YouSaid · the spoken record

John Harris

lines on the record: 57
first: 2021-06-15
most recent: 2021-06-15
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

“I was looking for some career advice and I was lucky through another family member to get a meeting with Michael Steinhardt a long, long time ago when he was still in business. At the end of the conversation, I sort of asked him for some just general advice and he said, just marry the right girl. He said, you can pretty much screw everything else up in life if you get that one decision right. And he was on to something there. I might broaden it a little bit to if you have the right wife and the right parents. But I think if you can just find that bedrock of family support and love, you're sort of ready for anything.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's probably not one person, it's probably my parents and my wife. They've given me what I think is the greatest gift any person can get, which is just truly unconditional love. And the knowledge that no matter what happens in the big brutal world, you can walk through that door every day and somebody's going to love you no matter what. That's a gift that, you know, my wife and I have really tried hard to give to our kids because I just, you know, it's a tough world. Stuff just goes wrong all the time. You make mistakes. Fate can be brutal. And to have a place you can go and people you can go to where you know no matter what happens, they love you. It's like a warm blanket. When I was early in my career,”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Investing is way more. Super smart people and so many super impressive resumes in our business, and there's just not that many great investment records. So what we do is about way more than IQ points, but there are a few temperamental traits that can really take you a long way in markets. And I think you can definitely train for them, accentuate them, improve them. But I think at some level, it's just got to be there. And if it's not, it's hard to teach just from scratch.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Years ago. But if I think of the quantum of opportunity that's available to firms like ours, the alpha that's out there in the markets, there's still more than enough of it for people like us to continue doing what we've done in the past.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“I guess one thing that we feel strongly about is that there still is and always will be a place for active management in the equity markets. And the idea that the market just becomes more and more efficient and it's harder for active managers to earn a fee, earn their right to clients' money. We just don't see that. I think the world changes and the cadence of opportunity can change. I think we've definitely noticed that over time opportunity has become a little more episodic and a little bit less idiosyncratic than it used to be. It's changing a little bit back now. I'd say that trend feels like it reached its apex a few years ago and it's a more idiosyncratic market and a less correlated market today than it was, I'd say two or three.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Say we have a definite bias toward really excellent management teams because they just reduce the uncertainty involved in making inherently deeply uncertain decisions. But I think you can develop enough confidence to make those long-term bets about the future without truly special people in a special culture so long as you have a really special business. And I think there are some businesses that are so good you don't need really special people. I mean, the A number one example in our portfolio in history would be MasterCard. It had different generations of leadership over the period that we owned it. And I think some were definitely better than others. But I wouldn't say that there was a special culture or really awesome management team there, but it's just one of the best businesses the world's ever invented and you didn't need great people.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“and to retain them and to push them to do what they did just a little bit better every year than their competitors did that's a powerful advantage in business it's very hard to quantify it's very qualitative in nature but it's very hard to copy”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“It was just impossible to copy, they were making bottle caps and alarm systems and building control systems that, you know, were not, I don't think, hugely unique, but they just did what they did better than everybody else did. And it really tied back to the people who were running and building the business and the culture that attracted really great people to the business and brought them together and turned one plus one plus one into way more than three and allowed a talented group of people to realize their talent to the fullest. And that really is the story of Fassinol. It's just a business that as a result of a really special culture that the founder Bob Kirlin built was able to attract people who just hustled a little harder than the next guy.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Used to own Fastenol. That's one of the most successful investments our firm ever made. And Fasanol is not so much a scale business as it's just a culture and a hustle business. It's an industrial distribution business, but it's branch-based, built around individual personal selling relationships and just good old-fashioned service, customer service. And that was a business where the value proposition always resonated, I think, particularly for me because I grew up in a business family where we had a family business and it was sort of a conglomerate. And one thing I appreciated, I think, from an early age about their business was it wasn't really doing anything special. You know, it wasn't like they had unique patents or some product somebody else didn't have or some unique scale advantage.