Guy Spier, what is your advice for Emerging Managers?

In this last part of my 2023 interview series with Guy Spier, we have collected helpful thoughts for emerging managers and investment business builders.

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We have discussed the following topics:

Teaser

[00:00:00] Tilman Versch: In this last episode of my interview series with Guy Spier, I traditionally discuss emerging managers and fund manager questions. In this episode, we have discussed how managers can get through the noise, how Guy Spier made investment decisions in his fund management business and the power of the indirect approach. If you like this episode, please leave a like and subscribe to my channel. Thank you.

Good Investing Talks Intro

[00:00:26] Tilman Versch: A warm welcome to the Good Investing Talks podcast. I’m your host Tilman Versch and I’m very happy that you’re discovering underfollowed investors and underfollowed companies with me. Before we jump into this conversation, I want to thank my supporters. They helped 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’s the disclaimer for you. All we are doing here is no advice and no recommendation. Please always do your own work and now enjoy the video.

What were your best investments as a business builder?

[00:01:05] Tilman Versch: Guy, welcome to the last part of our interview series. It’s nice to have you back and last time we were sitting on your balcony. This time it’s winter and it doesn’t make sense to sit on your balcony. And in our last series, we’re talking about your or some advice points you can give to emerging managers and I want to continue this tradition. As a fund manager, you are also a deallocated capital allocator for your own fund and for your own business. Over your life as a fund manager, what have been the best investments you made out of your return perspective for you as a fund manager?

[00:01:41] Guy Spier: So I guess we could talk about return on invested capital. So multi-bagger investments.

[00:01:50] Tilman Versch: More on the business side, reputation, return, visibility. What helped you to grow the firm?

[00:01:59] Guy Spier: Yeah. So the experience that I had in retrospect when I look at it is that it is in the nature of life that we are faced with gatekeepers and gatekeepers exist for all sorts of reasons and that’s probably worthy of the study in itself but the key thing that we’re looking to do as somebody who wants to be successful in the business of managing other people’s money is to break through the kind of the gatekeepers who are there to kind of they can’t let everybody through to whatever their gatekeeping too.

So my experience is that from writing the book which basically it took me, it was an effort that lasted five years and over the last year or two of the books, it was kind of like five or six hours a day. Pretty much every weekday at least. That investment was probably the most transformational for me. Once I had a book, in the words of Prince Harry owned my story, and could tell my own story my own way. I could send that to people or people could discover it and they can find out who I was. Not through third parties. So I got a direct relationship with them.

So in my experience, one of the best things that one can do I believe is an emerging manager is to write either a book or to write and to write honestly from one’s heart and soul and to get a direct connection to people who will potentially then either recommend you talk to you invest with you all of those good things. And I think that I have not talked about it. I don’t believe I’ve talked about it to you. I have to believe talked about it elsewhere. I’ve never met David Perrell.

I’ve never taken any of his courses but he’s a guy who has a course called the Right of Passage and his idea is that when we write or when we produce content, we are now turning the algorithm on its head instead of if I go on the Internet and look for something, browse, whatever it is I’m being consumed by the algorithm. But if I create content that is of my own hand and my own voice and I put it out there, now I can put the algorithm to use and the algorithm will go out and find the people who have my own particular version of crazy and bring them into my life. And so that idea of creating content– Ideally, I think when you’re an investor by writing I think is extraordinarily powerful.

Growing into new “marketing” channels

[00:04:43] Tilman Versch: Let me ask a bit of a mean question for being in a library right now because you’ve published your book in a time where we didn’t have that many interviews, we didn’t have that many videos, we didn’t have many podcasts. What do you think from your observation as a business builder of these new funnels, you also have a YouTube channel, and what they bring to you is maybe the value in comparison to the other channels of the book decreasing over time.

[00:05:12] Guy Spier: Yeah. And it’s a great question. It was during lockdown that I decided to try my hand at a podcast and part of what gave me the courage to do that was it’s from a punk rock band, I believe, or a heavy metal band where they talked about in their jamming sessions having the courage to suck. Have the courage to suck or my former politics tutor who’s just been made a sale run and bugged them.

Or he said you have to write when you’re drunk. At it when you’re sober. Write when you’re drunk but loosen yourself from the constraints that you would normally have. I think that the podcast has brought me a lot. It’s just an enormous investment of time and energy to do the podcast because really in order to interview people you need four or five hours at least of preparation. And then you have to take the time to interview them and then edit it but again then you have a conversation between two minds that goes out there.

