with my personality there so they have an investment with me because they want that kind of whatever that brings and that is extraordinarily idiosyncratic to that particular individual and I think that what I think is important to understand is we talked about the symbolic dimension we talked about the mythological dimension. So there's the analysis of is this a cheaper expensive company? What is the moat? Is it growing? Is it not growing? All of those things and then there's do I want to be in a relationship with the group of people who control and run that company? Are these people I want more of in my life or not? They could be extremely good investments that work out extraordinarily well, but you don't actually want a relationship.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think that what comes up for me is you say that, and I think that we don't talk about it. Actually, I don't feel like it's talked about as much, but I think it's a really important part of the decision of any investment decision is that you're creating your environment, and it's strange because these are just bits of paper, it's just an entry in your bank statement, but somehow it creates the environment in which you live. And what I get from the way you're talking is that there's a spice or something that having monash pabre in your portfolio brings you that actually helps you in some way to live better, think more clearly, make better decisions. And I think that that's probably idiosyncratic for many people. So I think that I have a number of investors who have high variance in their lives for various different reasons, and they want to have a bit of low.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Into the pantheon of the gods of investing there with Warren Buffett and Charlie Munger and others of being the world's greatest investor. But I can't force that. And I have to become who I'm going to become. That's not the most important thing. So what those investors really ought to do is realize that they have this myth that they're trying to live by, this myth that all those things I just said. And that's actually not the real scorecard. That's not the real measure of a life. It comes up to me, Clayton Christensen. How will you measure your life? Am I going to really measure my life by a number of the return that I had in my portfolio? I don't think that's a good, I mean, Warren Buffett, he could have been the richest man on the planet, but he's giving money away. He realizes that's not the right measure of his life.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“In order to find out what my destiny actually is. And just to go back to kind of like what you kind of sort of talking around with this investing and saying, oh, yeah, but my risk-adjusted returns are actually really, really good. The myth that those people are living by is somehow if I turn out to be the world's greatest investor or a very, very good investor with a very good track record, therefore I'm a good person, therefore my life on this planet is justified. Therefore, I deserve the respect and adulation of people and society around me. So they desperately want to be that person. And the minute you say, well, actually, the only person who needs and deserves my respect is me. And that requires me to be true to myself. And yes, it would be nice to be a billionaire. It would be nice to have the best track record. It would be nice to go and...”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Right, exactly. So that's something we can never, we ought to never give up. And no matter what returns you could get. Actually, it's a decision, a realization that I came to a long time ago, and I guess I'm just saying the same thing. I just remember a good friend of mine saying, but Guy, aren't you trying to be the best investor in the universe? It's like, no, I'm trying to be the best version of myself. And if that turns out the best version of myself turns out to be an incredible investor, one of the best investors on the planet, then I'll celebrate and I'll be grateful for it. And if I'm not, then that's also okay. There'll be other things that will be good for me. So it's scary. It requires courage. And I actually don't think in comparison to many people I know, I don't think I have that much courage. We actually don't need that much of it to say, I have to give up on what I'd like my destiny to be.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Become and let that be your adventure, if you like. So if we're living in a facade, if we're living in a projection of who we want to be, then we've actually given up our own autonomy. We've given up the most precious thing, which is actually what was written on your birthday card.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Market by 20 percentage points, let's say, but in order to do that, I would stop being Guy Spear. I'd be some distorted version of myself. I'm reasonably sure, or I think I'm 100% sure that that's not worth it. And what's really, really important, I've said this, a really, really important takeaway for me from the launch with Warren Buffett is that he actually is that person. The person who's this incredible investor, he's not trying to be anything different to who he is. He's not waking up saying I need to take more risk or I need to take less risk or the way the relationship with my father resulted that I ended up holding too much cash. The person he is is actually optimized for investing. He didn't have to try to make himself that way. And it was a huge revelation to me because I was like, wow, stop trying to optimize yourself for something that for who you think you want to be and become who you're destined to be.