Mohnish Pabrai: Berkshire, Big Mistakes & Letting Winners Run (TIP812)

Summary

Stig Brodersen talks with legendary value investor Mohnish Pabrai. Since its inception in 1999, one dollar invested in the flagship …

Transcript

00:00:00:01 - 00:00:30:13 Unknown  Well, for the last several years, both  Greg and a geat have been vice chairman   and they both every year gotten exactly  the same amount of compensation down to   the last dollar. And I think the  reason Warren and Charlie did that   is to avoid envy. And so Greg has been  paid 20 odd million for several years.   And Warren has said about Ajit that many times  when he's paid him, he felt he left out a zero. 00:00:30:19 - 00:00:53:11 Unknown  A deed is responsible single handedly for creating  more than 100 billion, maybe 150 billion in value   for both shareholders. So we can never compensate  him enough. I mean, in the sense that if Berkshire   paid him something like 30 billion or  something, then it might be appropriate. 00:00:53:13 - 00:01:18:23 Unknown  Today I'm here with no other than money's Perai.  Money is. Welcome to our annual banter here that   will be published over the Berkshire weekend  stage. I always look forward to this. It's like   the pre-game tailgate party. And so always a  pleasure to be here with you. Wonderful. And   so since this is the Berkshire weekend, I wanted  to ask you here a few questions about the company. 00:01:19:03 - 00:01:43:13 Unknown  Now, Greg Abel has arguably been running  the operating businesses since 2018,   when he became the vice chairman of non insurance  operations. And I think it's safe to say that Greg   is more hands on, whereas Buffett was inclined to  I think he said delegate almost to the point of   application. So which CEO approach would you  prefer if you were a Berkshire shareholder? 00:01:43:15 - 00:02:14:23 Unknown  Well, you know, Charlie Munger said that Greg  is better than Warren in some important ways,   and he never went further to describe what those.  But I thought about what he might have meant.   And so Greg is in Des Moines, Iowa,  and he has a team. It may be more now,   but he has a team about 30 people who  are between him and the businesses. 00:02:15:00 - 00:02:45:15 Unknown  And so he is put in a lot of very smart people  to help him basically look at these companies.   And for Warren was easier because he  bought these businesses one at a time,   and he got to know them, one  of them. So like, for example,   when he bought C's candy, there were very few  operating subsidiaries. And Warren spent an   inordinate amount of time on seeds in one  time on Coke and on Buffalo News and so on. 00:02:45:16 - 00:03:12:02 Unknown  Now, Greg doesn't have that luxury because when  he comes in, there's like 80 plus businesses. Plus   Moorman Group has hundreds of businesses inside  that. So he's never going to be able to know the   businesses as well as Warren does. And the second  thing is Warren's persona was not to get involved,   right. And so the Berkshire companies  for decades have been under managed. 00:03:12:03 - 00:03:33:20 Unknown  It can be an advantage to leave these managers  alone. But it also has a lot of disadvantages.   And I think Greg got a nice middle ground in the  sense that he's not overbearing in your face,   etc. but at the same time, if he clearly  sees that a manager is not delivering,   not the right person, etc.,  he is going to act on that. 00:03:33:21 - 00:03:52:03 Unknown  And so I think we are going to be  seeing tighter operations. Most of   the acquisitions Warren did did not work well  for Berkshire. Okay. Let that sink in stick. 00:03:52:05 - 00:04:16:22 Unknown  Because you know we're talking about  God here. Okay. So I would have some   conversations with Charlie and I would tell  him, you know, Charlie, I hate retail. You know,   I wrote a chapter in my first book about how  much I hate retail. And he says to me, well,   all the subsequent furniture companies  he bought after Nebraska Furniture Mart   and all the subsequent jewelers we  bought after Bhatia are so useless. 00:04:17:03 - 00:04:49:01 Unknown  I'm with humans. And I think if Charlie  had his way, Berkshire would have had much   smaller retail footprint than they ended up  with. And, you know, Warren himself has said,   I think it was a 22 or 23 letter where he said  that 12 ideas over 58 years or something have   led to the creation of bookshelf, and  Warren has made more than I would guess,   somewhere between 300 to 400 investments or  buying companies in those almost six decades. 00:04:49:01 - 00:05:18:18 Unknown  And it's 3 or 4% in trade. And so that's the  beautiful thing about this business. Now,   the interesting thing about 4% is that if we go  back for the last 90 years in the US stock market,   about 4% of the businesses have delivered  all the returns in the market. The other   96% have barely matched Barnes or  inflation. They haven't done much. 00:05:18:19 - 00:05:41:14 Unknown  So the funny thing is, what's happened in the  bigger, bigger market and what's happened inside   Berkshire have been very similar in terms of the  percentages. Of course, in the case of Berkshire,   the home runs have been so big that they've  found some markets. But it's humbling for all   of us is investors to know that most of the time  when we act, the odds are stacked against us. 00:05:41:16 - 00:06:03:05 Unknown  You know, it's interesting. One is  that you mentioned that in the study.   We had him on the show and talked to him  about it, and then he made this comment.   And I hope you'll forgive me for saying  this, because I actually think it came   across in a really nice way. But he said  something and going to pursue the quote,   and he said something along the lines of, I've  been speaking with a lot of stock investors and   they want to make money out of my study, and  I'm not really sure what to do about that. 00:06:03:06 - 00:06:21:14 Unknown  And I was like, have you met stock  investors? Yeah, of course. Like   they're looking at your resources, like, how  do I make money? And he was just more like,   that's such an interesting finding. Let  me see if I can get funding for another   reason that I was like, yes. Welcome to the  world of finance. And another question here. 00:06:21:18 - 00:06:39:06 Unknown  You are very kind here. Going into  before we hit record, you were like,   you have a tough job. You have to come up  with questions no one has asked before.   But the good thing here is that now with  the transition to Greg, it's at least that   part is going to be new, because we haven't  had this transition before with Berkshire. 00:06:39:06 - 00:06:59:09 Unknown  But I can't help but ask you about  the $25 million annual compensation   now. I think together with a lot  of other Berkshire shareholders,   I was curious about what Buffett would  come up with as this is how a CEO should   be compensated. And so it's all based. And then I  don't know if Buffett is not able or probably not. 00:06:59:09 - 00:07:26:00 Unknown  But, you know, he takes his entire  compensation after tax and then buy   Berkshire in the open market. If you are on  the board, if you could if you were a god,   how would you how would you incentivize Greg  able to align him most with shareholders? Well,   for the last several years, both Greg  and Ajit have been vice chairman,   and they both every year gotten exactly the same  amount of compensation down to the last dollar. 00:07:26:02 - 00:07:58:17 Unknown  And I think the reason Warren and Charlie did  that is to avoid envy and avoid anything. I mean,   even though these two guys are  very high quality individuals,   they didn't want to go go anywhere near  the envy kicking in or whatever else.   