And I think that those are extraordinarily valuable channels. I think that what will always be the case with writing is that we don’t know what we think until we’ve written it and in this conversation that we’re having and in other conversations that we’ve had you and the listener are benefiting from the fact that I’ve been writing my annual letter and it’s through writing stuff down that we discover what we think. And so I think that the act of writing improves the quality of our thought and the quality of our content no matter what else we’re doing whether it’s giving interviews doing podcasts all of those things.

So I think it’s not one or the other it’s probably both. I’m not been thinking about it a lot recently but original thought is what’s most lacking in the world and the ability– An original thought doesn’t mean that you have to have an Einstein moment of discovering relativity. It could be as simple as assembling together things that haven’t been assembled before but that happens not when we’re in interviews and podcasts or TV interviews. It happens when we’re sitting quietly in a room thinking. I think that to name somebody else who’s got a close relationship with David Perell, Tiago Forte has talked a lot about–

Well, David Perell talks about how when it comes to content, we want to create it from a place of abundance and most of us when we sit down to write we’re faced with a blank sheet of paper. And that’s extraordinarily painful. It’s the famous phrase goes writing is easy. You just stare at a blank piece of paper until blood clots form on your forehead but actually, that’s not the place we want to be. We want to be collecting observations about the world and thoughts wherever they occur, in the shower, when we’re walking, and we want to capture them because they’re a bit like butterflies and we want to note them down and just put them in a place where we know where we can find them and review them.

Because when we review them that’s when the thoughts and ideas will come and content is exploding and knowledge is exploding. And I believe it is that content is exploding at a faster rate. The amount is at a faster rate than our capacity to assimilate, understand, organise, and make sense of. So the capacity for people to look at what is happening in the world, to look at the content that’s out there and to make sense of it for the world to become curators, editors, explainers there’s enormous space for that.

And I think that one of the most important ways in which that happens is through writing but also through these other ways. And once one is developed thinking in one way or another what is amazing about the world today is there are all these channels through which to communicate it to the world whether it’s through a tweet thread or whether it’s a blog post, whether it’s an interview, whether it’s writing a book, all of those things can be done in parallel in various different ways.

But look that’s a long answer to a short question. And the short answer is probably the value of a book. Well, I was about to say the value of a book has gone down but here’s the way in which it hasn’t. So I’ve been studying a little bit the music industry and I think that if I’m not mistaken 22 million songs were written and produced in 2022. So if I didn’t get that number wrong. That is just an enormous number of songs and it is because they all go on to Spotify and other streaming services. And strangely enough, there is one reaction to the advent of streaming services is that now the content creator, I was going to say curator, I meant creator has easy and direct access to the end consumer.

But I believe that the music labels are discovering that because of the explosion of content the capacity to edit, sort, attribute quality and bring some of it to the fore which is what for example the music labels and the music companies do is even more important. And what a book does it’s not just writing a book.

Anybody can write a book set its text and self-publish. But there’s actually a huge value to getting a label on the book. So Palgrave Macmillan is a label that’s on my book. Wiley is a label that’s on some of Vitali Katswell Nelson’s books but William Green’s book, Richer Wiser Happier has a better label that’s called Scribner. And those labels actually make a difference. So I think that writing carefully and getting those right labels or the best possible labels attached to your work can actually help you to break through.

Long-term payback

[00:11:44] Tilman Versch: These labels and this kind of work you do. They are quite costly, time costly. And this brings me to my next question. Which investment that on first glance seemed to be very costly for you, as a manager and allocator, has brought you something great or was really worth it?

[00:12:07] Guy Spier: You know so here’s a counterintuitive idea and I presume you’re talking about investments in the business rather than investments in financial investments. Early on in the development of a brand, we may have to make very large investments. And then as the brand gets growing and develops its own steam the investments we make can be reduced. So to the extent that we can afford it. It’s very possible that. I might have compared myself to Warren Buffett and said, well, he doesn’t have to do anything and he gets invited on CNBC and he doesn’t spend any money on quote, call it, say promotional activity.

