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

“We're in this storm, and I just don't know the dimensions of this storm. And this storm can get worse. So as painful as it is to me to take this loss, which was manageable inside the context of a portfolio. But just, I hate losing, and that was clearly a loss. I decided to sell it. Now that proved to be a pretty darn good decision because it went a lot lower. Before it stopped going down.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, I've mentioned my partner, Mike Keaton. Mike has a great saying. He says, you know what it feels like when you're making a mistake? Feels great. If it didn't feel good, you wouldn't be doing it. So when I think about 06 or 07 or led up to the Great Financial Crisis, I was making mistakes. I was absolutely doing that. And I can remember, for instance, we were not large shareholders of CityCorp, but we did own some. And maybe our cost in it was 50 bucks and it was seven times earnings in yielding 5% or something like that. The numbers seemed rather compelling. And there's always a turnaround story at city that if you believe this time is the time it's really going to all work. It's always selling at a compelling valuation. So we own some city. And as the crisis began to develop, I think at 26, I sold the entire position, and I can just remember feeling horrible about that. But I also remember the feeling of”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“They're extraordinarily important and our annual letter that I've written, Steve was the one who wrote those letters from 86 through, I don't know, 2002, four or five, something like that. And I was his editor for a while. And then I took the responsibility. Writing them as a half for the last 15, 20 years, I think by writing, I need to write it down. And I almost feel like a pianist at a keyboard where, and I can't write by hand anymore, I've lost the skill of doing that on a yellow pad like I used to, but to sit at the keyboard and write is really how I form my thoughts.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And by the way, that's the title of Alice Schroeder's book about Buffett, Snowball. And with exactly that concept. And I was just wanted to snowball with some wet snow and a long hill.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“About being graded on an English exam than I had in my whole life because here I'm sending this packet of letters that I'd written over those years to Don Graham, to Warren Buffett, to Ron Olson, to Barry Diller, to Melinda Gates. I mean, the all-star nature of that board was just stunning to me. And it came back that they were indeed interested. So that was tied to. Steps and the process and the action I had taken through a multiple year period, which led to me going on that board and meeting those people and developing relationships and the ongoing sort of just consequences and waves that keep rolling on the beach from things that I did 10, 15, 20, 25 years ago. I mean, they still reverbate to this day”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And Don Graham, the chairman and CEO of the post, reached out to me and we chatted and he had understood through my friend Chris Davis who was on the board and perhaps Buffett as well who knew if Mark Allen knew of us, that we had navigated that period in financial history relatively well. So Don and I were chatting. And so Don then asked me as part of their consideration of me potentially being a candidate to join that board would I share with them some of the memos that I had written to our board real time during 98, 99, 2000, two thousand one, so five years where they could see what the logic and decision process were in real time rather than in retrospect. So I gathered some of those memos together and sent them off. And I had never been more nervous.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“That is correct, which put me back in the good graces of Stephen, the rest of the Markel board, because getting through that period of time proved itself to be the right way to go. So I was invited and asked to consider going to the Board of the Washington Post company at that time.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“He was able to do several times during the course of his career. I don't do that very often, but that was one time when I did and it worked out.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Which was March 1st. So by a week, that decision saved us. I don't know hundreds of millions of dollars. And it put us in a good financial position to work the process of turning around Terra Nova, which was a trouble coming to him. We knew that. But fortunately, we made a very good instantaneous decision, which had some skill and some luck about it. I don't claim prescience. I just claim that I knew I didn't want to own those things that they owned. And normally I tend to be incremental and take step by step by step. But every once in a while I am capable of dramatic action as well, which again gets back to the munger thoughts that are drifting through us right now. I mean, he talks about sort of in 60, 70 years of investing, there were half a dozen times in his life that he felt very compelled about a certain thing and took a huge swing at it. And that made all the difference. So that was one of his skills.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“They had drunk the Kool-Aid and had a Nasdaq laden portfolio at a time when those prices just made no sense to me whatsoever. So on the day of closing, which was...”