And so Greg has been paid 20 odd million  for several years. And Warren has said   about Ajit that many times when he's  paid him, he felt he left out a zero. 00:07:58:19 - 00:08:26:21 Unknown  So so a deed is responsible single handedly  for creating more than 100 billion, maybe 150   billion in value for boxer shareholders. So  we can never compensate him enough. I mean,   in the sense that if Berkshire paid him  something like 30 billion or something,   then it might be appropriate. Okay. But  they haven't paid anywhere near that.   And I think one time there was some hue  and cry about Jamie Diamond's compensation. 00:08:26:21 - 00:08:52:15 Unknown  And I think Jamie was making like 25 or  30 million. And Warren said, anytime Jamie   wants to come to Berkshire, I'm happy to double  it. Okay. He was telling people that you think   Jamie's overpaid at 30 million? Well, I'm  willing to give him 60 million base salary   tomorrow without even defining what he'd be doing  for us. Okay, so Greg is seriously underpaid. 00:08:52:17 - 00:09:27:06 Unknown  Ajit is seriously underpaid. Also, you have  to understand, Greg had a significant stake   in Berkshire Hathaway Energy, and that got  sold to Berkshire. So Greg's net worth,   I think, is somewhere between 700 million  and 1 billion somewhere in that range.   So between us girls, not much of his net worth  is in Berkshire. If I look at Ajith, for example,   Ajith has been taking his salary after expenses,  whatever else and just buying books, just talk. 00:09:27:06 - 00:09:48:08 Unknown  And he's been doing it for decades. So I would  say that I don't know what a net worth is,   but I would guess that maybe 80% or more  of his investment, maybe even 90% or more,   would be in Berkshire Hathaway. So Greg is plenty  diversified. I think he came up with putting the   money into Berkshire stock on his own, because  I think he felt it's appropriate thing to do. 00:09:48:13 - 00:10:11:04 Unknown  He's not at Berkshire for a paycheck. Greg is  very smart. He doesn't need to work another day   in his life, and any number of people will pay  him multiples of that to work for them. Yeah,   unlikely to say that money is. And that's  it's important for a number like that not   to stand alone. It's very difficult  to be like it's 25 million a lot. 00:10:11:05 - 00:10:33:05 Unknown  And if you do compare it to what other  fortune ten CEOs are making. Well,   we can go on the rabbit hole in terms of,  you know, well, I'm just saying look at   look at Sundance compensation. Look at Sasha's  compensation. Look at those hired guns in those   companies. I mean, Sundar is like more than  500 million, I think, and might be underpaid. 00:10:33:06 - 00:11:01:00 Unknown  Yeah. You know, so, you know, I've been watching  your videos for a very long time, as you know,   and starting your work for a long time. And  you used to say to people, unless they wanted   to invest and do the hard work themselves,  that they could buy the 500 or an index,   whatever. And I'm here to recently talk more  about not to give people a hot stock tip,   but you talk more about perhaps  with the valuation of the 500. 00:11:01:00 - 00:11:21:09 Unknown  Look at Berkshire, for example. And again,  not as a hot stock tip, but more as in, hey,   it's super diversified, it's well-managed,  it's a reasonable valuation and so on and   so forth. But I sort of like I wanted to tweak  a bit of a question here because as let's say,   over the next ten years, I think most people in  the investing community would be like, yeah, sure. 00:11:21:11 - 00:11:42:21 Unknown  All these 500. What if we said over the next  50 or 100 years, meaning the fingerprints above   the manga would slowly fade away? If Greg  Abel, for that matter. And then the 500 has   this built in mechanism where the recycles out  the bad companies and include some some good   companies. So if I put you on the spot today,  I know it's purely theoretical for grandkids. 00:11:42:23 - 00:12:10:19 Unknown  They had to hold it for 5200 years. Should they  be holding Sp500 or Berkshire? I think when you   go to such a long period, I would switch from a  single holding to maybe around four. So I would   say you could do the S&P one fourth, you could  do Berkshire one fourth. And I would like to get   some good broad international index which has more  exposure to Asia and China and others like that. 00:12:10:19 - 00:12:38:14 Unknown  So I would just make it more like four, spread it  between four indices, like that being one of them.   Okay. That makes sense. Previously here on  the show talked about how you like to play   single player games. And one example is that you  didn't want to run translate because you felt   you were herding cats. And I was speaking with  your team here before our interview, and they   asked me to include a disclaimer about me being an  investor in public funds, which is perfectly fine. 00:12:38:14 - 00:12:57:15 Unknown  I'll be happy to include all  the disclaimers I need to,   but you know, one of the reasons why  I started my own company was because I   didn't want to deal with all the politics  and of being in the corporate world. And   then the irony of life is that you build  your own company, you build your team,   and then all of a sudden you get this entangled  in the same admin stuff that you trying to escape. 00:12:57:19 - 00:13:18:15 Unknown  And I can't figure out if it's similar to being  a retailer. And then you have to accept that   there's just a small amount of shrinkage. It's  just a cost of doing business. But then I was   thinking ask money because he already thought  about this. Like, how much of your life can   you structure around not having any admin stuff,  and how much can you truly delegate to your team? 00:13:18:17 - 00:13:52:00 Unknown  I try to keep it front and center that Mohnish  is not going to do well if he's lost in a team,   and so thankfully, I have a few very gifted  people in the company, and I have delegated   to the point of abdication to them. You know,  just to tell you how much I just don't care for   the stuff is we use a software package to do our  reviews for our people, and it does a 360 review. 00:13:52:00 - 00:14:14:11 Unknown  So it sends information to, you know, peers,  superiors, subordinates, everything. And then,   you know, all of that gets pulled together and  then gives us a kind of combined report of what   the person thinks and what all these people above  or below him think as well. Right? And they send   it to me as well to fill out for at least  the people who are directly reporting to me. 00:14:14:13 - 00:14:52:09 Unknown  And I've never felt it out. And because that's  just not Mohnish, you know. So whenever I go   there, I tell them, I'm sorry, I just can't go  here. And here's my three sentences about what's   going on with this person. Warm regards. Okay.  And that's it. So I try not to get involved in   things that I don't like. I'm probably not  being fair to those individuals because they   would probably appreciate more granularity with  me about what is going on, but it's just not me. 00:14:52:11 - 00:15:15:12 Unknown  And so I really don't want to spend my  time on reviews. I mean, I hate reviews,   I don't like to think about compensation changes,  and I have no problem with the change. I just   don't want to spend brain cells on it, you know?  