What happened to the drunk in the bar, Guy Spier?

Guy Spier is back! 3 years after our first interview, I had the pleasure of interviewing Guy Spier of Aquamarine Capital again in his library in Zurich.

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We have discussed the following topics:

Introduction

[00:00:00] Tilman Versch: In this interview, we’ve touched on honesty, and drugs, and virus; what seduction and investing have in common, and how you can stay giver without changing a portfolio very much. If you like this interview, please subscribe to the channel and leave a like. Thank you.

A warm welcome to the Good Investing Talks podcast. I’m your host, Tilman Versch, and I’m very happy that you’re discovering under-followed investors and under-followed companies together with me. Before we jump into this conversation. I want to thank my supporters. They help me to keep this channel free and public for everyone. Thank you very much. If you also want to join the Good Investing Supporters Club, please click on the link below, you’re very welcome.

And now, one last step. Here is the disclaimer for you. All we are doing here is no advice, no recommendation. Please always do your own work, and now, enjoy the video.

Welcome back, Guy Spier

[00:00:57] Tilman Versch: Hi, Guy. It’s great to have you back after three years. We had our last interview exactly in this library, and I was traveling to Switzerland right now for Robina’s meeting. And I thought I would also say hello in your place and do an interview with you. So it’s great that you’re so nice to host me again.

[00:01:16] Guy Spier: Tilman, I would have liked to bring you to Zurich. I think it’s a beautiful place. I think you should come live here but somehow, we haven’t convinced you.

Guy’s meditation practice

[00:01:26] Tilman Versch: Okay, maybe someday. Let’s jump a bit back to our last interview, and there, you were sharing your ideas in meditation and your plans on meditation. So the first question that also came from the audience is, how is your meditation practice going?

[00:01:44] Guy Spier: So I don’t remember if at that point, I’d already done or not done my Vipassana Retreat.

[00:01:51] Tilman Versch: I think it was exactly before.

[00:01:53] Guy Spier: Before. So I can update you that I lasted three days. It was in the French Jura, and I was in a room with two other men of similar build to me who snored very, very loudly without any furniture in there. And I, within three days, was utterly sleepless, a total wreck and I was still told by some of the people that I should stay and continue, but I felt like it was not the right time or the right moment. I think that my friends all say that I would never have lasted any Vipassana Retreat. I have the intention to do one this time in India. What I discovered was that the French Calvinist approach to Vipassana Retreats maybe is a little extreme. And I really developed a respect for French-speaking Calvinism in that, it’s very harsh and very brutal. And I thought I would do well in the Jura mountains. I don’t think it was the right place to go.

So I failed at my first Vipassana Retreat. But it was an important thing for me because I have experiences of doing things that I was very unhappy with in the past where I didn’t quit and I think quitting is often as much a discipline as sticking with something. And in that moment, I knew that what was right for me to do was to quit. So I quit. Subsequent to that, what I can say is that even those three days of meditation taught me an enormous amount about what meditation is. I had thought that I would go to this retreat and I could take out all sorts of thoughts about my life and process them. But very quickly in the meditations, we went way beyond that to a place that feels quite harsh and in a certain way, lonely. You kind of feel like you’re there with the universe as if you’re sort of floating between the stars or something like that. So that was a new experience for me and I have a question, I’m curious to discover how my mind would have developed had I gone all the way through from day three to day ten.

So I quit at day three. I discovered that for individual meditations, five or ten minutes works for me. And I found an app called Insight Timer which is really lovely where I don’t do the guided meditations. There’s just a gong that happens. But I can’t say that I have a meditation practice and that I meditate every day. I feel like going for a run, going rowing, and all of those kinds of activities are meditative. I realized that it’s not the same thing. And so I think that I’m still very much a beginner who hasn’t made much progress.

