YouSaid · the spoken record

Tom Gayner

lines on the record: 150
first: 2024-01-23
most recent: 2024-01-23
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 think Buffett told a story once upon a time about the person who's going to really fool him and be able to swindle him out of some money is going to be a guy driving a used car wearing khaki pants being very modest and humble in his bearing and ways but at the same time just be stealing his wallet without buffet noticing”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“It's a bit of a hybrid. So, for instance, myself would be Markel as a whole, which is appropriate. I'm the CEO of the whole thing, so it all matters with different people individually. Number that year might indeed be tied almost exclusively to their business unit, but to the extent they start to accumulate wealth in the form of Marquel shares, then they become more and more tied to the fortunes of the whole group over time.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“If they were anywhere and they were running their own business, they do fine at Markel and they're happy with that kind of mentality and way of doing things.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“It's sort of irrelevant to me in the sense that I've always been at Markel. I always plan to be at Markel. So I was Markel blood. I didn't marry a Markel. But I think of myself as a member of the Markell family and a steward of the organization because it has defined my professional career. And so I want incentive systems that in essence mirror and foster that sort of mindset as much as possible. Some people love that and they're comfortable with it. And that's naturally how they want to operate. And some people chafe and are not happy with it. And generally speaking, those people tend to not be long-term people at Marquel, whereas those who sort of get it and understand it, and it's consistent with the way they would behave.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Basic architecture involved in everybody's compensation, gleam of my own, is multi-year. For instance, I'm personally compensated over a five year rolling average for any incentive compensation. And while the specifics will be different for the CEOs of the different businesses, none of them are compensated heavily on any one year's results. So if you extend time horizons, you get directionally correct information about what's really going on. And what you're really trying to do is foster”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Safety, some level of risk mitigation by virtue of the fact that you've had these things operate autonomously. And that would be a part of my thinking as to why autonomy is a good idea is because you create some fragility when you centralize things. So there's a lot of things we centralize, but some things we don't. And one of the factors we think about is does this increase or decrease risk to centralize it or leave it independently operated?”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, for instance, we live in a world of cyber risk. And among the things that we would do at Markel to deal with cyber risk is we try to be disciplined. We have appropriate cyber professionals who are trying to do their very best to keep us safe and protect us. But also, you know, we have 20 different businesses in addition to the insurance business, all the businesses within the Marquel group operate autonomously and their IT systems are autonomous. And by not unifying them or not linking them, you've created some level of...”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. So there's an example of real life risk and we've laughed about it since, but that's just kind of embedded within me.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Let it go. What is the upside of dealing with it? This is a rental car. If it costs money to fix it, we have it. We're going to be okay. If that guy has a gun, this is not going to end well and it's not worth the damage to the bumper that that guy just inflicted. So we had three people in the car who were processing it differently. But that was my immediate reaction. So there's an example of how I think about risk. In that situation, I was looking at the certain cost of what it was going to cost to get that car fixed versus the uncertainty of who knows who's in that car in front of us and why he behaved in a completely bizarre manner. What other bizarre behaviors is he capable of?”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Think Peter Bernstein defined risk as more things can happen than do happen. And I think that's a great definition of risk. So the thing is, you should think about that all the time. So just this past week, I was in Florida and I was traveling with two colleagues. And it was bizarre. And South Florida has its own world and ecosystem. And we were in a rental car. And we were stopped at a particular spot and we were about to park the car. And this other car comes up and literally rubs the side of our car and hits us in the slow sounding crunch as this guy in this big oversized vehicle just sort of crunched us and kept on going. So I'm in the back seat. And one of my colleagues is at the wheel and he's about to get out and sort of confront the guy who just slow motion crunched us. Well, I said, let it go.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“If you don't have a baseline of trusted institutions, what that means is you have no institutions. You have no institutional authority or legitimacy. And that is not a world you want to live in.