YouSaid · the spoken record

Thomas Russo

lines on the record: 94
first: 2022-09-18
most recent: 2022-09-18
sittings or episodes: 1
sources: podcast

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“thank you well i couldn't be more happy to have had the chance to spend more time with you it's been a terrific afternoon and let's make sure we don't wait so long to do it again”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“A person. But if you spend your whole life reading, reading the great works of art, literature, all the stuff that you might do to try to program your mind to absorb and process important things. And then you have something as profound as he was going through and you ignore it because it's just a belief. You're really shortchanging yourself for the kind of work that you do to protect yourself, quite frankly, for the long term. And so I hold that as an interesting memory of what really very, very important people end up doing at some point, which is you make decisions based on informed facts and all the rest. And then with a decent component of belief.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“But there's something about you that just leads me feeling awkward and uncomfortable. And I've struggled with this for a long time. I find I'm losing my appetite and sleeping less well and I'm too old and too rich to lose my appetite not to sleep well. And so I've decided I'm going to have to let you go. I'll do something with the highest of recommendation and with a very large lump sum upon departure. But I just can't put my arms on. I don't know what it is. I thank you for all you've done and I wish you well in what you will do. And that was it. And the beauty of that story is that the man who was as successful as he was listened to his stomach, listened to his gut. There is a whole another layer to what we do in addition to the numbers and the caliber, the business franchise, and all the rest. It's about judging people. And I like the story that Charlie shared with us because you're not going to get something quantitative about your assessment of”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“As a result, it's very interesting because many people might say what is this? How do you feel about something? And I reminded of its Charlie Munger story that took place at the annual meeting of West Coast some years back, many years back, in fact. And Charlie talked about character and about judging character and how it works. He said he was reminded of a friend of his who had the largest private business in LA. And that person's business was run by, had a sales director who had done the best job of any ever for the firm. And at the same time, the founder and the owner of the firm felt uncomfortable with the person. And it was a growing level of discomfort with the person. And he found these losing sleep and he wasn't feeling good. And so he finally had to call the guy in at some point. And he said to the guy, I understand that you've done nothing but extraordinary things for our firm, but we just couldn't be happy with it. And then he lowers the boom and says,”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think I learn through being around Bill and the rest of the people you mentioned just a moment ago and learn through hearing them, in fact, conduct themselves and then hearing after meetings how they would assess the character of the people with whom I met. That seemed to be the one thing that would be most likely to come out in these cases, what do you think about this person? I don't trust them. I don't like them. And it's just that sizing up of the character because that's a first, but it's also defining the question to get right. And I would like that to make sure it conveys well to Chris and to Chris's colleague, Timothy Quinn, who's our director of research and who is the assistant portfolio manager to Central Vic Partners, which is what is the heart of our business. And so Timothy has an extraordinarily important role to play, and he and I and Christopher have that same kind of conversation, and it has to do again with how do we feel?”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Interesting. I could see that you As described, I feel the attachment to, and then also the contribution that comes from this. If we add value, we're adding value to causes that are important, and then we can also support things as well we can. I was told that some point by a person who described the path they took on a measured life as one that in your early years you learn it, your middle years you earn it, and then your later years, you return it. And I sort of feel like I'm moving down that path, and we'll end up being supportive of needy causes. And I think that'll be a source of great satisfaction. But we should probably keep that quiet between ourselves to make those who might want to share in this fund work harder to find out that I have this interest.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“It's purely curiosity and also sort of a desire to make a contribution. But curiosity is just something that is wired in me. And I heard from somebody who happened to visit with my fourth grade teacher back in Wisconsin where I grew up. And they shared a moment about our times together. And she said, God, he was a pain, always asking questions. I think there's an element of that that just continues. I'm curious, and I think that's something I give wide birth to because I'm just interested in a range, a broad range of different options. I'm sure much like you and others as well.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“18, 24 months ago in terms of steps that you take to be absolutely rid of the problems of oil, for example. Well, that's probably given what Germany would let you know, they'd like to have arranged for the coming winter. It's probably more aspirational than implementatable at this moment. And then just to make sure that we go through with a science-based outcomes-based review of what it is that we want to accomplish in order of priority. And the first would be to somehow make sure that we get through these issues with these flashpoints like Taiwan and Ukraine at the moment.