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“If you like, out of the fund and invest it separately, or to create a separate fund. And again, I just didn't want the brain damage and the headache and realized at the time that that would give me a different life path because there would be many investors who choose not to do it. I think that what comes up for me as you say that is it's more important to be authentic and true, forgive me for citing Shakespeare, Blaertes and Hamlet to thine own self be true is more important than saying Yeah, but actually let's just optimize for XYZ marketability and returns because if you give up being true to yourself in a way it's the loss of happiness, it's the loss of one's place in the world because you're no longer you so I think just you know and that goes to so many that goes to so many life decisions so so just going back to if somebody were to lay out for me what I had to do to beat them”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Been managing an onshore and an offshore partnership in two separate vehicles, and it became imperative to me to create this kind of master feeder structure where they were all, it was just one account that we were managing and all of the investment was in that account. And around that time, one of my investors, a lovely, lovely guy who was in the same building as me in Carnegie Hall Tower, he said the same thing. He said, look, guy, I love the way you find these things. I love all of those and I totally get why for family different lifelines being okay in all of them. You also have these positions in places like Berkshire Hathaway, American Express. He said, I just want your best ideas. I don't want those kind of like whatever you want to call them core positions. And if I can't get that, then I will redeem my investment. And he kind of was encouraging me to either take my family money.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Know of that around 2006 I was approached by an American institution and they were sort of following that strategy and they said look we don't want to invest in your fund we're going to take your two best ideas and we'll reward you for the way they perform and the relationship ended during the financial crisis and they didn't lose much money I don't think they lost any money. There were two positions one was a gain one was a loss And I sent the money back to them it was kind of like separately managed account And their compensation they kind of said look we want to compensate you on each position so in theory I could have gotten compensation on the position that was up and I kind of just said what did I learn exactly to your point I just couldn't manage those positions in the same way as I did when it was all inside one portfolio and I realized it became really important to me to just manage one portfolio and actually at that time I”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“In this way, if you are diversified in as few as 10 sort of like very asymmetric outcome type things, unknown and unknowable, but huge payoffs if it works out, I guess I'm describing heads I win, tails I don't lose much. If you have 10 of those, you should do all right, even though you'll have a pretty high error rate. And so maybe when you're young, not taking a risk is in a way the biggest risk of all. And so I've actually have exhorted younger people, people in their 20s, like, you must take risks. You'll regret it. Don't be the guy who doesn't take risks till he's 40 and then starts taking risks when he can't recover from them. So that's a long way of saying, I really don't know if just to go back to your question, the investor says, yeah, but I've taken less risk in my portfolio and then they'll show they'll maybe come with calculations like variance or sortino ratio or drawdowns. And there's no real way of deciding whether.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“It's the day after, and you've got no data. And that is complete unknown and unknowable, if you like. You have no prior data. You have no prior experience. This is a new event. And what do you do? And now I'm being rambly. I'm not sure. Why was that important to me? Because risk is subjective and we only discover afterwards what it actually was. And then what I would also add is two thoughts that come to my mind on taking risk. I actually think that I've been extremely suboptimal in terms of taking risk. So first of all, when you're in your 20s, you should take a lot of risks, not with your life, but career risks, financial risks, because you have lots of time to recover from them. So it is suboptimal when you are young not to go to work for that startup, not to invest in that speculative stock. Because when you take a risk and it works out, you win, and when it doesn't work out, there's an enormous learning opportunity. And I think that Monish does in many ways run his portfolio.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Actually, a name that comes to mind is just an incredible guy. His name is Richard Zeckhauser, and he's a very famous, I don't know if he's famous, but he's a very, very good bridge player, a world-class bridge player. But he gives a course. We used to give a course at Harvard on investing. And he's got this article called Investing in the Unknown Unknowable. And what do you do when there are no data and there's no way to evaluate? First of all, it makes the distinction between risk and uncertainty. So you can have a variance, you can have an asset where you can measure what its variance is and the way in which it moves around. And so you can say, well, this asset's moving around in this way. And it's within relatively well-defined government bonds would be an example of that, of AAA rated countries. And then you have what's going to turn out in the world after 9-11. And two planes have hit the World Trade Towers.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Listeners here will understand extremely well. People say, Well, how can you have such a concentrated position in that very, very big company? And that is a huge risk. And I will say to them, well, if you study the businesses and you understand what's going on inside the organization, then you'll realize that it's perhaps the least risky position in my portfolio. And they just cannot see it. They cannot see it. And so how do you have a conversation about that? Myron Charles would say, let's just look at the variance. And that's not a very good measure. And then we just, or you can just agree to disagree and say, and I'll talk about things like I want to believe that the business that I'm invested in would survive the apocalypse or an asteroid hitting the earth or some major, major event. But how do I actually know? I kind of say, well, I think Coca-Cola will survive on the other side of such a major event. Do I really know? I don't really know. And it's like these things are such one-off things.