Chris Mayer Interview: World According to Boyar Podcast

Boyar Value Group recently started doing a podcast entitled The World According to Boyar.  In it, they'll conversations with top investors, authors, and businesspeople.  Their first guest was Chris Mayer, author of How Do You Know as well as the investing book: 100 Baggers.  He is the Chief Investment Strategist of Bonner & Partners.  Here's some notes from the podcast as well as the full podcast audio embedded below:


Chris Mayer Interview on Boyar Podcast

- On 100 Baggers, it's basically taking the concept of a 10x return on a stock from Peter Lynch and adding a zero to it, to find the cream of the crop in terms of investment returns.  Mayer looked at all stocks that returned 100x from 1962 to 2014 to find common characteristics.  It returned 365 stocks and the best performing stock of all was Berkshire Hathaway.

- His biggest takeaway was that: return on invested capital is the most important factor.  If you compound at 25% a year for 25 years, that's a 100 bagger.  But that's also an extremely large feat.

-  The returns can often be back-end loaded so patience is one of the most important factors.  The psychology of watching prices head higher and higher and being tempted to sell often keeps people from holding on.  On the other side of the equation, the other problem is during those 100 baggers, you have to often survive multiple big drawdowns.  So psychology plays a big part in being able to withstand the swings.

- Coffee Can Portfolio:  Idea from Journal of Portfolio Management.  Investor just bought a small portfolio of stocks and just didn't touch them for 10 years and performed extremely well, much better than someone who bought the same stocks but actively sold positions.  Mayer named Howard Hughes (HHC) as a stock that could be an example today.  He bought it in 2011 and hasn't sold any shares since.  Another he likes is Fairfax Financial in Canada.

- How Do You Know: A Guide to Clear Thinking About Wall Street, Investing & Life is his new book that's not necessarily a traditional investing book but it's about how you know what you know.  You shouldn't try to know or explain every single little move a stock makes.

Embedded below is the full podcast of Boyar's interview with Chris Mayer:



We also recently posted up some complimentary equity research from Boyar if you missed it.  They've analyzed three stocks they feel have high upside and those reports are available for free: CHTR, BEN, STKL.

Charlie Munger Interview: China's Weekly on Stocks

Charlie Munger of Berkshire Hathaway and Li Lu of Himalaya Capital were recently interviewed a few months ago with Chinese media: Weekly on Stocks.  If you're unfamiliar, Lu is Munger's investing partner in China, where he has been investing for 15 years.  We've also posted Li Lu's interview up in a separate post.

Here are a few excerpts from the interview, with full videos below.


Charlie Munger Interview With Weekly on Stocks

Munger's opinion on Chinese securities:  "For investors, having more value means buying the best company in China or buying the best company in the United States. Comparing the two securities markets in China and the United States, I think the current price of the best companies in China is cheaper than the best companies in the United States. Therefore, Chinese people do not have to go abroad to find good investments, and there are many opportunities in their own countries. There are some very good companies in China and the prices are very reasonable."

When asked if he can name specifics:  "Hey, we can't tell you (laughs). In short, the Chinese market is increasingly open to foreign investors, with more and more participation from abroad, and the market is becoming healthier. These are all very good and will eventually drive up market prices."

On whether Berkshire's circle of competence is expanding with recent tech investments:  "At present, it is difficult for Berkshire to find good and low-priced investment products in the US market. We have hardly found anything suitable. All in all, you can also say that Apple is an electronic consumer goods company. Warren said that we may know more about consumer electronics than computer science, which is why Berkshire bought Apple stock.  Also emphasize another reason why we do this. If you want to be a good investor, you must keep learning. In the process of continuous learning, the situation is changing, the reality is changing, our investment will change, and we will not be self-sufficient."

Will they make more tech investments going forward?  "We don't know everything, we don't know how to understand, we only do what we know. The only company we have announced that has already invested is Apple. I think Warren said that we know Apple better than other companies. We can't know everything, so we invest in investing in assets that we can find to provide good value.  Take a look at our investment in airlines. In the past few decades, we have been joking with investment airlines. Warren has a lot of jokes in this area.  But suddenly, we bought stocks of each airline, because the airline's stock price has fallen sharply, it is so cheap, very potential. The conditions have changed and we are all willing to own airline stocks.  Like airlines, Warren and I don't like railroad stocks for decades. After a few decades, we began to buy shares in the railway, because the world has changed and the technology has changed. In the end, there are only four large railway companies. Finally, we bought the largest and most complete railway company among the four.  We changed because the world has changed. This is our investment logic. When the reality changes, shouldn't your thoughts change?"