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Well, I mean, I think probably the most has to be both the Ukraine and Taiwan, because they both provoke very complicated individuals who ultimately oversee nuclear warheads in some fashion sort of aware of one another, their mutual positions up against the broader world. It's really the scariest aspect. And then beyond that, I guess my comment about how odd it is to have the issues that do come up in this context, it would be to make sure that we don't fall back and expect easier terms from those who have the right to produce, but still demand from them as much as we have been, but just understand that we'll be privy more nuance as we go through this process because it's not nearly so clean as apparent as I think people felt could have been.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“the ESG expectations and expressions of goals and desires run square into the world that we now confront in a very different way than it did even just a year ago. A year ago, we had all sorts of companies stating their intentions to have drastic changes underway. And in the face of the Russian Ukraine war, food sourcing, reliability of food is going to become an issue. Gas and oil and everything else will become an issue as we enter the harder periods of the year. And it's going to push back on the resolve of people who are normally bought into the virtues of sustaining our world because it is the primary question that we have to get right. But it's compromised at this moment by virtue of the harsh conduct that the world's going through with COVID and with the war at some level with inflation reprioritizing where people are spending money. And I do hope that we come back out of this period that we're going through more sober about what demands we should have and then more focus on sort of how we go about it.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“From where I said, and you're right. I mean, I own spirits companies, a beer company, I have a cigarette company, the conversations that we have, the actions that they're taking to have 7% of Heineken's beer now in something called 0.0 No Alcohol Beer. And to celebrate that as an option, choice is what increasingly is being offered. And I think with choice, you just go down the list and you have a chance to choose what you want. And I would venture to say that if you join me on a visit with the management of the companies that we do own, you'd feel as do I that they are marching down a path that's quite different than 30 years ago. And I think it's a predecessor to what will be the next 20 years. We won't slip back on this stuff, the best I can tell. I must say this last line of investigation is an important one. And it's amazing, honestly, to see how”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Billion on this along with four billion dollars of acquisitions in the last month to make sure that they are in the position that they can see, activate on the future that they see.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Than a lot of the I ran late this afternoon for discussion. As I was with the CEO of Philip Morris, it's the first trip back to the United States since COVID, and the extent to which that company has transformed itself. 30% of its customers do not smoke cigarettes. The movement towards an oral pouch or for a non-burning unit, which is called an ICOS, heat not burn. means that they're delivering to consumers who want nicotine, an adjustable dose of that product independent of combustion. And combustion is the source of harm. And they believe that by 2030, there'll be 50-50, and by 2040 there'll be sense no more cigarettes coming from them. And at already 30% of their consumers do not smoke cigarettes. It's a transformation that's been extraordinary. They spent 12”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“The associate level that they are mindful and also desirous of outcomes that allow them to continue to run their businesses. And as I said in that write-up, waste is waste. And when you start with that mindset, you then seek solutions where you can take the waste and then crack it and derive it. So for example, I was with senior management from ABNB, Budweiser, yesterday. They now have, I think, some $2 million of revenue that's involved with their processing of the spent barley, malt, and oats that go into beer. And it's a commercially viable business. And before it was just poured out into the sewer or fed to animals, that they're applying techniques to understand what it is that they once called waste. So they can extract from it something that's no longer called race. It was interesting to me.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Oh, yes. Mark Snyder is all in on sustainability. And then most of the platforms that you would measure best practices by in terms of the environment. And that's a question of pacing and what you ought to put out as the audacious goals for actually deploying capital and getting to work. So I think they put out $5 billion worth of plans for their plastic bottles for Perrier. Just go right down to the old-fashioned packaging for food, the investment in plant-based protein, which they now have a billion dollars worth of business doing. Now many of those check off sort of familiar, comfortable boxes, but they are, I think, truly and deeply felt up and down the organization of 340,000 people who work for Nestle. And so I spend a fair amount of time with them and I come away feeling like that the management level all the way down to”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Just a year ago, because the strident seat bumps up against the political reality. And the world's not going to be happy if Germany freezes.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Especially on the part of all of us who in different areas have causes, but we just as soon mandate be treated differently. And I would say, for example, energy right now is one. But it's very complicated. And Warren's purchase of $62 billion worth of energy shares squarely presents that question because I haven't bought energy shares, but you think about whether you can or you should. And Warren, I think, has clearly said he can and enacted with that assurance. And I have a feeling it has to do with the reality that we may wish it weren't so, but we'll be with oil for a very long time. And especially Warren will be because of his Mid-American energy activities and because of Burlington Northern and a host of other areas, they'll just be confronting energy as a cost of goods sold going forward. I think the world will end up probably a little more nuanced than it would have been, for example, on the issue of energy.