YouSaid · the spoken record

Joe Mansueto

lines on the record: 71
first: 2017-02-07
most recent: 2017-02-07
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Something to travel there. You know, I do some of those, but it's much better to say no. People, if somebody invites me to a board be on a board of directors, you know, it sounds prestigious. It sounds nice, interesting company, but you do the math. It's easier to say no and have your time. So I'm very protective of my time, and I've gotten pretty good at that. And, you know, Warren Buffett's been a great example in that, how he says no. And I think his free calendar has been a big part of his success. And he keeps an open calendar, and he's in demand 100x of what I'm in demand. And I think, you know, I learned from watching him, and I think anybody at any stage in their career should learn to say no, and don't try and satisfy all comers.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you are spot on, Patrick. I think people should learn that really quickly. And I try and tell that to my wife who gets invited to things and to my kids. Learn to say no. Do the things you want to do. Your time is precious. And I think I learned it the hard way. Because, you know, I try and kind of help people out. And all of a sudden, you know, you're going to get pulled in many directions. And then at some point, you're wondering, what the heck am I doing here? And this is not the best use of my time. And then you kind of get pretty good at it. It's not hard. People don't mind. Just say, you know, I've got a full plate. I like what you're doing, but I've got a full plate. I can't really, you know, work with you on that. And people get it. And then you've got your time. And so I say no all the time and, you know, speaking engagements, I get invited to a lot of those. And, you know, do you really want to travel halfway across the country? How much time that takes to prepare?”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“And he said, Oh, I'm happy to talk to your wife, give her my 800 number, I'll talk to her anytime. And, you know, Warren said it well. He said, you know, hey, if you're going to do this anyway, you might as well be on the good side of the ledger in life. And, you know, why not do that if you're going to do it anyway? And it was a no-pressure kind of thing. And so he just called me up and I said, sure, I'd be happy to do it. And that's how it happened.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“So Warren called me up, and I'd gotten to know Warren through the years. I'd sent Warren a letter a long time ago, as I mentioned I covered his firm when I was an analyst. And so, you know, at one point, you know, I'd been going to so many of the Berkshire meetings. And I thought, yeah, I just write him a letter. So I run him a letter. And he was kind enough to write me a nice response back. And that started, you know, a relationship. And he called me up once and said, I have this thing right when he was starting the giving pledge. You know, I have this thing, you know, would you want to sign on? And I said, right on the phone, I said, I have no problem doing that because I know I'm going to give away most of my assets. My, you know, kids will be well taken care of and I'll have excess assets. And I've known that for quite a time. But I may have, you know, to convince my wife, not that she would question it. I think she would question more being public about it. And that was more the bad.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's embarrassing. I go there, and everybody, all the wait staff knows me, and they tend to know my order. And I just like it. I don't have to think where to go. The food is good. People treat me well. And so, again, I tend to go to the same lunch spot. But, you know, the same routine, you know, I get home around the same time, dinner with my family is important to me, try and get to bed early. But yeah, a lot of the same habits. And that gives me pleasure and satisfaction.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“And for 32 years, I'd be getting in here at 8, 8 30, and working all day at Morningstar. I said I've made a transition now where, you know, I'm not coming in all day and I've made that transition to give a little more flexibility and more time to read, to think, reflect. But I'm very much a creature of habit. As I mentioned, I tend to go to the same lunch spot, people who know me. There's a place here in town I go to practically every day. A place called Beatrix North Clark Street is a great place”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“It is right Yeah, I mean, people who know me will tell you I'm a creature of routines, and I think Peter Lynch said it well when he also likes routines. And he says, I don't want to think of what breakfast cereal to eat every morning because I've got other things to think about. And I'm the same way. And so my routine is I get up early. I'm a morning person, 5.15, and I am also a runner. I love running. And running is a big part of who I am staying somewhat decent shape. But I get up and I go run four miles. So I get up early, run four miles, get back, shower, and then my kids get up. I've got three kids. When they were younger, I used to make them breakfast. I don't think I meet their culinary standards, so they have other things that they get. But, you know, spend time with them before they go off to school. And then, you know, my habits are a little different now because I just made a transition at January 1. I'm now executive chairman. So prior to Jan 1,”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“It was pure bluff and we never heard from them again, but it was, you know, it was just a lesson in sticking to your guns, being confident. And if you haven't done anything wrong, you know, why settle and tarnish your reputation even with a settlement? And I just, you just felt so abused where we went through this whole thing. And then, of course, one Spitzer gives you a subpoena. Then the SEC jumps on because they don't know what it is. But if Spitzer is doing it, we should do it too. So you end up spending millions of dollars, all this discovery, all these documents, all these law firms. And it was just such an unpleasant ordeal. And then to get this shakedown, but then I just, I really felt good just saying, you know, we're confident, go ahead, do it. We're not going to settle. And then not having it play out with a lawsuit. I think we just felt vindicated.