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Thomas S. Gayner

lines on the record: 128
first: 2021-11-05
most recent: 2021-11-05
sittings or episodes: 1
sources: podcast

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“Well, I was in a discussion last night with an absolutely fascinating person, absolutely high-end quality on every measure you could think about. And that excellence shown through and the discussion took this twist and turn where the distinction between an optimizer and a satisfier came up. And I think there is a tendency among type A people, extraordinarily high accomplishment people, high achievers to really latch onto the idea of optimization And there's nothing wrong with that. But sometimes there can be a hidden, intangible, unquantifiable cost to focusing entirely on optimizations all the time. Einstein says that not everything that counts can be counted and not everything that counts Einstein's smarter to me. Here's a perfect example of it. If I can remember it, not everything that...”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think people are maximizing their multitasking skills when they're listening to something like that on a Zoom call. I don't have the patience or the endurance to do that without fidgeting and looking at something else too.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“We had beer trucks. We had a bant. And that may seem minor, but it speaks to the culture of trying to connect with people in ways that you just cannot do in any other way than be with them and to cultivate this long-term sense of ownership where your time horizons are infinite, eternal, rather than cut into quarterly things. It's just an entirely different way of approaching things and thinking about things. So it doesn't really comport or match up with the typical way that major finance has done. Not right or wrong, just different.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Unfortunately, because the Berkshire meeting was virtual and that the crowd wasn't there, I said, well, we have the opportunity to try to create some center of gravity in Richmond, Virginia, because that convening that worldwide convening of people who are searching for certain values in certain ways of running a business, the world is hungry for that. So let's give them a forum and a venue to do so. So we found a concert arena in Richmond, Virginia that had a roof but open air to try to meet people halfway, the pandemic circumstances were getting better. We had a meeting. My goal was to get 100 out of town professional investors to attend. We ended up with about 150 professional investors. And then between employees associates, local people, we had 500 people at that meeting, and we tried to make it fun.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Get together. So we started doing that, and that became an annual tradition, and we did that year after year after year, what started with six people. By the time you got to the year before last, which was the last in-person meeting that Berkshire had, we had something on the order of 12 or 1300 people at that meeting. And again, same format. We opened it up. We say, thank you for being here. Great to see you. What questions can we answer for you? And there are more Markell shareholders in that room than typically come to Ireland. So it really is cultivating of the community that's out there. And this year”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of Buffett and Bill Rawayne. So we started off with just an absolutely wonderful set of people. And all Steve and I said at the end of that meeting was, you know, we'll be back again next year. And if you know anyone who would be interested, please let them know and”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“He would be a Well, worthy person to talk to, and he's a meaningful teacher to me over many years. We love people like that. I do indeed. Michael Owenstein, whose father was Lewis Loenstein, the professor at Columbia Business School. Exactly. And one of his cousins, I can't remember who, but one wonderful family and sort of the right kind of people, guy named Peter Cayman from Boston. Jonathan Brandt at Rouen Kiniff is one of the panelists that asks Buffett questions at the meeting. His father was a roommate and buddy of...”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, that very first year that we were there, just because I'd been in the investment business for a couple years, there were six people that were willing to sit down and drink coffee and eat bagels with Steve Markell and I. And we didn't have a formal presentation or anything. We just talked and answered their questions. And that went on for maybe two and a half, three hours or something like that. In that room, six people. Chuck Acry was one, who's a legendary investor. I don't know whether he's been on your podcast or not. Wonderful guy.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That just seems like a bad idea and contradictory to how we would really run a business. So we didn't have to think up all these things ourselves. We got to observe the way Buffett did things and we've been going to the Berkshire Annual Meeting since 1991, which had been the first year I joined. Because what I said to Steve at that point was in terms of investors that we wanted to get at Markel, the people who are most likely to understand what we're doing are people who already own Berkshire. So rather than try to get them to come to Richmond and engage, well, if you own Berkshire, you're already qualified. So let's go there and start meeting people.