0:00

You're listening to TIP.

0:03

Hey,

0:03

everyone. Welcome to the Investors

0:05

Podcast. I'm your host, ClayFink.

0:08

You may be somewhat surprised by the new

0:10

voice that you're hearing on the show. As

0:12

Stig recently introduced me in our previous

0:15

episode that I'll be one of the new hosts

0:17

for the We study billionaires podcast feed.

0:19

You might be wondering if I'm taking anyone's

0:22

place, but really I'm just filling in

0:24

and producing episodes on Mondays,

0:26

so nothing really changes with the original

0:28

show of what you're really typically used

0:30

to. I'll be producing episodes

0:32

that will be released on Mondays related

0:35

to content such as covering what billionaire

0:37

investing strategies are such as Warren

0:39

Buffett, Ray Dalia, Howard Marks,

0:41

and others. I may touch on other

0:43

investing strategies as well and maybe

0:45

even dive into some financial history.

0:48

I'll be doing quite a bit of prep for these episodes,

0:50

so It'll be a learning journey and

0:53

experience for not only the listener,

0:55

but really for me as well. I'm super

0:57

excited that for today's episode, I'm going

0:59

to be covering Warren Buffett's investment

1:02

journey and how he became known as

1:04

the greatest investor to ever

1:06

live. I've broken this down into

1:08

two episodes because the story is quite long.

1:11

This episode is labeled as part one,

1:13

and the second part will be released next

1:15

Monday. As the basis of these two

1:17

episodes, most of the content was

1:19

inspired by Alice Schroeder's biography called

1:22

The Snowball, as well as Robert Hackstrom's

1:24

book The Warren Buffett Way. Highly

1:26

recommend them both if you haven't read those.

1:28

and you're interested in learning more about Warren Buffett.

1:31

The investor's podcast was actually founded

1:33

on studying Warren Buffett, and I thought there

1:35

was really no better way to kick off this journey

1:38

on podcast feed other than doing the

1:40

same. With that, let's get right

1:42

to it.

1:46

You are listening to the Investors Podcast,

1:49

where we study the financial markets and

1:51

read the books that influence self made billionaires

1:54

the most. We keep you informed and

1:56

prepared for the unexpected.

2:06

First of all, let's start out by looking

2:08

at Warren Buffett's incredible investment

2:11

track record. Just how great is

2:13

he? On May tenth nineteen

2:15

sixty five, Warren Buffett threw

2:17

his investment partnership took over

2:20

the management and control of Berkshire

2:22

Hathaway. which at the time was a struggling

2:24

New England textile maker. Since

2:27

then, here's the performance of the company.

2:30

From nineteen sixty five through twenty twenty

2:32

one, which is fifty six years, Berkshire's

2:34

stock is up three million six

2:37

hundred and forty one thousand six

2:39

hundred and thirteen percent. While

2:41

the S and P five hundred with dividends

2:43

reinvested during that same time period,

2:46

is only up thirty thousand two

2:48

hundred and nine percent. The annualized

2:51

return on that performance is twenty

2:53

point one percent per year for

2:55

Berkshire Hathaway and ten point

2:57

five percent for the S and P five hundred.

2:59

Assuming your money compounded at

3:01

twenty point one percent over fifty

3:03

six years like Berkshire did. That

3:05

would turn in a thousand dollar initial

3:08

investment into an astounding twenty

3:11

eight point four million dollars.

3:13

There have been investors that have had higher

3:15

returns no doubt, but no investor

3:18

has had the ability to compound

3:20

capital and handily beat the market

3:22

over the span of their entire lives

3:25

in the manner that Buffet has. Before

3:27

we dive into the content, the purpose

3:29

of this episode isn't to teach you

3:31

how to be worn buffett. Honestly,

3:34

it's very likely that very few of us even

3:36

have the potential to be as good of an

3:38

investor as he is. But what we can

3:40

do is look into how he invests

3:42

and try and pull some of these useful ideas

3:45

and then take those ideas. and integrate

3:47

them into our own approach to investing

3:49

in a way that makes sense to each of us.

3:52

So let's talk about how he did it. Starting

3:54

from the very beginning, Buffet was born

3:57

in August of nineteen thirty in

3:59

Omaha, Nebraska.

3:59

yeah This was right at the beginning

4:02

of the Great Depression. I think growing

4:04

up during the Great Depression led to very

4:06

difficult times for his family. Early

4:08

on in his life, his family was Just

4:11

trying to do well enough to make ends meet

4:13

and put food on the table. His

4:15

father Howard Buffet ended up starting a

4:17

business as a stockbroker giving

4:19

Warren a middle class lifestyle. Growing

4:22

up during this difficult time period

4:24

led Warren to have this just tremendous

4:26

drive to become very, very

4:29

very rich. And it's something he seriously

4:31

committed to really his entire

4:33

life. At a very early age,

4:36

even as early as kindergarten Warren

4:38

developed a deep interest in

4:40

numbers and it was pretty obvious that he

4:42

had a very sharp mind. He

4:44

even developed an interest in business

4:46

at a very young age. The first

4:48

dollar he made from business was

4:50

from selling packs of chewing gum at

4:52

the age of six. Then he came

4:54

to figure out that selling bottles of Coca

4:56

Cola was much more profit so he pivoted

4:58

to selling those instead. He

5:00

could buy a six pack for one dollar.

5:02

And if he sold each bottle for twenty

5:04

cents, he could get a twenty percent

5:07

return on his initial investment. Even

5:09

during elementary school, Warren just

5:12

really enjoyed working so he could save all the

5:14

money he made and put it in his drawer

5:16

at home. Since his dad was

5:18

a stockbroker and owned his own

5:20

business, Warren spent a lot of time

5:22

at the office and spent a ton of

5:24

time just reading and consuming as many

5:26

books as possible. One book that

5:28

had a big effect on him was a book called

5:30

one thousand ways to make a thousand

5:32

dollars. This book really got

5:34

Warren's business mind thinking and helps

5:36

put him on the path of figuring out

5:38

what makes a good business and what makes

5:40

a bad business. And especially

5:42

what type of business he could set up,

5:45

which didn't, you know, really take much of

5:47

his time and attention. So essentially,

5:49

ways in which he can make money, work for

5:51

him rather than constantly just working

5:53

for money and trading his time for

5:55

money. This is also

5:57

when Warren really got started to understand

5:59

the power

5:59

of compounding, which is really

6:02

the key ingredient to Warren Buffett's success.