I would say that subsequently, I’ve had conversations with Josh Tarasoff, who’s a well-known investor and I think also a friend of Rob Vinall’s. And I’ve done group meditation with Josh, and Josh is really advanced to my perspective and experienced. And after we did a short meditation together, we kind of went around the room to discuss what our personal sensations were and what feelings were coming up. And I can say that I was astounded by the quality of the description of what Josh was saying about what was going on. So he’s got wiring that maybe I could get if I did more meditation but I was really impressed with that. So the answer is I’ve made some progress but probably nowhere near as much as some of my meditation friends would have liked.

It was an important thing for me because I have experiences of doing things that I was very unhappy with in the past where I didn’t quit and I think quitting is often as much a discipline as sticking with something.

The metaphor of the drunken bar

[00:05:36] Tilman Versch: Let’s go from the inner-looking side with meditation to the outer-looking side. We also touched in our last interview, there was this metaphor with the bar and drinks. What impact did it have on you, this kind of honest thing?

[00:05:51] Guy Spier: Yeah, it’s funny because you would imagine that somebody like me using a metaphor of drunken bars. Yeah, I said that with a little bit of trepidation because you’re sort of worried that somebody’s gonna say, “This guy is talking about drugs and bars. I don’t want to go anywhere near him.” And it’s just fascinating to me that every time that I successfully become more honest in my public persona and I take something out that I feel like would be a negative, it doesn’t ever seem to be a negative. People seem to take it in and there’s something really fascinating to jump to something that you probably don’t follow very closely and I should probably follow less closely; Prince Harry who’s just written this book, Spare, and you know, he’s generating a lot of reaction in the UK, but I think that in a similar way, he is really… And there are mistakes in the book and there are all sorts of legitimate criticisms that one can make. But you see somebody who I think through therapy has been transformed into somebody who’s removed the mask and he’s really revealing his true self to the audience and that’s kind of interesting.

I think that what’s really interesting is that when you find something that is honest and is also true and is useful to other people, you now then share that reality. So when I bring up the drunks and bars analogy with other people who’ve maybe seen that video, there’s an understanding and we kind of live in that metaphor together, and so communication has been advanced, if you like. So I think for investing, it really is a wonderful metaphor. I think that we all want to believe that we’re smarter than we are. We all want to believe that we know what we’re doing more than we actually do. We all want to believe that we have a model of the world that works for us and for our investors and the world has this way of proving to us when we least want it, when we least expect it, when it least convenient for us, the world has a way of showing up and saying, “You don’t really understand what the world is about. You don’t really understand yourself. You’re actually not that smart.” And so the drugs and bars helps with that. So yeah, it’s been fun, those metaphors.

Yeah, I think that what I’m also grateful for is I can’t think of anything right now, but I believe that it’s happened to many people that they bring something up that then they can’t live down afterwards, that they don’t like about the fact that they brought it up and then they have to live with whatever it was that they said. And I don’t feel that way about that metaphor, which is surprising because it took a certain kind of nervousness or I was a little nervous to talk about it if you like. You know, another metaphor that kind of pushes the boundaries is I think that there’s enormous aspect to success and, if you like, salesmanship or marketing oneself that can be likened to seduction. I talk about internally in the office that what you’re actually doing is, you’re kind of applying some of the same ideas or thoughts that a male would have in seeking to seduce a female. That’s what you’re trying to do in business.

And what I’ve learned if you look at the mating dance between males and females, you know, you have both males and females dressing themselves up to be something that they’re not to create an impression that is maybe not the reality and the reality comes out later. The man displays a fancy sports car or takes the girl out to a beautiful restaurant, but actually, the bank account is empty or you’ll have all sorts of props that a woman will use in order to enhance her physical attributes, whether it’s lipstick or a certain kind of dress. And our job in the investing world and in the mating game is you can’t ignore it, you have to play that game. But at the same time, you have to see what’s underlying it. And yeah, so there’s another analogy for you. I don’t know if you want to dive into that one.

We all want to believe that we have a model of the world that works for us and for our investors and when we least expect it, when it least convenient for us, the world has a way of showing up and saying, “You don’t really understand what the world is about. You’re actually not that smart.”