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“As you identify, I like strong brands and it just so happens that among the strongest brands are in what areas you just described. And so I am led there by my sense that those businesses are good. I offer a very certain reinvestment rate. They're strong businesses. As far as sort of society's demands from them, I sort of let society make those demands. There's a host of things I probably wouldn't invest in. But I'm sure I invest in things that others wouldn't. For example, energy, Exxon, we don't own it on behalf of clients. What we've realized as a world that the verv with which issues relating to the environment have crept up have run straight into sort of the messiness of European energy requirements. And so I think right at this time we're having some exposure to how complicated the world is.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Warren said, you don't get any extra credit points for degrees of difficulty. And indeed, we can take advantage of that insight and keep our capital and find something else that's more promising. And we're prepared to do that.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Well, it's just one of those things I just said Warren as so often is the case, he has given us the answer, and that is you get no extra credit for degrees of difficulty in investing. So, for example, we have a position in Google. Google has one of the absolute most fabulous cloud businesses. And I've held this position, ongoing position in small position versus a four or five times larger position in Google. I've held the small position in part because of the possibility that Baba would get us into the Chinese cloud business. But, you know, it's not clear. That's become politicizing as well just recently because of this TikTok move by the government. And so many of the things that we are involved with seem to degrade down to political outcome. And those political outcomes seem to break largely in the favor of the domestic participants. In which case, I go back to what”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Just so many areas that define complexity that I realized that we probably took on more need to know decisions that we have to make every day we hold the shares than I realize at the start. And I would say in part because the situation worsened over the course of the holding period. It's just a far more complicated investment.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Of the cloud business, I gather from one of my colleagues that TikTok had, I think it's the case that they had been a user of their cloud, Alibaba's cloud business, but would not be allowed to going forward for a variety of reasons. And then more recently, the dual listing question, the Hong Kong listing versus the requirement of changed accountings, that last one is what gave me the sense of Warren's comment, which is you don't get extra points for degrees of difficulty. And the degrees of difficulty that have surfaced by watching the Chinese government treat capital across a host of different areas, whether it's educational testing, whether it's the casino business, whether at the board level, whether it's the way that the financial service business has been treated. There's so many areas. And lastly, the cloud business with its intrusions.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Well, it's been from almost the first day and financial was the catalyst that caused the drop initially that we were able to put a small position on at the same time in Alibaba. And that was a fairly substantial reorientation of financial service venture that Alibaba profited mightily from. And it promised to have far less profits for them ever since really we entered the investment. But it was that direction was suggested, but it wasn't sure. And it's become more clear and sure over the holding period, which is about a year and a half, I guess, for us. But it's quite possible, it's our belief that the valuation has come down along with the share price and the certainty with which we believe some of the businesses would grow and contribute has raised. And so, for example, that is the cloud business and the politics.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Up until November of last year when we put a small position on it in Alibaba. And we said at the time, we understand that the biggest risk here is one of agency costs. And it's a whole nation that serves as your agent in some ways and their proclivity to pull from you what ought to be yours was just so vastly more profound than we had feared. We marked the position with a sort of be careful stamp because we weren't sure, and that's something that we've learned is even more entrenched in sort of the difficulty of keeping what you create. There's also been in China particularly, there's been massive, massive distractions as a result of real estate, which was built to bust in some ways, as is often the way in that case, that means that the people who build it make an awful lot of money, but the banks that fund it end up socially distributing out.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Yes. Netflix. Yes. Well, it's one of a couple. I mean, we had a position which we started during the turmoil in Alibaba. And Alibaba, the thinking there is they are absolutely positioned in a way that the Chinese consumer cannot do without them in terms of the extensiveness of their command over the e-commerce. And in fact, our Western companies who wish to sell their products to Chinese consumers cannot do without Alibaba. If you're Johnny Walker, you're Jamesons, your Heineken, whatever number of Cartier for sure, that Cartier is so enamored with Alibaba that they have cross shareholdings in some of the e-commerce platforms. And they also co-own pieces of Farfetch, which is one of the auction houses in China. So both of them had come down sharply in price. We hadn't owned any of them, as you said.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Came about as a result of their acquisition of Norwest became apparent. We moved with this batch with Ultra, the same sort of thought process. It was different and it showed a different aspect and we were prepared to move.