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“And then you get this kind of shakedown where right before he was going to leave office, I guess the memorable day was we were at a law firm and they said, you know, if you do not settle right now, right now, last chance, we are going to file suit at 9 a.m. tomorrow morning. And you're going to have to defend that. Expensive. Your name's going to be in the press. We are filing suit unless you settle right now. And we said, no, we're not guilty. You know, this comes, it's not a matter of money. We could have settled it and just been, you know, been done. But it was a matter of our reputation and our brand. We don't want to settle something where we weren't guilty. And so he said, no. And we walked out of there. I remember walking out with Don Phillips. And we thought for sure the next morning we were going to get this lawsuit. And they were so convincing. So 9 a.m. the next morning nothing happened.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I think what comes to mind is a time in the early 2000s when Elliot Spitzer was in his heyday and he fired off a subpoena to us. And it was at a time when just getting a subpoena from Spitzer almost implied you were guilty of something. And when I look back at the arrogance of that guy in their department, it was, you know, they sent a subpoena and they say, we know you're guilty. Let's cut to the chase and let's work out a deal right now because you know you're guilty. And it was a pure fishing expedition. And we had to spend millions of dollars to gather all these.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“We have that too Yeah, if you walk around the halls here, you'll see a lot of what we call huddles going on. And even if you're not in software development, you're going to be getting together with your team either daily or multiple times a week and looking at metrics. And there's a dashboard. And then there's new ideas left over from last huddle. And so there's a lot of kind of looking at metrics and this lean six sigma approach is also pervasive throughout the company.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a nice kind of process, and the software world has evolved to this what's called agile. That's the agile development and away from it used to be waterfall where it'd be designed by product managers, designers, given to engineering. They'd work on it for a couple months. You'd have a big, and then QA would test it. Then you have a big bang release every three months, six months. But now firms are releasing some every day. We release every couple of weeks.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's a little both. I mean, we have product managers who'll set a roadmap over a couple years. These are the milestones that we want to accomplish. Then it's up to the squads to figure out how to get there. And so we have squads both for the common elements. So maybe graphs, you know, various components of our software that are used throughout our lineup. And then more that are audience specific, things just for individuals, things for retirement clients. And so we have squads that are more audience focused and more general ones. And so we have, I don't know, we may have 30, 40 squads that are cross-disciplinary. So they'll have product managers, they'll have overseeing them, but they'll have engineers, designers, QA, so maybe 10, 15 people. And then we can release software every couple of weeks. And then they get up, they have showcases in front of the whole company. They show what they've been doing.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think just we, you know, I think we've got a culture of innovation here. We push that down. Innovation is not any one department's responsibility. A lot emanates from our analyst group who are analyzing funds, stocks, trying to find better ways to understand them. And they may come up with metrics, ESG ratings. And so we're always innovating from a research perspective. And then as well as a product perspective, when we develop product, we use the agile method of development. We have many squads. And these squads develop independently. And they'll have what's called an innovation sprint. Well, they'll go off the roadmap. They'll come up with their own ideas and just test those out, things that they want to do, and they have the authority to build in some innovation sprints into their development work.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Shutting down, and people were angry. You know, one guy got up, slammed the door, and it was just, you know, we've only had to lay off people twice in our history here, and both of them were pretty unpalatable things from my perspective that made me never want to get near it again. But to have to pull back from London to set up shop there, go around, do all that work, actually have a draft of the publication. And then we ended up coming back probably a decade later, and now we have a thriving business in the UK. But it pained my heart to have to pull back all those people put in so much work and to have to lay off some of the Londoners there was not a lot of fun.