6:04

The book taught him that if you had a

6:06

thousand dollars and compounded it

6:08

at ten percent per year, you'd have

6:10

sixteen hundred dollars at the end of five

6:12

years. twenty six hundred dollars at the

6:14

end of ten years and ten thousand

6:16

eight hundred dollars at the end of twenty

6:18

five years. If a dollar today was

6:20

going to be worth ten dollars sometime in

6:22

the future, then in Warren's mind,

6:24

the two were essentially the same thing.

6:27

So this idea led him to

6:29

being extremely frugal and

6:31

very mindful about his spending. Because

6:33

he knew that every dollar he let go of

6:35

was essentially the equivalent of letting

6:38

go of ten dollars sometime the future.

6:40

One of Warren's motivations around

6:42

accumulating wealth and having

6:44

strong business knowledge was the realization

6:46

that money could make him independent and

6:49

allow him to spend his time however

6:51

he wanted to. One of his biggest

6:53

goals in life was to work for himself.

6:55

So he had an immense passion for understanding

6:58

how great businesses operate in.

7:00

One of the keys to building wealth through

7:02

investing is to let your money compound

7:04

over a long periods of time. So it's no

7:06

surprise that Warren had purchased his very

7:08

first stock when he was eleven years

7:10

old. And by the age of fourteen, he

7:12

had accumulated his first one thousand

7:14

dollars primarily third, delivering

7:16

newspapers in the mornings. Anne was on

7:18

his way to achieving his goal of

7:20

becoming a millionaire at the age of thirty

7:22

five. Warren also started

7:24

a number of businesses throughout high school,

7:26

but one I thought was pretty neat was

7:28

his pinball machine business that

7:30

really apply the concept of compound

7:33

interest he have learned. So he had

7:35

purchased an old pinball machine for

7:37

twenty five dollars and partner with

7:39

local barbers in the area to

7:41

put these pinball machines in their shop. It

7:43

would just simply split the money with each

7:45

barber, and in the first week business, he

7:47

had collected twenty five dollars from the

7:49

very first pinball machine he put in.

7:51

After he had split the money with

7:53

the barber, So that was enough to

7:55

go out and buy another pinball machine to

7:57

put it in another barber shop.

7:59

This

7:59

about wraps up what I'd outlined from

8:02

his childhood. These were very

8:04

formative years for Buffet and

8:06

helped him learn some key lessons about

8:08

business and investing. Lessons

8:10

such as you shouldn't swing at every pitch that

8:12

is thrown at you for investment or business

8:14

ideas. You should rush to take a

8:16

quick profit and you should be very

8:18

careful when investing other people's money.

8:20

because he hated losing money for others

8:22

more than about anything. Then

8:24

at the age of seventeen, Warren went

8:26

off to the Morton's Business School at

8:28

the University of Pencil famous.

8:30

And initially Warren didn't really see

8:32

the point in college because he just saw it

8:34

as an obstacle in accumulating wealth.

8:37

And he just thought it was going to slow

8:39

down his path to doing that.

8:41

He ended up transferring to

8:43

Nebraska, which is where I went to college

8:45

actually. Upon graduation, Warren

8:47

got the sudden motivation to attend

8:49

Harvard Business School, which was driven

8:51

by the prestige he'd receive,

8:53

you know, as well as the networking opportunities and

8:55

the connections he would make from such

8:57

an experience. However,

9:00

Harvard denied him so he started

9:02

investigating other graduate programs.

9:04

In his research of other universities,

9:06

he had discovered that Benjamin

9:08

Graham was a professor at Columbia.

9:10

Graham wrote the book, the intelligent

9:13

investor, which is what Buffet would

9:15

consider essential reading for those

9:17

that want to understand how the stock

9:19

market really works. Buffet

9:21

was someone who would read and reread

9:23

every single investment book until

9:25

he discovered what actually worked

9:27

the best. He left Graham's

9:29

approach not only because it worked at the

9:31

time, but it was very rational, systematic,

9:33

and it was a reliable investing

9:36

method. And I think one

9:38

thing that really sets Buffet

9:40

apart from, you know, many other

9:42

people, many other investors was

9:44

his whole life and especially from an

9:46

early age, He just had this

9:48

intense obsession with

9:50

reading and learning. He was the

9:52

type of person that when he would get

9:54

interested in a particular topic, would

9:56

go out and read every single book he could

9:58

find on it. And this most definitely

10:00

applied to investing as well as he would

10:02

read and reread all the books he

10:04

could find. Benjamin

10:06

Graham's books, he outlined his own

10:08

definition of what makes an investment.

10:10

Graham said, an investment

10:13

operation is one in which

10:15

a pawn thorough analysis promises

10:18

safety of principle in a satisfactory

10:20

return. Operations not

10:22

meeting these requirements are speculative.

10:25

Graham was also well

10:27

known for ensuring all of his investments

10:29

had an adequate margin of safety,

10:31

giving him some room for error in his

10:33

stock picks and that if he was somewhat

10:35

off in any of his assessments,

10:37

It's still likely he would make

10:39

money. To try and do this,

10:41

there are two methods investors could

10:43

apply. One, purchase

10:45

shares when the overall market is

10:47

trading at low prices, like when stocks are

10:49

in a bear market, or two

10:51

purchase the stock when it trades below its

10:53

intrinsic value. even though the overall

10:55

market might not be substantially

10:57

cheap. In either case, Graham

10:59

said that a margin of safety is

11:01

present in the purchase price. Benjima

11:04

Graham also believes that the single most

11:06

important factor of a company's

11:08

value is their future

11:10

earnings power to determine how much

11:12

the company is actually worth.