Embedded below are the videos:

Charlie Munger Interview Videos

Video 1
Video 2
Video 3


Be sure to also check out the separate Li Lu interview we posted here.

The transcript of Munger's interview (in Chinese) is here.  H/T to @TaoValue for posting the videos.

Li Lu - Himalaya Capital Interview: China's Weekly on Stocks

Li Lu of Himalaya Capital was recently interviewed by Chinese media Weekly on Stocks.  If you're unfamiliar, Lu is Charlie Munger's investment partner in China and Munger has invested in Lu's fund for quite some time.  Charlie Munger was also interviewed, and we posted that up separately.


Li Lu Interview With Weekly on Stocks (China)

Li Lu on Munger/Buffett: "And so it is precisely their indifferent attitude towards personal interests that they have achieved such a long term performance success."  "Everyone is envious of Berkshire but no one is willing to learn their indifference to personal interests."

Lu on his fund:  He charges no management fee and has a 6% hurdle, modeled after the original Buffett partnerships.

Lu on investing:  "The investment itself is a prediction.  The prediction is indeed the result of a comprehensive combination of capabilities.  How to perform is the extension of conduct, so one's character, knowledge, and mentality really affect the long-term results.  There is no doubt about this."

"If you do this simply for the purpose of making money, it is almost impossible to achieve extraordinary long-term performance."

"Instead the key is that the most important thing for investment is to invest in anything you know and to avoid anything you don't know."

On the ongoing evolution of China's market:  "Three transformations: indirect finance to direct finance, debt dominance to equity dominance, and policy finance to market finance.  Then the whole financial market is gradually transformed from a disordered state like a gambling house to a relatively long term rational and sound decision."

On good investor characteristics:  "An excellent investor indeed should be honest to knowledge but not to the opinions of others.  Indeed this is actually somewhat against the humanity for us as social animals.  Indeed it is like this for us it is very important whether our evidence and logic is correct than whether others agree with you is not so important... An excellent investor has somewhat anti-human characteristics."

"The most important part in investment is objectivity and reasonability.  And the second is a deep understanding of intellectual honesty... That is to know what you really understand."


Embedded below are the videos:

Video 1


Video 2



For more on Li Lu, be sure to also check out a previous Columbia Business School interview with Li Lu.

H/T to @TaoValue for posting the videos.

Broyhill's Recommended Reading List

Numerous successful investors have noted how important it is to constantly be reading and learning.  Warren Buffett's business partner Charlie Munger once said, "You'd be amazed at how much Warren reads - at how much I read.  My children laugh at me.  They think I'm a book with a couple of legs sticking out."


Broyhill's Book Recommendations


Recently, we came across Broyhill Asset Management's Book Club where they share their favorite books of the past year.  It's a free curated list of their top recent recommendations.  It's quite comprehensive and had many titles we'd never read or even heard of. You can click here to view Broyhill's book recommendations.

If you're looking for some good summer reads, look no further.  While investing books are obviously useful, you might be surprised what kind of lessons you can learn from biographies and other genres as well.

While we'll occasionally highlight a book in our "What We're Reading" posts, this is a large compilation of recommendations from another trusted source.  They also provide a quick blurb on why a specific book was worth reading or what they learned from it.

Check out Broyhill's book recommendations for investors

Tourbillon's Jason Karp on Invest Like The Best Podcast

Jason Karp, founder of hedge fund Tourbillon Capital recently appeared on Patrick O'Shaughnessy's podcast, Invest Like The Best, and he talked about a range of investing topics.  We posted extensive notes from the conversation with the full audio below.


On The Differences Between Public and Private Investing These Days

Years ago, 40-50% of stock market volume came from fundamental allocators.  Today it's less than 10%, so 90% of trading activity is coming from passive, quant, CTAs, risk premium captures, etc.  The vast majority of trading then is not coming from people who are concerned with 'what does this company do?' etc.  This leads to multi-day or even multiyear dislocations.