Givers

[00:10:21] Tilman Versch: I think it’s a good one because it’s building a bridge to my next question about givers and takers. Like you describe social life as an exchange right now with this mating behaviour, but it’s also the economy even. In our last interview, you named givers and takers. It’s two interesting concepts and I think they also helped others and I think you also said that you try to surround yourself with givers. So how are you optimizing your life to have a life around givers?

[00:10:53] Guy Spier: That, I think, is a lifelong journey and obviously, the first thing is to discover that distinction. And I don’t know if I mentioned it there and I have said this elsewhere, but it’s such a powerful insight that, you know, there’s a movie that I watched whose name I won’t remember right now and it was the search for the chalice, the chalice of Christ. I don’t remember the exact religious significance, but at the very end of the movie, the hero of the movie has to pick the correct chalice. And if he doesn’t pick the correct chalice, very bad things will happen to him. And there’s three of them and one is out of gold and silver and beautifully decorated with jewels. And the other one is the simplest one, and he correctly chooses the simplest one. But there are many signals in the movie that perhaps the right chalice would have been the beautifully decorated gold one.

Similarly, often the world’s greatest givers are actually quite gruff and not very accessible on the outside. And the reason for that is that if you’re a giving person, you’re going to have a lot of people coming at you. By contrast, people who are takers, often dressed in the most beautiful suits, and have the best manners and have the most pleasant external appearance because they have to be that way. Otherwise, they won’t lure anybody in. I think that a huge part of anybody’s life, my life certainly, is a kind of a sorting process where you try and sort through who is somebody that you want in your life, if you like.

And I was with, actually, a private banker, I have no relationship with him. He used to be my father’s private banker and I was just taking him out for dinner. It was so interesting because I didn’t really know him very well but I was offering to do things for him. And without thinking about it, he was coming up with ways to promote me to his client base and saying, “Hey, we’re just here to have dinner. Don’t do that. I don’t see the interest for you.” He was just doing that. It was interesting that he was revealing something about him that he didn’t even realize he was revealing. So that told me that I want to have him a little closer in my life.

Life is a constant sorting process and to just go back to the drinks analogy, you know, we want every drink to be a good drink. So we were talking then, we were using the drinks as an analogy for an investment that we might buy. But if we think of the people in our lives, we want to be surrounded by so many good people that even if we make a bad choice or if we make a ill-considered choice, it’s such a great group of people around us that we’re still not going to fall. We’re still not going to be too terrible.

I find it extremely interesting that I think that the modus operandi, it wouldn’t surprise me if they talk explicitly about it. Berkshire Hathaway, if they have to sell shares in a company that they own in their portfolio, or if for some reason they were selling something, they have a policy of not selling the businesses that they own; I really do believe that their very powerful interest is not to take top dollar because if you take top dollar and then you have a disgruntled buyer. Yes, it was buyer beware, the buyer knew what they were doing but you even want people who buy from you to get a good deal because that’s going to last you best, that’s going to stand you in best stead throughout your whole life. So I don’t know if I’ve answered the question.

And the book that the viewers should read if they want to dive into is Adam Grant’s Give And Take. And very briefly, matchers, givers, and takers and what you want to be is around givers and you want to be very careful around matchers and takers. I think, for what it’s worth, you don’t want to right the wrongs of the world, you don’t want to preach to anyone, you don’t want to tell anybody what you think they are, you just want to organize yourself in such a way that you move yourself out of and you have less close contact with those people who are on the taking side of the spectrum and that you maximize your contact with the people on the giving side of the spectrum, and you try and be a giver yourself.

Often the world’s greatest givers are actually quite gruff and not very accessible on the outside. People who are takers have the best manners and have the most pleasant external appearance because otherwise, they won’t lure anybody in.