11:14

The simple formula he used was

11:16

determined by estimating the future

11:18

earnings of the company in multiplying those

11:20

earnings by an appropriate earnings

11:22

multiple, which depended on a

11:24

number of factors such as the

11:26

stability of the earnings, the company's

11:28

assets, dividend policy as well

11:30

as the financial health of the company. And

11:32

the intrinsic value isn't going

11:34

to be one specific and

11:37

exact number. Typically, for

11:39

a stable company, you can determine some

11:41

sort of range of values that the company's

11:43

intrinsic value is assessed to fall

11:45

between. And again, the margin of safety

11:47

concept plays in here because

11:49

grandma's to find a company whose intrinsic

11:51

value is trading well below the

11:53

market price in order to end up

11:55

making that purchase. So

11:58

Buffet ended up getting into Columbia

11:59

business school so he could learn from Benjamin

12:02

Graham. One of Buffet's

12:04

very first classes was with David

12:06

Dodd. He was the author of Security

12:08

Analysis alongside Benjamin

12:10

Graham. This book was over seven

12:12

hundred pages and Warren

12:14

had practically memorized this book

12:16

and he knew all the examples they laid

12:18

out in the book. Buffet knew

12:20

the book so well he claims

12:22

to have known it even better than

12:24

Dodd himself. This goes to

12:26

show just how smart Buffet was as

12:28

he not only was an extremely

12:30

avid reader, He also had

12:32

practically an incredible photographic

12:35

memory. Buffet

12:37

paid close attention to the stocks that

12:39

Benjamin Graham was buying because he believed

12:41

that Graham had cracked the

12:43

code on finding deeply undervalued

12:45

stocks. Upon his search, he

12:47

discovered that Graham was the chairman of

12:49

the board of GEICO. In that

12:51

Graham's investment company, Graham Newman

12:53

Corporation, had owned fifty

12:55

five percent of GEICO at the

12:57

time. Buffett wanted to learn more

12:59

about GEICO, so he hopped on a train to

13:01

head to Washington DC, knocked

13:03

on the company's front door and said that he

13:05

was a student of Graham's and wanted to

13:07

learn more about the business. GEICO's

13:10

financial vice president, Lorne

13:12

or Davidson, thought what the heck I'll

13:14

give the kid a few minutes of my time and

13:16

then just politely ask him to

13:18

leave. However, this guy quickly

13:20

realized that he was not talking

13:22

to your tip school student. The

13:24

questions Warren was asking

13:26

him are questions that he would be asked by

13:28

an experienced insurance

13:30

stock analyst. As many of you might

13:32

know, GEICO had positioned themselves

13:34

to be a low cost provider of

13:36

auto insurance by marketing through the mail

13:38

without using an insurance agent.

13:40

which oftentimes get paid a decent

13:42

commission for each policy sold.

13:44

Davidson and Buffet sat down and

13:46

chatted about insurance for four

13:48

hours that day. And that ended up

13:50

really being Buffet's introduction to

13:52

insurance, which many of you also

13:54

know ended up being an integral

13:56

part of his investment career.

13:58

After diving deep into GEICO's business

14:01

model, he moved seventy five

14:03

percent of his portfolio into

14:05

GEICO was a bold move for someone who

14:07

was pretty cautious with his investments.

14:09

Despite only being a freshman in

14:12

college, This was nearly a fifteen

14:14

thousand dollars bet for Buffet.

14:16

It was in Buffet's second semester

14:18

that he had the opportunity to be

14:20

in one of Benjamin Graham's classes. Graham's

14:23

approach to investing was to find companies

14:25

whose market price was trading far

14:27

below what the business was worth conservatively.

14:30

Essentially, he was looking for companies where

14:32

in theory if the debts were repaid,

14:34

the assets of the company were

14:36

sold off, how much cash would they have

14:38

left? That would be your intrinsic

14:40

value of the business. Put it

14:42

another way, if a person has fifty thousand

14:44

dollars in assets and cash, forty

14:47

thousand dollars in debt to be paid, the

14:49

net worth of that person would be ten

14:51

thousand dollars after the assets are

14:53

sold and the debt is repaid. The

14:55

trick with this approach is that you don't know

14:57

when the market will eventually come to

14:59

its senses and bring the market price

15:01

closer to fair value or the intrinsic

15:03

value. The way Graham hedged against the

15:05

certainty in the price was to be sure

15:07

he built in a margin of

15:09

safety or plenty of room for error to

15:11

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Alright? Back to the

17:47

show. Buffet

17:48

highlighted three primary principles

17:50

that he picked up from Graham's classes.

17:53

One, a stock is the right to

17:55

own a little piece of a business.

17:57

It's not a blip on a screen. It's not

17:59

a piece of paper.

18:01

or something that should be used to trade

18:03

in and out of constantly. Buying

18:06

a stock is the same as buying

18:08

ownership in a real business.

18:11

Two, Use a margin of safety. Investing

18:13

includes estimates and uncertainty.

18:15

A wide margin of safety ensures that

18:17

the effects of good decisions

18:20

are not wiped out by errors. Three,

18:23

mister Market is your servant, not

18:25

your master. Mister Market offers

18:27

you a price every day.

18:29

and the price that mister Market offers should

18:31

not influence your view over the price. From

18:33

time to time, he will give you a chance

18:35

to buy at a low price or

18:37

even sell at a high price. Next,

18:40

Buffet set his sights on doing

18:42

anything he could to work for Benjamin

18:45

Graham. He knew that if he work for him, it

18:47

was certain that he would excel.

18:49

At the time, Buffet lacked the self

18:51

confidence in many areas of his

18:54

life. But one area he

18:56

was very ambitious and confident

18:58

in was his ability to analyze

19:00

stocks. So he asked Graham if he could

19:02

work for him at Graham Newman, which

19:04

only had four employees. Buffet

19:06

was Graham's only student who had

19:08

ever earned an a plus in his twenty

19:10

two years of teaching. To help seal

19:12

the deal, Warren even offered to work

19:15

for Graham for free. But

19:17

Graham actually turned him down since

19:19

Graham was adamant about

19:21

only hiring Jewish people since

19:23

the big investment banks at the time

19:25

wouldn't do so. Since Warren

19:27

couldn't work for Graham, He decided to move to

19:29

Omaha, Nebraska and become a

19:31

stock broker for his father Howard's

19:33

company, Buffet Falk. Since

19:35

he moved to Omaha in not New York City, he was outside

19:37

of the confines of Wall Street and

19:40

was really able to think for

19:42

himself and come to his

19:44

own conclusions and not be influenced by

19:46

the herd mentality. And it

19:48

was at this point that you could see

19:50

Warren really start to think for himself

19:52

instead of solely following the two people

19:54

that had just a huge influence on

19:57

him up to that point. This

19:59

was his father Howard and then

20:01

Benjamin Graham as well. His

20:03

father was somewhat of a gold bug

20:05

and was very concerned about

20:07

inflation, so he recommended Warren hold

20:09

gold and mining stocks. Whereas

20:11

Graham was extremely conservative

20:13

and thought the market was overvalued.

20:16

Buffet took a very micro

20:18

approach and saw many great opportunities of businesses

20:20

that he thought would be fantastic investments.

20:23

GEICO being one of them.