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“In retrospect, that was not optimally timed. And there were some things that I wish I hadn't sold as we continue to go down the road. But at the same time, I did fortify our balance sheet and operated from a position of safety. So it wasn't fun, but it was the right thing to do. And confronted with the same facts and circumstances in real time, again, I would do the exact same thing. And if you want to see a movie, that would sort of illustrate, and I'm not claiming this amount of glory or involvement, but that Tom Anx movie Sully where the pilot lands the plane in the LaGuardia, and he was second guessed in the hearings. Why didn't you go to Teeterborough? Well, the decisions he had to make in real time with no possibility of turning back, they were outstanding. They were unbelievable. They can always be second-guessed. But you really shouldn't do that. So it just was a period.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“It was not a fun time. And as a consequence of that, 118 that we put up, I did take about 20% of our equity portfolio chips off the table and sold some positions just because, again, my number one job is to make sure we are always there to answer the bell for the next round of the fight. So I reduced some of our equity exposure as a consequence of what I saw taking place”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“The underwriter who would run our event cancellation book is doing things like Wimbledon in England, the Tokyo Olympics, a wine festival in Napa, a music festival in Tennessee, a fiddler's convention in Kentucky. I mean, weddings all over. It was a well-diversified book of business. But the losses on it were complete and total. So it didn't matter. You use an underwriter thought you were doing a good job because you were diversifying and how could all these risks correlate to one thing? Well, we found out how they could all correlate to one thing, a worldwide global pandemic. So we had big losses in that particular book of business that we recognized in that quarter, as well as many other things. And we reported a 118 that quarter, which is the worst quarter that I think has ever been reported in the history of the Markell organization. And we were operating amidst conditions of uncertainty.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“What mistakes we made through the period of COVID and educational gaps, social development, people's mental health that suffered because of isolation. So all that stuff was going on. Financially, we get to the end of March. It's the end of our first quarter. We have our normal review processes. One of the biggest hits that we took in our insurance business at that particular time. Was event cancellation insurance.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And a number of things. One, if that guy on March 9th was willing to shake my hands, that means that nobody knows anything. The amount of stuff that no one really can be capable of knowing is immense. So don't take anything too seriously when it's told to you by people who are supposedly authoritative because they don't know. And you need to have some degree of filter skepticism about the level of knowledge that somebody actually has when they're asserting something. By the end of that week, things were shut down. You weren't supposed to go out. And it was just a miserable time. Like Charlie, I too am a social person. I like being with people and the isolation that was enforced through that time has immense social costs. And I don't want to second guess the decisions that people made in good faith and to the best of their ability. But I also think in the sense of opportunity cost and mistakes of omission, we have not admitted to ourselves.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Early in the day in March 9th, I got a call and it was from someone who I would label appropriately as a senior government official. And he wanted to have dinner with me. And that was the kind of call off. That person calls you and wants to have dinner. You say yes. So I said yes. And we arranged a particular meeting place. This is March 9th. I'll remember this for the rest of my life. And I got there first. It was a restaurant. And he comes in and he has his hand extended to shake my hand. So March 9th, a senior government official who was in a position to know a lot of stuff that I didn't know that would receive briefings and things, walks into a restaurant and shakes my hand. That was the last hand I shook for probably two years.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“january twenty twenty was when things were just starting to unfold and you saw this news of things that were happening in China but not Richmond, Vir And slowly the encroachment of COVID came closer and closer. Such that by the time March came around, I was actually scheduled to go on a trip to Vietnam, which would have left the US in late February and come back in early March and kept sort of going back and forth that we would go, not go, and finally decided to scrub and not go on the group trip got canceled and everything. That was a game time decision. And that wasn't until the end of February and things getting shut down. I think it was March 13th where I think that was a Friday and that's in Virginia when things kind of shut down.