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Testing is a sort of scale and route density business the way people know it in the US is typically like lab Corp and Quest where you have a facility that is mostly fixed costs and if you layer enough volume onto your facility it just becomes advantage from a unit cost perspective relative to the competition And it's a great business because you're providing a service that your customer needs. They don't pay a lot for it. The cost of testing your typical product, especially a pharmaceutical product relative to the cost of the actual product, is very low, but the importance of the test is very high. So you have pricing power and also reputation matters right by definition, especially the more important your product is you want to have it tested by someone who's reputable. So if you have a brand and a reputation and”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“A really brilliant way. We have another CEO in the portfolio who I think works a similar story, Gilles Martin at Eurofin Scientific. It was Gilles understood probably earlier than anybody in the world just how good testing and measurement businesses could be. Again, like Mark Leonard just went around and bought a hand over fist before anybody else really realized what he had figured out.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“This very small community of people, Mark would be one of them, the people at Vista Equity, Toma Bravo, a couple other firms. They all came to realize that these businesses weren't just good, they were incredible, and that you could buy a portfolio of them and pay more than people thought was probably reasonable. And if you ran them a certain way, you weren't buying them well, you were just stealing them. And I think a lot of the realization and the insight was around pricing power and profit potential of businesses that are just super, super sticky, especially niche software businesses where not only is the software inherently sticky, but there's just not a lot of competition and you're doing something really important for your user. Mark just understood that at a really early stage before a lot of other people did and capitalized on that insight.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“One for sure is Mark Leonard at Constellation Software, what Mark has accomplished is just remarkable and not just what he's accomplished, but the way he's accomplished it. Mark had a really profound insight, which again gets back to this whole idea of having an open enough mind to appreciate just how good good can be sometimes. Mark was not the only person to have this insight, but there are a few people. Most of them actually, interestingly enough, in private equity as opposed to the public markets in this case, but there was a small community of people who figured out, call it 15, 20 years ago, just how great a business software was. I think the market writ large understood that it was a good business, better than average, maybe way better than average. But there was”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“always a failure of imagination or almost always a failure of imagination and an inability to fully appreciate how good can be. I think a lot of people tend to conceptualize that in a different way, which is to say I should have been willing to pay more. I was pennywise, pound foolish, I got hung up on valuation, whatever it is. Typically that's just code for a failure of imagination. You didn't appreciate how long that business could grow at that rate, how profitable it could get, how much market share it could take. The way we like to say it is just how right right can be sometimes.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Too many we haven't done. Those are all higher on the regrets list than Volkswagen because it's interesting. We took that big loss during what turned out to be an incredibly opportunity-rich environment. And as painful as it is to be down 53% in a year, if you're down 53% in an environment that's incredibly opportunity rich where everywhere you look, there are chances to make three, five, seven, ten times your money over the ensuing two or three years, you need to just like mentally compartmentalize the fact that you are down whatever you were down, forget about it, and just focus on making the best of the opportunities that are in front of you. Because if you do that, the down 53 will be a dismember in a few years and you'll do just fine.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And in the span of five days, I lost a third of my investors' capital. And we were just starting out. We had not really earned the right to take that kind of loss. You don't ever earn the right to take that kind of loss as an investor, but that was an incredibly painful episode. We ended up in 2008 down 53%, I think. It was our first full year of operating the fund. Those were dark days. What's interesting is here we are a bunch of years later, fun has done well. I don't think I'll ever completely forget that episode, but it's definitely receded into the background. And if I go back to that list of regrets we talked about earlier, I never ever thought I would say this, but that's not even on the list. There have been so many profound money making opportunities that we've come across from then to now, a couple of which we've done.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Shares in Volkswagen in proportion to the investment that they had. And it seemed like a really sensible thing to do. And then as often happens in markets, something you never expected happened. And there was a very weird sort of battle for corporate control at Volkswagen that actually has echoes in history, if you go back 100 years to a sort of similar episode that happened in the railroad industry in the United States. But anyway, the result without going into a lot of detail of that battle for control of Volkswagen is that those shares that we shorted went up 10 times in one week.