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“Destroying” ideas that don’t fit the portfolio

[00:15:50] Tilman Versch: Being in a network of givers, you might run into another problem because if you’re surrounded by givers, especially in the investing world and they give you good ideas, you also might have a problem, especially if I look at your portfolio, how it’s constructed and how much turnover you have, there’s not a lot of this giving that is coming by people to you in terms of good ideas that you set into motion. So what is your process if you get good ideas because you have a network of givers to destruct this ideas? There must be a huge destructive side maybe of you that isn’t revealed because there’s not much turnover in your portfolio. You look at ideas and you must always find something where you destruct ideas. So, how do you make this?

[00:16:39] Guy Spier: Disrupt meaning discard?

[00:16:41] Tilman Versch: Discard that you say, like, that’s not an idea that’s worth to my portfolio, even if your network of givers. Because especially, if you’re in investing scene, there’s a lot of idea-sharing giving ideas, good ideas.

[00:16:56] Guy Spier: I think that if you’re a giver, hopefully, the kind of things that are coming into your life as a result of that are extremely broad and you can say that… I don’t know if you received our holiday card this year, it’s an incredible design and the woman who designs that is somebody who’s a friend of William Greene’s, Cecilia Wong. But I try and invest in those relationships, I try to help somebody who’s in my life in any way, shape, or form that I can, and just to be clear, I think that she puts incredible effort into doing incredible things with those holiday card designs, for example. So the things that are coming back to me are kind of like all over your life. It might be invitations to dinner, it might be club memberships, so I would say that investment ideas is a very, very narrow proportion of that.

I think I haven’t really thought it through but the world of investment ideas and investment ideas coming at you is so noisy that I’m not sure that I, in my idea environment, want to pay too close attention to that. And just to give you one of many possible reasons why is that Nassim Taleb in Fooled by Randomness talks about how our wiring is such that when we’re winning, when we’re finding the berries on the bush, we get all sorts of chemicals that are released that give us, you know, he talks about how a trader who’s winning in the markets will hold himself differently, will feel better about himself and will talk more. So I think that, for example, in an environment that we’ve had over the last three or four years, you get a lot of people who feel powerfully motivated to talk about what they think are really good investment ideas, and especially, to talk to their friends, to bring them to conferences, to send them, to write them up. And so I think that you have to be really, really careful.

We’ve just been through an environment where a lot of supposedly great ideas were being shared in one way or another. So I don’t think there’s such a direct link between being a giver and, say, the quality of the ideas in one’s portfolio. And Tilman, it’s interesting because I don’t know what to do about it. You can type pretty much any company’s name into either Apple podcasts or into YouTube and there’ll be endless videos that you can watch. Some of them are just people talking about the idea and some of them are people who’re doing some really valuable research and analysis. But simply the fact that if you’re engaging in reciprocation, if you’re trying to be a giver in the world, yes, you’re going to hear about more stuff but I don’t think that that necessarily increases the quality actually.

And there’s another phenomenon that those ideas might be selecting me and Warren has this idea that you could be in the middle of the Pacific Ocean, but if you’re willing to write insurance, those insurance opportunities will find you, and the ones that find you are not good insurance opportunities, they’re actually badly priced. And so I’m trying to make a distinction in my mind not just around investment ideas but around people. Did they find me? Did they seek me out and target me, or did I seek them out? And so I think it’s always interesting to see what’s coming in but to stop and to say, “What am I doing outbound? What are the filters that I’m using to go find outbound stuff?” It’s really important.

And then we go into when I have a certain set of relationships and there is a bias, I think, in me and towards anybody to be more interested in the ideas that my friends have than the ideas that just come in through the email inbox for example. I find it interesting that the ideas that friends of mine who I respect very highly, or ones that I could never find a way to put them into my portfolio, I mean, I’ll just give three that are public knowledge. So Mohnish is very interested in Turkey and I don’t think there’s any way that I could convince myself that I wanted to put any portion of our investors’ money into Turkey.