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Classic nature of Munger. Believe me, the man liked people. He liked being with people. He liked eating and drinking and laughing and telling stories and telling jokes. So he drew sustenance from his fellow human being, just like the rest of us do.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And I had the great gift of being able to have some dinners with him along the way. And for instance, in my house right now, if you walk in, there will be a bottle of Santa Margarita Pinot Grigio wine. And there will always be a bottle of that in my house. Because the first time I got to have dinner with him, it was with my friend Chris Davis and myself and Charlie. We ate a restaurant and we sit down and The waiter comes over asking us if we want something to drink. And of course Charlie says yes. And he says, just bring us a bottle of the cheapest white wine you have, it'll be fine. And it was a nice enough restaurant that you do the base rate of what ever kind of wine they had. It would be fine. And it was a bottle that Santa Margarita Pinot Grigio. So I always have that as a marker and a testament in mass. So despite the legendary, I kind of...”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“So that was a gaping hole in my youth that somehow as a full grown adult, I get to have that sensation that I didn't get to have as a kid. And I love it. And that team aspect and the ability of a team to do things, just a very joyful thing. And that helps you endure the idea of being the kid who's picked last or not on the team, the social isolation and distancing that it takes to have that long-term view and stand apart from what the crowd might be saying. Perhaps some of that comes from these youthful experiences that give me a frame of reference to know I can endure this and I love that. And both of them are temporary. Sometimes you're on your own. Sometimes you're with your team. Be aware of it and be able to operate in either environment.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Feel that within the walls of Markel with my teammates who are so skilled at the positions therein, and I get to be the head coach who's not exactly on point. And I'm not the one hitting that ball, but I do get to be the coach of that team. And that's just a very joyful thing. And I think one of the reasons that matters so much to me is that as a kid, I was never on a team. I mean, I grew up on a farm 100 acres, rural area.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Exactly right. I find immense joy in being on the team of people that I'm with at Markel. And it really feels like a team sport to me. And among the things I've read and really studied and tried to internalize everything that John Wooden ever wrote, the UCLA coach. I'm currently infatuated with Nebraska volleyball. And I went to a Nebraska volleyball game a couple of weeks ago. And when you see a game like that unfold and you see the team aspect of the play, the positioning, the constant communication while the ball is in the air, the Libero who is 5'2 among all these six footers because her job is to dive to the floor to get that ball up to her team, to just see a team on display like that fascinates me and I love that aspect of sports.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“But it is so tempting to be at the moment where you're making bigger and bigger numbers and you're minimizing the risk of zeroing out because that's not what's happening right now. What is happening right now is you're making that number super big and that's super fun who wouldn't want to do that. Well, the person who wouldn't want to do that is that person who's at the party. And instead of completely falling into the joy of the party is looking at their watch and thinking, you know, we might want to make a different decision right now. And again, Munger's discipline of thinking backwards, inverting, always inverting, always working with the end in mind. That's just a fundamental component of the way I'm wired.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“disciplined enough or calculating enough to really be a good optimizer. So I try to move from satisfaction to satisfaction to satisfaction to satisfaction and to last long enough where that compounding effect of always being on the field, always being in the game, has created this wonderful compound effect because, again, as Munger said, any number, no matter how big, multiplied by zero is zero.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Yes, it's also because it's that opportunity cost. It's the thing you're not doing. So one of my friends talked about value investors always get the last laugh, but they miss a lot of laughs in the interim. So when the party's rocking and rolling and you're sort of looking at your watch and saying, you know, we better get out of here before the consequences start to show up. You're leaving the party at a suboptimal time. Because the optimal time to do it would be one second before the police show up. My wife is an engineer and I have a lot of friends who are engineer and engineering mindset. And the engineering mindset of optimization is a great thing up to a certain point. There's the point of satisfaction rather than optimization. And I am a satisfier, not an optimizer. I'm not smart enough.