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“That is exactly right, and here's another case where sort of lux serendipity process all combined to create, as Munger would say, a lollapalooza outcome. So we were involved in a transaction where, again, we bought a company that was larger than what we were. And that was Terra Nova. It cost us to move from being a US-based national insurer to an international company. And we were negotiating the deal right in the midst of all of that in early 2001. I believe the deal closed on March 1. Now March 9th, I think, was the day that the Nasdaq topped. I remember that because among other things, March 9th is my wife's birthday. So it's a meaningful date to me. And within 20 minutes of me getting my hands on that portfolio, I had sold 99% of the equity positions because in my sense.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Of whatever it is that you set out manifest themselves and just crush everything else. So you just have to play the odds game and be willing to think long term and operate. I mean, you talk about trusting. I think that's exactly right. I try to operate in the same way. You can't do that with stakes that are too high. You need to have appropriately sized stakes and bets and decisions along the way. And they can increase over time as you develop a relationship of trust with people. But it's all nuance and process and trying not to be stupid.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“So you can look at a hand that you won and you think, wow, I won. So I must have played that well. Well, not necessarily. You may or you may not have. What was your process? How did you think? What was your calculation of the odds along the way as you played that hand? And if you're playing poker and you're playing thousands upon thousands upon thousands of hands, which are under relatively constrained conditions, if your process is sound over time, you will have good outcomes. I mean, you'll win more than you lose, but that's driven by the fact that you have good process and you're able to do it a thousand times. Buffett famously talks about coin flips and the language of coin flips and a coin flip in your honor. In your favor where the odds are in your favor. Well, that's true, and it's a great example, but it's not a great example if you only flip a coin once. It's when you flip a coin a hundred times or a thousand times or a million times that the”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, there's nuance to that. So, for instance, there's another wonderful book called Thinking in Bets by Annie Duke. I don't know if you've read that one. I think that's a great book. And it casts things in probabilistic terms. And it's all about process. And it's within the realm of playing poker, which was her well-known skill, but it also has a lot of stuff in there about insurance. So it gets a lot of traction with me. She uses the phrase resulting.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And for instance, I think one of the great analogies for that is marriage. I've been married 42 years now. It's a wonderful thing. I've never really looked at the marriage license”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“That is so much better a life than always being suspicious and concerned and wary that somebody's going to get the better end of a deal on you and whatnot. Let it go. Doesn't matter. Somebody gets a better end of a deal with you. Okay. They did it one time. Now, if you deal with them over and over and over again, that's your mistake, not theirs.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“You should make the error of staying with people too long, giving them a longer leash and letting them play out their hand as much as is humanly possible. Because when you live in a positive environment like this, and I think of my own parents and the unconditional love that I received as a child growing up under the fortunate circumstances that I grew up in, that allowed me to flourish. Now, some people, there are going to be people in your life who you will offer that go positive, go first, and they will not reciprocate. But then you'll know. And the cumulative effect of just operating with that general mindset and doing it consistently over and over again, you're going to stumble upon people who will love you forever. And if you find one or two or three or seven or a hundred people like that in the course of your life, just because you operate that way.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“A decision that you think is reasonable, rational, thoughtful, and hope for a reasonable outcome. If you're judging yourself by the outcome, In the short run, you're going to make more mistakes than you otherwise would. And doing the right sort of process, which again, is that discipline of just being thoughtful about things. That, I think, is going to be the best you're going to get. So there isn't a single point of answering that question. And I think.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, you should look him up. There are two albums that I would encourage you to listen to, start to finish. One is Todd Snyder Live, and the second one is Todd Snyder Live, Return of the Storyteller. And those two albums are probably, I don't know, 10 years apart or whatever. And some of the songs are repeated. But on the first one, the first song is a song called Green Castle Blues. And every once in a while I hear it in my head and it's haunting. It's haunting in some ways because there's a line in there that is a refrain and how do you know when it's too late? How do you know when it's too late? How do you know when it's too late to learn? And there do come points where you're past the point of no return. Those words exist. That sentence exists because it means something. There are points of no return and acknowledge the point is out there and just try to be thoughtful and aware and make.