"The time for convergence between cashflows and the fundamentals of a business and stock price is usually 3-5 years at worst."

He said private companies tapping venture capital can now gain massive scale (i.e. Uber) without even going public.  Over the past 5 years there's been an 'explosion' of capital via VC's etc. 

"I believe the trends of why people allocating so aggressively privates is because the public markets have gotten harder. And people don't want to deal with daily, monthly mark-to-market."

He thinks there's a lot of edge left in private equity and a "more linear relationship between effort and outcome."  While that's applicable to public market investing, your time horizon has to be around 5 years.  But if you or your investors have a shorter horizon, it's less so.


On His Investment Style

"If I can find deep value, where the cashflows are growing, which is extremely rare, then that's the best case scenario.  My primary first variable is: 'are the cashflows growing?' Because growth solves a lot of sins."  If cashflows are growing, you can be wrong on the valuation.

They'll take the price today and instead of doing a DCF, he'll do it in reverse and try to figure out what's priced in today's stock and what would have to happen for it to be worth x.

He says that with deep value stocks, most have problems.  "All the cheap stocks have things that are very, very wrong with them.  So you're inherently in an adverse selection pool to try and find the frog that you can kiss that turns into a prince, when most of them are frogs and you're going to get warts on your face.  I just think there's an easier game to play."

On general investment advice he's learned over the years: "It's very important for you to keep your consumer hat on at all times, and remember that your gut instinct about how you feel about the product and experience... is so important."  He compared it a bit to a Peter Lynch-esque approach.  It helps you spot trends much earlier.


Talking Stocks

He thinks Facebook (FB) and Alphabet (GOOG) are surprisingly cheap given how entrenched they are in your everyday life.  He says FB's Instagram specifically is going to grow like crazy with businesses.  There's highly cyclical companies that are trading at around the same valuations, which is kind of crazy.

3 types of edge in market:  information edge, which is largely gone.  Analytical edge still exists and it's based on how you process information versus others.  Structural edge is where he sees the most opportunity: being able to stomach volatility via long-term holding etc. 

"There's more opportunity than I've ever seen in my career for duration... ever."  He says there's so many stocks that screen poorly and others that screen extremely well and are getting very crowded.

He thinks quality, safe, low volatility stocks are very overextended and then there's others that are more value and a little hairier... the disconnect between fundamental value and where the price is, is the largest he's seen in his career.


Industries To Watch For The Future

Karp feels health and wellness is one of the most interesting places to be doing research both in public and private markets right now.  The megatrend here is people focusing on less processed foods, not caring about brand, mainly just wanting quality products.  He thinks the trend is here to stay because once people find out about all the chemicals in their food and how it affects test animals or humans, there's no turning back.  And a lot of it will be demographics since millennials are so young and already focused on this.

He also feels cannabis is going to be one of the biggest industries in this country in the next 5-10 years.  He says it's much more valuable to be learning about this than crypto.  Many of these stocks will go to zero but many will also go up ten-fold.  As the tipping point has hit with legalization starting to happen, he thinks there will be alpha there.


On Hiring

He says that knowledge and passion are the two most important factors in hiring people.  The first is easy to find, the second's not.  And it's the more important of the two.  You want the people working for you to actually enjoy what they do. 

The third variable is emotional intelligence and it's the hardest to find.  He thinks it's more important than IQ.  It's about the ability to control yourself, have empathy, see other points of view, and rapidly change your opinion.  In the investment industry, these are crucial. 

He hires a lot of athletes due to the competitive nature (something we've heard from Julian Robertson before), and people from military backgrounds due to training.  He's also found mothers to be spectacular due to their perspective on managing people and conflicts.  Instead of looking at a resume, look at what a person has been through or actually done.


Embedded below is the podcast interview with Tourbillon's Jason Karp:



And if you haven't already, be sure to check out Patrick O'Shaughnessy's podcast: Invest Like The Best.

Free Chapter From Dear Chairman Book: Dan Loeb and Hedge Fund Activism

Jeff Gramm's book, Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism, has been featured on the site before and we reviewed it here.