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“We run a few different pools of capital at Rouenconf. We're best known for Sequoia Fund, our mutual fund. We also run a couple private partnerships that are basically structured as hedge funds. And I run one of those. And the way our documents were written, we always have the ability to sell short. And while that was never a core part of what we did, there was a period a long time ago where we found what we thought was really interesting investment. So this is going back to 2007, 2008. It was a period where Porsche had made investment in Volkswagen. And we really liked Porsche's business. And if you were able to hedge out that investment that Porsche had made in Volkswagen, the stub that you owned in Porsche was trading at what we thought was a really attractive price. So we sort of made an exception to our rule where we bought shares in Porsche and then we short”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“And billions of dollars and many, many years to replicate what they've built there. When you build an edifice like that, you earn the right to succeed. And so we like businesses like that. We like things that are hard.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think as a business, if you want a different result than your competitors, you need to do something different. There are a lot of different sources of competitive advantage, but I think one interesting one that we've had success backing over time is we like businesses that are hard, that require a lot of capital or a lot of expertise in order to provide a differentiated user experience because hard is hard to copy, right? You know, I think of something like a United Health. The network and the scale and the data and the systems and the experience that goes into building the engine that they've built there, it's incredibly hard to replicate. I mean, it would take you billions and billions.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“and made big investments in the back end of their marketplace, they could create a much more attractive proposition for both buyer and seller. And as they did that, they basically just made the business better and more attractive to both sides of the market. And as you do that, you get more sellers, you get more buyers, and then you're off to the raisins. So, you know, I think that was a situation where investing really aggressively in a more attractive user proposition brought more users, buyers, and sellers to a marketplace, made it more attractive, and got a flywheel starting that ultimately allowed them to achieve escape velocity and just create a ton of distance between them and their competitors.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“At attractive rates relative to what you are investing in advertising and you got more customers and more customers enabled you to invest more in scale, in selection. And eventually they got to a point where they realized they could also start investing in helping their marketplace to function better. They started with a market where the seller interacted directly with the user and everything was dropshipped. And then they realized, well, that was sort of a suboptimal logistics experience. And if we take it upon ourselves to play a role in the movement of goods around the marketplace, we'll create a better customer experience. It's very expensive thing to do. A lot of people who run a marketplace don't want to do that. They just want to sit back and collect the capital light profit and let the users and the sellers transact between themselves. They realize if they got their hands dirty.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Competition. We love situations like that. Wayfair is, I think, a classic example of that where they were early to a very big market. They built a user proposition that was attractive. And then as it got traction with their user, they just were relentless about reinvesting whatever contribution they got from their existing business to make their future business even better. It was more selection. It was more investment into logistics. The early insight at Wayfair was that they were really insightful Google marketers and they realized that if you were thoughtful about the way you advertised on Google, basically you could acquire customers at low cost. And then if you showed them a really wide selection, they were likely to convert”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Wayfair is an interesting example of a business where a lot of the best businesses, there's a flywheel effect that happens where you delight your user as a result you're able to earn a premium return on your interaction with that user, a high profit margin, a repeat sale, whatever it is that allows you to reinvest in making that proposition for the user even better and as a result more sales, more profits, more investment and the business and the user proposition just gets better and better and better over time. That's a really tough thing to compete with and that's the story of Walmart over four years basically more scale, more efficiency, lower prices, more customers, more scale, more efficiency, lower prices again, again again. That's the recipe for a business that just gets better and better over time and that creates more and more distance between it and its”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Hang on to and hang your hat on and believe in that gives you the confidence to make that bet. I think in a lot of cases for us it's management, it's culture, and then it's a product or a service that is really hard to do or imitate that delights a user.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Those typically tend to be businesses that inspire the confidence that you need to make a bold assumption about what the future holds that might be at odds with the market's assumptions. And ultimately, as an investor, if you want to earn a premium return, I think it was Michael Steinhardt coined the phrase, you have to have a variant perception. The market is really smart. Most of the time, the market is pretty good at sussing out what the future prospects of a business are. And I think the market probably gets better and better and better at it over time. And so it's no small thing to stick a stake in the ground and say, I have a different point of view about what the future of that business holds. Maybe I agree with the market about what it's going to do for the next couple of years, but I think that high rate of growth that you're going to see for the next couple of years actually is going to sustain way longer than the market thinks. That's a bold bet to make. And you need something you can.