Learning from Buffett and Munger: Masters in Business with Alex Morris

27:11I remember I got through two or three or four meetings and I realized I wasn't getting into a place where I wasn't going to have to repeat that process again. So I went back to the start, created an Excel file where I timestamped everything, had like primary topic and secondary topic, and then very simple green, yellow, red. Is this going to be in or maybe be in? As time went on, I had a lot of overlapping things. I had to figure out which answer is better, which one should I keep. But as I got through 10 or 15 years, I knew what I was doing at that point. Did it reveal itself to you as you were working?

27:46By the way, full disclosure, Harriman House is my publisher. But one of the things I found fascinating about the writing process is when you happen onto a good framework, it sort of opens itself up to you. It reveals itself. And like, oh, I see what this should look like. Like, did you have a, I would imagine you might have had a similar experience year after year. The same themes, the same ideas, although they must evolve over time somewhat. Somewhat. And I got to a point where, well, one, yes, the meetings definitely have their place in time. I mean, especially think of like the late 90s or you get to the financial crisis.

28:26The discussions that are had there, the part of it that I found so useful that I thought would resonate with people was, you know, the letters are edited. and Warren's very specific about what he says. Unscripted is very different. Unscripted. When they're off the cuff and Charlie a lot of time pushes Warren in directions that he may not want to go, the answers would be really revealing. And again, like a period like the late 90s when people were really pressing you on why aren't you investing in tech companies, there's a level of, as they're pushing them, they get a little bit more honest and say things in a slightly different way than if they had written them.

28:59So anyways, as I worked through it, it's got to a point where I can imagine myself, the college kid, reading this book and getting a lot of value out of it, but I also could see myself the person today who has a lot more experience reading it and still getting value. So I thought this is going to be a worthwhile book for a wide range of people, so it hopefully could be a good project. So a recurring theme of all of the meetings, and therefore of the book, investing success is a temperament problem, not an IQ problem, emotional stability patients and independence from crowd opinion do the compounding.

29:36Again, I don't remember which of them I'm taking the quote from, but we've heard that over and over again. Yes. Give us a little color on temperament versus IQ. Yeah. I mean, I think your book title sums it up well. Not to invest is what mistakes are you looking to avoid is a great place for starting to figure out where you're trying to go. And I think that's what they've done their entire career. And it's funny how that mindset of don't be stupid can still be connected to really big swings at points in time. Because that seems like an aggressive act and kind of a risky thing. But I think when you actually pair them together, they can work well.

30:16So the flip side of the Munger quote, be less stupid, is a Buffett quote. If you have an IQ of 160, well, you can sell 30 points. They're not needed in investing. I love that. That flies against everything we've ever heard about the genius hedge fund manager, the quants, the math whizzes. And clearly, both Charlie and Warren, not dumb guys, they were more than less stupid. But how sincere is that, hey, you don't need 160 and it's probably going to get in your way anyway? I definitely think the latter part is true. It's very easy to get overconfident in your abilities and to make mistakes that can be, particularly when you start doing things with options or leverage, you can make mistakes that are truly devastating.

31:06And if you just avoid those things, it's much easier to, at a minimum, stay in the game. And to get to a decent place is also, I don't think, overly difficult as a starting point. So over the three decades that the book covers, there have been wildly different environments where there was those examples of people who should have been less stupid. So you had long term capital management blow up in was that 98? The dot com implosion, the financial crisis, the zero interest rate policy of the 2010s, than COVID. How do the same principles that are espoused by Buffett and Munger apply to all these wildly different environments?

31:53Yeah, I think it's being consistently level-headed and not letting things get away from you and having a long-term view and staying within your circle, which I think that's one of the biggest lessons I've had as an investor is learning what game you're playing and why you're playing that game. And your answer may be different from mine. And I think a funny example is someone asked in one of the meetings about Peter Lynch and Warren Buff was talking about and say his approach works well for him and mine works well for me. And I think if he tried to adopt my approach, it would not work as well and vice versa.

