The Great Minds of Investing
Hi and welcome to The Successful Pitch. Today’s guest is William Green, the author of The Great Minds of Investing. William has written for many publications both in the U.S. and Europe including Time, Fortune, Forbes, Fast Company, The New Yorker, The London Spectator, and The Economist. He edited the Asian edition of Time while living in Hong Kong, and then moved to London to edit the European, Middle Eastern, and African editions of Time. As an editor and co-author, he has collaborated on books such as Guy Spier’s much-praised memoir, The Education of a Value Investor, a guy I’ve known recently and he’s fantastic, and that’s how we actually were fortunate enough to connect. He’s also coming up with an autobiography of a legendary art collector. Born and raised in London, and received a master’s degree in journalism in Columbia. He’s now in New York, Guy, I can’t thank you enough for introducing us, and William, welcome to the show.
John, it’s such a pleasure to be here with you. Thank you.
How did you get started in the world of journalism, investing, and how did you become passionate about that? Can you take us back to your childhood if you don’t mind?
Sure. I grew up in London and I grew up in a very bookish family. My father was a very literary judge. My mother was a writer and so everything really was about words and language and the like. I went to Eton which was this very posh English school, which was where people like Prince Harry and Prince William went. I was supposed to be this great English gentleman, and I thought I’d be a man of letters, and I went off to Oxford and I studied English literature. So far so good.
I left at 20, 21 thinking I was going to become a famous novelist, and then to my surprise I discovered the stock market. Basically, I had owned a small apartment with my brother at London and we sold it. I had a little bit of money — not a great deal because in those days land and property wasn’t as valuable, and I needed to figure out what to do with the money. I started to study investing, and what I found was really intriguing: there was this elite group of investors who were incredibly smart and who had this record of beating the market over many years. They were these master game players, and I think there was a part of me that had always been very lazy, and never really wanted to get my hands dirty. I never would have summer jobs where I would do other really serious and painful things. I always had this fantasy that I will just make money by using my brain.
When I was about 15, I had become obsessed with horse racing. Again, because I thought “Here’s a great way of making money without doing any real work”, what happened to me when I discovered investing was I thought once again “Okay, this is this really cool area where if you’re really smart you can actually outwit the crowd.” Initially, what happened to me, was my interest in business and investing was born out of my total laziness. I just wanted to make money without having to do a lot of work.
As I became a journalist in my early 20s, I had this incredible opportunity to interview some of these people. I would go off, say, to the Bahamas, to interview Sir John Templeton, who is this guy who had averaged 15% a year returns for 38 years, and ended up making $400 million selling his company. I would actually get to see these extraordinary people up close, so what started in a way is this naughty, somewhat lazy indolent boy wanting to not have to do very much work, actually becoming this intellectual passion.
I looked at these guys like Templeton, Peter Lynch, or Michael Price who is on the cover of Fortune and the biggest SOB on wall street, and think “So what do they have that other people don’t have? Why — when most people are going with the flow, doing okay and sometimes well, then failing, and then being fearful and not really fulfilling their potential — is there this group of people who perform extraordinarily well, that win over the long term? What I found that’s been enduring fascinations to me over the last 25 years, is this idea that if you want to be more successful both as an investor and also in life, in business, in your family life, you should really study people who are extraordinarily successful and then reverse engineer them, and figure out why they win.
I’d say my interest in these people became a little bit more profound as I got older, and ceased to be just about how you make money and became more about how you become successful in business, how you become successful in life, what matters in life, what disappointed them, what fulfilled them, etc. In a sense, what I’ve been trying to do for the last 20+ years, is to figure out what I can learn from these people that will help me in life. I think that’s probably the overarching theme of what I am writing and the speaking that I do. That’s really the question: how do you reverse engineer these people so you can become more successful — and hopefully happier — yourself?
One of the blogs that you wrote on your LinkedIn profile about Warren Buffett is so fascinating and full of great quotes. One that resonates with me is about taking action — “Predicting rain doesn’t count, building arks does”. Is there one theme that you’ve noticed not only in Warren Buffett but other people you interviewed that are successful entrepreneurs that you can expand on that quote with?
I think one of the things that’s really fascinating about Buffett, and one of the reasons he resonates with people so deeply is because he has extraordinarily values. Here’s a guy who’s unbelievably smart and clearly has an IQ that’s off the charts. But I think the reason when you read something like that piece on LinkedIn that resonates with you, is that he’s actually talking about some fairly deep values. If I remember rightly, the first quote from him was something where he said “When I look back at my life and figure out what the reason was why I’ve been so successful”…really, the key was the unconditional love that he received from his father. Here’s someone who we think is just going to tell us how to get rich, and actually, he’s talking about unconditional love. I’m looking at these quotes from him like that and I’m thinking, “Well, how do I become the better father?” Because I have a 14-year-old daughter and a 17-year-old son, and I’m thinking that’s really interesting. Buffett is actually saying that that the reason why he has become this guy who has $70 billion and has beaten the market over 50+ years is actually because of the love of his father.