And so thankfully, I've been able to keep our team   without going deep into that area,  which I would just not like to do. 00:15:15:14 - 00:15:40:11 Unknown  You live a good life, my friend. So I think  I think in your case, you know, like I said,   because you have more things than when you  started, I think you can set things up in a way   that can work better for you. So you have to think  about what does take love to do, what does take   not love to do, and who else can do what sting  doesn't love to do and then just go with that. 00:15:40:13 - 00:16:07:22 Unknown  Well said. So? So if we continue in this  framework of choosing, let's call the simplicity   over complexity. Could you talk to us about why  you set up the Pop Wagons ETF and how that adds   to your daily happiness? Yeah, so our minimums in  funds are very high. Funds are over $1 billion and   it's multiple millions. And so it's just a very  small sliver of folks that it would appeal to. 00:16:07:23 - 00:16:32:07 Unknown  And it's very concentrated and so on. And  I always felt like we had so many people   interested in wanting to invest, etc., and  really had no way to serve them. And I don't   like to be elitist about it. So I really  like the ETF because it allows us to work   with Joe Public and also work with your  public around the world, which is great. 00:16:32:11 - 00:16:56:15 Unknown  So that's one of the big motivations. Man  is just a good person. Mine is, you know,   I spoke with a friend here the other day.  He's like of a public company. And every   time there was something going on,  there was always someone with five   screaming at him about how unhappy  they are. And after I sort of, like,   have gone through the motions with him, I was  like, that's why you work in private companies. 00:16:56:16 - 00:17:13:14 Unknown  Like that's why you don't want that exposure.  And so that was why I don't think that reflects   well on me, I think reflects really well on  you that you were saying you could sort of   like have this gated walled garden, but you  don't want to just deal with that. You also   want to open up to the public, and perhaps  it's because you have a thicker skin than me. 00:17:13:14 - 00:17:44:19 Unknown  But like I would imagine you get a lot more  feedback just by numbers, because now you open   up to a lot more people. Or does that not face  you, or does that feedback just not get to you?   Whenever people are happy about whatever people  are happy about? One of the mental models that is   very front and center for me is that I run into  people who criticize Gandhi, criticize Buffett,   who criticize all kinds of people who are,  from my perspective, great or phenomenal. 00:17:44:22 - 00:18:14:01 Unknown  So if they can criticize Gandhi,  then who am I? Like Buffett says,   we can choose to live our life with the inner  scorecard or an outer scorecard. And it's really   important to live by an inner scorecard. So  you are not going to silence the critics.   And the critics will say all kinds of things,  and they may be fair or unfair or whatever,   but I love Teddy Roosevelt's quote about the man  in the arena, which it is not the critical counts. 00:18:14:05 - 00:18:36:12 Unknown  I have that quote right here on my wall. I'm  just going to read you a couple of parts of   it. Right? Yeah. So credit belongs to  the man who is actually in the arena,   whose face is marred by dust and sweat and  blood, who strives valiantly, who heirs,   who comes up short again and again. That's very  important. Who comes up short again and again. 00:18:36:13 - 00:19:14:23 Unknown  He's human. Okay? He's not perfect. He's  not always able to prevail because there is   no effort without error or shortcoming. But who  does actually strive to do the deeds? Who knows   great enthusiasms, the great devotions,  who spends himself in a worthy cause,   who at the best knows in the end  the triumphs of high achievement,   and who at the worst, if he fails, at  least fails while daring greatly so that   his place shall never be those old and timid  souls who neither know victory nor defeat. 00:19:15:00 - 00:19:43:15 Unknown  Okay, so I just think that to me, it's all about  the man in the arena and the man in the arena is   not perfect. He comes up short, he's bloodied and  scarred and whatever. But he keeps persevering,   ignores the critics. Right?  And so I think that's our job,   is we don't need to be in a walled  garden. Munger Buffett had been an   open field with all kinds of people  saying all kinds of things about him. 00:19:43:15 - 00:20:05:00 Unknown  And people criticize Warren all the time, I  think. Yeah, the outer scorecard in a scorecard,   those are great models. You know, I love  that you say that. One of the things I've   been thinking a lot about with this whole Buffett  and Mango framework is this idea of it's really   difficult to solve hard problems. So one of the  best ways just to complete it, to avoid them. 00:20:05:02 - 00:20:22:04 Unknown  But then at the same time, they're also things  you want to take on, sort of like you always   want to make sure that you keep your promises in  one way to do that is not to make any promises,   but it's also a poor life. If you don't  make promises to people that you really,   really care for. But then  you also have the struggle. 00:20:22:04 - 00:20:39:00 Unknown  But the struggle is is where the meat is. That's  still the good part. It's wonderful. If I can go   back to the South original after. This is a  wonderful quote that you just listened up,   and here I am. But I know you invest in  a lot of emerging countries. This is one   of the many wonderful reasons  why I like to invest with you. 00:20:39:00 - 00:21:07:04 Unknown  But do you ever have any issues withdrawing  money from those countries? Our investments   really very heavily are in  one country outside the US,   which is Turkey, and I was drawn to  Turkey because it was screening cheap,   but we didn't invest in these businesses because  we wanted Turkish exposure. We invested in these   businesses because they were exceptional  businesses available at cigar but prices. 00:21:07:06 - 00:21:36:22 Unknown  I think one thing to keep in mind is that  for most businesses, almost all businesses,   the micro is going to trump the macro. So  how well we do with our Turkish businesses is   probably 95% dependent on what the managers of  those businesses do, and what is the nature of   the markets they are serving. It's really  things inside and around the business. 00:21:37:00 - 00:22:03:22 Unknown  Very little has to do with the macro. So anytime  I bring up some Turkish business to someone,   they'll say, what about Ertegun? Right? And quite  frankly, the focus on going after the leadership   of a country as being your number one factor  you're concerned about is very myopic. I mean,   the important thing is what is  the quality of these managers? 00:22:03:22 - 00:22:29:00 Unknown  What is the quality of the business? What is the  size of the market? How well are they executing?   I think those are much more important  questions, because usually, I mean,   the companies we've invested in, there is no  real advantage. The leader of Turkey is going   to get by trying to go in and mess with those  companies. It's just he's got other fish to fry. 00:22:29:01 - 00:22:51:10 Unknown  It's always important to focus around and inside  the business. Okay, that makes sense. You know,   I'm always trying to figure out some of  that long tail risk. And one story that   stuck with me. I used to play  a lot of poker back in the day,   and there was one story that always sits with  me, and I think it's applicable to investing. 