Buffett's Early Investments

[Brett]

I posted about this in the Berkshire forum, but was moving over here. I am the author of the book--I hope you all enjoy it! I'm happy to answer any questions.

[John Hjorth]

Amazon : Buffett's Early Investments: A new investigation into the decades when Warren Buffett earned his best returns - Brett Gardner.

[dcollon]

I truly enjoyed the book Brett.  It was hard to put it down as I loved the history on the investments.  I can't imagine the amount of time it took to dig up all the information, but thank you for doing it.  You did a great job of putting it all together and making it entertaining to read. 

 

I would highly recommend the book.  

 

 

[John Hjorth]

I took delivery of Brett's [ @Bretts ] book a few days ago.

 

I'm reading it in the nights and early mornings, where I can't sleep atm. I haven't finished reading it yet.

 

To be totally honest, I think it contains claims / assertions, that related to Mr. Buffett [Warren Buffett, the young guy, back in the beginning and the early days, pre Berkshire] may seem provocative.

 

Investing back then in net-nets was simply put - hard, cumbersome - actual work.

 

The book portraits a young man, who in his early innings was overall successful, but also did not not experienced everything he touched as investment successes [please read : headwinds and bummers], to enjoy as his platform later in life, when his approach to investing changed, because of AUM.

 

I read it as Mr. Buffett wasen't a 'savant', 'natural talent' or a person 'wired to generate alpha' [from birth]. It [the extraordinary returns] all came from [hard, sometimes cumbersome] work and due diligence, and an intellectual framework evolved over time, combined with a personality, that if you are right, [based on reason] nothing can stop you, being it an incompetent, high paid CEO, or a chairman, with an outdated world view , and likely also a lot of shares.

 

The message to me personally from the book is 'Investing can be learned', and thereby also - by inverting - 'Investing can be taught'.

 

To me, personally, that's something really special.

Edited November 12 by John Hjorth

[Buckeye]

Hello Brett, congratulations on your book!  What a tremendous feat.  I just purchased a copy on Amazon and am looking forward to reading it. Keep up the good work.

[Ballinvarosig Investors]

My wife has bought me this for Christmas, looking forward to reading it.

 

 @Brett nice of you to drop by. A few questions for you, do you think the style of investing that Buffett did then is applicable today? Also, do you think you could get the same results today? Buffett has said himself that if he managed just $1M, he could compound that at 50%.

[John Hjorth]

New podcast episode about the book :

 

Redeye - Nordic Growth - Investing by the Books [November 12^th 2024] : Investing by the Books #64 Brett Gardner: Buffett’s Early Investments.

Edited November 15 by John Hjorth

[Spooky]

Ordered the book, looking forward to reading it.

[Kuhndan]

Just finished the book. Congratulations! Original take and great detailed information on a portion of Buffet’s career not fully known.

[Brett]

Thank you all for your kind comments! I really appreciate it. You made all that work worth it!

[Brett]

On 11/12/2024 at 11:47 AM, John Hjorth said:

I took delivery of Brett's [ @Bretts ] book a few days ago.

 

I'm reading it in the nights and early mornings, where I can't sleep atm. I haven't finished reading it yet.

 

To be totally honest, I think it contains claims / assertions, that related to Mr. Buffett [Warren Buffett, the young guy, back in the beginning and the early days, pre Berkshire] may seem provocative.

 

Investing back then in net-nets was simply put - hard, cumbersome - actual work.

 

The book portraits a young man, who in his early innings was overall successful, but also did not not experienced everything he touched as investment successes [please read : headwinds and bummers], to enjoy as his platform later in life, when his approach to investing changed, because of AUM.

 

I read it as Mr. Buffett wasen't a 'savant', 'natural talent' or a person 'wired to generate alpha' [from birth]. It [the extraordinary returns] all came from [hard, sometimes cumbersome] work and due diligence, and an intellectual framework evolved over time, combined with a personality, that if you are right, [based on reason] nothing can stop you, being it an incompetent, high paid CEO, or a chairman, with an outdated world view , and likely also a lot of shares.

 

The message to me personally from the book is 'Investing can be learned', and thereby also - by inverting - 'Investing can be taught'.

 

To me, personally, that's something really special.

 

This is my exact take while researching and I'm so thrilled to hear the point came across! 