I think what’s really interesting with someone like Buffett is that it’s not just about how you beat the market or how you make money, it’s about these broader values of what works in life. When you look at the way that Buffett runs his business, he has a tremendous emphasis on integrity and decency. There’s a wonderful line from Buffett at one point where he says, “You can’t do a good deal with a bad person.” I think what’s really striking about Buffett on many levels is his profundity as a thinker about life not just about business. What fascinated me with Buffett is that I figure there were at least people like Robert Hagstrom with his great writers about why Buffet’s such an incredible investor. And my fascination increasingly over the last couple of years has been: what can we learn from Buffett about having a more successful life? I think that idea of integrity and honesty that he represents and these values like trustfulness, and authenticity, these are incredibly powerful ideas.
One of the reasons why he’s been so successful is that he has a reputational advantage. You know that if he’s going to take over your company, he’s going to leave you in places. The CEO, he thinks you’re doing a great job, he’s going to treat you decently, he’s going to let you have some autonomy. I think for a lot of us, we look at the business world and we think if you want to be really successful you have to be at stake, and I think what’s fascinating about Buffett is that you really said that’s not actually entirely true. There’s this other, more enlightened way to be a capitalist where being decent becomes very powerful.
There was a fascinating speech that Buffett gave many years ago where he was talking about his partner, Charlie Munger. If I remember rightly he said something like “When I look back over the last 41 years that I’ve been in business with Charlie, I’ve never seen him take advantage of a single person,” and that’s an incredible reputational advantage. I think this is something that applies to all of us. You have to figure out, do you want to get ahead by whacking everyone in the face with your elbows on your way up, or do you want to try to do it this other way?
That’s that great quote that you have in your blog from Warren Buffett: “It takes 20 years to build a reputation and 5 minutes to ruin it.”
Exactly, and these two friends of mine, Guy Spier and Mohnish Pabrai, had a charity launched with Warren. I think it was in 2009 where they paid $650,000 to have that. They won this charity auction to have lunch with them, and one of the most memorable things, particularly for Guy, that Buffett talked about was this whole concept of the inner scorecard. The way Buffett presented it was: “You have to ask yourself would you rather be the worst lover in the world but known publicly as the best, or be the best lover in the world but known publicly as the worst?” His point was, you have to have this internal barometer of how you behave, and he said his father was the greatest inner scorecard guide. His father was a congressman. At one point, I think there was some change in the salary scale of a congressman, so they told his father “You’re going to get an extra couple of thousand bucks.” His father said “No, I was the elected a salary of $12,500, so that’s how much I’ll take”, and he returned the money to the treasury.
I think this had a huge impact on Buffett, this idea that you should act in a way where you look yourself in the mirror every morning and you just think, ‘I’m okay with who I am’. We shouldn’t lionize Buffett or any of these other guys; they’re all flawed just as we are. Buffett had problems with his relationships and marriage. He clearly had an extraordinary wife who divorced him and who he continued to adore and remain close to. It’s not like you can look at these people and say “This is a saint and everything is perfect,” and that’s not to be discouraging about Buffett who I really do revere. I think it’s just to remind that we’re all deeply flawed, but when you look at people like Buffett it gives you something to aspire to because you start to think there’s a different way to do business that might only seem naive, but actually there’s a tremendous advantage to behaving in an ethical decent fair way.
What you said about living your life by your own inner scorecard for me, really is just a great reminder that you can’t live your life worried about what other people think about you.
I think that’s really the key. This was one of the very profound lessons I had very early in my career as a writer when I went to Bahamas to see Templeton. Before I had my interview with him, I sneaked behind a tree and was watching him exercising. He would go into the ocean every day and pump his arms and legs under the water for 45 minutes using the resistance of the water to exercise. I’m looking at this old guy — at the time I think he was 86 — and his face is slathered with this horrible white goop to protect him from the sun.
Exactly. It’s super thick and he’s got this ridiculous hat on with ear flaps, and I was looking at him I was just thinking, “Here’s a guy who just absolutely does not care what anybody thinks about how he looks, how he exercises, how he thinks,” and it struck me. It became a metaphor in my own mind, but he had this extraordinary ability to go his own way and to think to himself.
Someone had a lovely phrase to describe it when I was interviewing people about Templeton, where he said it was the ‘willingness to be lonely’. I remember asking Templeton where it came from. I said to him, “Who would it be that has the biggest influence on you?” and he said, “Really, nobody. Nobody influenced me.” I thought this was an incredibly arrogant thing at that time. Then he started talking about his parents, and he said that they would go in these road trips when he was a boy, and they would put him in charge from a fairly early age of 7, 8, or 9 of navigation. They said that they basically left him totally in charge of this, and there was one occasion where, finally, after a couple of hours, he realized that he’d taken them 200 miles in the wrong direction, and they hadn’t told him. They really were just saying, “You’re free to make your own mistakes,” and this for him became an enormously powerful thing.
But wait, there’s more!?
This post has been adapted from The Successful Pitch podcast. Listen to this past episode for more on the inspiring story of William Green
Subscribe to The Successful Pitch via iTunes.
To learn more, watch my Get Funded Fast video.
As a funding strategist, John Livesay helps CEOs craft a compelling pitch which engages investors in a way that inspires them to join a startup’s team.
After a successful 20-year career in media sales with Conde Nast where he worked across all 22 brands in their corporate division [GQ, Vanity Fair, Wired, W and Vogue] and created integrated programs for clients such as Lexus, Hyundai and Guess, John won salesperson of the year in 2012 across the entire company.
Follow John on Twitter at @john_livesay. We welcome your comments.