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Upon by all these fundamental investors who say that's just not a measure of risk. But once you get beyond that, finding something that you and I agree is the same in terms of risk is extraordinarily difficult. And I don't have any good answers. I think that Myron Scholz and I can't remember as the other guy, they struggled with the really difficult question. How do we get an objective measure, an objective understanding? I don't think that there is one. We're all trying to take less risk in our portfolio relative to the returns that we expect to get. And once we move away from a very, very imperfect measure, who's to decide what is more risk and what is less risk? I really genuinely believe that I didn't have much risk in my horsehead position until it blew up on me and then I realized how much risk I had. And there's an argument people will look at me and I will say, I mean, a fascinating one is Berkshire Hathaway, which many”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And so what is risk? And we can all say, I think that most of the world, the people in the world that we live in understand that Myron Charles capital asset pricing model risk is approximated by variance is we can throw that out the window. But for what it's worth, the reason why Myron and Cholls picked that, I wasn't in the room when they picked it, but they needed something that was scientifically objective or objective period. And what they were able to do was, so I think that they wouldn't say that that is a good approximation of risk. They'd say we need an approximation of risk. We need an approximation of risk that we can all agree upon and that nobody's going to argue with us on. And that everybody can measure the variance of an asset or the price variance of an asset. So that was why they did it. They were not saying that it was great. They've since been dumped.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Thought that was a great analogy that you put there, and nobody's made that before. And I just want to pose on that before you actually ask the question because I think it's worth it if you haven't said it before. So we all know everybody thinks they're above average driver and there are many tests that show that. And if you think that Stig and I are immune to that, we're not. We also feel like we're above average drivers. And so why would that not apply in the world of investing? Every investor, especially those of professional investors, think they're above average investors.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Or his makeup is far more consistent with the possibility of having very, very significant outperformance. But it comes at this cost of the tail on the downside is that, I mean, the evaluation of the downside risk in a portfolio that Monish runs would be different in my case, I would see it differently to the way he sees it. But that's why he and I are different. Yeah, am I answering the question?”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Good, but I'm not going to send you my money for that meager outperformance. I think I can do better. Or I know people, somebody I know who's got a significant investment from the Graham family that used to run the Washington Post. Would I love to have those people look me up and say, oh, we need to be invested with Guy Spear? Of course I would. But the honesty and the good steward of capital in a congruent and consistent and way is far more important than lodging for that stuff. I mean, obviously, I spend a lot of time talking to Monish Pabrai. He's a very, very different mental makeup to me. I think that what's key there is that I know that on some level I'm tapping into the core of who I am by saying that Manish Pabrai could not say those words. He is a very, very different person with a very, very different experience of the world and of his reality. And so I think that actually his behavior”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“That this came up to me. So when you understand this very, anybody who's been to the Berkshire Hathaway meeting understands this very well. We all know, those of us who are kind of like the die-hard faithful, that the Berkshire Hathaway meeting is about so much more than just figuring out how to become better investors. We become better humans and we live better lives as a result. So people say, well, you could have just avoided all this effort pretty much and invested in the S&P. And my answer to them is the S&P is a pretty impersonal thing. And I'm not sure that if I'd been invested in the S&P, if I would have stayed in equities. So we have to be aware that what we invest in and the decisions we make then have an influence back on ourselves. So I understand that there are many people who won't want to invest with me. And I get emails and letters all the time. And people say, hey, guy, I've reviewed your fund. And it all looks...”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Thousand replays, I'm going to have satisfactory outcomes in both. And even if some genius who sees the future is yelling at me, no, no, guy, but if you follow the strategy in all thousand versions of the way the world unfolds, you'll outperform in all of them. It's no good because I need to know that and I need to be comfortable with that, not them. So that's a long way of saying that I'm willing to be truthful and honest about the possibility that I may underperform and that may be the story of the rest of my investing career. And what my job is to be honest about that. And I'm in the extraordinarily fortunate and lucky position that if that is the outcome, I'm still okay in my life. I'm still okay doing what I'm doing, if you like. I will still have been a good steward of that family nest egg because I'll still be way out performing what we would have had if we would have been in some kind of fixed income securities. I would also add to”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“I kind of came to the conclusion that I need to do what I believe is right for my investors as a steward of their capital. That's the most important thing for me, even if somebody's yelling at me who's knowledgeable and saying, well, if you do that, you'll underperform. I cannot give that up in order to launch for some kind of outperformance. And so I think that what comes down to me is if I was, well, sorry, I'm going to repeat myself because I'm kind of thinking aloud, being a trusted steward of my investor's capital and acting in a way that is consistent with my personality and my best understanding of what I should be doing with my investors' capital is more important than outperforming. And yes, I would like to outperform, but if I have to choose between the two, I'll choose that because in a way, if I behave that way of those...”