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“And then when we're terribly in favor, sadly, we're never as smart as we think we are. I do think that it's a deeply held belief. We look for investors who have a similar point of view. That's the number one way to make sure that you have a fighting chance to take advantage of opportunities where near-term gain results in long-term pain and take advantage of the opposite currents in our case. It's you just have to make sure that that's what your investors know that that's what you're setting out to do. And along the way, we'll get it wrong, in which case we'll have to part companies with something. You have to make sure that we guard against the temptation to misthink that just because we said we're going to stay long-term focused means that we have to stay long-term because there will be times when we make a mistake and we're supposed to head for the hills immediately. That wouldn't have been the case with Wells Fargo because we've owned it for a very long time, but we sold fairly soon after the contagion that”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“That's a good one. It's just what I've said, I believe in. I illustrate those beliefs by examples, which I hope convey the plot in some ways. And then I spend time letting my investors know that these are core principles that we intend to stick to and there will be times.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Of unrealized gains. So you should take advantage of that and make sure that what you invest in, as Warren said, allows you to be right once. You come up with a business that's correct. It has capacity to invest management that's long-term minded, that protects, that's protected by boards that are often failing controlled. And they just set about creating something that's disruptively advancing their long-term net asset value on a per share basis, which is how we settle everything up. It could be advancing that tremendously even while reporting trouble in the execution, which is inevitable.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“I think so. And then how do you implement it and how do you live it are both extraordinarily hard challenges? And so I observe it and I recount it and have gone through EW scripts. We own those shares. They delivered a terrific result to us as they went down the path which took advantage of the fact that they knew that their viewers would probably stay put and they could absorb the burden on the reported profits near term that the proper amount of spending would certainly generate because they had in their pocket the votes from a board that was family controlled and that was interested in long-term gains. Now all of this at some level going very back to the start of this afternoon's conversation one of the other things that Warren said to that class in 82 was that you want to never forget that the only break you get as an investor is the non-textation”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“They didn't end up losing any money. They're better off for having the structure that allowed that all to take place and for them to allow to invest in something that has upfront optics that are troubling when there's a sense that the long term is pretty secure. That trade-off is what really gives power to somebody who's bidding against a person who thinks that it's just a really tight spread and be lucky to get by.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Values that still added up to the number that they had to show during the course of that 15-year period, they had to maintain that level. And so when Warren said that he'd protect them against declines that level, he committed his whole balance sheet to making up for the shortfalls because, as I said, the end of each year, there was a mark to market that described what decline in value was for the portfolio, those four stock exchanges that Berkshire insured would collectively remain over $35 billion in value. And it cost his reported earnings for those years and his balance sheet had a huge hole in it that said payables under insurance recovery, which meant that if at any time they wanted to close it out, they would have to settle up without cap them out. Of course, the story ended well, the global markets recovered, Berkshire, you never get to reverse those negative reports back, but in fact they...”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Right, but they can't act long term unless they have the governance and the board support that protects against the visit from an activist or even a takeover person who feels that, who often know that what looks like it's declining, as it was the case in Scripps' newspapers, that old business looked like it was declining at an accelerating rate, they can easily figure out, as can we. There's no miracle on this that the investment spending is really why the decline was taking place and the other business was actually quite flourishing. And thank you very much. I'd say I think the Scripps example is pretty good one. The other one is this one with Berkshire Hathaway taking $5 billion of premium to underwrite for someone who very easily possibly for the wrong reason had to show that $35 billion of equity index”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“And he says that for about three quarters in a row, and he's going to have an activist knocking on his door. And that activist knows that all of those investment spendings have burdened the income. And if they just turned off this picket, they would show a big jump in profitability. It would destroy the asset value of what they built, but they could show more near-term earnings. And it's that trade-off that takes place between what a family-controlled company would do for their own wealth and what a Wall Street council company might do for quarterly boost to reported profits.