So I should be the same way. But I’m not Warren Buffett. I’m not being invited on CNBC and it may be that I have to the extent I can afford it made very high investments to get myself to break through the noise. And so I think that there are multiple investments that I’ve made. That has helped me to, I guess, break through the noise to the extent that I’ve successfully done that. One example and it wasn’t really me who did it and it wasn’t the core motive for doing it but it there was certainly an aspect to that was a charity lunch with Warren Buffett that got me exposure in ways that I didn’t have before and one level you sort of say well what a wasted amount of money for lunch.

On the other hand, is the famous logic that yes but it’s going to a very good charitable cause. And over and above that you could see that as an investment that kind of broke through the noise. I didn’t see that at the time but in retrospect I did and it makes me realise that investing in– So what does that mean? What would that mean practically? What are analogous things that one might do? It might involve spending the money to go to a specific place where you’re going to meet the right people. I think that if you take me back 25 years and somebody says, hey, Guy, for this large amount of money you could attend the Sun Valley conference whereas in the past I might have said, well, that’s just too much money. I can’t do it.

There’s another version that says, oh I’ll absolutely take the opportunity to put myself into that group of people. So I would say that the Buffet lunch wasn’t always an investment. I would also say that the decision that I took was pretty much any rather than just sending holiday cards to a core group of friends, I said to myself I would send holiday cards to not every single person I’ve met but every person I’ve met that I liked. And that’s an expensive thing to do. But I think that it’s brought me a richness of interactions with people that I would not otherwise have had. And I think that it’s perfectly legitimate for those of us who are at the beginning of our careers to make much higher investments.

In all of those different positional assets if you like then somebody who’s in the middle or the end. Another example would be investing in great education. So it’s very expensive to attend some of these branded schools but it gives you a stamp of approval. It gives you a mark or if you’re in mid-career if you’re not at a stage where you’re going to university to attend the Columbia Value Investing programme or to join a conference or to go and do, Harvard Business School has their own president manager programme, those are all ways of positioning ourselves and I would argue that– So I think it was the Ford who said that you need to invest in yourself until you’re 40. Well, that was a long time ago. We could now say until you’re 60. And so to continually find ways to make investments.

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Giving more

[00:16:37] Tilman Versch: I sometimes get emails from you and I have the feeling that you run your fund or your partnership a bit like an exclusive club. You offer other services for people who are invested with you. What do you think about these additional services and what is the idea behind offering this?

[00:16:56] Guy Spier: You know it’s a story that I’ve told before. It’s a second-hand story for me. But Monish has told me of the experience of sort of becoming friends with Charlie Munger and the feeling that he had that he was being pulled into a very special warm place. And by the way Charlie Munger we know has a pretty graphic exterior and I think that was one of the first indications for me that people who were extraordinarily generous can’t necessarily show that generosity to the world because they’re just going to have too much noise. And so I see that or I thought I remember attending Lilu used to live in a place in Pasadena that was developed by Charlie Munger where in order to buy the place, it was just a condominium, but in order to buy a unit in the condominium it was like you would become a member of a club.

I thought that was clearly a fun way to live your life. I’ve heard of partnerships where in order for a new investor to come into the partnership every existing investor in the partnership has to approve of the new investor. I realise that life is more fun and more interesting if you kind of run your life in a certain way like a club. And so I think that it extends beyond the investment partnership but it extends to as many other areas of your life as you possibly can.

So if there’s something good that I have to offer that’s of limited quantity I look to offer it up to people who are central in my life first, if you like. Yeah. So if you’re an investor in the fund, I mean there are no promises. There’s no like sort of if you invest in the fund, you get all these things. But to the extent that good stuff comes up, I do try to offer it up to my quote in a circle if you like. Something that I’ve expressed in various places is that we know the famous story that Warren Buffett tells because all the best stories told by Warren Buffett and there’s nothing that I’ve learned to date that I haven’t learned from Warren Buffett first. forgive me for bringing him up so often that the guy who died and all these people came to his funeral and they all came to see that he was really dead. And that’s a very sad state of affairs. And I think that Warren also talked about how he doesn’t need to own a beautiful yacht but he doesn’t mind if his friends own beautiful yachts and they can invite him onto the yacht.

So I don’t need to own a beautiful yacht. I just need to be friends with Jeff Bezos if you like. And so one can ask the question. Yeah, but you’re not friends with Jeff Bezos and you’re not friends with Bill Gates or whoever else has yachts or nice positional toys. But there’s no guarantee of success. But what if I live my life in such a way that I try to help every single person who’s close to me become as successful as I possibly can help them become. I don’t ever want to own a yacht but I really wouldn’t mind if some of my friends do.