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Know, there was never a kind of make or break moment in our history, thank goodness where the company was on the precipice of disaster that we have grown pretty strongly and tried to finance things pretty conservatively, not to put us in that position. You know, I think the hardest time for me personally though was we expanded into Europe in the early 90s, set up shop in London. We're going to start publishing on funds there. And then we had to get regulated. And then the regulators were merging. We couldn't get approval. We had 30 people there. And it's just burning cash. And we didn't have the authority to publish. And in the meantime, we had a downturn a bit in the US business. We launched a new publication at Cannibalize one of our others, had a little crunch here. That's burning. So I had to go to London, gather everybody in a conference room and tell them we're”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“The drama that he's able to instill in these stories and then just having seen Hamilton the musical, I'm going to read his Hamilton biography. But, you know, I try and read pretty widely, but I try and learn from others. And I love reading in non-fiction I'm probably drawn to. But, you know, one of the things I want to do is I have more free time is read more of the classics. I think one of the in the haste of running a large company and kind of a time crunch, somehow room to read fiction kind of gets crowded out. And so actually Don Phillips here has gone back to school studying the great books, had a good line where, you know, he says you read the classics early in life at school when you don't have any experience. It's good after you've lived a life.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“But it's a wonderful book. And everybody talks a lot about life lessons, the death of his son is very touching. And so I think that's a wonderful book. So, you know, I read a lot of biographies. I'm a big Ron Chernow fan. You know, his biographies of the Warburg family, Rockefeller are just wonderful.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's see, what have I read recently? So the last book I read was Shoe Dog by Phil Knight, which is a great Great story of Nike. And it's a very candid biography, but it's a nice reminder of how precarious it is to start a business. He almost won bankrupt multiple times. I don't know if you've read it.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the thing that always leaps out at me is job hoppers. I get a resume and the person has worked at seven firms each for 18 months. And I'm thinking, why are you going to work here longer than 18 months? And, you know, is it a lack of stickuitiveness? And everyone seems to have a good story. Well, you know, I left there and my boss there went to this company, so I went there, but I just wonder. I don't know, just it's a red flag for me. So somebody who doesn't stick with something, and I like to see people who stick with things.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Who've gone on to success and looked at the Navy seals, what predicts what somebody will get through that training program, this rigorous training program, or how Harvard does it with their admissions. But, you know, typically people who have stuck with something. And so as we're kind of coding the resumes that come to us, maybe you've gone out for something, you get zero points. But if you've done it two years in a row, you get one point. And then if you've done it two years in a row and you've had a position, you've been editor or something, you get another point. And so kind of scoring the resumes that come in, looking for this persistence, and then we're also looking at GPA, quality of the school. And so now we're just starting to kind of mine this and see what is predictive. We've done some other work of people here and what's predictive. But, you know, those in general are some of the things that we look for.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Together an argument, question, probe, analyze data. So I'm really looking for that. And then I'm looking for some kind of demonstrated record of success. There's a lot of bright people who are idle. Don't get a lot done. So I don't care what it's in. You know, it can be in athletics. It can be in your newspaper. It can be grades in school. Something where you've really shown that you've rolled up your sleeves and just engaged, embrace something and had some success, some excitement, some passion, some fire. But we do a lot of analytical things. One of the projects I'm having, the HR team work on now is really, you know, we get a lot of resumes in, but coding all the resumes and looking for these predictive factors. You know, there's a great book that I like grit by Angela Duckwork. There's a really good book. And she talks a lot about persistence as a predictor of people.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“People who just like to learn because the world is constantly changing. We can teach them the investing side. You know, if they've had it, if they found it prior to coming here, that's fantastic, but they don't need it. So I really look for a bright mind. People who know how to reason.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's funny, hiring is one of my passions in business. I really like the subject. The head of our HR will tell you I'm pretty involved in our HR programs here. And I tell my senior team, I think hiring is the single most important thing you do. You know, a business decision, you know, it'll have some short-term impact, but the hiring decisions, bringing in superstars are going to have a really long lasting impact on the business. And so I'm still involved in interviewing people. My senior team is we try and grow talent from within. We have a morningstar development program. We hire last year 150 kids right out of school, college, business school, put them through a two-year rotational program. It's a big part of the culture and how we run the organization. So we spend a lot of time looking at what makes somebody successful here. And so I typically, you know, I like to hire very bright people. I favor liberal arts.