We wanted to let everyone know that Gramm has generously made the chapter about Third Point's Dan Loeb available for free.  The chapter is entitled: Daniel Loeb and Hedge Fund Activism: The Shame Game.  This was one of our favorite parts of the book so if you haven't read it yet, check it out.

You can download a .pdf copy of the free chapter on the book's website here.

And if you haven't already, definitely be sure to pick up a copy of Dear Chairman.

Ken Griffin Talk at Georgetown: Leaders of Global Finance Speakers Series

Ken Griffin of Citadel was interviewed at Georgetown University McDonough School of Business as part of the Leaders of Global Finance Speakers Series in September last year. 

He talked about how he doesn't think machines will completely dominate the finance industry.  He says that good old fashioned stockpicking won't die because there's so many qualitative aspects of the process that machines can't necessarily do like interacting with management teams, supply chain, competitors, etc.

"Computers will never, in my opinion, replace the judgment and intellect and the ability to connect dots that people do who are world class analysts in equities."

Griffin noted that machine learning is about pattern recognition and cited outlier events such as Brexit and the machines not knowing how to react or trade.  "Machine learning works really well when you have persistent, consistent patterns."

He says one of the keys to success in finance is to work in the industry because you're passionate about it and love it, not just because you want to make money.  This is because if you're just in it for the money, you're competing with people who absolutely love what they do and will work harder than you.

Griffin said that even his best colleagues at Citadel win 53% of the time and lose 47% of the time with their trades.  That's incredibly humbling, especially when that person is used to getting "A's" in all their classes their whole life. 

Regarding the low volatility last year, he thinks it's a part of the business cycle and one that normally comes in the 7th or 8th innings. 

Asked what hedge funds and private equity firms he admired, Griffin said Paul Tudor Jones (Tudor Investment Corp) he's always looked up to, as well as Ed Thorp. 

On the private equity side, he said he has great respect for Blackstone Group and Steve Schwarzmann, as well as Henry Kravis at KKR.

When asked what advice he'd give to people starting their own fund:  "You do not own your business, your business owns you.  #2: The best advice I've ever had in my life: Hire the best people you can possibly hire."

Embedded below is the video of Ken Griffin's talk at Georgetown followed by the Q&A session:

David Einhorn's Investing Talk at Oxford Union

Greenlight Capital's David Einhorn recently was interviewed and completed a question and answer session at Oxford Union.  He's been quite busy in recent months as he also spoke at the Capitalize For Kids conference.

Einhorn noted he likes debate and did it in high school, as you had to be able to argue both sides of the argument.  That trait is useful in investing as you look at the contra viewpoint to your position.

"We're wrong all the time.  I shouldn't say all the time.  We're wrong often.  We have to constantly question whether we're wrong."

On launching Greenlight: There's very low barriers to entry in the hedge fund industry and he thought if they could do a good job with a small amount of money they could live a good life.  He never dreamed that it would grow as much as it did.

He attributes his success to critical thinking skill.  If you can have a distinct viewpoint from everybody else and be right, you can be successful. 

About Greenlight's culture:  He thinks Greenlight has a lot of humility and respect with smart and nice people working together.  They want to respect each other's time.  Critical thinkers that reason and think before they speak and can adjust to new facts and feedback.

Einhorn is an avid poker player and he says it's a very similar skillset as you have certain facts you know (info about the company) and then things you can surmise (CEO's motivation, etc), and then unknown things that could come in the future.  "So you combine what you know, with what you think you can surmise, combined with understanding the range of outcomes relating to the uncertain things and saying is this a good place to commit a fraction of my capital?"

In poker, you know how many chips everyone has, what your cards are, what the card on the table are.  But you have to surmise what the other players might have or might do.  And then the uncertainty is the range of future cards that aren't yet displayed.

In investing, Einhorn likes to focus locally or in developed markets.  He says the further you get away (geographically or developmentally) there's a lot of local customs, local knowledge you have to acquire and it's hard to compete when you're sitting in New York, even if you go visit every once in a while.


Q&A Session:

On the environment for launching funds: If you're launching today, you're basically hiring 14-40 people from analysts to traders to CFO to backoffice, etc.  So you basically need to have enough assets under management right out of the gate to justify all that hiring and to fund the business.  His launch wasn't really like that: it was him and another guy in a tiny office doing all the various duties.  With a small AUM, there wasn't a lot of expense so you could do that.  He thinks you could still do that today if you had a differentiated strategy and articulated it well and had a client base.  He relied on word of mouth once he had a good start performance-wise.   He notes that the whole 'capital introduction' industry has spawned since then and so that's been a big difference.