And there are some people who have been very successful at doing that I’m thinking, I’m sorry that his name was not bouncing to the top of my head but he was the chairman of– Oh, I’m so sorry to do this. He’s Ken Langone. He was the chairman of the New York Stock Exchange I believe or at least on the board.

And he was also not of Costco but of a company that does household goods, big immovable household goods, very Home Depot I believe, very successful company. But he very clearly was an absolute genius at not just creating relationships but becoming a person where all of these successful people wanted Ken Langone in his life. And so you want to get to your grave. I certainly want to get to my grave with people saying I’m so glad that Guy Spier was in my life. And why would people say they were so glad that Guy Spear was in their life? Because all sorts of good things happened to them. Because I was in their life. And so if you actually want to get to that end result you need to start trying to make good things happen in the lives of the people who’ve chosen to be close to you and who else to do it for than one’s investors.

But it’s not done as some kind of “marketing programme.” And actually, Tilman and I believe this is for emerging managers. I mean I really do believe this. So I don’t know if I’ve successfully done it with you to make it personal but Tilman gives me the honour of investing your time and energy to come and talk to me in my office. I’m extremely grateful because it gives me all sorts of great opportunities. It’s a wonderful thing. So my goal should be to look to make good things happen in Tilman’s life. I don’t even have to let Tilman know that it’s happening just need to try and do that.

So with that perspective, I probably can deliver better for you. But to take the example of my investor, I realised that I really enjoyed the investors who are doing interesting things. So some of my investors are venture capitalists. There’s one investor who’s a former surgeon who was prevented from continuing to be a surgeon through a sort of repetitive stress injury that happened through surgery. He’s also become an Angel investor.

I take close interest as close interests as I possibly can in the activities of our investors and where I can I try to promote their interests. First of all, it’s fun and exciting and if I can at the margin improve the probability of success in their goals, and in their life then it’s more likely that I’ll attract great investors into my fund because somewhere people will figure out. Wow, if you invest with Guy or I heard the story that somebody invests with Guy and then these good things happened, I mean, it’s very early stages.

But I think what’s beautiful about that idea for matching managers is that the fact that I’m doing it and the fact that I’m sharing the idea with somebody else to do it doesn’t diminish anything about what I’m doing. We just in a certain way make the world a more beautiful place. And I think that it’s kind of like deep investment in success. By the way, Warren Buffett does this. It’s just incredible. He does this all the time. He’s understood that I believe. And if I was interviewing him like Becky Quick, I’d ask him about that and he’d probably kind of just smile and go.

He would kind of just brush it off. But I’ve seen him do it for me and he’s written me a letter. I’ve already talked about where I’m like, why on Earth did he do that? I’m not that great. And I really say that genuinely. And he’s saying, I believe that he’s saying– It was William Green author of Richer, Wiser, Happier explained this to me and I think he’s right. Warren is saying if somebody is in my life and I like them I want them to have a better life because I’m in their life and there’s this story.

It’s a parable, I believe. I heard it in an assembly in high school. Basically, what’s the difference between heaven and hell? Both heaven and hell have lots of plentiful food around but in hell the forks, there’s plenty of food but the forks are so long that you can’t feed yourself and in hell, they haven’t figured out that you need to feed your neighbour. And in heaven, they’ve worked out that if you feed your neighbour there’s more than enough to eat and that this principle can play itself out in its own life.

So I’m trying to do that not just for my investors, but just for fun. And if you don’t mind. And for those of you who don’t see it, Thomas nodding. So I kind of like continuing with this. So my children were at Zurich International School and we’ve taken interns over the yards from Zurich International School. So now Zurich International School has a publication voice. And they said would you like to buy an ad? So in the past what I would have done is I would have bought an ad that said, We’re aquamarine. We’re great. Here we are. Instead, what I did was I said, thank you and named in the ad every single one of the interns who’d come from Zurich International School.

So it’s like a way of trying to give them a boost in their careers because their name is mentioned. Then more recently we took an ad where we named every single one of our service providers. So it’s kind of like this idea which I learned from American Express because one of our investments has this phrase, Membership has its benefits. And so it’s in a certain way trying to seek to implement that in my own life, membership has its benefits.