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, how do you do acquisitions? How does that work? You know, do you integrate? Do you leave them alone? How do you do business abroad? So travel to Europe, travel to Asia, how does that work? Do you leave them alone? Do you integrate? How do you go public? We won public 2005. How do you become a public company CEO? What's that about? And so learning all of these steps and growing as a leader, I have just found fascinating. So I try and be a student of business. At times I've gone on a board of a bigger company to learn. You know, I was on the board of transunion. A consumer credit firm here in town that was owned by the Pritzkers. Now it's a publicly held entity. But I was on their board because they were a bigger data and information company to see how they were run, learned a lot there. And so I've tried to kind of grow as a leader, expanding my skill set, but I think my basic style as hiring great people and delegating is”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Say my management style is intact and has not changed. You know, it's hire great people surround yourself with great people, really delegate to those people. I manage people as I want to be managed. I'm not a micromanager. I try and hire the best check in with them a lot, understand what's going on, have a lot of dialogue, but really give them autonomy to do what they've been hired to do. And I think I've been that way since the beginning. Frankly, I don't have the time. If I have 10 reports, I don't have time to be running around kind of second guessing everybody. And I just know that people get a lot more job satisfaction if they can make the decisions in their domain. So I think of it like chess. You know, you give up the pawns, but you fight for the kings and queens. And so if you're designing a brochure and you like blue better than red and I like red, blue it is. I'm not going to fight you for that. But there's something.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think buybacks have gotten a bum rap lately when people have tied it to this is managers trying to line their own pocket. When I think buybacks are just super shareholder friendly and a great use of capital as long as the stock is not overvalued.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's inertia, it's legacy, it's people not really understanding kind of how all this works. A lot of people running companies are experts in their field, but they might not understand investing. I think managements who have more of an investing bent or understanding would favor that. You look at Berkshire Hathaway doesn't pay a dividend, right? It's all, and even there he rarely does buybacks. But I think managers who have more of a conviction in their own capital allocation abilities and what makes sense for shareholders. But it's a good question. I do think buybacks make sense, or they may view that their stock is not cheap enough and they're waiting for lower prices and they can't buy it back and they've got excess cash it to option programs and trying to boost the stock but”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“With our buyback program, given that Morningstar stock is not super liquid, there's not a tremendous amount of float out there. We don't have the luxury of trying to time our purchases that finally because the liquidity is just not there. You know, some years we've bought over 100 million, this is on a, you know, we're about a $3 billion market cap, $100 million a stock. And again, if the float is not big, we can't really kind of move in and buy aggressively. And so I view it more as dollar cost averaging as long as that share price is going to be below fair market value. We do tempered a bit if it's greater that more, the bigger the discount, the more aggressive we're going to get. But we can't, I try not to be too clever about trying to time this too finely because liquidity is just not there.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Dividend if the price is reasonable. And so we do a valuation of our stock, just like we do other stocks. And if it's at fair market value or below, then we can buy back shares. And to me, that's better because then shareholders can time when they want to have a taxable event. If I pay a dividend to shareholders, Uncle Sam is going to take a third of that or whatever percentage, and the shareholder has no choice. If I give it back to the shareholder in a repurchase, they can choose not to make that a taxable event and let it ride. And so I think it's a little bit more shareholder friendly if your stock is selling at fair value or below to do a repurchase.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Basis points lower. And so it's, you know, where do you want your profitability to be? And so we can fund all of our organic growth just by calibrating our margin a bit. With the money on our balance sheet, then we can do look at things like acquisitions, dividend, share repurchase. You know, if we can find an acquisition where it furthers our strategic direction. And typically it's a build or buy decision. We know how to build databases. We know how to create software. But if somebody's already built something that we're going to need on our roadmap and it can get us there quicker and we like the people, you know, we'll consider an acquisition. You know, a pretty significant one at the end of the year last year. Pitchbook private equity venture capital database. Wonderful company. So we'll take a look at those. And then any money left over, dividend share repurchase. My preference is repurchase over.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Source of long term value creation is organic growth. Businesses that can grow on their own without having to resort to say acquisitions, just a much healthier growth. There's no integration issues. And so if you can get organic growth, I think that's by far the best. Of course it depends what the project is, what the projected returns are going to be. But we typically have plenty of opportunities because we just stay focused on investors and try and find other adjacent needs to satisfy and there's a lot of needs we can satisfy. So we're always looking at organic growth opportunities. But typically, you know, given where we are today, it doesn't really take cash from our balance sheet to fund those because we have 30% EBITDA margins. And so when we invest in a new opportunity, it's not going to take money from our balance sheet. It's going to mean our EBITDA margin is 200.