20:26

Sure. Inflation might take hold

20:28

temporarily or the economy might have

20:30

the inevitable hiccup at some point in the

20:32

future. But he was certain that over

20:34

the Great businesses was

20:36

where the money was to be made.

20:38

Buffet also quickly learned about the

20:40

importance of incentives. As

20:42

a stockbroker, you're paid a commission each

20:44

time someone buys or sells the stock

20:46

through you. But at the time, Warren

20:49

wanted to recommend all his

20:51

friends and family buy GEICO stock

20:53

and hold it for the next twenty years.

20:55

But you can't make a living by giving that

20:57

advice and being a stockbro so

20:59

he felt there was a bit of a conflict of

21:01

interest being in this position. So

21:03

Warren was in search for something new.

21:05

Luckily, he had kept in touch with

21:08

Benjamin Graham and Graham gave him a call in nineteen fifty

21:10

four and asked Warren to come work for

21:12

him in New York. As

21:14

many of the listeners know, Warren,

21:16

Graham, and the rest of the team at

21:18

Graham Newman focused on finding companies

21:20

they like to call cigar butts.

21:23

cheap in unloved stocks that had been cast aside

21:25

like rest of the team at Graham Newman

21:28

focused on finding companies they like

21:30

to call cigar butts. cheap

21:32

in unloved stocks that had been cast aside

21:34

like a little cigarette that had

21:36

one or two free puffs left in

21:39

them. that everyone else would just

21:41

really overlook. This is what Graham

21:43

specialized in. Not because he loved

21:45

these companies in particular, He

21:48

just recognized that the strategy worked

21:50

really well for him. And Graham knew that

21:52

some of these companies would end up going

21:54

bankrupt and lose him money, so he would

21:56

spread out his risk over a large number

21:59

of these companies. Warren

22:00

however took a slightly different

22:02

approach personally. He was much more

22:04

confident in his ability to pick winning stocks.

22:06

And when he found picks that he was very sure

22:09

in, he would bet big on

22:11

them. For Buffet,

22:13

Graham was much more than a

22:15

tutor. Graham provided Buffet a clear and reliable

22:18

roadmap to successful stock picking,

22:20

which was essentially seen as

22:22

similar to gambling by

22:24

many people. Warren then learned the

22:26

importance of opportunity costs.

22:28

Without using leverage, he could only invest

22:30

a certain dollar in one place.

22:32

He take that dollar and invest it in two

22:35

different companies. He had to choose the

22:37

best place for that dollar

22:39

so that he could earn the highest

22:41

possible return without taking any

22:43

excess risk. Because

22:45

of this, Buffet had sold off much of

22:47

his Geico position because he had

22:49

found better opportunities such as

22:51

Western Insurance, which was earning

22:53

twenty nine dollars per share while the stock

22:55

was trading for as little as three dollars

22:57

per share. So

22:59

to find these companies, Warren would

23:01

sift through any resource he could,

23:03

such as Moody's manuals or what

23:05

were called pink sheets, In nineteen

23:07

fifty five, Warren had made twenty thousand

23:10

dollars in profit in just a few

23:12

weeks on a bus company that was

23:14

trading at a big discount to

23:16

its nest to its net

23:18

assets. Warren was only in his mid

23:20

twenties at the time and nobody

23:22

in Buffet's family had ever made

23:24

twenty thousand dollars on a

23:26

single idea. The amount was several

23:28

times more than what the average person earned

23:30

in a whole year's work.

23:32

Now some of you might be wondering how

23:34

can I do what Buffet did today and invest my

23:36

money at high rates of return with very

23:38

little risk. Well, today with

23:40

the rise of technology, Large

23:43

trading firms can't spot these

23:45

opportunities in an instant. So

23:47

finding these types of deals that Warren

23:49

Buffett found in the nineteen fifties

23:51

is extremely difficult if

23:53

not impossible. So we as investors

23:55

will have to find a different approach

23:57

to investing that works well for us if want

23:59

to take an active investing approach.

24:02

Then in nineteen fifty six, Graham

24:04

decided his time was up with his

24:06

investment career and it was time for him

24:08

to retire. Buffet was offered to

24:10

become a general partner in

24:12

Graham's firm, but he turned it down and at

24:14

the age of twenty six moved back to

24:16

Omaha to start his own

24:18

partnership where he could invest from his house

24:20

and could put his friends and

24:22

relatives into the same stocks he invested

24:25

in. At this point, Warren was worth a

24:27

hundred and seventy four thousand

24:29

dollars at the age of twenty six.

24:31

He structured the partnership so that

24:33

he got half of the upside above a

24:36

four percent threshold, and he took a quarter of

24:38

the downside himself. So even

24:40

if his investments broke even, he

24:42

ended up losing money.

24:44

He promised his investors that his investments

24:47

would be chosen on the basis of

24:49

value in not popularity and

24:51

that the partnership will attempt to

24:53

reduce the permanent loss of capital to

24:55

a minimum. Within that

24:57

first year, Buffet already managed

24:59

over one million dollars in

25:01

assets, much of which came over from just

25:03

friends and family, but from people who needed

25:05

a new place to invest after

25:07

Graham's partnership had ended.

25:09

During that time period, Buffet was primarily

25:12

purchasing companies that were around the

25:14

one to ten million dollars in

25:16

market cap that most people knew

25:18

nothing about. One of Buffet's

25:20

big problems in the early days was that

25:22

he had so many opportunities, but

25:24

not enough capital to pursue

25:26

such opportunities. So a

25:28

lot of his time was spent trying to sell

25:30

others on joining the partnership whether

25:32

that would be networking or

25:34

introducing himself around Omaha or

25:36

reaching out to former members of Graham's

25:39

partnership. He'd get ten thousand dollars

25:41

here, hundred thousand there, fifty

25:43

thousand there, month after month, he was

25:45

getting more and more investors in his

25:47

partnerships. And this was great from

25:49

Warren's perspective because the more

25:51

money he managed the more money he could

25:53

make and the faster his snowball of

25:55

wealth to the million dollar mark

25:57

could accumulate. Like mentioned

25:59

before, Warren was very big

26:01

on incentives. He knew that his

26:04

incentives were aligned with his investors' incentives.

26:06

If he did well in managing their money,

26:08

then his partners would do well too. If

26:10

he did poorly, then he would suffer

26:12

from that just like his partners did.