00:22:51:10 - 00:23:09:08 Unknown  And so for a guy who's been banned in Vegas,  I thought you would they thought you would   appreciate the story. But so it's about in  poker, like so in poker you can have the   so-called nuts. So that's the best hand. So you  can say that in life nothing is 0 or 100%. But   then you can be like, hey, but in poker, if  you have the notch, you have the best hand. 00:23:09:08 - 00:23:34:22 Unknown  So what is your risk? And then there was this  Brunson, this old poker legend who said, well,   whenever you played in Texas back in the day,  even if you had the nuts, someone would pull   out a gun and then you would just take your  money. So like even 100% is not 100%. Just so   you know. Yeah. So so that was the reason why I  mentioned that it was that was sort of like where   I came from when I was thinking, I understand  the thesis or like to think so in Turkey. 00:23:34:22 - 00:23:56:14 Unknown  And I was like, is there like, like I told  my investors and you've probably read this   where I said, look, if you are invested in any  of the funds and they're very concentrated,   in some cases one stock is more than half  the fun. And I said that if you have less   than 20% of your net worth with me, you  have nothing to be concerned about, okay. 00:23:56:15 - 00:24:19:22 Unknown  And if you have more than 20% of your net worth  with me, you can trim the position. In fact,   I recommend you turn it right. And if someone  has one fifth of their assets with funds,   and when you look through those one  fifth, probably no more than 1,012%   of their net worth is in one particular  company. That's plenty of diversification. 00:24:20:03 - 00:24:58:00 Unknown  And if we if we look at I mean, let's put it this  way, Walmart went public in, I think 1970 or 72,   I think maybe 72. They went public. So  it's been 28 and 26. So like, you know,   54 years since they've been public. Right? The  heirs of Sam Walton owned more than what they   owned in terms of percentage of Walmart  that they own today versus when it IPO,   because Walmart has bought back shares, 46%  of the company is owned by family members. 00:24:58:02 - 00:25:38:09 Unknown  56 years after the IPO. And they are not  diversified. Refunds is diversified. Okay. The   Walton family is not diversified, but the Walton  family would be far worse off if they had listened   to the helpers. You don't need to listen to the  helpers. The helpers are just helping themselves.   So the reality is that most entrepreneurs and most  people who have become billionaires have, through   that journey had 90, 95, 99% of their net worth in  a single stock and they don't lose sleep over it. 00:25:38:10 - 00:26:04:07 Unknown  So we somehow accept that some couple  running a Chinese restaurant has 90%   of everything in the restaurant. They're  just busy working. It's not even liquid.   They don't lose sleep over it. And here  we have a portfolio that we can, you know,   buy and sell every day. And we want to own  one of everything. That just makes no sense. 00:26:04:09 - 00:26:22:17 Unknown  No, I think it's a good point. And there  was this expression the cup is already   full. Basically means that people already have  an idea of how the world is. And so actually,   I was having a conversation with  Guy about this some time ago when   we talked about you and your portfolio, and  he talked about how concentrated you were. 00:26:22:23 - 00:26:41:23 Unknown  Not in a bad way, but he was just  like, he just does it a different way,   as I'm sure you know. And my rebuttal to  that was that was because guys thinking   someone would put all his wealth into,  let's say, funds, which is probably if   you not an investor, you probably want  money to be fully invested in refunds. 00:26:41:23 - 00:26:58:16 Unknown  If you're investing in Berkshire Hathaway, you  want Buffett to be fully invested in the way,   but you can size accordingly. Like if  you feel it's too much, you know, sure,   put 10% in or 3% of your networks or whatever,  and then you would have it. I think a lot   of people are missing that whenever you're  looking. Oh, look at the concentration here. 00:26:58:17 - 00:27:18:05 Unknown  Yes, but what is your true exposure of that?  And it probably comes from this feeling of   control where we feel like if things are going  well, we feel like it's okay. Oh, minus is just   doing his thing, but we get something back and  say, oh, that doesn't look as it's different. If   you run your own restaurant, you can just  feel like you just do this differently. 00:27:18:05 - 00:27:43:01 Unknown  But I can't control what's going  on in Turkey or whatever. So I was   reading one of the investment letters of an  investment manager who shall go nameless,   and they were very early to invest  in Constellation Software. You know,   Mark Leonard, unbelievably great,  great manager, built a great business,   etc. and constellation has compounded at 30 plus  percent, 35% since they went public, whatever. 00:27:43:03 - 00:28:16:16 Unknown  And these guys were invested early, etc. anytime  the constellation position got to 10% or more in   this fund, they trim it. And in my opinion that a  great fund manager should, after 20 or 30 years,   end up with 95% in one stock. Because  what Warren has told us, with the 4% rule,   that's like a law of physics, is it is very  difficult to find companies like constellation. 00:28:16:18 - 00:28:38:05 Unknown  Constellation is a very rare company, just  like the company I have in Turkey. Resource   is a very rare company. And so when you find  yourself in the happy position of owning it,   owning a small portion of it, and the  guy is compounding and he's doing his   thing. And you know, Mark Leonard,  he now has cancer. He stepped away. 00:28:38:05 - 00:29:01:07 Unknown  He's the chairman. Did not  take a base salary, no bonus,   no base salary. And he flew commercial. Okay.  Then he said that I'm too old for commercial.   I need to fly business. So what he told the  company is I'm going to be flying business,   but I'm going to be paying personally. So  the company used to pay for his coach travel. 00:29:01:10 - 00:29:30:11 Unknown  Now the company pays nothing and he travels  business. Right? I mean, look at the ethics of   the manager. Okay. And the other thing is, so  when I look at a business like constellation,   I actually see a business like constellation at  as far less risky than a business like Walmart.   I think constellation is a more resilient business  than Walmart because it is 1000 businesses in one. 00:29:30:12 - 00:30:00:00 Unknown  I mean, Walmart is also many businesses in one,   but not 1000. Maybe by the time you get the 6 or  7 business of Walmart, the rest may be very small.   So Walmart is an exceptional company as  well. But just if you look at resilience,   I would bet for me constellation is  more resilient. So when we are managers,   investment managers running a portfolio, and  these people who have invested in constellation,   they're listening to every conference  call, they're reading every annual letter. 00:30:00:03 - 00:30:25:16 Unknown  They know that company code and they  know how good that company is. And to me,   it is desecration of the temple. When you sit  there and say it's not going to go over 10%,   the temple just got desecrated. One is I want  to take the opportunity to talk about one of   your older investments. It's actually it's the  front line investment back from the fall of 2002. 00:30:25:17 - 00:30:44:18 Unknown  And you might be thinking, that's such  a ridiculous question. Is that really   because stake really wants to come up with  brand new questions? Is, is that why we're   talking about something I have 24 years ago? No,  that's actually not why. I think, to be fair,   one of the reasons is that I think that there are  some similarities to the whole medical thesis. 