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Today is still extraordinary. It was built with the money that came from having the capacity to reinvest, they had the people, they had the talent, they had the equipment, and a board who gave the management team a capacity to look really bad. And why that matters is that he has to report for the public company. He has to report, and he will go to the public company and say, we had a great quarter, but the number”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Broadcast network thrive, and they ended up selling it for just somewhere under $10 billion on a business that harnessed all the power of their various media-related assets, but in order to deliver that product had to suffer through the investment spending pressure on earnings that took place. Understand that there are other businesses were earning money along the way. But as those operating losses from the buildout mounted, it looked like the companies' reported net income was going down sharply. It wasn't. Still had the base business and they had losses reported on top of the base business. But at the end of the day, that beginning profitability that was concealed within HCTV ended up being a torrent and it was an extraordinarily high utility. And people who liked the home of the garden couldn't do without that network.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Had so Home and Garden TV network would borrow from some of those internal capacities. And the family said, we'll dedicate those internal capacities to trying to make this work. And you have $150 million. That's it. You can spend that, but when you're done with that, you're done with it. And so they hired two people the first year, seven the next, 15 the next, and 40 the next, the next year they're up to 70 and they're ready to go to market. And they lost exactly $150 million along that path. And so the last days before they switched it on, they passed through their income statement, the last money in that $150. And it opened a great fanfare of success. And fast forward, the newspaper business that suffered through that construction process underwrote the investment, their newspaper business, their TV business all went sort of awry because of the internet. But this digital”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“We think that we can attach ourselves to their long term desire to grow their wealth slowly, but securely, and to be mindful of not having to pay taxes along the way. And so EWScript's publishing company, as they were approached by one of their key executives, who sold out the business of radio, had money and petitioned to them that they permitted him to spend it on a new advertising-supported cable company that would embrace both the house and the garden. He thought it might be called the HGTV, home garden TV network. And the family looked it over and realized that they had capacity. They had a musical station band that played background music for all the different 12 or 14 different TV stations. So they had television ad salespeople, they had mixing equipment, the graphics equipments, everything you needed to power up TV station.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Such an extraordinary monopoly on local stories, and so people had to read those, you know, who was drunk, who was the quarterback of the high school football team, who scored the goal, all that stuff that you gotta have to be a member of. Now, what they didn't do is they didn't make the turn to the internet, and they sort of fell flat-footed on solutions that were truly local but didn't have the ability to cross over it and cure them from most of their other newspapers, but there was a professional there who sold the scripts companies, radio stations, and had proceeds from it, and he had an idea that he'd like to do, and he went to the family that controlled the board as a quick aside, I haven't yet described one of the key components of the model that we try to apply is that the companies that execute best on our behalf tend to be a still run by founding family members.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“With the brands, but the market's just waiting for more spending power and more capacity to deliver inside that market, and that requires the investment. And so we love it when companies say that they're making sizable investments to expand it into their capacity to serve a market, which has proved to be thirsty for their products. Just a different story has to do with EW scripts, which is a newspaper company founded by the Scripps family. It had 100 papers around the country. They're all more profitable than the other one. And it's a business, the newspaper business, daily newspaper business, Monopoly Town businesses, has been one which consumers cannot do without for decades. If you needed to know that, just think back on any of the houses or homes you've lived in your growing up and ask yourself whether or not it was the case that the richest family in any given town you're in was the newspaper family. I don't know that that's the case, but it typically is because they had”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Zealot messianic people buried inside Nestle pulled it to the side and said, we're not going to let you die. And they kept it going. And then it passed some more hurdles that went longer. But today, it's a $5 billion platform, sort of three and a half billion in capsules, which are quite profitable, and the other one and a half is machinery, which they sort of pass through, but has some marginal profits, but they really make the money disposable cartridge. And that's a good example. Another good example would be, I'll share this one with you because it's domestic. The beauty about Nesty, again, is just like Heineken, just like others that we've spoken about. My goal is to tap into the places in the world where the populations are still growing, consumers, income still advancing. So we tend to look for that redeployment of capital, especially closely when it goes into new markets, especially those new markets where we know that there's been a history of interactive.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Yes, well, it is a perfect example of it is espresso, which as you can imagine, meant some degree of hostility when even proposed. It was proposed to be espresso was going to be a premium home delivered premium individual coffee serving kit where there's a cartridge that's so fresh in its release that it will feel like you have it from a real barista, but it's actually coming from your kitchen on a little device that sits next to your orange juice pressed. Anyways, they saw the opportunity. It's very hard. I don't know if any of you have tried to brew home espresso. It's hard to do it because it's a sub-European trick that they get we don't. And this is a great equalizer because it's a great cup that comes out. But it costs them. And they did not break even for 15 years on this. And the product was canceled by the chairman several times along the way.