 

Buffett was blessed with some abilities: high IQ, natural mathematical abilities. But he got to where he was through hard work. We are not all going to be Warren Buffett--but we can still be successful investors (or we can thrive at whatever endeavor we choose!).

[Brett]

On 11/13/2024 at 8:19 AM, Ballinvarosig Investors said:

My wife has bought me this for Christmas, looking forward to reading it.

 

 @Brett nice of you to drop by. A few questions for you, do you think the style of investing that Buffett did then is applicable today? Also, do you think you could get the same results today? Buffett has said himself that if he managed just $1M, he could compound that at 50%.

 

Thank you, I hope you love it!

 

On your first question: Net-net investing, particularly in the U.S., HAS gotten much tougher. There are objectively fewer of them as the economy has shifted from being dependent on property, plane, and equipment to tangible assets being a minority of those for the companies in the S&P 500. With that said, there are still these types of opportunities on the fringes (and more internationally!). You only need 1 or 2 a year to make your returns. Can Buffett find that one or two? Yeah, I think so. It's possible it would be international than here, and my guess is it may be in even smaller companies. 

 

I'd add, Buffett also did a lot of arbitrage, and he would also use this. I think he would pivot to companies more dependent on the earnings a little sooner than he did if he were running today, especially as he scaled, but he would still do a lot of balance sheet-oriented investing / activism. 

 

On the second question, I think he can definitely get 50% on $1 million deploying broadly the same tactics he did in the pre-partnership years and the first half of the partnership (he did fewer net-nets in the second half of the partnership, such as Amex and Disney). I think the anchor scale presents is pretty drastic, though. Meaning the returns on $10 million are way worse, $100 million are way worse than that, etc.  

 

I think there are a lot more investors that had outstanding returns for 10+ years than is commonly known. But they sort of stop investing other people's capital after accumulating their initial fortune. 

[John Hjorth]

9 minutes ago, Brett said:

 

This is my exact take while researching and I'm so thrilled to hear the point came across! 

 

Buffett was blessed with some abilities: high IQ, natural mathematical abilities. But he got to where he was through hard work. We are not all going to be Warren Buffett--but we can still be successful investors (or we can thrive at whatever endeavor we choose!).

 

Thank you for the flowers, Brett [ @Brett], 

 

I'm one of those 'Berkaholics' around here at CoBF, who really enjoys new stuff about Berkshire! This book is, to me personally, exceptional, as expressed above.

 

What you also have alluded to in the above mentioned Redeye podcast episode, is that the verbal presentations of 'the good old days' as it was 'a game of shooting fish in a barrel', perhaps mostly here alluding to statements by late Mr. Munger [may he rest in peace], buying net-nets [also] 'back then' wasen't without challenges and problems at all.

 

PS: Thank you for sharing all that great Buffett / Berkshire related stuff, you have shared in your LinkedIn feed recently, due to all your work related to the book, that eventually ended up about not to meet your criteria to get included in the book, for the reasons explained by you in the book! [For my fellow CoBF members : Link ]

[gfp]

I think there are some investors doing the 50% annually on tiny companies currently.  This guy comes to mind: https://dirtcheapstocks.substack.com  (this is a paid sub stack but the picks I have seen have been very good) - he is also on twitter.

 

Also Tim Eriksen, who runs Cedar Creek Partners, will probably get close with his expert market stuff.

[Brett]

On 11/16/2024 at 1:42 PM, John Hjorth said:

 

Thank you for the flowers, Brett [ @Brett], 

 

I'm one of those 'Berkaholics' around here at CoBF, who really enjoys new stuff about Berkshire! This book is, to me personally, exceptional, as expressed above.

 

What you also have alluded to in the above mentioned Redeye podcast episode, is that the verbal presentations of 'the good old days' as it was 'a game of shooting fish in a barrel', perhaps mostly here alluding to statements by late Mr. Munger [may he rest in peace], buying net-nets [also] 'back then' wasen't without challenges and problems at all.

 

PS: Thank you for sharing all that great Buffett / Berkshire related stuff, you have shared in your LinkedIn feed recently, due to all your work related to the book, that eventually ended up about not to meet your criteria to get included in the book, for the reasons explained by you in the book! [For my fellow CoBF members : Link ]

 

Of course! I came across so much fun stuff that just didn't make it into the book! I tried to set a high bar for what made it in, but there was some stuff I knew folks would like and had to share it somewhere! 