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“That what are we not going to do? And you have to make a choice. And people just don't like that. It's not fun. So the point about being curious about the path you are not taking so that you're thoughtful about why you're not taking it is hugely important to do because there are many times in life when, in fact, you should take that path. And how are you going to know that you should change your mind or you should alter course if you're not even going to sort of incorporate that in your daily hygiene of how you think and how you process stuff?”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“The things you did that you shouldn't have, but there's mistakes of omission, things you didn't do that you should have. And those tend to be way, way, way bigger than the mistakes of commission that you make. And those two have been very intellectually honest about talking about some of their substantial mistakes of omission and omission. You don't have a spreadsheet on that. You're not tracking the world is too big. We as humans don't think in terms of opportunity cost. What didn't I do? What didn't I choose because of what I did? I just happened to have this weird twist that somehow or another the idea of opportunity costs landed deeply within me and you could make my children sort of have a gag reflex anytime you bring up the idea of opportunity cost because they kept hearing at the kitchen table when they wanted to do something. The phrase, well, if we do.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“I don't think that's just lost today. I think that's a fundamental human flaw. And again, getting back to munger and buffet as well, when they talk about they're asked what mistakes you've made. They say, well, there's two kinds of mistakes. These are the mistakes of commission”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“I just sat there and watched the cubs for a while to try to think this through of what was happening. And about five or ten minutes later, another guy stumbles out of the class and he looks at me like, is that guy nuts? Because he'd come to the same conclusion about those assumptions just being fundamentally flawed. And I said, yes, so we kind of sat down and watched the Cubs came together. As it turns out, that guy's named John Fox. He's with Fenimore Asset Management. He's been a friend of mine now for 25 years, and their long-term Markel shareholders. And where we met was to sort of accounting slash value guys trying to figure out what the world was like and finding confusion, but we also found each other.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“About khakis and these models that would dance and swing dancing. It was just, it was just the it thing. So this professor was trying to teach us about how discounted cash flow model works. And he had laid all this stuff out and he used the gap as an example. And he had these growth rates of 15 to 20 percent going for years. And I thought to myself, I said, I understand the math. I know how to do that. But those assumptions, they're just wrong. They're insane. And I sort of pressed in on him about that and he wouldn't give an inch and just wouldn't process the notion that these assumptions you're making might just be wildly wrong. And I couldn't get anywhere with them. So literally, I walked out of the class. And there was a little lounge there where they had a coffee machine and a TV. And there was a Cubs game going on.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“sort of what my next steps were because it seemed that the investment world had changed in so fundamental a way that perhaps I was a dinosaur and I needed to be thinking about something else and I thought about going to dental school I mean who knows I just I needed to make a living I had a family to support so this somehow or another I became aware of this class at Northwestern Northwestern well regarded academic institution great reputation they deserve all of it so there was this two-week class that I signed up to take out at Northwestern to just try to think things through. And they had a variety of their professors come through and one of the professors got up and he did a discounted cash flow model and he used the gap as the example for how these discounted cash flow models work. And I don't know if you remember at that time, but the gap was white hot. I mean, it was white hot. And they had this campaign.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“See you next month There are times when, as my friend Chad Row would say, in the investment business, and I think this is true in business and life in general, that you either look way smarter than you really are or way dumber than you really are. So I think one of my skills as a manager is I develop deep relationship with people and I ascertain that these are good people and they are productive. They're very good at what they do, but they can go through periods of time where it doesn't look that way. So I try to encourage them and I try to help them think things through, recognize if they should change their mind about something. But if not, give them the psychological safety and the comfort in the environment to keep persisting at what is likely to work out very, very well in the fullness of time. So that was one of the aspects that I wanted to mention. The other thing I can remember, again, I was trying to figure out.