00:30:44:18 - 00:31:08:13 Unknown  But anyways, I think one of the things that  asset managers love to talk about is their   ears. Whenever they if I put you on here a bit  on the spot, mine is where they say, oh, I saw   loud too early. I only made 55% on front line. I  could have made 100 x on that. And so sometimes,   you know, as a man just like to talk about their  emissions, but I think I wanted to talk about it. 00:31:08:14 - 00:31:37:09 Unknown  I sort of like I'm a bit sneaky about it. So  please forgive me for this. But beyond the the   lesson of exiting too early with a wonderful  business case here, what key insights or   principles did you take away from the frontline  vestment that have influenced how you approach   similar opportunities today? So as you know, with  the frontline story, and just to give you give   your listeners the Cliff notes version of it is  that I bought a stock with basically no downside. 00:31:37:12 - 00:32:04:03 Unknown  Very quickly I doubled my money and patted myself  on the back and exited. And then I saw it go up   200 x after that or more. Right now, in the  fall of 2008. You know, God loves Mohnish a   lot. And the proof of that is that in the fall  of 2008, I was going to make a trip to San Jose,   California, and I was saying, well,  you know, I know they have some time. 00:32:04:03 - 00:32:21:00 Unknown  Who can I meet? And I see that Michael Burry lives  in San Jose, California, and I don't know Michael   Burry very well, but I sent him a email and  said, Michael, more than you or may not know me,   but I would love to meet you in your office if you  have some time. And he says, come on over, okay. 00:32:21:00 - 00:32:41:08 Unknown  And so it's like September 2008 or something.  So I go to Michael Burley's office,   which you saw in The Big Short. They  short his office. It office looks like   that. And all these papers all over and all  that. And as soon as I go into his office,   he launches into CDs, okay. And  he's picking up all these things. 00:32:41:09 - 00:33:06:11 Unknown  Like, literally, he didn't even say, hi, Mohnish.  Welcome. Whatever. He just goes straight into CDs.   And God, who loves me so much, brought me to  the epicenter of CDs. Okay? There's no human   on the planet who could have explained CDs to  me and the whole housing market, implosion,   etc., which was going to happen in  the future, better than Michael Berry. 00:33:06:13 - 00:33:31:19 Unknown  And it's going so far above my head  so fast and so poor God, he thought,   Mohnish is a capable guy. And he said, if I  just sent him to Mecca and show him the sermon,   everything will be obvious to him.  But of course God did not understand   how dumb I am. Okay now. So you know,  this whole front line thing happened. 00:33:31:20 - 00:33:55:05 Unknown  I got a double layer end up 200 days. Last  year I happened to have a trip to Norway.   I'd never been to Norway in my life. Okay. And  I'm had this conference for offshore drillers,   whatever in Norway. That's why I went  right. And they say that we have a field   trip which is not on the schedule. If  you guys want to go on the field trip. 00:33:55:05 - 00:34:02:00 Unknown  The field trip is to the  headquarters of Front Line. 00:34:02:02 - 00:34:23:15 Unknown  Okay. So I said, you know, God has  a sense of humor. Okay. I said,   I'm going to go on this field trip because  I know that's why he brought me to Norway,   not for the offshore drillers. He  wants to rub my nose in. Okay? He   wants to rub my nose in. My mistake. So  I go to the headquarters of frontline. 00:34:23:18 - 00:34:51:11 Unknown  It was an out-of-body experience. So when  I go to the headquarter of the front line,   it's very high end Persian rugs.  It's very ornate, extremely ornate,   old school mahogany interiors and all that.  But they have a lot of art all over the   place. And they have a lot of ships, you know,  replicas of ships and those replicas or ships,   you know, they're like, you  know, four feet, five feet. 00:34:51:13 - 00:35:07:00 Unknown  There's a real CC. Here's another. These  are the very large crude carriers which   went up to one next. Right. I'm walking around  and seeing that I owned 2% of all of this. 00:35:07:01 - 00:35:29:11 Unknown  And Frederickson, you know,  did all of that. Then I go,   there's like a there's a door that opens and  you can it's right on the harbor. I mean,   it's the most beautiful building right on the  harbor, all these boats and everything. Such   a nice office says God wanted you to see  this knowledge. He didn't want you to die. 00:35:29:11 - 00:35:52:21 Unknown  And just knowing that was a 200 x whatever.  All that art, all those Vlk. See, everything   got paid by a tiny rounding error of the  returns on that investment. So I like the   way God has a sense of humor with me. I  knew the front line trip was not to hey,   I'm going to make you some money. It  was like, hey, I took you to the altar. 00:35:52:23 - 00:36:01:05 Unknown  You decided not to get married,   and I want to show you what could  have been if you had gotten married. 00:36:01:07 - 00:36:28:13 Unknown  I love it, so you wanted to know. I'm sorry.  The similarity between front line and what   were you saying? The the Metco thesis. Yeah. So  actually, the the medical thesis is more similar   to a company called Ipso than it is to front  line. And you may recall that if school was   a Canadian steelmaker and this was a beautiful  math game, it's like playing blackjack in Vegas. 00:36:28:14 - 00:36:51:21 Unknown  Okay, what a blessed life. So I wake  up one morning, I look at school,   and if school is a Canadian company with a $40  stock price, they have $15 a share in cash on   their balance sheet, no debt. And they have  publicly announced that for the next two years,   they're going to produce $15 a share of  cash flow each of the next two years. 00:36:51:21 - 00:37:14:08 Unknown  So if you just hold the stock for two  years, you have $45 in cash. Stock is   currently at 40 plant equipment inventory.  Everything free. Okay. What's not to like   about that? And then of course the issue  was that in year three it's a cyclical   business. They make tubular steel cash flows  could be negative. They could go below zero. 00:37:14:08 - 00:37:42:21 Unknown  But I said you know why entertain such morose  thoughts okay let's just hold the stock for   two years and see what happens. I want to see Mr.  Market price this thing at 40 bucks when there's   $45 of cash on the balance sheet. Okay,  so I put 10% of the funds in scope.   One year goes by and the company announces the  third year is also going to be $15 a share. 00:37:42:23 - 00:38:10:21 Unknown  So now we are at $60 on the balance sheet. And  the stock price by now has moved to about $90,   which is a little bit more reasonable  than the stupid $40 was sitting at. Now,   in a city of $90, I'm thinking,  Mohnish, we have long term gains,   we have a double. Well done  and we need to be out of here. 00:38:10:23 - 00:38:36:23 Unknown  Okay. And while I'm going through these thoughts,  I wake up one day and I see the stock that 155   were share. It jumped from 90 to 155 because  some Swedish company came in and offered 160 a   share. Now Mark Twain says that truth is stranger  than fiction because fiction has to make sense.   Why that Swedish company didn't make an offer  of 50 bucks when it was 40 bucks a share. 00:38:37:00 - 00:39:12:00 Unknown  It's something I will never understand. Okay,   but but what they did offer the 160  and one femtosecond after I read that,   I exited my position. Okay? And I've always had  great nostalgia about it. And then on Twitter,   where about 260,000 of my close friends hang  out, one of my close friends on Twitter posts.   