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“thing we're really attuned to and i think we're a little bit ahead of our time as a firm being attuned to was how important it is to own businesses that really do right by their user people talk about sustainability in business that is just a key element of building a sustainable business that can thrive over long periods of time and where you as an investor can have that confidence to make a truly long-term investment you were you were asking earlier well where do you get the confidence to own a business over the inevitable ups and downs of a 10 year holding period or a 15-year holding period one thing is definitely people i would say another thing is it's just a lot easier to live with businesses that delight their user that's a lot more rare than it sounds but a business that delights its user especially in a way that's really hard to replicate that's an easy thing for us to get behind and”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Really carefully that you know really well and that you've bought pursuant to some kind of just commonsensical framework around valuation. You do that year in, year out, rinse, repeat, rinse, repeat, and a little better every year than you did the last year. The odds of getting a good result are really, really high. Come what may.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“But what we want to do is make a lot of really well-informed and thoughtful decisions every year within a framework of basic common sense. And we want to apply that process and that framework to a lot of different businesses and a lot of different places doing a lot of different things, hopefully with a really healthy dose of creativity around the ideas that we generate. And we know that if we do that well enough for long enough, we're going to get a good result. And what's really important is we're going to get a resilient result. Whatever happens in the world, whether what's happening today keeps happening or whether it changes, whether there's a huge curveball like we saw last year. If you own a concentrated group of high quality businesses run by high quality people that you evaluate.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“And we say this to clients all the time we are very unlikely to be your best single money manager in any given year because there's always going to be the firm or the person that's all in whatever that thing is that's working. And we all know what those things have been. I wish we had just filled the fund with cloud software five years ago, right? We would look like complete geniuses, just like if you went back to 2004 and you had filled your portfolio with Phelps Dodge and Cleveland Cliffs and Mittel Steele and nobody remembers that stuff anymore. But those were the drivers of the GoGo portfolios of the mid-2000s. It was anything that was exposed to the emerging market super cycle. Trends come and go. The world changes. And so we may not be your best manager in any given year because we're not going to be all in those businesses, trends, geographies, whatever that are leading the market.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“the conditions that you've seen over the last 10 or 15 years, they could very well extend for another 10 or 15 years, or they might not. And so one thing that we think a lot about as a firm, and I think increasingly as we've watched the landscape unfold over the last few years, is we really try to be diligent about not playing OneNote. It's just such an unpredictable world. It's so easy to be wrong. Things can change in such surprising and nonlinear ways that I think one way to protect yourself is to just own a lot of different businesses that do a lot of different things in a lot of different places and not be all in a single type, a single business model, a single industry, a single geography. We just like to play a lot of different notes. Now, the one big implication of that preference.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“One thing that's on my mind increasingly is that a lot of what you just talked about, I think, has become the conventional wisdom. And there's a generation today that is driving markets and allocating capital and that is basically behind what you see on your screen every day today that has watched a certain type of business flourish repeatedly has seen a certain type of investment work repeatedly, have seen certain industries drive success both in business and investing. And that has operated from beginning to end against a backdrop of essentially free money. And one thing I know is that the world changes.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Businesses in this digital world just have the ability to get bigger, scale faster, and be more profitable than the leaders of the prior generation. And so I think that's part of what you've seen with the Facebooks and the TSMCs and the Googles and so forth. And trees don't grow to the sky. I think we're very cognizant of that fact. But I think in spots, if you pick your spots very carefully and you do your homework very carefully, you can find situations even with these huge businesses where the market just doesn't fully appreciate how great, great it is and how long duration growth can extend.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, I think it's probably unlikely that the Facebooks or the Taiwan semiconductors are the next 25 times your money open-ended success. But I think what's true of small businesses can also be true of big businesses is the market can still underestimate the quality growth potential and ultimately profit potential of a big business just like it can a small business. And I think one thing we've all learned over the last decade is that in an economy that's based increasingly on human capital rather than physical capital, it's possible to build these massive businesses that can ultimately turn out to be just way bigger and more profitable.