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“You're making a spectacular point here. So by every single daily decision, I'm always trying to avoid exactly what you spoke of where you're in such a decimal set of options that the circumstances make the decision for you. I hate that and trying to do every single thing I can to avoid that. So what that means is low leverage. And what that means is not being at a point where you're faced with a very difficult decision and you really don't have many options or whole cards to go to. So everything is designed to not have to be in that circumstance, both for Markel and personally.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And I thought, you know, was the guy stupid or a jerk or trying to joke? And she says, Daddy, he was poor. He was poor. And he was hungry. And she says, my clients are Zen masters of the right now. There is no past. There is no future. He was hungry. He knew if he went into Waffle House and spoke the words of Emil. They would bring it to him. And the consequences of what happened when it came time to pay for that meal were irrelevant to him because he was hungry. That stopped to be cold. And again opened up a new area of things one should have empathy for and empathy about for people who are in circumstances that are less lovely than my own. But I have been given the gifts of being able to afford to think long term. So it would be irresponsible of me not to.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“My oldest daughter is a lawyer, and she was essentially practicing as a public defender kind of practice. And she had done that for a number of years, seven or eight years. And it was time to make a change and do something else because she was a very empathetic person, very caring and very involved in very difficult circumstances day after day after day. And a human being can only take so much of that. So it was her last day, and I decided to celebrate by taking her out to lunch. And so we go out to lunch and we're very lovely place and looking out over some beautiful green hills in Richmond. And I asked her about her last case. And she told me. And she said, well, this guy went into the waffle house and he ordered a meal. Then he had the meal. And when it came time to pay for it, he paid with monopoly money.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Some people do, and some people literally do that, and some people in a sort of meadow way do that. So you're constantly faced with that choice of taking a short-term gain at the expense of the long term or trading, it's deferred gratification. It's the marshmallow test. These are not complicated topics. They are a matter of discipline, thoughtfulness, common sense, long-term perspective. Now that being said, you know, it's easy for me to say these kinds of things because my life is good. I've been gainfully employed. I'm happily married. I was raised in a nuclear family just at advantage, great education, advantage after advantage after advantage after advantage. And I can remember at one point.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“One of the ways that you do that is you say extreme things and reductio ad absurdum. You reduce things to an absurd level. So for instance, Munger, I believe one of the times he says, you want two great weeks in your life, start taking heroin. Have two great weeks, but you'll ruin your life.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Is a gray, murky area. So we'll see. But I think that the environment we've just lived through of essentially 0% rates, that's just weird. There's no fundamental justification for that. And I think we'll look back on it as just a very unusual episode, but we'll be looking back on it. We will not be living through it again for a long time.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Answer to your question writ large of people who did not hit the bid of the ability to issue long-term fixed rate debt. There was a trade-off where they were looking at Even lower short term costs, and they just operated under the assumption that you'd always be able to refinance the loan at a lower rate when it rolled over. And for a whole generation, that has been true. So the idea, and I've been way early on this. 10 years ago, I thought rates were starting to get too low and would have pushed out our maturities, whatnot. Well, tactically, that would have been labeled as a mistake. might well come to be seen that that was just too early and the DMZ between too early and wrong.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Public company that had a market cap of maybe $20 million to it. So I went back to our CFO and I said, here's what we should do. We should buy Eskimo Pie and change the name of Markel to Eskimo Pie. And then we can call people up and say, hey, you want an Eskimo pie bond? Who can say no to wanting an Eskimo pie? Now, needless to say, that was one of those ideas that I walk around the hall with that did not get executed upon, but to your to the point about debt. And we've seen issuances. I mean, the last five or ten years where we've lived through this unbelievable episode of extraordinarily low interest rates putting 30, 50, 100 year debt on the books at those kinds of rates, like my children, they have 30-year mortgages in the twos. That's a good piece of debt to have.