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Top five or ten holdings which accounted for 50% of the value of the portfolio. And we would talk about those businesses, fundamentals, sales, revenues, earnings, management changes, new products, things that would seem relative to the fundamental aspects of the profitability of a business. Well, in that period, where I was so grossly underperforming, in addition to talking about the top holdings that we owned, I would talk about the top things that were in the news that were going up the most that we didn't own. And we would talk about the same sorts of aspects, the business, the sales, the revenues, the management, the products, things of that nature. And fortunately, for 18, 24 months, every month at the end of that meeting, Steve would conclude by saying, I understand what you are doing and why you're doing it. And I understand what you are not doing and why you are not doing it.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“I struggled to understand how things that did not appear to be profitable could sell for such prices in the marketplace. And I resisted it in many ways. Now, my friend Josh Terasov helped me a great deal in helping to see the cash flows that were there separate and distinct from the way GAP accounting would present them and managed to round that corner and pivot in an appropriate way. But 98, 99, they were miserable years. And I can remember a couple of things that I think are worth noting, and this may make it to the podcast. It may end up on the cutting room floor. I get it. But two things. One, a leadership story. So Steve's office was next to mine. And we would talk every day, all day, every day. And every month we would have a formal meeting where I would print out the portfolio. And typically the pattern was, you triage among the...”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And with those pennies of underwriting profit, we're willing to invest that money with an eternal, forever mindset. So my job day one was basically to invest that money, those pennies of underwriting profit in a long-term way. And fortunately, from 90 through 96 or something like that, the results were spectacular. And I established credibility by putting up very good numbers for the first five, six, seven years. I was there. Now in the late 90s, that's when I would say the internet 1.0 came along. And I struggled. I struggled massively and I really had the biggest period of underperformance that I've ever had in my career. And that went on, I mean, it seemed like forever. Maybe it was two, two and a half years or something like that. And I'm an accountant by training as those businesses were coming along.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“We think in addition to the financial capital that we put up to honor those promises, we have intellectual capital at work, and we should be paid for the intellectual capital as well as the financial capital. And that's really where the underwriting profitability comes from.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Let me step into that just a little bit because there's a lot of ground. So fortunately, when I came in 1990, and again, the playbook was, we had this insurance business that, and Steve's word, specialization in diversification were the hallmarks of what we would do. We would do, I mean, sometimes at a cocktail party, people ask me, insurance, what kind of insurance do you all do? And I respond, if you can think of a form of insurance that you can get easily and quickly. We probably don't do that. We do the kinds of things that people say, oh no, or where can we get coverage for fill in the blank? And we try to be creative. We have roughly 100 different product lines run by very thoughtful people who are always trying to figure out a way to solve a customer's problems.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Interest expense to the extent you had interest income. So I happened to know that he was building up this tax loss carry forward of interest expense that would only be useful to him if he had interest income. So I called him up and I said, Steve, you're like the one person in the world that this makes sense for. And those bonds were traded at 30 cents. He was intrigued by the idea. And I think by December, they had been paid off in full. And I think the next day I was working at Markell.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“It was an interesting speculation to buy this. Well, the tax law had changed recently to where I think TEFRA was the name of the tax law. If you bought a deep discount bond, personally, you had a Crete interest income to your taxes and pay tax on it, even though you had no cash to do it. So most individuals wouldn't buy this risky thing because they're going to have to come out of their pocket for taxes in that particular circumstance. And you really couldn't put them in iris or things like that where you take the tax angle off the table because it was too risky for something like that. So I happen to know that Steve had been part of a group with his cousins that in essence had done a leverage buyout of Markel from their parents. And they had borrowed money to do it. So under TEFRA, you could only deduct.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And I can remember my partner at Davenport, Mike Beale, we said, you know, if we were ever going to buy a junk bond, this is the day we should do it. And we came to the conclusion that the most creditworthy of the tradable junk bonds that were out there was RJR. So we knew that business and we rough penciled some things out and we thought if there was this RJR issue that we're paying kind zero coupon bonds And they were set by the terms of that bond they had to be repriced in 1994 at a yield that caused them to trade at par they were trading for about 30 cents on the dollar at that point now we penciled some stuff out and we swagged an estimate that worst comes to worst we thought they were worth 70 cents so they're trading at 30 and I think”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“I saw that and immediately I said, that's what Buffett did with Berkshire. So it instantly, like a light bulb going off for me, became apparent that at least there was the bones there of running the exact same play and following the same approach that Buffett had done with Berkshire. So I became insanely curious about the company, got to know Steve, bought some stock from 86 through 1990. He became a client. He became a friend, which has developed a relationship. In 1990, Markel completed the second half of a deal, which more than doubled the size of a company. So they bought a company that was larger than what they were. Steve had been doing a lot of things. He was pretty busy, and by that time he thought he could take on a wingman. So after my four years of persistent nagging and begging, that seemed like a good idea to him at the time. February 14th of 1990, that year, that was when Drexel Burnham went bankrupt.