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“In a quarterly time frame, we think about our customers once you're a customer of ours, in whatever business we have, we want to be doing a good enough job for you and delivering enough value and delighting you in such a way that you want to keep doing business with us. So cutting that.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's a lot of layers to that, but I think it makes sense. Think about it this way. If you really are, as I said, the first definition of Markel, the family office, which is a very popular term. These days, that was not a term so much in 1990 when I joined. If you really want shareholders who are going to be there for a long period of time and have a sense of ownership and have a sense of partnership and really wish to be multi-generational investors, well, I run a business and setting aside the investment side, but the Mark Lentures sides of things, in the businesses that we run, which are long-term established businesses, I don't think, and people who run those businesses do not think about their customers.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Him for a job for four years because I just wanted to be part of that. In 1990, Markel did one of their famous double the size of the company deals, where they bought another company that was as large as what they were. Steve had been managing investments by himself. Thought he might like a wingman. Offered me the job at that time. Got the call at that particular time.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“On real basis, but still. But this was an unusual discipline. To stick to the idea of making an underwriting profit, even amidst the ability to earn epic investment returns. So what I saw, and by this time I'm 25 or so from the IPO, is that here's an insurance-based organization which is going to make a dedicated to making an underrated profit. And Steve Markell, who was the vice chairman at the time, was open-minded and had already started making some equity investments with those pennies of underwriting profit out of each dollar. So they had a long-term mentality from day one. So I saw that instantly. It was a light bulb kind of realization. And I wanted to own some of that stock and be connected to the company. So from 86 through 90, four years, Steve Markell became a friend, a client, a business associate, and he might tell the story differently. I might tell it differently depending on the point of view. But I sort of begged.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. Dance with a girl you brang with and keep dancing. But so answering your question about how the Berkshire comparison started to take place. So in 1986, Mark Kell went public. And luck of the draw, I was the analyst at Davenport who was assigned to cover it. So I started covering Markel from the day of the IPO. And what I observed was here was an insurance company that made an underwriting profit. And at that time, in an era of meaningfully higher rates, you didn't really need to be disciplined about your insurance so much because you make so much from interesting income that you could engage in cash flow indirectly. You just wanted to get cash in the door and we'll worry about the claims.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And by the way, that's still a pretty good buy. But there's immense lessons to be learned from that. So the per share value as opposed to the per share price. It's do your math or do your homework about that. And by the way, getting back to Teledyne, which is one of those companies that was on the list of balancing out the insurance and the industrial sides of the business under the leadership of Henry Singleton, Faye Seraphim is a famous money manager who made a lot of his reputation in returns by being right about Teledyne in the early days. And people used to ask seraphim, what's the next Teledyne? In his famous response was The next teledyn is Teledyne. So when you got something right and you're going to have with?”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And I said, no stock could possibly be worth that much. So I made the great mistake of omission and sat there and watched it go from that to the first share we bought was $5,750.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, exactly. He was right. So as a kid, and the stupid things you do as a kid, and I'll defer to the notion that at age 22, you're still a kid. So I'll ask for grace in that sense. So I looked at it. I could tell the numbers were good. And I made the searing mistake. I think the stock was $375 or something like that.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not going anywhere. The head of the department was a gentleman named Joe Antrim. And I read this article. And here's how naive and stupid I was. So it was 1984. I was 22 years old. And I went into Joe's office and I said, hey, Joe, have you ever heard of this guy named Warren Buffet? Had Joe was sort of a crusty fella, and he says, It's Buffett, you idiot, and threw me out. Well, I went to the cutting edge technology of the day, which was the standard poor's tear sheet. And I looked at the Berkshire Hathaway page, and my training is as an accountant. I started out as a CPA with PricewaterhouseCoopers. And I looked at those numbers, and I could tell without resorting to four decimal point calculations. They were good. So I became a Berkshire at that point.