Hey Mohnish, this console energy position  by David Einhorn looks like your ipso bet. 00:39:12:05 - 00:39:40:09 Unknown  And I read that and say, oh God, you know he  still loves me so much because now through   Twitter and through X, he gives me what he's  thinking. So anytime someone says something   like if so, I'm going to look at it. Such a  beautiful experience. No downside. So I look   at console energy and the guy is right. It looks  very similar to if they have forward selling. 00:39:40:09 - 00:40:00:20 Unknown  They've got kind of visibility in which it's not  as clean as if if score was just with a bow on it,   it was just picture perfect, like you  couldn't do this was not as clean as that,   but it was very favorable risk reward  because of the what the stock price was,   what the cash flows were coming in and so on. 00:40:01:00 - 00:40:27:17 Unknown  And so I said, Hallelujah. It was back. And  we don't need to think much. We already have   that framework in the head. So I went in  and bought console and I started studying   the whole business. And then I find that  on the met cold side console was thermal   called a very good company. But on the  medical side it's even more favorable. 00:40:27:19 - 00:40:54:06 Unknown  And so I switched the bet from console to Alpha  and Warrior. And then one month before Charlie   Munger passed away, I had never in all the  years I was friends with Charlie Munger ever   requested that he meet me. I always met him  when he wanted me. So he would say, Mohnish,   comfort dinner. I'd come. I'd never  ask for anything, and he's too busy. 00:40:54:08 - 00:41:13:20 Unknown  But that year in 23, for the first  time, I was feeling that I need to   meet Charlie. Right? So I reached out  to his assistant and said, you know, I   really like to connect with Charlie. She  said, oh, here's some dates and weekends,   whatever. What do you want to do? So I picked a  Saturday and I flew from Austin to me, Charlie. 00:41:13:22 - 00:41:48:13 Unknown  It turned out that exactly four weeks after  that, he passed away. And so we had our last   what was to be our last meal together in October  2023. Right. And when I'm talking to Charlie,   console energy comes up and Charlie says  that he invested in console. And this   was in May of 2023. And I told Charlie we  both bought the same stock, a coal company,   within two weeks of each other without  ever having spoken to each other about it. 00:41:48:14 - 00:42:13:20 Unknown  So I said, how strange is that? So he says,  Mohnish, it was bound to happen. I'm glad,   glad Charlie felt like that. Like bound  to happen by by saying that. But then I   told Charlie in October, I said, Charlie,  you know, I was orgasmic about cancer.   But then I ran into Alpha Alpha metallurgical  resource and it was even better than console. 00:42:13:22 - 00:42:39:09 Unknown  So I said, I'm going to send you a write up  on alpha, and I think you should switch. You   should switch from console to album. So I  sent him the writer and six days before he   passed away that used before Thanksgiving, he  was still buying AlphaStar. What I love about   Charlie's is 99.9 years old, and it's  irrelevant what his life expectancy is. 00:42:39:09 - 00:43:05:06 Unknown  He's still excited to make bets, so he was buying  Alpha literally till he passed away. I mean,   I think these are these are just great bets  because no one wants to be in coal. It's a   four letter word, and people don't want  to even spend time thinking about it. And   that's all okay with me. No problem. I'm  going to make an ambitious bridge here. 00:43:05:08 - 00:43:24:04 Unknown  Money is because people think that they're getting  a investing show whenever they listen to you,   but you also give good merits, advice. And  one of the things that you, for example,   have told me is that remember that the mistress  is not always better than the wife. You know,   like, I just think there's one line  itself. It's just like, what did I ask? 00:43:24:06 - 00:43:46:02 Unknown  But anyway, it was one of the things you  said to me. So I'm going to send you,   send one back to you that you should not  go back to your ex-girlfriend unless it's   for the right reasons and not for the wrong  reasons and the reason why I came to think   of that. And I know it's a bit of a stretch  here, but I was looking at front line and I   was looking at the medical, and I had  this idea of this supply opportunity. 00:43:46:03 - 00:44:10:15 Unknown  You know, whenever the demand goes  parabolic and the supply can't go   online and then what happens? And so on  and so forth. And then it dawned to me,   whenever someone like Manish would double  his money but lose out on a 200 bagger,   is there something lingering where we all  know that we shouldn't be making the money   back the way that we lost it, or whatever  metaphorical way you want to put that. 00:44:10:15 - 00:44:31:14 Unknown  But how do you protect your  own bias against saying,   I should have had a 200 bag of in front  line, and now I see the same thing and   this thesis or whatever. And so now I want  to make that best, because now I learn the   framework. So you're making those bets for  the right reasons. How do we protect against   yourself and sort of like only take the good  from your past experiences and not the bad. 00:44:31:16 - 00:45:00:20 Unknown  I think that's a wonderful question and it's a  very important question. So one of the lessons   that took me many decades to learn is not to sell  a good company or great company when it's fairly   priced or even overpriced. I was always trying to  sell things at 90% of fair value, and that was a   very bad framework to have, because we don't know  what actual fair value is for a great business. 00:45:00:22 - 00:45:28:17 Unknown  Only when it gets egregiously overpriced, like  there's no way you can justify it is when you   can consider exiting the business because of the  4% rule that what Warren has shown that was talk   market has shown us that the true great compounds  are few and far between. They are going to end up   in your portfolio, and your job, when it ends up  in your portfolio, is not to be trigger happy. 00:45:28:19 - 00:45:54:03 Unknown  And so the the reality of investing is that  this is a very forgiving business. So let's say,   for example, there's some controversy whether  Walmart was part of the nifty 50 or not   in the 1970s. Right. Let's take the case.  It was part of the nifty 50. It was 2%   allocation to Walmart out of 50 stocks. And  let's say the other 49 stocks went to zero. 00:45:54:05 - 00:46:14:09 Unknown  So we we made a $100,000 bet in 1970 or whatever,   or 1972, and 98,000 of that has gone to  zero. All the companies that were there,   which some of them were very good companies  like McDonald's and Coke and all of that,   let's say they all went to zero, and you  only had the 2% that you invested in Walmart. 00:46:14:10 - 00:46:48:17 Unknown  If you carried that till today, you blew out the  SNP. So you blew out the SNP with 98% error rate,   holding on to just one business, because  that one business outperformed the S&P by   so much that it outperformed significantly.  So there's a very strong asymmetry here where   the winners can be true, truly spectacular  winners. So it's not so much that if you   hold on to five companies that it may  have been better sell three of them. 00:46:48:18 - 00:47:13:15 Unknown  You don't need to be optimized. You own all  five. And that allows you to own the 1 or   2 that just go spectacular. So the important  thing is that not to get cute. So for example,   if you look at our wagons fund, right,  we have the constellation businesses   in there, the Mark Lerner constellation  businesses. They have a good future okay. 00:47:13:16 - 00:47:31:08 Unknown  I have no crystal ball. That tells  me what those companies look like   10 or 20 years from now. But I want to  let them run. I want to let them run.   