26:15

really operated in that manner

26:17

from day one. Many

26:19

times when Buffet brought on larger

26:21

investors, he would set up new

26:23

partnerships that were legally separate

26:25

from his other partnerships. Legally,

26:27

he can only take on a hundred partners

26:29

without having to register with the SCC

26:31

as an investment adviser. And

26:33

eventually, his partnerships got to the

26:35

point where word-of-mouth was really

26:37

starting to take hold. People would

26:39

see the results they were getting from Buffet

26:41

and they would go out and tell all their friends, hey,

26:43

if you wanna get rich, then you need to invest

26:45

your money with Warren Buffet. So

26:48

he didn't need to do much selling at

26:50

this point as he was getting many

26:52

organic inbound requests

26:54

from prospective investors. His

26:56

second partnership achieved an annualized rate

26:58

of return of twenty four point

27:00

five percent versus the market

27:02

average of nine point three percent.

27:05

Warren eventually dissolved all of the

27:07

partnerships into one. And in nineteen

27:09

sixty one, the partnership

27:11

returned forty six percent

27:13

versus the Dow's twenty two percent. Because of

27:15

Buffett's massive success up to

27:17

this point, he had achieved his

27:20

goal of becoming a millionaire by the age of thirty

27:23

five. His whole family thought he was crazy

27:25

for setting such a goal and thinking

27:27

he could achieve such a thing. but

27:29

he ended up doing it at the age of

27:32

thirty rather than thirty five. Although

27:34

he was on his own investing

27:36

now, Buffet, frilly didn't deviate

27:38

too much from Graham's investment

27:40

strategy of buying the cheapest stocks

27:42

he could possibly find. was until

27:44

Buffet met Charlie Muenger.

27:47

Warren met Charlie Muenger in

27:49

nineteen fifty nine when Buffet was

27:51

around twenty nine years old. and

27:54

they clicked and became friends

27:56

almost instantly. Manger

27:58

was a lawyer for most of his career up

27:59

until then, But like Buffet, he

28:02

was also an avid reader

28:03

that enjoyed reading about business,

28:06

investing, and studying successful

28:08

individuals. Mungar enjoyed being a lawyer,

28:10

but what he decided he really

28:12

wanted was to have the freedom and

28:14

financial independence to do whatever he

28:16

wanted. Similar to Buffet, After

28:19

he learned about Buffet's partnership model,

28:21

he was hooked and wanted to

28:23

implement the same model for himself

28:25

to achieve that independence he wanted.

28:28

Munger was a bit older, but he wasn't as wealthy

28:30

as Buffet. One reason was because he

28:32

was a lawyer and not so focused on

28:35

accumulating as much money as

28:37

possible. But another reason was that Monger

28:39

had eight children, which we all know

28:41

is not cheap. Now Monger understood

28:43

Buffet's approach of buying businesses that

28:45

were really cheap, but he was much more

28:48

interested in investing in great

28:50

companies. He wanted to learn more

28:52

about a company's intangibles intangible

28:54

assets such as the strength, the management, the

28:57

durability of the brand, or how someone

28:59

else could compete with them.

29:02

What Monger didn't like about Benjamin

29:04

Graham's approach was that he was quite

29:06

pessimistic about the future and

29:08

invested in a way that was very very

29:10

conservative. Whereas Buffett's personality

29:12

was very optimistic about the future

29:14

and bullish on where America was

29:16

heading. The cigar butt style of investing

29:19

determining what the company would be worth

29:21

if it were dead in all of its assets

29:23

were liquidated. Munger thought

29:25

that given Buffet was so optimistic

29:27

about the future, He should be investing in a

29:29

way that reflects that. One time

29:31

Buffet explained why Graham's cigar

29:33

butt strategy wasn't always

29:35

the best. He said if you paid eight

29:37

million dollars for a company whose assets

29:39

were ten million, you will

29:41

profit handsomely if the assets are

29:43

sold on a timely basis. However,

29:45

if the underlying economics of the

29:47

business are poor and it takes ten years to

29:49

sell the business, your total return

29:51

is likely to be below average.

29:54

Remember, time is your friend of the wonderful

29:56

business in the enemy of the

29:58

mediocre business. Buffet quoted

30:00

John Caines in regards to

30:03

this transition. The difficulty

30:05

lies not in the new ideas, but

30:07

in escaping from the old

30:09

ones. Buffet however

30:11

didn't ever forget one

30:13

key principal that Graham taught him. Successful

30:15

investing involves purchasing stocks when

30:17

their market price is at a significant

30:19

discount to their underlying business

30:22

value. In nineteen sixty

30:24

three, in nineteen sixty four,

30:26

Buffet did start to come around to Munger's

30:28

line of thinking as he purchased American

30:30

Express as it was being punished by

30:32

the market. It was by no means a

30:34

cigar butt style pick. However,

30:36

Buffet invested thirteen million dollars of

30:38

the partnership's money into the stock

30:41

making it the fund's largest position.

30:43

The stock had been involved in a giant

30:45

scandal in which it was backed by

30:48

fraudulent loans, And American Express's

30:50

share price decreased by over fifty

30:52

percent. As Robert

30:54

hackstrom put it in his book, if

30:56

Buffet has learned anything from Ben Graham, it

30:58

was this. When a stock of a strong

31:00

company sells below its intrinsic

31:02

value acts decisively. Buffet

31:06

was aware of the fifty eight million dollar

31:08

loss American Express have had from

31:10

the fraudulent loans, but he went

31:12

around Omaha and found that people who had

31:14

American Express cards still using them as

31:17

usual. Then he visited

31:19

several banks and saw that American Express.

31:21

Travel's checks had no impact

31:23

on their sales either. So he pulled the trigger

31:25

as his share price tripled over the

31:27

next two years. This was a

31:29

timely move for Buffet as the cigar butt

31:31

approach was becoming more

31:33

and more goal to implement as the

31:35

opportunities begun to be

31:37

arbitraged away by the market. And since

31:39

Buffet was managing larger sums

31:41

of money, This also limited the

31:43

choices of Cigarba companies to

31:45

invest in as very small companies were

31:47

no longer really moving the needle

31:49

for him. Another individual who had

31:51

influence on Buffet transitioning to

31:53

buying quality companies was

31:55

Phil Fisher. Fisher believes that

31:57

superior returns could be made by

31:59

investing in companies with above average

32:01

potential that had capable managers.