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“What's going on? So, next step is I went into our chief financial officer at the time. And I said, You need to call our bankers and see if we can issue anything like this. And he sort of scoffed at me and whatnot. And I said, no, no, you really need to chase this down. So he did, and he called our bankers. And our banker said, well, you know, Walt Disney is a consumer name. It's very well known. Markell, nobody's ever heard of Markell. Half the time they pronounce it Markel. So you guys can't issue something like that. So I sort of walked away. little pouty as I can be. And at that time, there was a company called Eskimo Pie, which makes the chocolate covered desserts. And it had been owned by Reynolds Metals, which was the aluminum company that was headquartered in Richmond. Reynolds had gotten a hold of that company because Eskimo pies are packed in a foil wrapper. And at one point in time, they couldn't pay their bill. And it ended up as part of Reynolds. It was not really a natural part of Reynolds. So they spun it out. And it was this.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, I'll tell you a story about this. And this probably goes back 15 years or so ago. And I can remember one day coming in the office and my normal routine is drink a cup of coffee and read a set of newspapers, one of which is the Wall Street Journal. And there was this article in the Wall Street Journal about the Walt Disney Company that had just issued 100-year debt. And I think it was at five and five-eighths. And I saw that and I said, oh man, I'll bet that they're refinancing something that was a hundred year debt at 5 and 7 eighths that had a five-year call. And I just instantaneously had that thought. And I dug into it, that was almost exactly what they were doing. So if you're Walt Disney and you can issue 100 year debt at those kinds of rates, use all the debt that they will give you. Because really, while the label is debt, that's fixed cost equity. So the labels don't always describe exactly.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And he just liked wine. And his friends were impressed with the fact that he seemed to be accumulating this knowledge about wine and was thoughtful. So he started the rating system basically as a means of communicating with his friends and compared this wine to that wine and like this one a little better than that one and less and assigned the points rating and certain phrases and language that came to be used as the currency for how you discuss wine. And it's a frame of reference kind of exercise. So that's the point about meeting a lot of people and looking at a lot of businesses is you develop this lifelong inventory of frames of reference and points of comparison to judge the next thing that you're looking at. And again, Munger, the lattice work of models and all these multidisciplinary things such that anything you come across, you should have some mental concept.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Do you like the Parker wine ratings? You go in a wine shop and you see something 89, 92, whatever. Well, it's my understanding, and I'm sure you should probably fact check me on this because it's a great story. And I'd like to think it's true. But I know.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, Mark Leonard is a great example of someone who's incredibly thoughtful, who laid out a plan, and you have decades of evidence that he's executed upon it. So that is a guy who has earned the confidence that the marketplace places in him. And also he's in a kind of classic enough gentleman that you get the sensation that he's really not driven by the approval of others quite so much. He is a self-motivated, independent, autonomous thinker. And you don't just have to suspect that's going to be the case because you're looking at a 14-year-old kid. You're looking at somebody who has done it for decades. And again, to your point about having looked at a lot of businesses and talked to a lot of people, that in and of itself becomes a frame of reference for how you make the judgment about the next person that you meet. Do you ever drink wine?”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think it does. And again, there's an adrenaline rush. I mean, addictions happen because there's a moment of positive reinforcement. I mean, you won the bet. Your horse won. Your football team won. You hit the slot. Whatever. So there's a dopamine reinforcement and hit that you get from winning and it disproportionate sizes. It's an outsized return relative to the equity capital that you laid out there. So yeah, that sounds like a fundamentally important component of addictive type substances. And I think people get hooked on the adrenaline and of that. I mean, the phrase deal junkies. And I can think of companies that are run by CEOs that just always seem to be doing the next deal. That's what gets them going and motivates them. And it's important to have some of that drive, but it needs to be balanced. And again, in the right direction.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Internal wiring from the fact that they operate with no debt or very low leverage compared to somebody who operates with a lot of leverage.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And so said, Tell me about this. He says, Well, think about it. If you're 100% equity financed, you are not going to steal money from that business because it's your own money. Crooks don't want to steal their own money. They want to steal somebody else's money. So when you have a structure that has a lot of leverage to it, that is not a statement that that person is a crook, but it is a statement that conditions exist in which a crook would operate, whereas if you have a business that's largely equity financed and it's the person's own capital involved, you have greatly reduced the conditions and the circumstances that would allow a person who is not of integrity to take advantage of that situation. So it's not just the finances. It's the character indication and the till that you get into somebody's”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Businesses with him and he very quickly and succinctly put his finger right on it. He says, you know, if you want to make sure you're not buying a business run by a crook, buy one that doesn't use leverage.