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The first time I became aware of Buffett and Berkshire was in 1984 with the Seminole Carol Loomis article in Fortune. And I can remember I worked for a firm called Davenport and Company of Virginia. Wonderful firm, still there today, been in Richmond since 1863. Not”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I guess the first time I really heard it was when I said it to myself looking in the mirror And frankly, that would have happened even before I joined Markell. Really? Because the way that started was.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The detail work and the daily discipline of what it takes to run a very good insurance operation. So if you look at organizations that have successfully been able to balance that tension and have both sides of the house not have one overwhelm the other side, that list is very, very short.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Circumstance that's at play there in that. If you look at insurance companies that are run by investment people, oftentimes that movie didn't end that well. Because investment people have a certain mindset, a certain culture, a certain way of doing things, a certain risk, certain lifestyle they'd like to lead. Insurance people are probably not wired that way. Yes. And most insurance companies are run by people who came up through the discipline of insurance. So they were claims people. They were actuaries. They were sales people, whatever. But the realm of insurance is what they're wired to do and how they understand life. Similarly, and as such, since they don't understand it, I don't think they appreciate it and the discipline and what's required to be really Top league in that requirement.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And a lot of minds have figured that out and known about that. There's some interesting sort of financial history episodes. If you go back to the 1960s or 70s, when conglomerates were sort of the hot money things of the day, many of those had an insurance company as the financial core of the business, either Golf and Western, Teledyne, things like that. Now, I think there's an interesting cultural”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the CIO, in terms of chief investment officer, as opposed to chief information officer, that is exactly the job I had prior to becoming the co-CEO and effectively it is still a job that's in. Now, again, if you're a business historian and you have a sophisticated listening base, if you think about insurance, first off, set it up. Your initial point is correct in that an insurance company collects premiums today. And they're going to make a payment for a claim sometime in the future. So embedded in every single insurance company is an investment operation. And historically, it's not been unusual for insurance companies to make the vast majority, if not The totality of their earnings from what they make on the investments while they're holding that pool of money. That's the case.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Historically largely through insurance products and ensuring things that a lot of other companies choose not to do for a variety of legitimate reasons. But then also we've expanded into a lot of different products and services, industrial products and services over the last 15 years with the growth of Mark Elventure. So we can do anything and everything. And if we can figure out a way to make the customers, the employees better off by doing so, we'll do it”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And well, no insurance company was willing to take that sort of risk. So Sam Markel said, well, I'll start an insurance company to take that risk. Now, I don't know what the chicken and egg was, whether Sam had the chest moves all laid out before he proposed the ordinance. I would not be surprised if he did. But that was really the start and the genesis of the company. And they caught a mega wave in the sense that the automobile, trucks, the highway system, the internate interstate highway system for 30 or 40 years you really had this tailwind of epic growth in the underlying business that they would insure. We could go on and on with this conversation, but I think the hallmark that still matters today is you look at problems, you look at something that somebody needs, you try to be creative, you try to figure out a way to solve it, and that's what Markel does.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he was on the city council there, and Norfolk, Virginia was a place where a lot of veterans would be getting off the boat from World War I, some of whom decided to stay. And it was the early days of the automobile and trucking industry. So Sam Markell had been an insurance agent. There were veterans getting off the boat. They were providing cab rides, which were unregulated, unlicensed nickel aride, jidneys was the name of the term. Of course, accidents ensued, as would be the case in anything like that. And Sam Markel got a law passed that said, if you're going to operate one of these jidneys, you had to have insurance.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. And in fact, not only do a lot of people not know what Markell does, a lot of people don't know how to pronounce it. So it's easy screening technique when somebody asks for Markle. They probably don't know who they're talking to. So yes, Markel, to some degree, I think the shorthand way of describing it in the usage of today's words is we're a family office that happens to be publicly traded. Now, the way that business started was in the 1930s as a specialty insurance company. It's kind of an interesting history in that Sam Markell was in Norfolk, Virginia.”
2021-11-05 · Masters in Business · Thomas S. Gayner on Things That Matter in Markets (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source