We have the coal companies. I also  don't know what those look like ten,   20 years from now. You want to let those run  to it looks favorable. We want to let them run. 00:47:31:08 - 00:47:57:20 Unknown  So we have some Turkish bets in there too. You  know, like race assets. We want to let them   run. And I think that when you put enough of these  things which have great characteristics, you know,   the world is a messy place. Things will come  from left field. We don't know what happens to   these different companies at what point, but it's  almost inconceivable that all of them fall apart. 00:47:57:22 - 00:48:18:15 Unknown  That constellation falls apart and the coal beds  part fall apart and Turkey falls apart. And,   you know, our offshore drillers fall apart.  Everything falls apart. That's just in fact,   I just can't see that. I can see that maybe  1 or 2 of them might have some issues,   but I don't see it across the board. So we  don't need to be right to the fourth decimal. 00:48:18:17 - 00:48:40:14 Unknown  We also don't need to know which one of these is  going to be the one. They're all there. Let them   all run. Let them go do their thing. We just watch  in the sidelines, see what happens and that's it.   So whenever you're saying that and you're  mentioning Walmart and saying the 50 stocks,   you need to hold on, it's a 2% position. 00:48:40:19 - 00:48:57:03 Unknown  I'm probably the only one of your investors in  funds who wants you to be more concentrated.   Because I have this this bias where I feel  the highest conviction ideas and that what   you're doing personally, you know, I only  have five stocks, probably because I don't   understand a lot of things. And so and  so I have a bias towards concentration. 00:48:57:03 - 00:49:18:11 Unknown  But then to your point, you know, if you  have 50 stocks and then just 2% allocation,   you just hold on for 50 years and then  it beats the 149 others go to. How do you   think about position sizing? Are you thinking  differently about the ten by ten framework,   for example, in funds and we talked about in  the past, or how should we square the circle? 00:49:18:13 - 00:49:52:05 Unknown  Well, the ETF laws and rules require plenty  of diversification, much more diversification   than I would natural. That's my natural bent. So  we are not going to have large positions there,   which is fine and in funds. We've never wanted  to put more than 10% into anything. So that's   also fine. And so basically, I think at the end  of the day, if you've got a spectacular winner,   it's going to take care of itself,  even with a small position size,   as long as you don't trim, as long as you  don't desecrate the temple, we're all fine. 00:49:52:09 - 00:50:16:18 Unknown  And so so we don't need to go all in with the big  conviction. The winners are going to get there   even no matter what they where they start out,  they'll get there. Just be relaxed and patient   and they'll be fine. In fact, that's exactly what  happens in index investing. We don't get to see   what's happening with the sausage factory  or how the sausage is made with the index. 00:50:16:18 - 00:50:38:21 Unknown  But effectively what's happening in the index  is that it keeps the winners for very long   time. And those few 4 or 5% of companies are  driving the whole end result. But we don't see   it because we just see the S&P. And that's  fine. So that's actually what's happening   inside the market and inside the index as well.  And the important thing is just leave it alone. 00:50:38:22 - 00:50:58:18 Unknown  I'm looking all these mental models  and trying to figure out how to go   back to first principles. And you're  typically in trouble whenever you're   listening to someone who's talking about  first principles, because they seem to go   all kinds of directions whenever you do. But  I was trying to think about Davin and what he   taught us about survival and adaptation,  and I wanted to give you that framework. 00:50:58:19 - 00:51:24:04 Unknown  And please feel free to question the  premise in the first place. But have   you learned anything from Davin about how to  avoid ruin and compound capital in investing?   There's a wonderful book written by  a great investor called Polak Prasad,   called what I Learned from Darwin about  Investing, and it's one of the best   investment books I ever read. It's a wonderful  book, and in fact I learned a lot from Polak. 00:51:24:06 - 00:51:51:18 Unknown  And Polak is an interesting guy. He lives  in Singapore and he runs a fund. It's,   I think about about 5 billion or so. I don't  think they're taking new capital in. He's posted   his entire portfolio on their home page. And  basically there's no movement in that portfolio.   If they buy a company, they're married to the  company. They might do five years of research   before they buy a company, but once they buy  the company, they're pretty much all in forever. 00:51:51:20 - 00:52:23:12 Unknown  So it's a very wonderful framework where they  think of themselves as owners of these businesses,   and these are businesses with truly  exceptional corporate governance,   very well run businesses. They  can be very basic businesses,   but they're really well run. So I think Darwin  says that the species that survive are not the   strongest or the biggest. But he says the ones  that are the fittest, its arrival of the fittest. 00:52:23:12 - 00:53:02:10 Unknown  And I think that applies to investments big time.   So if we look at if we look at a company like,  let's say you look at a company like Microsoft,   I mean, the evolution that business has gone  through over the last six decades or whatever   they've been around is unbelievable. They've  continuously reinvented themselves. And each   time they reinvented, I mean, they were Microsoft  was threatened with extinction so many times,   and if they had not exact, they would  have gone extinct like everyone else did. 00:53:02:12 - 00:53:33:12 Unknown  That's an example of a business that's a very  fit business, even though it was a big business.   What are the important was the fitness of the  business. When we look at business like Walmart,   for example, that's also a very fit business  because they've been so fanatical about delivering   value to their customers and efficiency and  taking cost of the system and all of that,   that they've taken out everyone and,  you know, built their footprint. 00:53:33:14 - 00:54:03:13 Unknown  So yes, we we want to have the fittest  businesses. And one of the definitions   of fitness is lack of leverage. You know,  so so when you look at these businesses,   you want to see management teams that have the  ability to think that. And you have a capital   structure that allows you the freedom to zig zag.  And so I think, yeah, there's a lot of things that   you can learn from Darwin that you can apply  in the corporate world, which would be helpful. 00:54:03:19 - 00:54:23:22 Unknown  Well, let's jump from Darwin. And then to our  friend Guy, I think Guy would appreciate that   we make that jump, but especially in this  tricky situation. But I wanted to round   off the episode by asking you, but the most  important thing that you learned from Guy,   both whenever it comes to investing,  but also about living a good life. 00:54:24:00 - 00:54:54:21 Unknown  Yeah, well, first of all, guy's situation is very  unfortunate. Very sad. Actually, I was I was so   heartbroken. Probably still heartbroken. Guy and I  are very different people, and I would have never   predicted that someone like him would be my best  friend. I mean, just we are so different in how   we think about things. You know, I recently  wrote a letter to Guy, old fashioned letter. 