And once you figure that out, there are a thousand different ways you can implement it. I mean, I think that I did this. Somebody who you must know Investing with Tom. He did something where he did a summary reel for the year and he named every single person that he did interview. And it was a little promotion for himself but also for every single person that he’d interviewed. I can remember that I did it.

Well, here’s an example of a simple small way to do it. So I gave a talk at Oxford University and there’s Oxford University, they call it the Alpha Fund or it’s the investment society and the Investment Society has various people who volunteer to work as officers of the society. And how wonderful it is. So instead of saying I’m going to be giving a talk to the Oxford Alpha Fund. And I said thanks for the work and I named all the committee members and I tagged them on LinkedIn.

They’ve invited me. So I’m giving them just a little bit of prominence. I’m giving credit and this beautiful idea that giving credit to others never diminishes you. It’s this fascinating thing. It never diminishes the originator. And I’m blown away at how many people think that if they give credit to somebody else it’s somehow going to diminish them. It never diminishes you. In fact, it enhances you.

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Managing business expenses

[00:27:26] Tilman Versch: There’s this question of how the giver then survives the phase of intensive giving that you have to do at the beginning and there’s also a question that was coming from the Internet how you kept yourself like your fund expenses and your personal and family expenses when you switch to this 06/25 structure. And how do you go also about this general fear of giving and giving and giving while the reward sometimes takes time to get back to you?

[00:27:55] Guy Spier: Yeah. So to start with the last part first. So it is delicate and one has to be really smart about it. So if you go into a giving mode mindset, one of the first things that’s going to happen is you’re going to attract a lot of takers. I think that’s what causes a lot of people to give up on giving because, in fact, I don’t want this. I just got a bunch of takers in my life. So you have to do a lot of screening and the screening cannot insult the takers because they’re just part of the world. In a certain way, we probably need a relationship with them. They’re not evil people. They just have a different strategy for success. That’s why Charlie Mungers, I believe, developed this graph exterior. That’s one protective mechanism. There are other protective mechanisms that allow you to screen out and screen away the takers that you can attract into your life.

So you have to start becoming far more careful. So it’s an evolution of one’s strategy of success. As you start becoming more of a giver, you’re going to start attracting certain kinds of people. You need certain ways to keep them away and keep them at bay.

As you start becoming more of a giver, you’re going to start attracting certain kinds of people. You need certain ways to keep them away and keep them at bay.

All of those things. There’s no point at which you can implement anyone of this, anything that’s going to work in your life without you having to implement it intelligently and you have to evolve in the way you implement it. And it’s constantly evolving and constantly changing. It’s not just like applying the rule and then closing your eyes and being blind. Apply the rule. Apply the idea. Observe carefully to see what’s happening. Act intelligently in response. Evolve the rule, evolve the implementation of the rule. Keep seeking.

I have realised that at some point with holiday cards I said, well I remember the time that I signed 1000 holiday cards and my back was aching and I wanted to increase the number of holiday cards. So I decided not to sign any of them and now next year I want to go to signing at least some of them because I think that I’ve lost a little bit of the personal touch. So there’s the strategy evolves. When it comes to fee structures, it’s kind of a barrier to entry. How do you charge the zero management if you when you’ve got to live and that is that is a real challenge? I don’t want to pretend that is in any way shape or form easy. And I grew a huge distinction between the way Monish is where he is and the way I am where I am.

Monish had extraordinary entrepreneurial talents before he became an investor. He ran multiple businesses at which he was very successful and he’s got an incredible focus on practical things. And he’s got incredible human people intelligence to get things done with people that I’m far more of a kind of an impractical academic mindset point being that I don’t know where I would be if I had not had some kind of starter sum that was being invested with friends and family money.

Monish started with the proceeds of a business that he sold and so he was working initially with his own money and then took outside money. Those are very different paths. In Monisha’s case, the proceeds from the sale of his business were sufficient to allow him to continue to live for a year or two or five or maybe even 10 without getting any fees. And so that was the way that he did it.

Now if you go into the other category and you don’t have that what can you do? I think the best example that I know of and it’s just through talking to him about it is Josh Tarasoff where he said, look, I need to charge a fee to survive. But here’s the way in which the fee will decline to zero as the funds under management grow. And so that’s another way to do it. In my case, what I moved to was that the family funds the funds that under family control do pay a fee.