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Just assessing how big the capacity is for them to redeploy capital and how will it secure their belief among the consumers in India that there's no other product than they would rather do or can do without. But you were right on that 20 million. That's an amazing number.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“If the bottles come back instead of 30 cents a bottle, it's three cents a bottle. And you take six of those, it's 18 cents instead of $1.80. And so they will have some substantial competitive advantage. They will be building fresh greenfield route to market and brewery, and then they'll have the benefit of that extra margin that comes from the returnable glass bottles. And they have 60 plus percent of the marketplace. And so mature market cash flows come to support the build out. They have a high rate of return on that spending, which is great because otherwise the money we just sort of, they'd struggle with how to place it if they didn't have this thirsty engine kicking in. We have a very long-term field. What I will spend”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“The Czech Republic is 142 leaders per capita. Heineken has presence in all those markets. 142, the Czech market, they have a presence there. Anyways, we couldn't be happier if we were in a position now where one of our longest standing investments is about to rebirth itself. One other area that they succeeded amazingly through a lot of interesting steps and turns is Brazil, where they sell more Heineken than glass bottles than in any other market in the world. There's a nuance in investing in the beverage industry, which is that if you're large enough in one of the developing emerging markets, you will have the ability to serve that market using recyclable, returnable glass bottles. And if you think about a 30 cent bottle as a part of a six-pack that goes out and never comes back, that's $1.80 of packaging costs in that six-pack.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“And I met who I was with Heidek Management earlier this week, and we were talking about their priorities of where will they reinvest going forward. And they have, as I said, India, they're extraordinarily charged up. I think it's an unusual opportunity. And by measurement, the Indians today consume 1.5 liters of beer per year. They like it. They are becoming more, their consumer disposable income. is growing as a nation and they have a fondness for Kingfisher beer, which is the brand that is at the heart of that company. So I am ecstatic. They will have the capacity to spend hundreds and hundreds of millions of dollars building from a market that has one and a half liters. By contrast, India is China is 38 liters per capita. The US is 60%.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“They had the great fortune of winning 20 percentage points of the Indian market through transactions that took place during the pandemic where they were the best positioned to buy it because they were partners with that business for the prior 25 years. So when they bought it, they nodded 60 plus percent of the business and they can begin to do what we've long wanted India to do, which is to develop a bottled beer, taxed beer, attractively priced beer. that's now under Heineken's watch so that it has all of the management inside and capability of the world's leading brewer and they're going to deliver that to a nation of thirsty drinkers.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Of the 400 million barrels of beer-like liquids consumed each day in Africa, only a hundred of that is bottled, brewed traditionally with the equipment of the West. It's pasteurized. It's bottled. It's taxed. It's marketed. So one-third, actually one-fourth of the market is Western style. And the three quarters that await our total addressable market. The investment case will be made by the mature cash flows that come from the West. Now, that's kind of the way Heineken set up in 1986, and so it played its way through to the day. It kept growing by new countries. It kept growing by different brands. They came up with Heineken 0.0 recently, which is an alcohol-free Heineken, which is number one alcohol beer, free beer in the country. And all the things that made them made them succeed. To just last year, when”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Reviewable head of the business, and our answer to that is no that they do think of us when they make decisions. This is my belief I've met him. I do believe that he thinks about the outside shareholders and the duty that he has to them. And so that checks off the agency cost. The capacity to reinvest is checked off because, you know, you're converting 10% to 90% of the market that's not branded. That same story, by the way, is true of selling beer, Heineken in Africa. the same time I bought the Richemont position, we bought the Heineken position and that belief was that they had the leading beer and they had cash flow from around the world, especially from markets where the growth rates had slowed. And so they had capital and they had presence. They had presence, longstanding presence, much like RT and Ries. They had presence in markets that are 100 years old. And so the trick.”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT
“Which we have in front of us as shareholders, the two most powerful Julie brands in the world. And so that's a position which allows us to then reinvest into making sure that they have the right locations, pricing goods at the right price, coming up with the right innovations because you don't want to seem overly innovative because it's all about traditions. And so we see there the kind of business that I would like to own 100% myself if I had the choice or the ability to. But we don't. And so we then find it to exist in this example in the public company. Now, then the question is, what about Johann Rupert? He's the family heir to the fortune that controls. Will he invest the right amount of money or will he cut corners? Will he do even lacking a big Wall Street package for compensation? Will he nonetheless do the same thing as un”
2022-09-18 · We Study Billionaires · RWH013: Move Slow, Win Big W/ Thomas Russo · IDENTIFIED FROM THE TRANSCRIPT