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“And those investments are really the story of Rowan Kanif. And all the stupid stuff we did along the way where we bought it, went down and we sold it. You know, and the fullness of time is not terribly consequential.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Have from discipline, you need a basic level of discipline to do what we do well. You have to operate with common sense. You just can't do patently stupid things. But I think once you clear that bar, you can be incredibly well compensated for having an open mind and a healthy sense of imagination. If you look at our 50-year experience, there are probably 10 investments that have driven the vast majority of the returns where we found a really great business run by really great people. We paid a sensible price for it. In some cases, it was a great price. In some cases, it was not demonstrably great when we did it. But the business just really performed. And not only were we right, but right meant really, really, really right. And we made five, seven, ten, twenty, a hundred times our money.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you said a lot of things patience is definitely part of it. A big part of it is the ability to and the ability to maintain your imagination as an investor, it's way easier for people to think about what can go wrong than what can go right. And I think it's very hard to conceptualize not just what can go right, but how right can it go. We do a better job of guessing at what could go wrong than what could go right. I think that's true of the vast majority of investors. There definitely have been some fortunes in our business made by people who are just very, very diligent about thinking about what can go wrong and protecting themselves from it. There's money to be made from that mindset and discipline in our business pays. There's no doubt about that. I've never seen a study done on this or hard numbers, but I bet you reasonably good money that there have been more investing fortunes made from imagination than there.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Things can go right, and sometimes they can go really, really, really right. And capturing a few of those situations over your career as an investor is just way more important than the ones that, you know, the mistakes, the overt mistakes that you make where it goes down 20 or 30 percent you sell it.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“and we had tried to get an allocation in the IPO and we didn't get it. We're like the world's worst Wall Street clients and we never get allocations IPOs. But it was sort of a failed IPO and the day that the company went public, it basically traded for the offer price. And so we were buying it in the aftermarket. And we had all these things we were worried about and I was worried about. And I can't remember what they were because I've tried to purge the whole episode for my mind. Basically, we put one percent of Sequoia Fund into MasterCard. And I think we probably made over 100 times our money on that investment. If we had just put a single percentage point more and held it as we did for, I don't know, well over a decade, the amount of money we would have made is almost hard for me to contemplate. of great businesses teaches you over time is that every so often”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“A wonderful business we own for probably like something on the order of 15 years Google, as you pointed out, 10 years MasterCard. We have made Rwanda NIF over, you know, one thing 50 years gives you the opportunity to do is to screw everything up every which way you can do it and then do it multiple times over and over again. And we've done it all. And I would say it's probably indisputable that the single biggest mistake we ever made is a firm was not buying more MasterCard on the day we bought it after the IPO. I think if you took a poll of our clients, very few of them would point to that. They would all have their episode of where we actually bought something and it went down and it was an embarrassing result. And that was my mistake. It was me in the office with the person who managed Sequoia Fund at the time and I was the analyst on MasterCard.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“hardly ever happens i've done that a couple times too but much more likely is if you're wrong you're going to lose 10 20 30 40 we've had embarrassing situations where it's been more like 50 60 70 as painful as that is it's way way worse to miss the situation where you make five six seven ten twelve times your money i guess emotionally in some cases they don't seem as painful because you didn't actually lose money but opportunity cost is real and it can be enormous in this business i mean again just mathematically your ability to lose money in opportunity cost terms is way way greater than your ability to lose money in actual you know maybe investment it went down owning businesses like a tjx for i think we owned tjx from beginning to end for 20 years fast and all is a business”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think to have a healthier appreciation for how right things can go when they sometimes go right. It's very common in our business to talk prudence, rule number one, don't lose money. Rule number two, don't forget rule number one. Those aren't great rules because as an investor, I have a list of regrets that is literally a mile long and it just gets longer every year. And I have to tell you, there's not a single thing on that list, I don't know, anywhere in the top 20, 30, 40 regrets that involve something we actually did where we lost money. All of them are the things we either didn't do or the businesses that we sold to soon. And it sort of stands to reason because that's the way, I mean, mathematically, that's the way the stock market is set up. You can only lose what you put in.