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, it was in the early days of Markell Ventures. So Markel obviously started out as an insurance company. It had always been willing to invest in equity securities and be long term. But the next logical step when you're investing in equity securities and you're doing it from the perspective of what is the underlying businesses involved instead of just buying a partial interest in that business through the purchase of publicly traded shares, how about we buy a majority of it or all of it? There were people who were rightly concerned about what it is we knew and what skills we had when we were buying controlling interest in companies that weren't in the insurance business. So Shelby Davis was a wonderful and is a wonderful teacher and mentor and helped me in many ways along the way. And I can remember in the early days having a conversation with about the Kelly Venture.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Today is because he lived 99 years. And many of the things that he talked about and the disciplines he followed had a long enough time to play out that we can see he was obviously right. He was obviously brilliant. Well, there were a lot of people who encountered Charlie Munger at age 37 or 52 or 29 or 60 who didn't just write up a check for all the money they had. Why? Because at that moment in time, It was not as obvious as it is today that the stuff he was saying was right. So, being able to last through difficult episodes and still be in the game is apically important. And that's one of the things a long, successful life will show you”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, the number one Piece is the dimensions of leverage. And we all use some leverage of one sort or another in our lives. And leverage used positively. It's the lever. It's, was it Archimedes that had to give me long enough lever and a fulcrum and I can move the world. I'm butchering that quote, but the sense of the power of a lever has a fundamental aspect of civilization. But too much leverage and being on the wrong end of a lever can wipe you out. So to try to have awareness of what levels of leverage you're operating with in your life and doing the very, very best you can to keep them constrained and within the bounds of where you can be wrong and still answer the bell for the next round of the fight and persist in being durable. Again, one of the reasons we're talking about Charlie Munker.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Being an incrementalist, I think, is pretty helpful. Secondly, take a walk, take some time. Don't feel like you need to do everything immediately. Slow down. It's almost like watching those Bruce Lee movies where the action seems to slow as he's making the steps and things get slow motion in your mind. That's helpful. I don't think there are good rules. I think there are processes and habits and disciplines that you follow consistently over years. And those will serve you well in times of need.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, generally, I'm a pretty methodical person, both in the buying and the selling, so it's fairly dramatic when I would make big decisions rather than a series of small incremental decisions. So in general, I think I'm somewhat protected by the history and the pattern of making small incremental decisions towards a better spot than what I believe I'm in right now. In terms of the big decisions, well, don't make too many of them. So yeah, I can talk about a couple instances of making some big decisions, some of which have worked out, some of which have not worked out so well. But in general.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“It doesn't matter. Exactly right. In the insurance business, we've sold an insurance policy against an auto accident or a house fire or life being lost. So unless you have those triggering events, generally speaking, are pretty limited and say, I want my money, i.e. the premiums back. You can't just do that because you've lost confidence. And insurance business is both typically much less levered. It has much more equity capital relative to the size of the total balance sheet than would be the case in banking. And it is not subject to the same run on the bank risk. So I felt very good about peeing in the insurance business in that I felt confident in the cash flows that we had, which were the way in which we could navigate through the storm.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. So 26 was a painful sale, but it was the right decision. So that is an example of part of the memory of your face being ripped off in the financial crisis. Now, at the same time, there were some positives that I felt. And these were emotional aspects. So for instance, being in the insurance business as compared to being in the banking business is a meaningfully better position to be in because you can't have a run on the bank in the insurance business in the way that if your depositor say, I want my money, you have to give it to them and you have to give it to them on pretty short notice.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT