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Warren Buffett's money managers, Todd Combs and Ted Weschler, speak


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Guest longinvestor

Great to see them sit together for the interview. Also nice to see that 12 hour daily reading routine continues.  :)

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Guest longinvestor

There's a rumor floating around that Bill Gates could take the reins as the next CEO. If Todd and Ted do what they are apparently preparing for, valuing both investments and business acquisitions, it is possible but to get Bill to focus away from the charitable work?? meh..

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One comment in particular from Ted about how life changed after coming to work for Berkshire; Removing the friction ; This theme repeats itself; Mark Donegan was similarly freed from all frictional activity(like reporting, reviews, phone calls, meetings etc.). Surely all these guys had to report to idiots in prior life and over time this has got to be such a load off of them that's intangible to put a value on! Probably priceless. I see this as a key part of the culture continuity. From the comments in the interview, Ted and Todd appear to be reading from paper and are using a PA to print/file/annotate. I've also wondered about my own vision impairment with all those lumens from the LCD screen, especially the palm sized one.

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One comment in particular from Ted about how life changed after coming to work for Berkshire; Removing the friction ; This theme repeats itself; Mark Donegan was similarly freed from all frictional activity(like reporting, reviews, phone calls, meetings etc.). Surely all these guys had to report to idiots in prior life and over time this has got to be such a load off of them that's intangible to put a value on! Probably priceless. I see this as a key part of the culture continuity. From the comments in the interview, Ted and Todd appear to be reading from paper and are using a PA to print/file/annotate. I've also wondered about my own vision impairment with all those lumens from the LCD screen, especially the palm sized one.

 

The more businesses BRK buys, the less BS earnings calls we have to listen to.

 

PDF's on a Paperwhite are OK (just can't resize fonts...)

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Don't worry too much about this going forward, DooDiligence.

 

Last night I had the opportunity to read the 2067 Berkhire Shareholder Letter.

 

I get the impression, that there is basically no conference calls left to listen to, only one set of 10Qs and 10Ks and Annual Report to read yearly. Only people at that time in future reading history books about business know about the concept of conference calls. Same goes with the concept of guidances.

 

That year - 2067 - Berkshire acquires the Vatican State - so from then on the Pope is officially a renter - reporting directly to Mr. Buffett. However there will still be black and white smoke when Buffett appoints a new Pope, I suppose. The principle of delegation of repsonsibility to the CEOs at the subs is fully intact.

 

The material change between now and 2067 is that at one point in time in future, Mr. Buffett and Mr. Munger had an important telephone conversation on the topic : "succession", because they were so fed up with answerering questions about that topic from reporters, that they made a quick decision to get cloned - a dozen clones each.

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Summary:

They were chosen for ability and character.

Manage 10B each.

They were picked by looking at what they had done, how they had done it, and what kind of people they were.

They spend the vast majority of the day reading.

Get to learn from Warren, compare notes.

No interruptions, assistent helping with reading material.

Advantage at berkshire: There’s dusins and dusins of businesses at Berkshire to learn competitive dynamics from. I’ve (Buffett) always said:”I’m a better investor because I’ve had experience of business and I’m a better businessman because I’ve had the experience of investments”

Able to get in contact with other CEO’s at Berkshire owned subsidiaries and leverage their knowledge on industries, thus rapidly gaining knowledge that would otherwise take a long time to gain”

---------------------------------

 

 

It's crystal clear that the average investor has no chance in hell to ever get to their skill level. Funny thing is you sort of don't have to as you get their advice for free 4 times a year -- pretty sweet deal! Still people pay 2 and 20!

 

Just wondering, do you guys know other industries with similar freebies?

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Guest longinvestor

Summary:

They were chosen for ability and character.

Manage 10B each.

They were picked by looking at what they had done, how they had done it, and what kind of people they were.

They spend the vast majority of the day reading.

Get to learn from Warren, compare notes.

No interruptions, assistent helping with reading material.

Advantage at berkshire: There’s dusins and dusins of businesses at Berkshire to learn competitive dynamics from. I’ve (Buffett) always said:”I’m a better investor because I’ve had experience of business and I’m a better businessman because I’ve had the experience of investments”

Able to get in contact with other CEO’s at Berkshire owned subsidiaries and leverage their knowledge on industries, thus rapidly gaining knowledge that would otherwise take a long time to gain”

---------------------------------

 

 

It's crystal clear that the average investor has no chance in hell to ever get to their skill level. Funny thing is you sort of don't have to as you get their advice for free 4 times a year -- pretty sweet deal! Still people pay 2 and 20!

 

Just wondering, do you guys know other industries with similar freebies?

+1 to skill level. Those Monday lunches with Buffett have to be priceless. And throw in permanent capital. I believe part of their $10B is the pension fund assets at BRK subs, that has to have a long tail.