32:24And there's more than one way to get to heaven in this game. And as long as you understand that, I think you're in at least a good starting point. Another quote that I can't remember which of them said, volatility is the friend of the investor who knows values and the enemy of the one who doesn't. Explain that. Yeah, well, sometimes in real life it feels a little different than that when you're seeing a lot of volatility in your portfolio. But I think the idea is a sensible one, which is you don't want your decisions to be led by the market. You want to be making decisions that are somewhat independent of what the market's telling you.

32:56There's a fine line there between just being stubborn and overconfident that I think, especially when you're younger, let a quote like that. You know, this is true of a lot of quotes from Warren and Charlie. A little bit of experience helps you understand what they're actually saying versus maybe a more novice interpretation that can get you in trouble. So I think to completely disregard what the market's saying is something that you should do cautiously. But the idea of acting based on what the facts tell you as opposed to a short-term weighing machine is the right mindset to have in investing.

33:24So there are so many quotes of theirs that are just become so famous and repeated over and over again. And what sort of buried gems did you find in there that people don't really talk about? What stands out is how is this not a more famous line? I mean, I think some of the discussions on, again, things like stock option accounting in the late 90s where they're really, I mean, I think they say in the book, there was 500 companies and two of them had adopted, quote unquote, the right stock option accounting rules. Everybody else is playing this kind of game and and they talk about things like that so clearly in a way that's that anybody can understand that it's just so so useful to hear those things.

34:06Trying to think of other examples throughout the book that that stand out. One example they give in terms like their business is National Indemnity Insurance Company. They talk about this idea of there was a period of time where the volumes of that insurance business went up, I believe, 5x. Then over a period of 15 years contracted 85 percent. Wow. And then it's back, back below the original, uh, starting line. You could imagine running a business and how painful that is. And they use it to teach a lesson in terms of, it applies differently in different businesses, but how in the insurance business, the only thing that matters is writing good business.

34:39And you have to, you have to get to a place where all the stakeholders, particularly employees, realize that writing bad businesses is not the decision to make. And you have to help them appreciate that they can keep their job too, as you go through this. So it's just an example of them laying out something that when they explain it is so sensible and logical, but you have to have that long term mindset. And again, when you compare something like that to how a lot of public companies act, you start to notice things that you may want to avoid. That's very much a science of hitting philosophy. You're better off not writing bad business, not writing any business than writing bad business.

35:16I think the modern Berkshire is underappreciated for the importance of the various insurance. So there's Geico, there's Berkshire, there's a few insurance companies, which essentially gave Warren a giant pool of capital and patient capital to work with. Talk about the significance of insurance to the success of Berkshire Hathaway. Yeah, I mean, it's been hugely important. And that float has, I don't know what the number is now, but it's grown very significantly over a long period of time. And it has allowed them to make the investments that have got Berkshire to where it is today. One example that I come back to a lot from one of those investments is Coca-Cola, which everybody knows that Berkshire owns Coca-Cola.

36:02I think the part that people sometimes don't know is that Warren started buying in, I believe it was 88 or 89. He bought his last share in 94, and he hasn't bought or sold a single share since then. which is at a point in time, it was more than 30 % of Berkshire's equity portfolio. It's not like it was 2 % of their portfolio that they're not touching. It was a hugely important position, and he hasn't touched it for more than 30 years, which is when someone's really good at investing like they are, and they do something like that, and you look around, you see, well, nobody else is really acting in this way.

36:32It's something that stands out and I think is noteworthy. So I love the concept of imagine you only get 20 investment decisions for a lifetime. When you look at Berkshire's returns, it's a handful of decisions and decades of sitting still that have been driving it. What is that thesis? Hey, you're only going to make 20 meaningful investment decisions. What does that do to selectivity? Yeah, it raises your bar a lot. A lot. The things that you're willing to compromise on will, you know, if you need to find 100 things to own, you've got to make a lot of compromises. If you can own 10 things, you can make less compromises.

37:10And if you can own one thing, you can get even more selective. So I think that idea of knowing what you're looking for, being patient, and then these two are connected. If you're going to act in that way, you have to swing big to some extent. So they repeat a lot of the same principles over and over over the years. I'm curious not only how things evolved, but what are some examples of them reaching a conclusion, hey, maybe we haven't really thought this through and we want to pivot or tack away from a previous belief? Where did they really change their minds? Yeah, two really prominent examples are one in an own business in GEICO.