And so I charge myself and my family and it’s kind of an internal accounting of a percentage of the assets but the external investors have the choice to invest in an asset class that does not charge them a fee. So I think it’s a long answer. Sorry, Tilman, all of my answers are long. I think that it’s a difficult question and one has to address it in an intelligent way it’s a problem to solve and it’s not an easy problem to solve.

Recommendations for Emerging Managers

[00:32:39] Tilman Versch: Is there anything you could think for the end of the interview you would give at hand a young person or even an intelligent person so to say, it could also be a person at 50 who’s starting a fund, that you would recommend to this person?

[00:32:55] Guy Spier: Something that I would give to them physically, you mean?

[00:32:57] Tilman Versch: No, an idea we haven’t discussed, maybe. Something you want

to add to.

[00:33:09] Guy Spier: Yeah. What is a great final closing thought? Trying to think of something really mind-blowing and maybe.

[00:33:19] Tilman Versch: It’s good if you take the first thing that comes to you.

[00:33:19] Guy Spier: Well, I think that. So I just want to kind of like add some thoughts around what I’ve already been saying. So I think that some of the most effective ideas that have cost money that I’ve implemented like sending holiday cards out. Like Monish does and sending books out. Our idea is that if you came to a marketing manager inside a for-profit business that is especially if it’s publicly traded and you came with that proposal.

Well, the marketing manager would say no way we’re doing that because there’s no way that we can honour a reasonable return on that or we can show that we can earn a reasonable return on that over a reasonable period of time. So we just can’t do that. And I think that when you’re starting out or when you’re running your own business their investments that you can intelligently make that have an unusual return profile that could never be made in any kind of setting where there are multiple people looking at it and who want to make sense.

And I think that idea that the whole opportunity set that exists is a very rich opportunity set to explore and each individual will come up with their own ways to do it but I can make investments in myself and in my family and in people around me that might only have a payoff 10, 20, 30 years down the road. And because it’s me and I will always be me it will make sense for me to make those investments.

But many people would say well that’s a ridiculous waste of time. And I go back to the story of I believe it’s Mexico sending a team of people to help Israel with some disaster that happened in Israel. This is in Robert Cialdini’s book, Influence: The Psychology of Persuasion. The question was asked why did that happen? And it was because Israel had sent a team out to Mexico to help them with a disaster that had happened 20 years prior.

So reciprocation can even work across countries over multiple generations. So the ability that I can take or that somebody starting out in their careers can take to make investments in positional assets in human relationships that may only pay off decades down the road. The thing is that if one starts making those investments. And one does it consistently long enough eventually and I think I’ve maybe expressed this even to you, Tilman. Eventually, you’ll start reaping the rewards of those or you’ll see things coming back to you. I think that what I would urge somebody is sort of like if you have a long career ahead of you, start doing as many of those things as you possibly can.

I think that what I would urge somebody is sort of if you have a long career ahead of you, start doing as many of those things as you possibly can.

And because other people aren’t doing them or because they’re not written up in some kind of marketing book. Don’t assume that it’s not a worthwhile thing to do it’s just that very few people may have the time horizon that you can afford to have.

Persistence in giving

[00:36:39] Tilman Versch: How important is persistence in giving?

[00:36:44] Guy Spier: So what comes up for me is you asked that question is that. We have to be we have to have an open and generous spirit towards the world. But at the same time be very carefully observant of how people are reacting to that and in some cases, persistence is just not going to work. I think that in many cases the persistence may well eventually work but one has to calibrate it. For some people it may be worth coming back at them with some opportunity for them once a month but for the vast majority of people in the world that I’m in if there’s an overture that is made. First of all the overture should be made. Let’s say it’s an invitation to a meeting or an invitation to join a podcast. That overture needs to be made in a way that doesn’t make them feel obligated.