On shorting companies/bubble basket:  He doesn't short companies on overvaluation.  He always looks for some sort of deterioration.  There's been a lot of companies that aren't really profitable (his bubble basket of 40-50 companies) and while 4 or 5 really worked against him, the vast majority of the basket worked in their favor.  That is, until this year.  They've all gone up and rallied against him but until they start showing profit, he won't take a different view.

On being contrarian:  He has to re-assess constantly, especially if the position moves against him.  So you have to constantly evaluate and understand the other side.  If something's changed, you've got to reduce/increase/exit based on that information.  Generally his choice is to reduce or eliminate a position.  But if he thinks he's right, patience is the way to go.

On if he'll change his strategy as value hasn't worked as well recently:  "Our goal is to achieve attractive risk-adjusted returns over time while taking demonstrably less risk than the market as a whole.  Which means fundamentally we're not comparing ourselves to the S&P 500 or an index, so we don't evaluate ourselves that way."

"The way you deal with unknown unknowns is through portfolio construction.  We like to run a concentrated portfolio, but even our best idea we're not going to put all our money in.  You have to have some level of diversification ... a certain amount of market risk."

"We tend to think of risk as how much can we lose in the worst case?"

On machine learning/competing with robots:  "We view these investments as puzzles.  There are the few things you know, but they're not the most important things because everybody knows them.  The most important things are what is that you can infer and how good are you assessing the possible range of outcomes, either the known unknowns or unknown unknowns and how do you construct that into a portfolio.  I'm sure the machines have views on these and the shorter-term the decision, the more likely the machine is going to figure it out better and faster than the human.  But our goal here is just to find things that are widely misunderstood by a large margin such that we're not competing with that kind of technology, because I don't think we would beat them."

On short-termism vs long-term focus:  "I think that one of the inefficiencies in the market is investors are generically too short-term oriented and time arbitrage is one of the best inefficiencies in the market."

Embedded below is the video of David Einhorn's talk at Oxford Union:



You can view Greenlight Capital's portfolio in the latest issue of our newsletter.

Warren Buffett, John Templeton & Robert Wilson Interview From 1985

A reader was kind enough to pass along an old interview from around 1985 with Adam Smith featuring Warren Buffett, John Templeton, and Robert Wilson where each investor talked about their investment process and style.


Warren Buffett Interview

Buffett starts the interview with his trademark quote: "The first rule in investment is don't lose.  And the second rule in investment is don't forget the first rule, and that's all the rules there are."

Buffett said the most important quality of an investor is the temperamental nature rather than the intellectual capacity.

He also pointed out the short-term nature of others: "Most of the investors focus on what the stock is going to do in the next year ... They do not really think of themselves as owning a piece of the business."

Buffett said he prefers to value the business first without even knowing the price.  That way he can make a determination and then decide how it compares to the current valuation.

He said to define your area of competence, then within that area of competence find whatever sells at the cheapest price relative to value.

It's funny to hear Buffett say that he doesn't own IBM (IBM) in the interview as he noted he doesn't dabble in tech stocks.  Fast forward 30+ years and his views have evolved a bit.  He now owns both IBM and Apple (AAPL) today, though he's been selling the former as we noted in our recent newsletter.

"Boredom is the problem with most professional money managers."  He's perfectly content to sit and wait for the fat pitch.

Buffett was featured in Adam Smith's book Supermoney.


John Templeton Interview

Templeton made his mark by going against the herd, and thought his distance from Wall Street was an advantage (he was in the Bahamas).  Buffett, of course, has also been positioned away from New York in Omaha, Nebraska.

Templeton developed a motto: "To buy when others are despondently selling and to sell when others are avidly buying, requires the greatest fortitude and pays the greatest reward."

He said his average holding period was 6 years so patience was the name of his game.  His strategy was to look for bargains worldwide and to buy the cheapest stocks and then to extrapolate earnings further into the future than most investors.