 

Thank you all for the kind reception! If you enjoy the book, please do give it a review on Amazon! These are very helpful (and I love hearing all your thoughts)!: https://amzn.to/49jdNtR

[Stuart D]

Hey Brett,

I just saw your book is being reviewed on the investor’s podcast - congrats!!

[boilermaker75]

sales rank #6 in Business & Money » Investing » Investment Portfolio Management, well done!

[spartansaver]

Article in the WSJ! Congratulations!

 

https://www.wsj.com/finance/investing/warren-buffett-early-investment-methods-brett-gardner-10e027fe

[yesman182]

Hi Brett,

 

Did you meet with Warren at all through this process. I assume you sent him the book. Did he read it and respond to you?

 

I just ordered a copy and look forward to reading over the holiday. 

 

 

[wescobrk]

I can’t speak for Brett but he put in the book Buffett didn’t cooperate but sent him a letter wishing him good luck.

i think it’s in the preface.

[John Hjorth]

12 minutes ago, wescobrk said:

I can’t speak for Brett but he put in the book Buffett didn’t cooperate but sent him a letter wishing him good luck.

i think it’s in the preface.

 

Correct, @wescobrk,

 

It's in the book. Thank you.

[wescobrk]

It’s a very well researched book.

i love the parts where Buffett would talk to front line employees for hours and I think counted some type of product (not Amex) for several hours. I need to read it again.

Amex was the only part that has been repeated several times in other books.

Almost the entire book (excluding Amex) is information I haven’t read before.

Great job by the author.

I wish he would have been on the investors podcast at that covered the book.

[Brett]

On 12/13/2024 at 5:16 PM, yesman182 said:

Hi Brett,

 

Did you meet with Warren at all through this process. I assume you sent him the book. Did he read it and respond to you?

 

I just ordered a copy and look forward to reading over the holiday. 

 

 

I have never been lucky enough to meet him, but had 3 interactions that are fun to talk about: 

1. I wrote to him--years prior to deciding to write the book--asking for the memo on Cleveland Worsted Mills. I get a letter back a few weeks later from his assistant telling me it wasn't accessible, but to check Security Analysis (which it was--third edition!). His memory is amazing.

2. I requested an interview once I decided I was going to write it (in 2021). I sent along a letter and a few documents I thought he might get a kick out of (and also to show that I was trying to do a serious research project... whether I was successful in this will obviously be judged by all of you!). I didn't expect a response, but I get an email via his assistant politely declining but wishing me luck. 

3. I sent him two copies once I received my physical books and asked if he could sign one and send one back, which he very generously did. I was thrilled, it's my most prized possession! Now you also asked if he read it... I have no idea. I assumed no, but his quote in the WSJ made me wonder!

[Brett]

On 12/13/2024 at 12:52 PM, spartansaver said:

Article in the WSJ! Congratulations!

 

https://www.wsj.com/finance/investing/warren-buffett-early-investment-methods-brett-gardner-10e027fe

Thank you! It's a huge honor to get in Jason Zweig's column! His book Your Money and Your Brain is one of the first books I read when I started getting into finance. And obviously he's done such a great job with The Intelligent Investor editions over the years (including the one that came out two months ago--which I highly recommend). 

[Brett]

6 hours ago, wescobrk said:

It’s a very well researched book.

i love the parts where Buffett would talk to front line employees for hours and I think counted some type of product (not Amex) for several hours. I need to read it again.

Amex was the only part that has been repeated several times in other books.

Almost the entire book (excluding Amex) is information I haven’t read before.

Great job by the author.

I wish he would have been on the investors podcast at that covered the book.

Thank you!  I'm really glad you enjoyed his gumshoe research, I was surprised at the volume of work he did on this front. It's so impressive. 

 

A quick story on Amex: it was actually a late addition to the book, I had submitted the manuscript already before deciding to write about it. I decided to put it in for a couple reasons, despite the fact it's been written about quite a bit: 1. The company it replaced wasn't all that fun and I couldn't verify a key fact in the chapter, so I left it out. 2. I thought there were some parts of the American Express story not thoroughly covered: the intricacies of the salad oil scandal (some folks told me I went into too much detail... but I love the detail personally), Buffett's delayed entry into the position (I had it in the back of my head for years that he bought the stock right after the scandal, rather than waiting months to do so), the scaling of the position, and also the history of American Express itself.