32:04

While Graham's approach was very qualitative,

32:07

Fisher's approach was very much

32:09

quantitative. He popularized what he

32:11

called the Scuttlebutt method of

32:13

researching all of the qualitative aspects

32:15

of a business, its management,

32:17

and its competitive advantage, especially from

32:19

those who are very familiar with

32:22

the company. Fisher would take

32:24

those steps that most other investors

32:26

simply wouldn't take in their research such

32:28

as meeting with the customers or the

32:30

vendors to get their opinion on

32:32

the company as well as their opinion on the company's

32:34

competitors. So Fisher would go

32:36

out and chat with the most knowledgeable people

32:38

about a company, their employees, their

32:40

investors, and those who weren't knowledgeable

32:42

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Back

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to the show. Buffet

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also adopted ideas from Fisher around portfolio diversification.

36:34

Graham being very conservative

36:36

liked to diversify

36:38

his bets. whereas Fisher top

36:40

Buffet not to overstress

36:42

diversification. He thought it was

36:44

a mistake to spread out your risk

36:46

given that your very sure about a handful of stocks that were

36:48

very well researched. Also,

36:50

once you have too many stocks, it

36:52

makes it practically impossible to watch

36:55

all of them It monitored their

36:57

business performance In Fisher's view, buying shares

37:00

in the company without thoroughly

37:02

understanding the business was

37:04

far riskier than having

37:06

limited diversification. But

37:08

Buffet wasn't a hundred percent done with

37:10

buying cigar butts when he found them.

37:12

as he had discovered a textile maker

37:15

in Massachusetts. This company was called

37:17

Berkshire Hathaway. The plan was

37:19

to buy the company liquidated

37:21

its assets and shut down the

37:24

business. According to the accountants in the

37:26

company's books, the business was

37:28

worth over nineteen dollars

37:30

per share. but the stock was

37:32

trading at seven dollars and fifty cents. So Buffet started accumulating

37:34

shares in the company. Original

37:38

planned to sell his shares in a tender

37:40

offer at eleven dollars and fifty

37:42

cents. But he received a note

37:44

that the

37:46

tender offer or they offered to buy Buffet shares was not at eleven

37:48

dollars and fifty cents, but it was

37:50

at eleven dollars and thirty seven

37:52

point five

37:54

cents. Being who he was, this infuriated him

37:56

to no end as he was pretty much

37:58

a tight wad and wanted to maximize

38:00

every single dollar he could.

38:03

So instead of selling the stock, he

38:05

continued to buy as many shares

38:07

as he could possibly get. He

38:09

wanted to buy the

38:12

whole company. There's a whole backstory on how this ended up

38:14

playing out, but essentially it seems like

38:16

Buffet ended up getting pretty

38:18

emotional when purchasing

38:20

Z shares. Because he had

38:22

issues with shutting down operations and

38:24

companies in the past, he had

38:26

enough shares to have influence

38:28

over the management of

38:30

the business But he learned from his past he shouldn't shut Berkshire's

38:33

operations. Essentially, he had

38:35

discovered that Berkshire was a

38:38

cigar butt. But it didn't have any puffs left. And he's

38:40

on the record for saying he would

38:42

have been better off if he had

38:44

never even heard of

38:46

Berkshire Hathaway. which is pretty

38:48

funny given that the company is worth over

38:50

six hundred billion dollars

38:52

today. By nineteen

38:54

sixty six, His partnership

38:56

had grown to forty four million.

38:58

And for the first time in his career,

39:00

he had more money than he

39:02

had ideas. So he made the

39:04

decision to close the doors on new

39:06

investors in his partnership so

39:08

that he wouldn't disappoint his partners

39:10

by investing in

39:12

subpar opportunities. Still at this point, Buffet was making a lot of cigar butt

39:14

approach deals with the exception of

39:16

American Express, which had played

39:18

out extremely well up to

39:20

that point. However,

39:22

as we approached the late nineteen

39:24

sixties, he was beginning to make the

39:26

transition to buying great businesses

39:28

rather than

39:30

cheap businesses. At the time, companies like Polaroid,

39:32

Xerox and Electronic Data

39:34

Systems were taking hold on

39:36

the market gaining a lot

39:38

of hype as technology companies

39:40

whose products went way over Buffet's

39:42

head started to soar.

39:44

With that, Buffet made

39:46

two rules for himself.

39:48

One, he would not invest in

39:50

businesses whose technology is way over

39:52

his head and it's crucial to the

39:55

investment decision. Two, he would

39:57

not seek out activity in the

39:59

operations of the investment. even if it

40:01

offered tremendous opportunities for profit, meaning that he wanted

40:03

his investments to be very

40:05

passive and not acquire

40:07

a tremendous amount of his time and

40:10

attention. The first point

40:12

is that value investing principle that you

40:14

should only invest and what you

40:16

truly understand. If you don't

40:18

truly understand your investment, then

40:20

it's very difficult to hold on

40:22

during the inevitable drawdowns in

40:24

the market. When Buffet

40:26

was thirty eight years old, he had

40:28

watched Intel start from nothing

40:30

and turned into a massive success

40:32

and likely one of the best opportunities he

40:34

had ever come Cross, but he never purchased Intel for the

40:36

partnerships. And he had watched a

40:38

number of other tech companies be great

40:40

successes as

40:42

well. but also many more had ended up failing.

40:44

He did have a strong, long standing

40:46

bias against technology companies because

40:48

he felt there was no margin

40:51

of safety in them. Buffet

40:53

was so focused on margin of

40:55

safety, quoting Alice Rotter

40:57

in her This particular quality, to passive possible

41:00

riches, if he could limit his

41:02

risk, was what made him

41:04

warn Buffet.

41:06

and

41:06

quote. The second point got to

41:08

something Buffet learned through experience.

41:10

He was involved in many

41:12

deals that led to headaches,

41:14

just a massive time commitment. The purchase of Berkshire Hathaway

41:16

stock being one of them. He was

41:19

on the phone almost daily

41:22

with Berkshire employees trying to the

41:24

right decisions to ensure he didn't

41:27

lose any money. In

41:30

October nineteen sixty seven letter to

41:32

shareholders, he wrote to

41:34

investors that he would limit himself to

41:36

activities that

41:38

were safe, profitable, and pleasant.

41:40

He also wrote that when I am dealing with

41:42

people I like and businesses, I find

41:44

stimulating and

41:46

achieving worthwhile all returns

41:48

on capital employed, say ten to

41:50

twelve percent. It seems

41:52

foolish to rush from situation to

41:54

situation to earn a few more

41:56

percentage points. It also does

41:58

not seem sensible to me to trade

41:59

known, pleasant, personal relationships

42:02

with high grade people at a decent

42:04

rate of return for possible irritation,

42:06

aggravation or worse at potentially higher returns, end

42:09

quote. This was a huge step for

42:11

Warren as he was the

42:14

biggest penny pincher anyone had ever known,

42:16

and he was always trying to achieve the

42:19

highest returns possible. So for his

42:22

investors to hear him say that he was willing

42:24

to sacrifice returns was quite a

42:26

transition for someone so

42:28

strong willed. Figuring out where he was going to allocate capital

42:30

next, he have long had his eye on

42:32

a company in Omaha named

42:34

National Indemnity.