 

 

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It's crystal clear that the average investor has no chance in hell to ever get to their skill level.

 

Hmm. And what have they done lately? Look at their purchases. Isn't every single one of them discussed on CoBF and elsewhere at prices that might be even better than what they paid.

 

Nah, I know that they are hamstrung by having to invest 10B+. So they can't buy obscure stocks that would return 50% annually. And in current information glut it's very likely every single idea is discussed in multiple places.

 

So really it all comes down to execution.

 

But it's still not clear to me that their execution is (so much) better than a lot of people here for example.

 

Edit: this is not to diminish their smarts or their huge advantage of having access to Warren and CEOs of BRK subs.

 

Funny thing is you sort of don't have to as you get their advice for free 4 times a year -- pretty sweet deal! Still people pay 2 and 20!

 

Yeah, you can buy BRK. But you're not really investing in them if you buy BRK. Their 10B investments are unfortunately still mostly peanuts in terms of BRK return. (Although airlines stocks that got picked up by Warren ... well we'll see how that works out  ::) ).

 

I'm not against buying BRK. But you can't get them for free by themselves (although you possibly did not mean that).

 

And yeah we can get their advice and clone...

 

Have fun  8)

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BTW, two questions:

 

1. Has anyone tracked their performance while at BRK (as much as it is possible)? I know Buffett says they are outperforming SP500 and their bonus is based on that, but I wonder what are the numbers if it's possible to get at all.

 

2. Has anyone calculated BRK investment portfolio returns for last 5/10/15 years (as much as possible... I know this might be hard)? Stocks only, no wholly owned businesses, no fixed income. (What do you do with all the prefs that Buffett got in 2008...?)

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I don't know about anyone else but I don't know whether I could read 14 hours per day. I currently do 5/6 hours a day and I find that full plenty. I need time to think the ideas through. I found when I tried reading a lot more than my 5/6 hours I can't think if that makes any sense I just keep trying to push facts in. Maybe it is just the way I am wired up.

 

Also one of the things I thought about Buffett's biography was how sad it was that he didn't have any time for his family. I mean he is a very smart guy and would surely have been extremely wealthy working 8 hours a day and having a family life? Same with watching Coombs. I mean if he seriously does that everyday its pretty sad I think as it just cannot leave much time at all for family. I love reading, I love investing, I love work but I don't want it to become absolutely everything in life.

 

Maybe this will be my downfall as an investor and far be it for me to criticize 3 of the best investors there are. I am sure it works for them. It just seems a bit crazy to me. Surely you have to some outside interests as well??

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Nobody actively reads 12 or 14 hours a day. It is an impossibility. You have to realize this is a marketing piece. What is communicated is that their focus is on absorbing information and making a few critical decisions. People take things way too literally. But now this quote will be making the rounds as gospel for years to come... Oh well.

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That informational and experience edge from owning many private businesses.

 

That was the most interesting part to me. I wish I could just go to a CEO in the industry I'm looking at and ask them to explain to me what's most important, the market dynamics, what they think of each competitor, etc. could learn so much faster that way.

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That informational and experience edge from owning many private businesses.

 

That was the most interesting part to me. I wish I could just go to a CEO in the industry I'm looking at and ask them to explain to me what's most important, the market dynamics, what they think of each competitor, etc. could learn so much faster that way.

 

Keep up compounding maybe we all can have such edge in 30 years. :)

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It's crystal clear that the average investor has no chance in hell to ever get to their skill level.

 

Hmm. And what have they done lately? Look at their purchases. Isn't every single one of them discussed on CoBF and elsewhere at prices that might be even better than what they paid.

 

Nah, I know that they are hamstrung by having to invest 10B+. So they can't buy obscure stocks that would return 50% annually. And in current information glut it's very likely every single idea is discussed in multiple places.

 

So really it all comes down to execution.

 

But it's still not clear to me that their execution is (so much) better than a lot of people here for example.

 

Edit: this is not to diminish their smarts or their huge advantage of having access to Warren and CEOs of BRK subs.

 

Funny thing is you sort of don't have to as you get their advice for free 4 times a year -- pretty sweet deal! Still people pay 2 and 20!

 

Yeah, you can buy BRK. But you're not really investing in them if you buy BRK. Their 10B investments are unfortunately still mostly peanuts in terms of BRK return. (Although airlines stocks that got picked up by Warren ... well we'll see how that works out  ::) ).

 

I'm not against buying BRK. But you can't get them for free by themselves (although you possibly did not mean that).

 

And yeah we can get their advice and clone...

 

Have fun  8)

Yea cloning is what I was referring to!

 

Regarding their skills, for me it's real simple: If they're good enough for Warren & Charlie, they are good enough for me! ;)

 

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