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I come at it with the mindset of trying to drive long-term value. So I want to build long-term value, and what's the best way to do that? And so you've got a number of choices, you know, obviously the most near and dear is organic growth. And so looking at all of the opportunities we have internally, and typically there's a long list. You know, when we sit down with our teams, there's a long list of investment possibilities. And so to me, that's the best.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Early 2000. You know, I've owned Apple at times, Dell, some of the more techie names that have gone on. And just a lot of names. I might damage my ego if I go through too many of them.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, no, certainly being on the inside and being in a controlling position gave me more confidence to hang on and be content with that as a big portion of my net worth. So yeah, that's certainly true. But still, if you look at a lot of the great private businesses, again, trying to buy in or out of Mars or whatever the company is, even if you're not on the inside, you can just see that these have been built over a long period of time, limiting transaction costs, taxes. If you find the right businesses that continue to grow and the right management teams to get on that up escalator and just stay there, I think there's just a lot of merit to that. And I look back even on the stocks that I've owned over time, you know, I tend to buy well, but the mistakes I've made have been selling too early. You know, I look back at some of the stocks I sold in the 90s.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“To hold good companies for a long period of time and participate in the wealth creation as opposed to jumping around and trying to own based on who the president is, what the economic cycle you think is going to be, what the dollar is, et cetera.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I'm definitely more in the value camp. I mean, I like to try and buy, write, but I also like to try and buy great companies and hang on to them for a long period of time. I think there's a lot to be learned from private business ownership and how that creates wealth. I look at my personal situation and the best investment I've ever made has been Morningstar stock. So it's the biggest source of my wealth. And, you know, I've held Morningstar stock for 32 years. And holding something that long, you know, any period, any point along the way to sell it would have been a mistake. So just said, oh, you know, in 87, looks like there's going to be a crash. I better sell some of my Morningstar. It would have been a bad decision, very short term. But to me, it's very instructive then for my publicly held stock. that you don't want to kind of jump in, jump out.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's right Then you might as well buy an index fund, right? You're going to have a massively diversified portfolio covering every square of the style box. I'm not sure you need active management.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think you have to be careful how you use it. It's meant to be a descriptive tool, it's a framework, as you put it, describing how a manager is invested. It doesn't mean to be prescriptive that you have to fill in every hole. It's perfectly fine to have a hole. We're not saying you have to fill in every corner, but it's a nice shorthand way to understand how a manager is invested, to look at a style box. You'll get a quick sense of the portfolio. It certainly beats looking at all the holdings, trying to plot that out yourself. But it's really not meant to be portfolio construction philosophy that you need to fill in every little square of the style box.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“As the other access, but looking again at the holdings, more of a holdings base than a prospectus objective. But Don really deserves a lot of credit for coming up with that. And that really changed how funds were classified in the industry.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that was Don. Don Phillips came up with that. And I think Don tells the story of writing it on a napkin at a conference and just trying to better describe how managers invest. You know, at the time, when we first classified funds, it was the prospectus objective. So the prospectus would say, okay, this is a growth in income fund, an equity income fund growth fund, whatever. And pretty quickly what we found is what they said on the perspectus and what was in the holdings might be two different stories. So he said, this doesn't make sense. Let's classify funds based on not what they say in the perspectives, but what they're buying. So he took the holdings, and we classified the funds based on what they were actually doing, and that led to the style box with its axes of investment style, is it PE or growth, and then market cap.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“The average manager is, you know, tends to lag a bit because of fees, but the better managers still deliver outsized returns. And so will passive take over the industry? I don't think so. Will it continue to grow a little bit and continue to wash out this middle? I think that's probably right. It might grow by market share, 100 basis points a year, some years a little more, some years a little less. But I think that trend will certainly continue. But I still think there's a strong case to be made for active management.