42:36

which was located just a few blocks from his office downtown. Through

42:39

Buffet's research, he came to find

42:41

out that national indemnity ensured

42:44

some unusual people such as

42:46

circus performers and lion

42:48

tamers. The company's CEO,

42:50

Jack Ringwold, used to say, there's

42:52

no such thing as a bad risk, only

42:54

bad rates referring to the premiums that policyholders were

42:58

charged. Buffet weasled his way

43:00

to talk Ringwold into

43:02

selling National Indemnity to him. And

43:04

Buffet quickly put together the final

43:06

papers before Ringwold could change his mind

43:08

and back out of the deal. And at

43:11

that point, Buffet had entered the insurance business and was on

43:13

his way to exiting the

43:15

textile business. This But

43:17

since he had bought the whole business of National

43:20

Indemnity, he could then use the

43:22

extra profits from that business to

43:24

go out and purchased other

43:26

businesses that offered better opportunities

43:28

to compound his capital.

43:30

Another thing that Buffet loved about the

43:32

insurance business was the float that insurance

43:34

company had the advantage of holding.

43:36

Insards would pay a premium

43:38

today in return for potentially receiving

43:40

some benefit in

43:42

the future. For the time in between those dates, the insurer had

43:44

the opportunity to invest that money

43:46

and keep the returns they earned

43:48

for themselves. Buffet,

43:50

having other people's money to invest

43:52

on which she kept the profit was

43:54

like a dream come true. Despite

43:58

insurance being essentially a commodity business. It was a key

43:59

piece for his investing career as he would

44:02

eventually come around to owning large

44:04

stakes in GEICO in General

44:06

Re as

44:08

well. Likely his best insurance acquisition wasn't a

44:10

company, but a person, a Jeep

44:12

Jean. Whom he would eventually hire

44:14

to run the Berkshire Hathaway reinsurance

44:18

group At this point, his partnership had been around

44:20

for twelve years and it had achieved

44:22

an average annualized rate of return

44:25

of thirty one percent while the Dow

44:27

returned nine percent. Despite

44:30

achieving a significantly

44:32

higher return, Buffet believes that he also achieved those

44:34

returns with much less risk

44:36

taken as well. But

44:38

Buffet's opportunity set was beginning to

44:40

dry up and he was

44:42

realizing it. It worried Buffet that he would

44:44

potentially let his investors down

44:46

because he wasn't able to find deals that met

44:48

his investment

44:50

criteria. He delivered the bombshell to investors in early nineteen

44:52

seventy, letting them know that he would be

44:54

closing down the investment partnership.

44:57

For many of his investors, this was

44:59

terrible news because they just didn't

45:01

trust anyone else to manage their money

45:03

other than mourn. Buffet's partnership was making waves as

45:05

Forbes recognized it in their titled

45:08

article, How Omaha beats

45:10

Wall Street. stated

45:12

that ten thousand dollars invested in the partnership

45:14

in nineteen fifty seven would now

45:16

be worth two hundred and sixty thousand

45:19

dollars thirteen years later. It

45:21

ended with a hundred million dollars in assets

45:23

under management and grew at an

45:25

annualized growth rate of thirty one

45:27

percent without a single

45:30

losing year. At the time, Buffet was now worth twenty six

45:32

point five million dollars, and he

45:34

owned twenty six percent of

45:36

the partnership. Forbes said

45:38

that Buffet is not a simple

45:40

person, but he does have simple

45:42

taste. He had four to five bottles of Pepsi

45:44

per day, and would have that

45:46

instead of wine at dinner

45:48

parties. If the meal included anything more

45:50

complicated than a steak or a hamburger

45:52

oddly enough, he would just eat

45:54

dinner rolls. His wife had done plenty to take care of him as far

45:56

as cooking and preparing his clothes each day

45:58

for him. But he worked about

45:59

every waking

46:02

hour and he really wasn't attentive to his children at all.

46:04

Buffet was most definitely extraordinary when

46:06

it came to making money and

46:10

compounding capital. but seemed to

46:12

be anything but that in other areas

46:14

of his life because of his obsession

46:16

with business and investing. To

46:18

Buffet, doing well with money, was how he

46:20

measured success. One thing

46:22

I've really admire about Buffet is

46:24

how he truly treated his

46:26

shareholders like partners. He really

46:28

truly wanted what was best

46:30

for them. He would be fully transparent in his letters about how

46:32

the partnership performed, what his

46:34

strategy was, and what they could do with their

46:36

money once the partnership have

46:38

been diluted. As those of

46:40

you who have read Buffett's shareholder

46:42

letters know, there is so much to

46:44

learn from his brilliant writings

46:46

and teachings. He would tell his shareholders or partners as much as he

46:48

would like to be told if he were in their

46:50

shoes. When the parting shareholders

46:52

asked Buffet if they should keep their

46:54

Berkshire shares,

46:56

or to sell them, he has said he plans to hold onto it and

46:58

continue buying more. At that time,

47:00

Berkshire owned the failing textile mills,

47:03

a small bank, in the

47:06

Insure National Indemnity. Later,

47:08

Buffet would comment that Berkshire is still

47:10

like a partnership and that you basically

47:12

have the closest thing to a

47:14

private business with shareholders who identify with you and who like to

47:16

come to Omaha. He often said he

47:18

tried to treat his partners in a way he would

47:20

treat his

47:22

family. As I mentioned, Buffet is going through this transition period

47:24

as he isn't finding the cigar

47:26

opportunities anymore, so he essentially

47:28

had to adjust his strategy for

47:32

Berkshire. Here is how Buffet phrased his new approach, which was largely

47:34

influenced by Charlie Muenger.

