“I’m trying to manage myself, not just my portfolio.” – Guy Spier
With An Education of a Value Investor, Guy Spier has written one of the more unique investing books I’ve read in a long time. The book is equal parts self-discovery, career advice, psychology, motivation and value investing all in one.
The most interesting thing to most die hard investors will be Spier’s charity lunch with Warren Buffett but it’s the journey that got him there that I found fascinating. Here are some of the lessons I took away from Spier’s self-exploration to become a value investor and a happier person:
Working at a terrible job you hate can be a great learning experience. In his first job out of school he worked for your stereotypical investment bank, a place called D.H. Blair. People were greedy. Competition was fierce between employees. When he left no one would hire him because the bank’s reputation was tainted. But he learned a lot from the experience about what he did not want to do which helped going forward.
Intelligence without common sense can be worthless. Spier graduated from Oxford and Harvard Business School, but admitted that even the best education can actually be a disadvantage without the correct perspective.
One of my favorite quotes from the book: “How is it possible that I could be so well educated and yet not have the common sense or moral courage to get out of D.H. Blair instantly?”
As we saw in the build up to the financial crisis, intelligence doesn’t save you from irrational behavior and many times it only magnifies it.
You can see the biggest changes by un-educating yourself. There was an adjustment period where he had to reprogram himself because of this elite education and learn what did and didn’t work for his own process: “In a sense what I really needed to do was reeducate myself. Or, for that matter, un-educate myself.”
Life is about what you make of it. While attending Harvard Business School, Spier went to a speech given by Warren Buffett with a friend, but he didn’t pay much attention to the Oracle of Omaha because he wasn’t interested in value investing at that point in his life.
Later on, when he was in a bad place looking for work he saw self-help guru Tony Robbins give a speech. After initially dismissing Robbins he actually bought into the message of authenticity, speaking from the heart and being honest. This ended up being a springboard for starting his own fund and changing his attitude.
Surely Buffett had much more to teach about investing, but he wasn’t ready yet to grab that message. He was able to utilize the Tony Robbins approach and it changed his entire outlook on life.
Learn as much as you can from those around you. Although Spier spends a lot of time discussing the lessons he’s learned from Buffett it seems to me that fellow investor Monish Pabrai has had an even more profound impact on his life and investment style. Throughout the book he speaks in glowing terms about Pabrai and shares numerous lessons he’s taken away just by observing how he operates.
Be honest with yourself and with others. Initially Spier went out of his way to impress current and prospective investors in his fund. When he finally admitted he didn’t have it all figured out and that he was terrible at the process of selling stocks (“I don’t believe that anyone handles the selling process particularly well.”) at one of his annual investor meetings it relieved him of the need to constantly try to impress people. Laying it all out there made it easier to operate the fund how he saw fit without playing any games or hiding anything.
Authenticity is an underappreciated quality. Once he realized that value investing suited him he went out of his way to emulate Buffett. But in the end he finally realized that he didn’t need to be Warren Buffett; he needed to be the most authentic version of himself. Even Buffett told Spier at their lunch that Berkshire Hathaway was set up in a decentralized way because it suited his personality, not because it maximized returns.
I think it’s easy to get caught up in hero worship, especially in the investment business where the best and brightest are often put up on a huge pedestal. This can lead to unrealistic expectations.
I think this was my main takeaway from the book — learn from your heroes but be yourself.
Charlie Munger on Human Misjudgment
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