And then, we go to some of these tech stocks that were, in the last couple of years, at Value X pretty much. A lot of the presentations were about these high-flying companies with huge revenue growth, but not much earnings and supposedly good customer economics and I could never have put those into my portfolio either. So, I was on the front row of many things that I just couldn’t put in because I had a different filter. I think that what’s interesting is that I just updated one of my screens and I can go into the details of what I did on the screen and I suddenly found a whole bunch of companies that I hadn’t really looked at before that are actually super interesting. And you’re basically getting the benefit of what I’m writing in my annual letter right now. So if you like, I can dive into it now.

So the problem with screens is that what you’re screening for can be manipulated. Many of the of the criteria that you would screen for in a capital IQ or in Bloomberg, if you screen for profit margins or operating profits or earnings growth, those are all numbers that you can’t necessarily have the same… Different companies, there’s a broad latitude within the accounting rules as to how you measure those things. So why would you look for a company that has, say, high profit margins and there’s this phenomenon that actually, some of the most interesting companies deliberately have low profit margins. But you cannot compare some companies that have low profit margins because they’re just badly run versus some companies that have low profit margins because they’re doing huge investment.

So, one of the ways that I realized that I could get around that, or a way to deal with that, is to look for companies or look for criteria that are very hard to manipulate, where there’s no latitude. So I think that of all the income line numbers, revenues can be manipulated. But over a long period of time, revenues, you actually have to have money flowing into the company and that is the lifeblood of any company, is the revenues flowing in. So, another number that is very, very hard to manipulate is the outstanding share count. You have some companies where the share count is constantly rising. And, of course, the cannibals, the company’s share count is constantly falling is absolutely fascinating. I don’t think that those of us who don’t run companies understand the extraordinary discipline that is required, not just in the one individual, maybe the CEO, but also in the board and the various people have to approve the share repurchases, isn’t it? It’s not an easy thing to just get a declining share count. It is something that I believe is extraordinarily difficult.

What I realized was that, you know, so how do you find the companies? I think that what we’ve learned over the last three or four or five years is that you can have companies that are growing an awful lot, but if they’re relying for that growth to quote, build out their infrastructure by bringing money in from the capital markets, and suddenly that money gets shot off, and then they can’t invest in building out that infrastructure, and it turns out that they weren’t investing in building out infrastructure. Actually, the money from the capital markets was subsidizing operating losses. And that again, is not an easy or clear distinction to make and even if your internal management and accounting, is this expenditure building our infrastructure or is it funding operating losses, not easy to tell which way you categorize it.

Bottom line is rather than looking for companies that have successfully reduced their share count, why not look for companies that are likely to be ones, through sales growth or growth and sales per share, have not had to increase their share count, which is a subtle distinction. So, basically, rather than looking for companies that had decreased their share count by consistent amount over decades, or over a period of years, I say leave that alone and look more for sales growth so that somehow what they’re doing inside is turning into sales growth. That is an outbound approach and I think that’s fascinating for me.

And actually, that only happened on Friday. Why did it happen? I don’t remember. It was something that I was watching and I said, wait a second. And the point is this, you want internally funded growth ideally, because internally funded growth can continue even when the capital market’s closed, when the capital markets changed their mind about your business. And externally funded growth, you’re very reliant on the capital markets and you get this horrible cycle where you need to raise money, so you figure out what the capital markets going to get excited about and you start managing to that and doing that. So that was an interesting decision for me, but that’s all outbound. It’s coming from me and it’s a filter of framework that I’m placing on the data. I’m saying what data matches that. I love talking about Turkey to my friend Mohnish, I love talking to my value X mates about these high-flying SAS and other businesses. In my case, certainly, giving to the world means that there are more of those opportunities but I think it would be a big mistake for me to actually put those ideas into my portfolio. I don’t think that’s the right way to manage money.

I think I’m fascinated by the fact that my portfolio turnover was so low last year. I think I did one trade and you know, I’m literally getting contents of my letter, Tilman. I think that there are a couple of explanations. One is that having lived through multiple crises and having a healthy awareness of what a crisis looks and feels like and how my own perception of the world changes radically, I’ve been very careful to own businesses that would allow me to survive the worst storm, if you like. So I’m actually happy with the businesses that we’re invested in and they’re businesses that can survive some pretty bad storms, perhaps not asteroids hitting the Earth in great number, not a kind of an extinction event like that with the dinosaurs, but some pretty bad events.