So in the past, I’d write somebody a thank you note and at the end of the thank you note I’d say I hope you would come on my podcast or I hope you’ll dot, dot, dot. That is trying to put them under a sense of obligation and many smart people will react very badly to that. So carefully calibrate your overtures they should never be too frequent because that can put you into a bad relationship with the person where you will never get anywhere but they’re frequent enough and they say that it takes seven touches before somebody pays attention to a brand or an individual. But to find the right way to touch the person is subtle work but it’s fun work and I think that something that I’ve learned Tilman is just a whole area of exploration in itself is that–

And I don’t fully understand why this is but I’ve found that invariably the indirect approach is better than the direct approach. Indirect means that we have an idea of how this person might make a positive contribution to our lives. But if we ask them directly for that it’s not going to happen. So tomorrow I’m hosting a lunch here. Actually, it’s called lunch and learn. And it’s being hosted with the benefit of the Chabad rabbi here or the son-in-law of the original Chabad rabbi. His name is Nahum Bernstein, has an amazing wife Schtani. Schtani has a 40-minute video in Swiss German that you can find on YouTube, very, very interesting that goes into the details of what it’s like to be an Orthodox Jew.

I’m inviting people to this lunch at my office. People who I’d like to have in my life and for whom I believe I could help them but they could help me an awful lot. But I’m not saying to them, hey, I’d love to see if you can help me in this way. I’m saying come to lunch and learn in my office and I’m inviting you. So that’s kind of an indirect approach and there are all sorts of ways to do an indirect approach.

The key to the indirect approach is that the person should never feel obligated. They should feel like it’s a genuine invitation. Many people want the Buffet launch auction. I have the sense that they approached it with we’re going to get our full value out of the launch. So in a certain way, they’re approaching it with a certain sense that Buffett was obligated. I think that this is part of the genius of Monish Pabrai is that he took a different approach. He said, we’re here just to thank you and you genuinely made the lunch about thanking Warren for all that he’s taught us.

Of course, Warren could help us in a thousand different ways but we were making it and I learned through Monish to make it clear in the whole everything that those are going to be nothing like that taking place again is sort of saying creating the possibility for a relationship to happen and for positive things to come out of it but it’s created indirectly through saying thank you not for us not through asking for something for example.

So just for what it’s worth all of these insights or so many of these insights are insights that I learned through travelling through India with Monish, visiting Dutch Shawna Foundation locations around kind of some of this we called deepest darkest India. We’d be in a car and I would ask to put my feet up. I’d take my shoes off and I’d put my feet up on the seat between the two seats with the driver in the front and we’d have these conversations and these things come up and I’ve said this elsewhere but I’ve learned the lunch with Buffett was valuable. So valuable for me because I in many ways learned more that is of practical use to me from Monish and the relationship that was created with Monish than I learned from Warren which was also great. But so much that I learned about how to be in the world of business I learned from Monish and in that, he’s a genius.

He’s really extraordinary. In fact, Tilman I wish I could just call him on a shop and ask him to do an interview with you. But maybe one day the stars will align and it will happen where you basically say, tell us what you talk, Guy. Get it straight from his mouth. But by the way just to sort of share with you this kind of idea of not putting people under obligation.

The reason why I can’t direct Monish to do that is that would be asking for something inappropriate for me to ask. It would diminish my relationship with him it hasn’t happened for a long time but I’d get people to approach me to ask me to ask something on their behalf to Warren. And I did it once or twice and as Monish explained you’re diminishing your relationship with Warren, not a smart move. A huge part of succeeding in relationships is creating a protective space around the relationship where the person can trust you.

A huge part of succeeding in relationships is creating a protective space around the relationship where the person can trust you.

Not to make what I call her indecent proposals but I don’t know why I ended up in that place. But for those who are interested Tilman is not nodding. He’s got his hand in front of his mouth like that which basically means okay, Guy, bring this to an end which I’m now doing.

Thank you

[00:43:10] Tilman Versch: No, it doesn’t mean it but they mean it. I also want to thank you. I also want to practise it. Thank you because you delivered a lot of like good points for further podcasts and also for other podcasters to ask you, I think. If they want to attach to the stories here, feel free. But anyway, outside of this I also want to thank you for coming on the podcast again and sharing.

[00:43:40] Guy Spier: I just want you to know for what it’s worth that when Tilman first came to interview me I was I was happy to do it. And then I was blown away. First of all, because he had this camera set up but then the quality of what was produced was off the charts and so this time, Tilman, it was like a hands-down moment. So happy to see you here and talk to you by the way, I think the quality of the questions last time was very high and it’s worth saying that you know if you get asked high-quality questions then you learn. I learn through the process of doing this because it forces me to clarify my thoughts. So thank you for doing that.

[00:44:19] Tilman Versch: Thank you.

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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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