Supported by Greenhaven Road Capital, finding value off the beaten path.
Our first post on Guy Spier was from The Investor’s Podcast. This post will cover his book, The Education of a Value Investor, a book that was more philosophical than practical. The spirit was similar to Early Retirement Extreme where Jacob Fisker wrote, “It’s important to understand that doing the right thing (good strategy) is much more important than doing things right (good tactics).”
Every person, couple, and organization exist within a system and are influenced by it. Spier wrote, “We like to think that we change our environment, but the truth is that it changes us.” That means choosing the best environment for us. For Spier, the design of New York Finance was too much. Citing Taleb he writes that it was materialism extremistan.
Norms are location independent. Spier moved his office and family to Zurich, but not the bustling part. Spier hooked up his Bloomberg terminal, but only periodically turns it on. Spier has an office, but with different sections for different tasks.
His see-the-light-moment was working at D.H. Blair, where “This kind of environment is perfectly designed to get people to push the boundaries in order to succeed.”
Beyond situational changes, Spier made relational changes too. “Ideally, we should stick close to people who are better than us so that we can become more like them.” That meant more time with people like Mohnish Pabrai, Warren Buffett, and Charlie Munger.
But don’t be like Spier. “Instead of trying to compete with Buffett, I should focus on the real opportunity, which is to become the best version of Guy Spier that I can be.” Neil Gaiman advises the same thing, to be the best version of yourself because you are the only you.
And there are many ways to be the best you. Bill Gates, Spier writes, had a precise calendar. Buffett does not.
In the same way, animals evolve within an ecosystem, humans act based on what’s easy for them. Once you figure out what you want, no easy task, make the negative things harder and the positive things easier.
Asymmetric, non-financial bets.
Every hour of every day is an expiring option. We can choose to call the option and create value for ourselves or let the option expire. One way is to learn from others. “For me,” Spier writes, “the beginning of wisdom was to drop these narrow prejudices so that I could begin to learn from everyone.”
Carl Turner Jr. said the same thing about running Dollar General. Turner thought the smartest person he knew was his grandfather, who only had an elementary education because he was willing, able, and capable of learning something from everyone.
Chris Cole talked about how this applies to our relationships too. Talking to strangers is a very small cost compared to the relationship that may blossom.
For Spier, this person was Tony Robbins whose Unleash the Power Within event “looked like some kind of cult” but “was brainwashing for the good.”
At each level of our lives, stakeholders bump us toward one outcome range rather than another.
For investors, the professional stakeholders are their shareholders. Reading the first Berkshire Hathaway report, Spier reflected, “I’d never seen a report like this. It was designed to attract shareholders who were genuinely reading it for the right reasons.”
Rather than “shouting louder than the next guy so you could get attention” Buffett herded shareholders who would hodl.
Stakeholders are also why founders tend to be younger. Paul Graham encourages these ‘cockroaches’. Without mortgages, daycare, and basic standards for survival, young people can last longer on a lower budget to find sustainable profitability.
So Spier set out to select selective stakeholders, including a landlord. Pabrai told Spier “I don’t need all that razzmatazz!” in an office. Klarman has an unflashy office in Boston. Nick Sleep is “far from the grandeur of Mayfair.”
Jim Koch of Sam Adams said he didn’t have an office, plant, or even a phone. He used the pay phone outside and used them so often he knew where the warm ones were during the cold Boston winters.
But more important than landlords and investors are spouses. Spier told Danielle and Phil Towns on the InvestED podcast, “I could not be the best investor I could be if my primary relationship with my wife is not a relationship that supports that.”
We can’t be Guy Spier and we shouldn’t try. But we can pursue unique goals with the same vigor. As Buffett said, they tapdance to work. As Josh Wolfe said, they read about their business interests on Sunday mornings. As Mohnish Pabrai said, they choose 10Ks over the new movie of the week.
As Spier said:
“How does a boar find truffles? I don’t know, the guy loves truffles! His brain is working so many different ways to figure out how to get some truffles. He’s using all five sense and that, in a certain way, is the quest for undervalued businesses.”
Thanks for reading.