Robert Wilson Interview

He was focused on stocks with rapidly growing earnings and bets against those whose earnings are going down.

He said, "I am not an original thinker.  I tend to rely on other people to feed me ideas.  And more bright people are in New York than anywhere else. I'm a derivative thinker."

His philosophy is to be in stocks that have potential for huge gains and risk/volatility is perfectly fine by him.  "The only way one makes money in the market is when the market's perception of a stock changes."

He was looking for stocks where earnings haven't started to improve yet, or if they're improved they're going to accelerate.

Wilson also focused on the notion of hubris in markets and how he too fell victim to it.

Embedded below is the video of the interview with these well known investors:

Ray Dalio's Reading List

Ray Dalio, the founder of hedge fund Bridgewater Associates, has penned a book called Principles.  He's been doing various interviews about it and recently joined Tim Ferriss' podcast.  During the interview, Dalio outlined some of the books he's read and enjoyed, as well as others he has stacked up in a pile that he's going to read.  He said curiosity is the driving force behind him reading so much.


Ray Dalio's Reading List

  Einstein's Mistakes: The Human Failings of Genius by Hans Ohanian: A book Dalio's already read and enjoyed.

  Sapiens: A Brief History of Humankind by Yuval Noah Harari: #1 international bestseller by a renowned historian.

  The Undoing Project: A Friendship That Changed Our Minds by Michael Lewis: A look at Daniel Kahneman and Amos Tversky's studies on the decision-making process.

  The Upside of Inequality: How Good Intentions Undermine the Middle Class by Edward Conard: The scourge of America's economy isn't the success of the 1%.

  The Serengeti Rules: The Quest to Discover How Life Works and Why It Matters by Sean Carroll: Award winning biologist examines questions about how the natural world is regulated.

  From Bacteria to Bach and Back: The Evolution of Minds by Daniel Dennett: A look at how the human mind has developed its ability to crate, imagine, and explain.



Dalio was also asked to list books he would give to anyone graduating high school or college.  Here were his 3 picks:



  The Lessons of History by Will and Ariel Durant: A concise survey of the culture and civilization of mankind from Pulitzer Prize winning historians.

  River Out of Eden: A Darwinian View of Life by Richard Dawkins: How did life begin and where is it heading?

  The Hero With a Thousand Faces by Joseph Campbell: Combining the insights of modern psychology with comparative mythology.



Be sure to also check out Dalio's own new book, Principles, about all he's learned over the years.

And if you're looking for recommendations from more smart investors, check out Charlie Munger's recommended reading list, as well as many others linked in the right sidebar of Market Folly.

Ray Dalio's TED Talk on Idea Meritocracy

Bridgewater Associates founder Ray Dalio gave a TED talk on what idea meritocracy looks like at his hedge fund.

The talk focuses on how to build a company where the best ideas win.  Dalio talks about algorithmic decision making and his history as an investor and how he began to learn from his mistakes.

He would write down his lessons and it became a set of principles which eventually were developed into algorithmic decision making.  Dalio has also recently published a brand new book, Principles.  

He notes, "In order to be an effective investor, one has to bet against the consensus and be right."

Dalio walks through the biggest mistake he ever made and how it made him ask himself in any future decisions: "How do I know I'm right?"  He gained humility.


The Bridgewater founder also takes us inside a meeting at Bridgewater and shows how they collect data on each person's ideas and believability.  Dalio says they do this because people naively and arrogantly hold opinions in their mind that are wrong.  But if you zoom out and gain perspective, you can see things through everybody's eyes and view things collectively. 

"Collective decision making is so much better than individual decision making if it's done well.  It's been the secret sauce behind our success."

Embedded below is the video of Ray Dalio's TED Talk:



Be sure to also check out Dalio's brand new book, Principles.

Peter Lynch on How to Pick Stocks

Legendary investor Peter Lynch once gave a talk on how to pick stocks from "The Stock Shop" and goes over basic concepts like time horizon, your advantages for stock picking, types of companies, hidden assets, risk factors, etc. 

He previously managed the Magellan Fund and between 1977 and 1990 returned an average of 29% annually.  He's also the author of the famous investing book One Up On Wall Street.

Embedded below is the video of Peter Lynch on how to pick stocks:



For more from this investor, we've also previously posted about Peter Lynch on using your edge: timeless advice for investors.