But the other thing to have this enormous respect for is that I have no doubt that we are going through one of the great historical changes in the history of the world, we’re living through it. And this is, in a certain way, a bigger change than what happened with the fall of the Berlin Wall, for example, which happened at least in my lifetime, maybe even in your lifetime, Tilman. Or we think about the enormous changes that happened after World War Two, but I think that we have to probably go back a century or more to find as big changes. It’s kind of like the French Revolution type of changes and in such an environment to stop and look, and try and understand what is going on and to pay close attention, don’t make any big moves if you don’t have to is kind of where I’m at.

It was a long rambling, but it was in response to bring the reader or the listener back. I felt like, Tilman, you had this approach of to me of saying, “Well, how does it work that you’re a giver and you must receive a lot of inbound investment ideas, but you haven’t implemented any of them in your portfolio?” Answer being giving gives a lot of good results in your life. Probably, the noise that comes through giving from new investment ideas coming in is not necessarily a place where you actually want to act on the abundance that giving creates. And then I talked a little bit about my filters to look for ideas.

If you’re engaging in reciprocation, if you’re trying to be a giver in the world, yes, you’re going to hear about more stuff but I don’t think that that necessarily increases the quality. Rather than looking for companies that have successfully reduced their share count, why not look for companies that are likely to be ones, through sales growth or growth and sales per share, have not had to increase their share count, which is a subtle distinction. In such an environment to stop and look, and try and understand what is going on and to pay close attention, don’t make any big moves if you don’t have to is kind of where I’m at.

[00:30:29] Tilman Versch: What drives you to set up these filters on these lines? What are the trigger points sometimes to set this filters or lines? If you think about Turkey, for instance.

[00:30:40] Guy Spier: Well, do you mean setting up screens for or why I feel…

Setting up filters with the example of Turkey

[00:30:50] Tilman Versch: Having a discussion, for example, with Mohnish about Turkey, enjoying the intellectual exchange and enjoying the play about thinking about the scenarios, thinking about the country. But then finally saying, “No, I can’t.”

[00:31:07] Guy Spier: Yeah. I’ll be visiting Turkey later this year and will be visiting some of those companies and I’m super excited to visit and learn and look. So you know, I used to own Wells Fargo in the portfolio, and through Debbie Bosanek, I met somebody who was a trust officer at Wells Fargo and she was one data point. Lovely lady. I remember talking to her at the Berkshire meeting and she said, “I’m having a hard time at Wells Fargo because all they want to do is make me sell and I’m not a sales type. I’m a really good trust officer but I’m not a selling type, that’s not what I do.” And it got so bad for her that she decided to leave the company. That was such a significant data point. Now it was only one and so it was not statistically significant, I don’t believe. But I regret that I didn’t take that data point into account in my investment decision making and I didn’t at least use it as a reason to drill down and drill further.

So I think that personal data points are really, really important and can lead us to something. And I cannot tell whether my data points around Turkey are just my personal experience or whether they’re representatives of something bigger and more important. And it’s tied up with Turkey’s tortured relationship to Israel. Turkey used to have a very close military relationship with Israel and a very good under-the-radar alliance and many Israelis used to go on holiday in Turkey. I think many still do but a new kind of politics emerged with Erdoğan, which is kind of like this authoritarian populism, in which he appeals to the Islamic base of the country. And I think that one can say that control of the country which used to be very firmly with the military is now with this populist politician.