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of time with really dominant competitive positions that you can trust to stay dominant over long stretches. You just don't have to make so many decisions. Instead of buying 15 stocks every year, maybe you only have to buy one or two or three. And it's a lot easier, I think, we think, to be right one or two or three times a year than to have to be right 15 or 20 or 30 times a year. You know, when we say that quality and duration reduce investment risk and reinvestment risk, I think that's what we mean. Because when you have a successful investment, you sell it, you got to find something else to do with the money. I hate to say it because, you know, it doesn't sound terribly confident, I guess, alluring in a client presentation. But every time you sell something and have to make a new investment, it's just another opportunity to be wrong.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it just goes back to the whole idea that this is really hard to do and it just gets harder every year. It's really hard to be right. One way to make the game of trying to make correct predictions about the future a little easier is just to not have to make so many of them. A lot of what we do is effort in the service of trying to minimize the number of questions that we have to answer try to focus on the easier questions rather than the hard ones. And one way to minimize the number of predictions that you have to make and frankly minimize your number of opportunities to be wrong is to own businesses that you can own for a really long time because if you own businesses that have long duration opportunities run by people who you can trust to run them for you over long periods.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Tend to be good ones. And if you're with the wrong people, they tend to be bad ones. So I think a lot of what we perceive as business quality and a lot of what goes into our judgments of what is or is not a quality. Boils down to people and culture. And we get way more comfortable making those assumptions about what the future holds when we're backing people who we like and trust.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Why does quality reduce risk? Well, first of all, the one thing you know when you're in the business of predicting the long-term future, what's going to happen three, four, five, seven, ten years into the future, those are just incredibly hard questions to answer. And I would say experience is definitely helpful in this business. But at the same time, with each passing year, the longer I do this, the less confident I get in my own ability to predict what the future holds. 10 years is just a really long time. And no matter how much homework you do up front, the one thing you know for sure is there are going to be surprises. And I think one thing we found repeatedly over 50 years of experience is that ultimately people run and build businesses. And if you're with the right people and the right teams and the right cultures, the surprise is the inevitable surprise.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I heard someone say this recently, and I really like the way they put it, assuming qualitative equivalence in investing is a dangerous thing. I think that's really true. You can look at two businesses on paper by the numbers and they can look very similar depending on what they do and who's in charge, they can be extremely different enterprises with extremely different future trajectories. So again, the numbers are the easy part. What's behind the numbers is where all the nuances. And I think 30, 40, 50 years ago in our business, you could do paint by numbers and get a very good result. But people are observant. And if simple constructs for success work, they get copied. And eventually paint by numbers doesn't work anymore. And you have to appreciate the nuance behind the numbers if you want to keep getting that successful result as you evaluate those numbers. So quality matters.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“alternative data sets. It means expanding your circle of competence and your ability to look at different types of businesses and business models. It means broadening your aperture to encompass different geographies. It can mean all kinds of things. But in a competitive world, the one thing I'm certain of is you need to get better every year because somebody else is.”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“Reach a point of diminishing returns where you keep hearing the same things over and over and over again. And then you pretty much know you've done all your homework or as much as you can do. I think that's a process that our industry has gotten better and better at over time. And that's the nature of the world, right? We live in a competitive market, in a competitive capitalist economy where everybody gets better at everything every year. And it's frankly not just in business, it's in life. It's in sports. It's in whatever. And so if you want to keep competing in that world at a high level, you have to get better and better and better every year at doing that basic process of understanding businesses and sussing out whether those numbers you see on the page are as good as they look. And that means finding new sources of information, finding different ways of approaching people and cultivating human sources. It means using different”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source
“It means trying to understand a business from every angle, thinking about it the way a long-term business owner would think rather than a hold or a stock. Those are two very different mindsets. I mean, when we talk to executives at companies that we own or invest in, we typically describe our work as the kind of work they would do if they were making an acquisition where you're not approaching whatever you're thinking about from a standpoint of going on dates. You're thinking about getting married. And so we try to talk to everybody we can talk to who understands that business, that industry, how it competes with other businesses, why it's grown in the past, who are the people running the business, what has to happen for it to thrive in the future, what are the risks, what should we be worried about, we'll talk to people, we'll go to trade shows, we'll read whatever we can read, and eventually you tend to”
2021-06-15 · Invest Like the Best · John Harris - Resilience and Imagination - [Invest Like the Best, EP. 230] · IDENTIFIED FROM THE TRANSCRIPT · source