Mohnish Pabrai's Talk at Google on Entrenched Biases

Fund manager Mohnish Pabrai recently gave a talk at Google on how intensive stock research can be injurious to financial health. 

The video's description is "how the plethora of deeply entrenched biases and flawed evolutionary brain wiring makes us prone to make plenty of mistakes when picking stocks.  Specifically, the more time we spend analyzing a given business, the more likely we are to like it and invest in it. 

But if we don't spend time studying a business, how are we expected to understand its prospects and likely future?  This strong commitment bias is an important reason why most investment managers have trouble beating the index. 

Mohnish will lay out the origins of this bias problem and a few hacks to get around it."

Embedded below is the video of Mohnish Pabrai's latest talk at Google:



For more from this investor, we've posted Pabrai's talk on value investing as well.

For other investor talks at Google, we've posted many of those presentations and you can scroll through that link.

Charlie Munger on The Psychology of Human Misjudgement

Investor Charlie Munger is well known for delivering his talk on The Psychology of Human Misjudgement at Harvard in 1995. 

A company called Tiny has created an animated and abridged version of the speech that hits the highlights and puts a visual twist on the talk.  So if you missed his talk or are looking for a quick refresh, this is a great synopsis. 

Embedded below is the video of Charlie Munger on the Psychology of Human Misjudgement:



For more on this investor, check out Charlie Munger's recommended reading list.

Jim Chanos Interview on Bloomberg

Jim Chanos, founder of hedge fund Kynikos Associates recently sat down with Bloomberg to share his thoughts on markets.

He talks about the macro landscape, how the recent political shift has changed things, and other topics.

Chanos is worried about China because it's a debt driven model.  He thinks they've added trillions to the system.

Turning to US healthcare, Chanos says it's a system designed to be gamed:  "It's a hybrid of socialized and free market healthcare."

He thinks the kidney dialysis business is "headed for difficulties."  DaVita (DVA) seems to be one play that Chanos is short.

Telsa (TSLA) is another company Chanos has been short.  He would cover the short if the company actually began to make money.  They were also short Solar City before it got folded into Tesla.  The company burns a lot of cash (he thinks up to as much as $1 billion a quarter).  The upcoming Model 3 is the big test.

Embedded below is the video of Jim Chanos' Bloomberg interview:



For more recent interviews with prominent investors, be sure to also check out Paul Singer's chat with David Rubenstein.

Paul Singer Chats With David Rubenstein

Paul Singer of hedge fund Elliott Management sat down with Carlye Group co-founder David Rubenstein to chat at Bloomberg Invest New York.

They talk about how Singer founded Elliott, investing, and more.

Elliott manages $34 billion now and started in 1977 with $1.3 million.  Singer was a practicing lawyer at the time but started with friends and family money as he found investing much more enjoyable.

Convertible bond hedging was the first strategy Elliott used for around ten years. (Elliott, by the way, is Singer's middle name).  Over 40 years, Elliott has compounded at 13.5% net.

Embedded below is the video of Singer's chat with Rubenstein:



For more profiles of prominent investors, check out Howard Marks' recent interview with Bruce Karsh.

Howard Marks Interviews Bruce Karsh at Wharton School

University of Pennsylvania's Wharton School has started a Howard Marks investor series where the founder of Oaktree Capital interviews outstanding investors and this time around he's interviewed Bruce Karsh, his co-founder at Oaktree.

They talk about the founding of Oaktree, distressed investing, and a myriad of other topics. 

Embedded below is the video of Howard Marks' interview with Bruce Karsh:



For more from Marks, check out his most recent memo: Lines in the Sand.

Market Strategist Jeff Saut on Gaining Street Smarts

Market strategist Jeff Saut has released his latest weekly investment strategy piece entitled "Street Smarts."  The title sums up exactly what his piece is about as he begins by quoting Confessions of a Street Smart Manager by David Mahoney:

"Some people can have a lot of experience and still not have good judgement. Others can pull a great deal of value out of much less experience. That’s why some people have street smarts and others don’t. A person with street smarts is someone able to take strong action based on good judgement drawn from hard experience. For example, a novice trader once asked an old Wall Street pro why he had good judgement. “Well,” said the pro, “Good judgement comes from experience.” “Then where does experience come from?” asked the novice. “Experience comes from bad judgement,” was the pro’s answer. So you can say that good judgement comes from experience comes from bad judgement."