My experience of Western Turkey visiting Istanbul is it feels extraordinarily European and the Turks that I know in Istanbul, Europeans, I mean, could be comfortable in any European city. But I have not been to Ankara or to Eastern Turkey, that is a very different region, I believe, with very different people. Erdoğan has found a way to unite the country or to govern a country that has these incredibly diverse populations. During this whole sort of unfolding of Turkey and move away from the Turkish Army, my uncle invested in real estate in the Southwest of Turkey, which is a very beautiful area. The name escapes me and ended up losing most of his investment because it turned out that owning property in Turkey as a non-Turk, there were all sorts of ways in which the local system and entrepreneurs who understood the local system could pull the wool over the eyes of foreign investors. And so it was not a happy place to be a direct investor in real estate in Turkey.

Unlike for example, Switzerland, where I think there are many people around the world who will invest in Swiss real estate because they know they’re going to get treated exactly the same as a local. So when I look at both, that macro political picture and I look at the micro, I see a country with a lot of quirks that I don’t understand. And where I feel like the probability that I’ll be mugged on the street corner is extremely high and leads me to just go, I don’t want to participate and play. There was a point at which Turkey’s diplomatic relationship to Israel was ruptured in a way that, from the Israeli perspective, felt very unfair. But from the perspective of Erdoğan, I think was very successful in gaining popularity with the Muslim population. And so I don’t really want to mix myself into that kind of dynamic.

Having said that, the people that Mohnish has invested with appear to be utterly brilliant business people who know what they’re doing, who have all the attributes that one would want to have. But I even think, you know, it’s kind of superstitious that that would all work out unless Guy Spier invests. And the minute Guy Spier invests, the nature of the world would change. But then, I would just go to somewhere even more general, which is, “What’s my end point? Where do I want to end up in 20 years’ time?” And I hate to say it, but Turkish companies are not on my wish list for where I want to end up. I think of the companies in Switzerland that I admire like Sika, or Schindler, or, Nestle, and I think that I’ve chosen to live in Switzerland and the investments that I want to make should be consistent with a life based in Switzerland.

So it’s perfectly possible that the energy exchange, the fund owned in India, would end up becoming part of a global conglomerate of energy exchanges. So that’s an industry which could easily become… That specific company in India could become a part of a global network, perhaps even managed out of Switzerland, or managed out of New York. But if you’re looking at small and micro-cap companies in Turkey, it will never fit into that.

I’m playing quite a lot of chess these days. I’m not very good actually, I’m embarrassed, my rating’s gone from 400 to 800, and people who know chess will know that that’s not a very high rating. But there’s a concept in chess about developing your pieces harmoniously with each other. You can make moves which on their own, you’ve developed the knight, you’ve developed the bishop, but how does the knight in the place where you’ve put it work with your other pieces? And are they supporting each other or do they not support each other? And sometimes, I make moves in the game in chess where I strongly believe that the pieces are supporting each other, as I make the moves. And then I get to a point in the game against a stronger opponent. And I just get so frustrated because none of my pieces are helping each other out. And so it’s hard for me to see how…

Interestingly enough, the analogy that I’ve made with Turkey, where I did make an investment, was this condensed milk company in the Philippines. But interestingly enough, that company called Alaska milk, they ended up getting sold by the family that controlled them to surprise, surprise, a Dutch company. So they got pulled into the global economic system and the idea of investing ahead of the global economic system, pulling your company in; or when I invested in Crisil, well, they were already part-owned by Standard & Poor’s, and then over the course of my investment, Standard & Poor’s took more and more of the company. But how did I do?

I think that personal data points are really, really important and can lead us to something. And I cannot tell whether my data points around Turkey are just my personal experience or whether they’re representatives of something bigger and more important.

Thank you

[00:38:33] Tilman Versch: You did well.

[00:38:34] Guy Spier: Long answer.

[00:38:36] Tilman Versch: And you explained how you set lines, and I also want to set a line now because I want to finish the first part of the interview, but also want to set a cliff-hanger to the second part of the interview, where we also discuss the topic of setting lines a bit. So it will come next week and thank you for listening till now. See you in the next interview with Guy.

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Tilman is a very enthusiastic, long-term investor. Over the last years he has taught himself important investing concepts autodidactically. He tries to combine a positive climate and environmental impact with his investments.
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