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Trying to mimic those benchmarks, maybe tweak it a little bit, but basically they were closet indexers, index funds charging active fees. So if you look at the industry today, I think of this bell curve. You know, there's the poor managers, this mushy middle, this big part of the normal distribution where there's a lot of average managers charging active fees. And then on the right, you know, you've got true active management people who are really outperforming, doing well deserve active fees. And I think what's happening now, this trend to passive, is this. And it deserves to be washed out. If you're going to deliver index-like performance,”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think those two trends are related. As I mentioned when I started in the industry in the early 80s, it was full of boutiques. As it grew, it's a very profitable industry. You know, big business entered the picture. So all of a sudden, product managers are hired, Harvard MBAs trying to standardize, productize the industry. You know, we need an offering for every square in the style box, and we need consistency. And so what happened is the rise of the closet indexers is how I think of it, that people wanted really the unattainable. They wanted consistently good high performance. And so they don't want to get fired. And so you had managers looking very closely at their benchmarks.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“People largely with their name on the door. It wasn't big business getting into the fun business. And so it was much more people with a defined philosophy. And there were, you know, I think the quality percentage was much higher back then. You got people who are really passionate about investing, and it really wasn't business types running fund complexes. It was people who were really good at investing.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I did a little bit in the early days. I mean, I did some of the early interviews with people like Ralph Wanger at the Acorn Fund, Don Yachman. But pretty quickly, I realized this is a big job. I can't be running the company and doing this. So my first hire was a grade hire. Don Phillips, I hired Don. It was the first fund analyst. He really deserves a ton of credit for building up the analyst team here, building up that editorial, that analyst voice. And with Don It was just, you know, I think I just gave him the Berkshire Hathaway materials and said, read this. But, you know, he was already a fun guy coming in. It already admired Templeton. He had the right instincts coming in. It's not as if I had changed direction with him. So he had the right instincts, but he got inculcated with Warren Buffett, that style of thinking. And the industry was very different back in the early 80s. It was full of boutiques.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“That. So we've had an open architecture help all comers approach. So consequently, you'll find our data, our research on Google, MSN, Yahoo, as well as our clients, T-Row Price, Charles Schwab, Fidelity, you go to those sites. They all have Morningstar data, research, star ratings. So we've tried to be ubiquitous. Wherever investors are, we want to be there. As a little part of it, or if they want to come to us, we'll have a more complete experience. But I think that's been a big part of building that brand, building that presence.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Have typically serve institutions. They don't want to offend the institution. They're primarily giving data to the extent that they give commentary, it's only positive. So we're, I think, pretty unique in the industry in being critical. And that willingness, that confidence to criticize creates a very strong authenticity and trust that I think is at the heart of our brand. So we've always tried to be ubiquitous in the industry. Reverend investors are, we want to be there. So in terms of building the brand. And so we've always had an open architecture philosophy. So Bloomberg, for example, is a very closed architecture. You want Bloomberg, you come, the only place you get it is at that terminal. We've had the opposite. We're here, you know, we're very mission driven. We want to help investors no matter where they are. They use our products fantastic. If they use somebody else's, let's at least be part of that.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, certainly building a brand, building a reputation was pretty paramount in our thinking throughout the history of the company. I think it got more structured and formalized later as how we think about it. But in the beginning, we just tried to create a really authentic product. And a lot of our brand derives from being a very trusted source for independent, unbiased research and advice. And we built that, I think, in a large way because we built up an analyst team. And the analyst team was never told, only, you know, just say good things about a fund. It's give your true unvarnished opinion about a security. And because you're willing to criticize as well as praise, you develop an unusual degree of trust among your readers. The competitors that we”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source
“Bought the thing and then took out an ad, and then my parents paid him back when we got home. But I took out an ad and easily sold it for $250. It was probably worth three or it was worth a lot. I could tell it was way priced totally wrong. And I made a couple hundred dollars as a little kid. And it was, you know, to me like a million dollars. But I just kind of had that sense that, hey, I know from reading all these publications that this is worth X. And you're saying, you know, you want to get out. And so part of it, I don't know, maybe I have a math, I think I'm fairly good in math. And so maybe part of it is a mathematical ability. And then just a confidence in yourself. Arbitrage is really not that hard, right? You know, the difference between A and B. But I think it could be cultivated, but I think there is a kind of a business sense, a common sense that maybe is a bit more.”
2017-02-07 · Invest Like the Best · Joe Mansueto – Lessons From the Founder of Morningstar - [Invest Like the Best, EP.23] · IDENTIFIED FROM THE TRANSCRIPT · source