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Year that made me feel much better. He said, You should never criticize someone who mispronounces a word because that means he learned about it by reading. So I appreciate Morgan's grace in understanding word mispronunciations. So starting there. So Markell went public in 1986. And luck of the draw, I was the analyst at Davenport, who was assigned to govern Markel. So I saw this company. It was going public. It was a small Richmond-based company, sort of a regional operator that started in 1930 and operated in the area. I'd never known anything about it. It really didn't have much of a consumer presence. But I saw the idea of a specialty insurance operation that was dedicated to making an underwriting profit. And Steve Markell, who's the vice chairman and really the financial guy there, he was also interested in investing the underwriting profits long term rather than just in cash and fixed income securities, which is predominantly what most insurance companies did at the time.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“I was trying to forget a lot of those, but you're correct. A lot of water has flowed over the dam. So it's a long story in many ways. And again, it ties back to Munger and Buffett. It was nineteen eighty four when Carol Loomis wrote that article about Buffett and Fortune. And I read that. I was relatively fresh out of school and I graduated from UVA in 1983. So 1984, I wasn't out very long. And I was working in a small investment firm in Richmond called Davenport and Company of Virginia. And the scales fell from my eyes in the logic and the common sense and how much sense it all made to me. And I remember this is how little I knew. I went into the office of the head of the department and he was a bit of a crusty fellow. And I said, hey, Joe, have you ever heard of this guy Warren Buffet? And I mean, I literally said that because I didn't know. And he said, it's buffet, you idiot. Threw me out of his office. But I read. And by the way, our mutual friend, Morgan Housel, he told me something within the last.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And funny thing is, so your kids, and I don't know how old your kids are, but your kid who doesn't have 99 years of Munger's worldly wisdom accumulated, they can go either way with that, depending on the context of the rest of the values and how old they are and how mature they are. Because one logical reaction from a 12-year-old kid might be, wow, how do I set up a business like that? Because I can buy a bottle of water for 50 cents and sell it for 18 bucks. That's a great business. I completely want to do that.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, you've explained it better than I could. You want companies that are doing things for their customers rather than to their customers.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“To think about really the net present value of a customer over a long period of time, so different businesses have different sort of natural rhythms and cadences to them that either support the notion of win-win-win architecture or diminish that to greater or lesser degrees.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Whether they're going to shop at your store as a regular customer over and over and over again. Getting back to the Carmax example, one of the things that people were not completely believing that this thing would work is that the cycle time to buy a car is way, way, way longer than what it is to buy a gallon of milk. So you're only going to buy a car once every five, six, seven, eight years, something like that. So the way in which you are treated car dealers, which did not have the greatest reputation in the world, there was huge incentive for them to not let you walk out of the showroom. What will it take to get you to buy this car today? And even if that wasn't a great deal for you, they figured it would be seven or eight years before you were involved in another transaction. So therefore, they didn't have the incentives that a grocer would.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, there's a time dimension to that. So, for instance, you can win in the short run. Now, that does not meet my definition of winning, but you can be involved in a transaction where you win. And for instance, the cycle time is a Key factor in thinking about what sort of preconditions help you operate in a win-win world. So for instance, if you're a grocer, there is a very short cycle time. Maybe people go to the grocery store every week. So your incentive to treat people fairly and price the gallon of milk and the can of beans and the stalk of celery at a fair and equitable price and treat people well is very high because they're going to be making lifetime decisions.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And R.H. Macy, the chain went for a hundred plus years of a head start that all came about because mister RH Macy is a Quaker acted in a certain way as a merchant which derived from the principle that you don't charge somebody a higher price just because you can. You charge everybody the same price because they are equal.