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Me, and especially the first group, none of them had exposure to equities, suddenly all of them had exposure to equities. But for a number of other families as well. So I actually don't know if you saw my most recent letter. And it was really scary for me to say it, but I felt like I had to say it. So what if right now, if somebody came to me, if God were to say to me and say, Guy, in order to outperform significantly, you're going to have to massively change your strategy and you're going to have to do all these different things. Would I do it? I kind of said actually I wouldn't because I don't want to do things that I don't understand. I don't want to do things that are not within the grain of my personality. That would be a, well, first of all, I don't think it's likely to work out. It would be likely to work out if I were to take such a hypothetical decision. And I also wouldn't sleep very well and I wouldn't be a congruent person in the world. I wouldn't be aligned.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“It is. So if you take the particular provenance of Aquamarine Fund with this kind of like investment from friends and family, I take the hit at the beginning that I had a huge amount of cash and I was making very, very tiny investments. But then I also get to take the benefit of the fact that I have performed, I think, a very, very powerful role or a transformation role, I would argue, in my own family, in that the single decision effectively to move from fixed income portfolio to an equities portfolio and to get into some of the right equities, but it might have just been the S&P has been transformational because the difference in return between bonds and stocks is way more than my 50 or 60 basis points. It's a way, way high number. And so I kind of come back to saying, I've been a steward of the capital of the people who've entrusted it.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“The first time when that question came up for me was when I'd written my book and I'd gone, I'd been invited by Sarab Madan to give a talk at Google Authors at Google, I was super nervous and excited. I went and gave my talk. Google full of very smart engineers. An engineer says, look, you seem your results that you've put up show that you've outperformed the S&P. How do you know that it's not luck? And how do you know that it'll continue? And the honest answer, which I gave was, I don't know that it's not luck. It could be luck. How on earth should I know? I have one individual. We don't have enough data points in a way we'll never have enough data points. And of course, the stress and the pressure that somebody in those shoes may well find themselves in is that what if it's actually luck and what if actually my destiny is going to turn around next year and now I'm going to, if I outperform for the last five years, I'm now going to underperform for the next five years or 10 years or however long.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“And to wow, I've outperformed the SP by this minuscule sliver. And I really wish I had better performance. You know, that's also being honest and truthful. And then the adventure begins.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“Could have had the courage, which he did have, to point out what he saw, and eventually got him fired from the university he was teaching at. But he's on an adventure, an incredible adventure. And another guy that I've been tuned into recently is somebody called Gad Sad, who's written a book called The Parasitic Mind. And he's actually an evolutionary psychologist. He's got some other books that I really want to read about the evolutionary basis of marketing, marketing within an understanding of our evolutionary psychology. But he's got a book out called The Parasitic Mind, and he's talking some very, very unpleasant truths in the Canadian environment. And he's got the courage to say it. But it actually starts with me having the courage to say, wow, you have an issue. It's called ADHD. So start understanding yourself. And then even better to start talking about it to the world or somebody who says, wow, I have a problem with alcohol. I need to pay attention to that. Or wow, I'm arguing with my wife a lot. I need to pay attention to that.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“An opportunity to say later if you're living a boring life or then you're probably not telling the truth and this beautiful phrase by Jordan Peterson, if you want an adventure, tell the truth. And when we tell the truth, that's where everything starts. Everything starts when we start tearing the truth. The truth is often extremely painful and we don't want to own up to it and we don't want to see it because we'd rather stick our heads in the sand. I tell you a few people that I think in the political world that we are in today are kind of truth tellers. John Alcan has talked about this. He's talking about finding truth tellers in organizations, people who are willing to speak the truth as they see it without regard to the consequences. I think Jordan Peterson is one of those people. He could have kept his head down as a Canadian academic and not told the truth of what he saw around him.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT
“That's just part of my story. And we're kind of dumb if we don't pay attention to that. One of the things that comes up all the time when we see people making investment moves is that the investment move is taken out of context from that person's financial background. And you just can't do it. You have to take into account all these things that are hidden from you when you look at whatever move it was. And yeah, in my case, for some reason early enough, even before I'd met Monish Pabrai and even before I had read these books like Power vs. Force and the Mahatma Gandhi autobiography, I wanted to be truthful and honest. And that was more important to me than trying to present myself in the best possible light, if you like. And a thought comes up for me, which I hope is not a kind of a rabbit hole, but I'm going to say it now. I would have maybe found it.”
2024-08-18 · We Study Billionaires · TIP653: Track Record and Risk w/ Guy Spier · IDENTIFIED FROM THE TRANSCRIPT