47:36

Time is the friend of

47:38

the wonderful business and the enemy of

47:42

the mediocre. It's far better to buy a wonderful company at

47:44

a fair price than a fair company

47:46

at a wonderful price. Charlie

47:48

understood this early. I was a

47:50

slow learner. But now buying

47:52

companies or common stocks, we look

47:54

for first class businesses accompanied by

47:57

first class managements. That leads

47:59

right into a related lesson. Good

48:01

jockeys will do well on good horses, but

48:04

not on broken down

48:06

nags. One day in the early

48:08

nineteen seventies, Buffet got a call

48:10

about a company called Sea's

48:12

Candy based in California that sold

48:14

premium quality candy. Sea's

48:16

is a classic

48:18

example of great business that was trading at a fair price. This is

48:20

not a company whose stock price you'd

48:22

expect to double in one or

48:24

two years. However, Buffet and

48:26

Monker were certain that the company would be able to

48:28

grow and compound their cash flows for the

48:30

many years to come. They ended up

48:32

paying twenty five million for

48:34

seized candy, which produced roughly in nine percent earnings yield at the

48:36

time or just over two million

48:38

dollars. Munger regarded C's

48:40

candy as the first time Buffet paid

48:42

for quality.

48:44

Ten years later, Buffet was offered to sell seats for

48:46

a hundred and twenty five million dollars,

48:48

which was five times the nineteen seventy

48:50

two purchase price and he decided to

48:53

pass on the Another area that interested

48:55

Buffet was the newspaper and publishing

48:58

business. By the early nineteen seventies, he had

49:00

owned some

49:02

newspaper which was based in Omaha and he was always on the lookout

49:04

for other newspapers to purchase for Berkshire

49:06

Hathaway. In nineteen seventy

49:08

three, Buffet had started purchasing shares

49:10

in Washington Post and a number of other newspaper

49:13

companies. Buffet believes that the overall

49:15

market was not appreciating the underlying

49:17

value of these newspaper companies,

49:19

so he took advantage of the opportunities

49:21

he found. Buffet was also involved

49:24

in a holding company with Charlie Muncker

49:26

called Diversified Retail Company

49:28

or DRC. Bufa owned

49:30

eighty percent of the company, Mongo owns

49:32

ten percent, and David Guttsman owned ten

49:34

percent as well. It was created to

49:37

primarily invest in chief retail companies. Despite

49:39

having quote unquote retired from being a

49:41

money manager on behalf of others, he

49:43

was still very busy finding companies to

49:45

buy in the cheap. It

49:47

was what he loved to do and he had no plans

49:50

on ever stopping. During the

49:52

nineteen seventies, inflation had started to

49:54

take hold Eventually bringing

49:56

down those stocks and Buffet was out looking

49:58

for more deals. Since he was

49:59

fully immersed and understood the

50:02

newspaper business, He found stocks of

50:04

advertising agencies such as Interpublic, Jay Walters Thompson,

50:06

and Al Gilvey and Martha that

50:09

he put nearly three million dollars

50:11

into as they were trading at less than times earnings. Through the

50:14

inflationary nineteen seventies, Buffa

50:16

believed that owning stocks and companies that

50:18

had strong

50:20

pricing power were the best protection against inflation. Inflation

50:22

was running in the double digits

50:24

and investors were piling into gold,

50:28

diamonds, platinum art, real estate, and

50:30

commodities. Everyone thought that

50:32

cashless trash in business week

50:35

titled an article the death of

50:38

equities. Meanwhile, Buffet wrote

50:40

that it was time for investors to

50:42

be buying stocks, thinking that when everyone else

50:44

wants to void stocks is the best time

50:46

to purchase as investors are getting more

50:49

favorable prices when the consensus

50:51

outlook is poor. Many of Buffett's holdings were down twenty five percent

50:53

or so. His former partners had wondered

50:56

if it was a mistake to hold on to

50:58

Berkshire, but Buffett saw it as

51:00

the opposite. as he started buying as much of the stock as he could

51:02

until he had run out of cash.

51:04

Buffet remained calm throughout the downturn as

51:06

he believes mister markets opinion of

51:08

the stock's

51:10

price at time had no bearing

51:12

on the company's true intrinsic value. At this time,

51:14

Buffet was receiving a fifty thousand

51:16

dollar annual salary from Berkshire Hathaway.

51:20

and come to realize that he was very rich from a network

51:22

perspective, but very cash poor.

51:24

Despite Buffet being cash poor, were

51:28

producing plenty of cash, which he

51:30

could then use to reinvest in other

51:32

companies. Buffet decided

51:34

to set up a reinsurance company to link

51:37

Berkshire Hathaway to his holding

51:39

company, DRC. The reinsurance company

51:41

ensured National Indemnity, and he set it up in

51:43

a way that allowed him to take the

51:46

immense profit fits from National Indemnity and invest them in

51:48

DRC. Alright. That is

51:50

all I had for part one of how

51:52

Warren Buffett became the greatest investor

51:56

to ever live. To give a quick rundown on what we covered

51:58

today, we touched on Buffet's childhood

52:00

in how he was really just

52:02

a learning machine that was

52:04

just obsessed with business in making money. Then he

52:06

attended college and started learning directly

52:08

from his mentor, Benjamin Graham. Then

52:12

he started as his extremely successful investment partnership and

52:14

eventually met Charlie Munger who

52:16

joined him at Berkshire Hathaway. At

52:19

this point in buffer's journey, we are now in the

52:21

mid nineteen seventies as we have a

52:24

lot more ground to cover in next

52:26

week's episode. Next week, we'll

52:28

be diving into his purchase of

52:30

GEICO, Nebraska Furniture Mart,

52:32

Coca Cola, and many others,

52:34

how Solomon brothers nearly destroyed Buffet's entire investment

52:36

career? How he ventured through the two

52:38

thousand tech bubble and crash

52:40

to follow? as well as Berkshire

52:42

Hathaway weather through the great financial

52:44

crisis, which occurred from two thousand

52:46

seven to two thousand nine. Again,

52:49

part two will be released next Monday

52:51

on October seventeenth twenty twenty two. This

52:53

will be titled WSB four

52:56

eighty four. To stay tuned for part two, be sure to subscribe to

52:58

the show so you can get notified next

53:00

Monday when the episode gets released.

53:02

In the episodes

53:04

to come, I'll be diving

53:06

in even more on how Warren

53:08

Buffett invests exactly today and what his

53:10

principles entail. I'll also be getting

53:12

into some real world

53:14

examples and applying Warren Buffett's framework. Thank you so much for

53:16

tuning in. I really, really appreciate

53:18

it. And hope you've enjoyed this series so

53:20

far on

53:22

Warren Buffett. With that, I'll see you again next week.

53:24

Thank you for listening

53:25

to TIP. Make sure to

53:27

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53:28

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