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“In one of the traits that Quakers pursued. So, for instance, Macy's department store here in New York. Mr. R.H. Macy himself, I believe was born in Nantucket Island, and there was a Quaker community there were merchants that specialized in outfitting the whaling expeditions. So they had the supplies and equipped those ships. Well, Nantucket Island was a small place, and Mr. Rhacy, I think, had some large ambitions. So he came to New York City in the 1850s or 60s or wherever that was. And because of his heritage and background as a Quaker, he had this dry goods business, and he was willing to sell at a fixed prices. And most merchants didn't do that at the time. And because he was willing to sell anybody a set of sheets, a set of dishes at the same price, he was able to advertise and put those prices in the newspaper. And no other merchants would do that at the time.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“The central tenet of being a Quaker is that all people are equal before God. And everything flows from that. So, for instance, if you wanted to tie that to a specific investment decision, and this skips over a lot of intermediate steps, I remember when Carmax was starting out, which was a great investment for us for many years. And the whole principle of Carmax was selling used cars at fixed prices. Well, being a Quaker, I had seen that movie before. And the old joke about Quakers and Philadelphia and Philadelphia was kind of the center of where the Quakers came when they came to America. The old joke around Philadelphia is that the Quakers came to America to do good. And they did well. And they became merchants by and large. So, for instance, John Wanamaker's department store, which was a great department store in the department store, era in Philadelphia. John Wanamaker was a Quaker. And being merchants was just a fundamental aspect of what it meant to be a”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Add value, always trying to do favors for people, always just trying to make them glad they interacted with you somehow or another. That's a pretty good central organizing principle. And if you do that consistently, day after day, month after month, year after year, you find that the world is kind of rooting for you. And Peter Kaufman, for instance, who was a great friend of Munger's and was the editor of Poor Charlie's Almanac, he talks about the idea that the universe will do most of the work for you if you align yourself with its general principles. So I think there's 8 billion people on planet Earth. I'm only one if I can get the other 7.999999999999 billion to maybe not like me, but at least not hate me. That's a recipe for profound success.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Well, for instance, my father was also a tremendous teacher in my life and really the first and foremost teacher that I had. And there was a situation that came up the other day where someone had sort of tricked me into doing a favor for them, sort of some backdoor moves and whatnot. I ended up doing a favor for them. And I was with a colleague at the time and we both sort of realized we'd been hustled a little bit. And I said, you know, my dad used to tell me, anytime, anytime you can do a favor for somebody, do it. Just do it because life is long and you never know how those things come back over time. So I think the idea of just always trying to be helpful, always trying to...”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“price that they paid, but yet the spectacular economics they earned not only from that business, but so many of the things they did subsequently because they had been taught by the example of C's what it is that a wonderful business could do for you over time.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“Wow, you said we booked three hours for this, and three hours would not even begin to do justice to ninety-nine years of his life. What an amazing teacher. His statements about The best way to get what you want is to deserve what you want and working backwards from that idea and that concept and as recently as the most recent annual meeting, I think the story was told about what you should do is write your own obituary and then work backwards from what you wrote if you wanted to be. And his life just stands as a testament to that over and over and over again. Now that's at the 80,000 foot level and I think that's really where his most dramatic influence and communication skills as a teacher can really land with people. The next level down was sort of the transition he fostered in Buffett to move from the digging around in the balance sheet, finding businesses that were cheap to finding businesses that were good and seize candy. That story is told over and over again about the standing on tippy toes.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT
“And there do come points where you're past the point of no return. Those words exist. That sentence exists because it means something. Acknowledge that the point is out there and just try to be thoughtful and aware and make a decision that you think is reasonable, rational, thoughtful. If you're judging yourself by the outcome in the short run, you're going to make more mistakes than you otherwise would. You should have some sensation of the process and doing the right sort of process, which again is that discipline of just being thoughtful about things. That, I think, is going to be the best you're going to get.”
2024-01-23 · The Knowledge Project with Shane Parrish · Tom Gayner: Invest Like The Best · IDENTIFIED FROM THE TRANSCRIPT