We've said before that investing is a continual education, you never stop learning.  And while you can read all the investment books out there and learn from the mistakes of others (which is highly beneficial), sometimes you just have to make a mistake yourself to truly learn from it.

Saut's weekly strategy piece "Street Smarts" is embedded below:



You can download a .pdf copy here.

Howard Marks' Latest Memo: Lines in the Sand

Oaktree Capital's Chairman Howard Marks has just penned a new memo entitled, "Lines in the Sand."  In it, he addresses the use of subscription lines in private equity, real estate, distressed debt and other fields.

His piece asks investors to consider the implications of closed-end funds' increasing use of subscription lines.  He seems to conclude that subscription lines 'may be adding to risk at a variety of levels.'

Marks also notes,

"The key to financial security  –  individual or societal  – doesn’t lie in counting on things to work  in good times or on average.  Rather, it consists of figuring out what can go wrong in bad times,  and of only doing things that will prove survivable even if they materialize."

Embedded below is Howard Marks' new memo: Lines in the Sand



You can download a .pdf copy here.

For more from this investor, we also just posted Marks' recent presentation: The Truth About Investing.

Warren Buffett & Jorge Paulo Lemann Talk at Harvard Business School: Brazil Conference

Berkshire Hathaway's Warren Buffett and 3G Capital's Jorge Paulo Lemann sat down for a talk at Harvard Business School for the Brazil Conference 2017.  Here are some takeaways:

- Buffett considers it one of the larger mistakes in his life that he didn't team up with Lemann until later in his life

- Buffett: "Who you have as partners in life... it's a lot more fun and a lot more profitable to have good partners."

- Lemann met Buffett at the Gillette board and Buffett said he was very rich in the sense that he had tons of time and was able to do what he loves and that's what Lemann wanted after selling the bank.  Buffett: "The two things you can't buy are time and love."

- Buffett tells students to look for the job they'd still do if they didn't need to have a job.  Says to always hang out with people that are better than you.  You don't need a high IQ to succeed in life... find the place where your talents leave you happiest and produce the best results.

-  Lemann almost got expelled his first year at Harvard, went broke his first attempt at business, and he finally started getting going at age 30.

-  Buffett says Tom Murphy is his #1 example as a leader. Also cited Amazon's Jeff Bezos and then Jack Welch too.  Good leaders have big ideas.  "They don't settle cheap."

- Lemann on leadership: have focus, be efficient, have good people, keep costs down, take a bit of risk

-  3G likes to evaluate people in the system by giving them an opportunity to learn from mistakes; wants people that will try hard and do things exceptionally well.  "The only thing you cannot accept is somebody who is ethically not totally there."

-  Buffett asks himself: do they love the money or do they love the business?  (When he looks at leaders for his decentralized model at Berkshire)

-  "That's the one thing I've probably improved on over the years: judging the future behavior of people I encounter." - Buffett

-  "The first thing I want is a business I understand... where it'll be 10, 15, 20 years from now.  Understand if there's some economic castle with a moat, and whether the knight in the castle is any good." - Buffett

-  "The ideal moat is something that would be protected by any competition; usually earnings are regulated in businesses like that.  Perfect product is something that costs a penny and sells for a dollar and is habit forming." - Buffett

-  Lemann says they're "Running things for the long run and building them to last forever."

-  "In the food area, there's a lot to be done still... it'll probably be bigger than the beer area possibly ... We have to adjust, we have to be more nimble (to consumer taste)." - Lemann

-  "On SAB: the big attraction there is Africa... hot climate, young population, we have to learn how to operate, but the potential is there.  Africa maybe 30 years from now will be bigger than the US in beer consumption." - Lemann

-  On the current largest market cap companies being tech.  Lemann: "The better investments will be in technology.  But the problem is technology is very difficult to pick and things change very fast there."


Embedded below is the video of Jorge Paulo Lemann and Warren Buffett at the Brazil Conference 2017:



For more wisdom, we've also highlighted Warren Buffett's 2016 letter as well as Buffett's talk with Bill Gates.