00:54:54:22 - 00:55:23:19 Unknown  Right? And I told him that I've often wondered,  why do we have a connection? Why do I feel such   a strong connection with you? Why do you feel  such a strong connection with you? And I told   him that. I concluded that it was because he  sees me. You remember the avatar movie I see   you? Yes. You don't remember saying you  have to go back and see the movie again. 00:55:23:21 - 00:55:55:15 Unknown  Okay. You got too much going on.  Watch the movie. So in the movie,   there's a there's a point and they bring it  up several points where they make the comment,   I see you and I see you is very deep. And what  what I felt with Guy is still feel is he gets   me in a way almost no one gets me and I  get him in a way almost nobody gets it. 00:55:55:17 - 00:56:25:14 Unknown  So I told him, Guy, I think the  reason we have this connection   is because you see me and I see and I  remember that one time guy and I were   going to take an overnight train in India  from Mumbai to Delhi. The train leaves at   around 4 p.m. from Mumbai and it gets  into Delhi around 10:00 in the morning. 00:56:25:14 - 00:56:51:13 Unknown  It's the overnight train and it's a  beautiful train. It's it's a very nice   train. And he and I had a two person private  compartment, private troop, two people. And   I told him, Guy, I want to just tell  you something. Just when the journey   was about to start, I said, you see that?  There's that button there. That's a bell. 00:56:51:15 - 00:57:17:01 Unknown  And I said, when you press that bell,   the butler is going to show up and the  butler will do whatever you want. Okay.   But I said that I want you the first time  you press that bell to drown the butler in   cash. Okay? I said the first time you press the  bell, don't ask him for anything. Just hand over. 00:57:17:01 - 00:57:43:00 Unknown  And I said, drowning in cash. In India,   $25 is enough. Okay? He's almost going to  have a cardiac at that point. Okay, so I said,   just ring the bell. So he he rings the bell.  The butler shows up, guy gives him the 25. And   I'm going to take a little detour for a  second before I continue the story, though. 00:57:43:03 - 00:58:03:15 Unknown  Another friend of mine, who used to  be an engineer installing cellular   networks in Africa. He used to work for  AT&T, so they'd go into different African   countries and he was like in charge. So  he said that one time he went to Ghana,   okay? And they always put him up in the best  hotel Accra, right on the ocean. Beautiful hotel. 00:58:03:16 - 00:58:25:00 Unknown  Right. So he says that, you know,  the porter carrying my luggage   to my villa. I gave him a dollar,  $1 tip. And the guy looked at the   dollar and he said he gave me a full  military salute, okay. And he said,   no one has ever given me that type of salute  or that type of respect ever in my life. 00:58:25:02 - 00:58:47:22 Unknown  So he said, I gave him another dollar and  said, can you please do it again? So he said   I was giving him a lot of dollars because  it was not. It was awesome. So anyway,   coming back to coming back to Guy and so the  guy shows up, gives him the $25. He's like,   he's almost died. It's like almost  half as much salary or something. 00:58:48:02 - 00:59:12:09 Unknown  And he said, yes, sir. What can I do  for you? So Guy says nothing right now,   please. This was just we just wanted  to say that we're so happy to have you,   etc.. And the guy couldn't believe. He couldn't  believe that we had called him back. And I said,   now, Guy, feel free to ring that  bell as often as you want, okay? 00:59:12:09 - 00:59:36:17 Unknown  And he's going to drop everyone else and be  here, okay? Now Guy loves to have tea, right?   And I said, don't you want some tea guy?  He said, yeah. So in that, you know,   17 our journey guy must have rung that  bell like 30 times. Okay. Like there was   tea coming every 45 minutes. And then, you  know, he's he's FaceTiming his wife Laurie. 00:59:36:18 - 00:59:56:10 Unknown  He's in a orgasmic state, okay? He's an organic  state, the third world country with a train,   whatever. And he's telling his wife, Laurie,  that in the compartment you don't have to go   to a dining car. In the compartment. They bring  me my tea. They bring me just to bring me this.   Bring me that. And then I tell him, slightly  called the new one this, that, whatever. 00:59:56:10 - 01:00:24:13 Unknown  And then he says for dinner, white  tablecloth, everything in our suite,   right in our thing. It's continuously FaceTiming  his wife, telling her this, that whatever else is   going on. And I told Guy, Guy, I see if you were  traveling with anyone else, they would not be   able to understand what's really going to get you  excited. So that was just a wonderful experience. 01:00:24:13 - 01:00:52:16 Unknown  And I felt many times when I'm doing something,  he'll make some comment and I'll say what? He's   looking straight into me. You knows exactly  what I need. You know, it was just so beautiful.   Wonderful. I see you. Yeah. What's the movie  again? You said avatar, didn't you? Oh,   yeah. Yeah, yeah. Okay. Yeah. Go out and  watch avatar. That's the final words. 01:00:52:18 - 01:01:21:14 Unknown  What is this is. So thank you so much  for your service to the value investing   community. And how poetic that you say all  these wonderful things about Guy. I'm sure   he would say the same thing about you.  And we published this over the Berkshire   weekend. Any concluding remarks  here before I let you go, Stig,   I always enjoy our conversations and you always  impressed me so much because every time I'm   thinking Stig is going to have such a hard time,  you know, he's asked me everything already. 01:01:21:14 - 01:01:43:12 Unknown  He's. Well, guy has to watch so  many hours of videos and all that,   but you outdo yourself each time. It's  so much fun. Thank you so much. Oh,   thank you so much for saying so. Thanks for  listening. To tip, visit the Investors Podcast   for show notes and educational resources.  This podcast is for informational and   entertainment purposes only and does not provide  financial, investment, tax or legal advice. 01:01:43:13 - 01:02:03:16 Unknown  The content is impersonal and does not consider  your objectives, financial situation or needs.   Investing involves risk, including possible  loss of principal and past performance is not   a guarantee of future results. Listeners  should do their own research and consult   a qualified professional before making any  financial decisions. Nothing on this show   is a recommendation or solicitation to buy or  sell any security or other financial product. 01:02:03:17 - 01:02:25:12 Unknown  Hosts, guests and the Investors Podcast Network  may hold positions in securities discussed and may   change those positions at any time without notice.  References to any third party products, services   or advertisers do not constitute endorsements, and  the Investors Podcast Network is not responsible   for any claims made by them. Copyright by the  Investors Podcast Network. All rights reserved. 01:02:25:14 - 01:02:45:06 Unknown  A lot of humans have difficulty with  giving up. Like you're saying, okay,   I like this business. I've seen this  business, I've spent some time on the   business. But I don't understand this part of  it. How do I get to understanding that part?   And I think buffet and mongers answer would  be that 99% of businesses need to go in.