37:49They basically missed the move in telematics, which is like the data measurement in the car. And Progressive was really early there, and Warren publicly at the meetings kind of said, we don't think this is going to be important to the rate-making decision. And they were wrong, and they were years behind as a result of that. Explain what telematics does for an insurer. Yeah, basically it gives you actual data from how someone drives, which it turns out is very important for determining how they drive and setting their rate and the riskiness, et cetera. So GEICO was – or the way Warren talked about it, they were convinced they had – Is it built into the car, he asked, concerned?

38:23Or is it something that you have to give permission to? You had to get a device at one point. I believe you can do it with your phone now. But they would... And you get a discount if you agree to do this. You can get a discount for using it. And they've changed over time what they're willing to do with your rates. But early on, you could just get a discount from it. You wouldn't get a rate increase. So, yeah, Berkshire or Geico kind of missed that early. And they've kind of been playing catch-up since then. And Progressive went from millions of policyholders less than Geico to now being quite a bit larger than Geico.

38:54They're one of the bigger – this is a huge, huge growth story and change for them over the years. Is the telematic strategy what drove them? Yeah, it's a huge part of it. It's a huge part of it. And then the other issue that comes up is Buffett has been notoriously tech-averse and then becomes one of the biggest shareholders of Apple. Yeah. How did he explain that? How did he wrap his head around that major pivot? That's the other example I was going to say. You go through a period of, I believe it's 2011, 2012, 2013, some select quotes are that when they owned IBM, they basically said we'll never have the confidence in, the person asking the question specifically asked about Apple and Google, which in hindsight is kind of funny because those are the two companies that they've now invested in.

39:43And they basically said, we'll never have the confidence on those two companies that we have in IBM, which was not a good investment. And then I think late at the next meeting, Charlie even more forcefully said, basically, Apple's too hard for us. We'll never own it. Fast forward a few years. And it was a I think at one point is almost a 200 billion dollar position. And it's one of the greatest investments of all time. And I think it just speaks to a willingness to continue learning. And, you know, Warren specifically talked about on CNBC when they bought. he spoke about how at the Nebraska Furniture Mart, which is a retailer that they own, people come in and buy a TV, and they're looking at the number of pixels or the quality of the screen.

40:21They're comparing the prices, et cetera. And then when it comes to an iPhone versus an Android, it doesn't matter if an Android phone is 60 % cheaper. Some people were just absolutely going to buy the iPhone no matter what. So he noticed that in terms of that differentiation between a technology question versus a consumer brand kind of question. I think he also recognized early the value of the screen and the services strategy that Apple in the mid-2010s really got underway. And also the valuation was attractive, and they had capital returns policy. That's one of the things that really jumps out in terms of his investment approach is how much he, particularly in publicly traded companies, how much he valued the combination of the valuation and very clear capital return strategy.

41:03You see that at Apple. You see that at PetroChina in the early 2000s. It's a very prominent part of what he seemed to be looking for. So I see how their ideas have changed over time. I'm curious, the process of going through the whole book and all of the various meetings and videos you ended up watching, anything change the way you invest personally? Any ideas you're still wrestling with trying to put into practice? Yeah, I think this idea of, again, I think I mentioned this before, kind of traditional value investors, this idea of change being a bad thing and trying to avoid it. It's just, I mean, it's borderline impossible in today's.

41:45I mean, if you could give me a list of five companies that haven't meaningfully changed in the last 10 or 15 years, it'd kind of be tough to do. Every industry is changing, and you have to be, you can't just avoid it, I don't think. It doesn't mean you have to run into it, but you have to be really thoughtful about how every business is changing. And you think the prominent examples that they gave over time of the greatest businesses are newspapers and other things that are either greatly changed or gone. So you have to, and retailers as an example. Adapt or die. Yes, adapt or die. And I think that's a reality of being a business manager.

42:18It's a reality of being an investor. And you have to be willing to lean into that. Really, really interesting. Coming up, we continue our conversation with Alex Morris, author of Buffett and Munger Unscripted, discussing Berkshire Hathaway after Warren Buffett. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work.

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44:18Don't go down the rabbit hole. Amazon Health AI gets you the right care fast. Health care just got less painful. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. Alex Morris is my extra special guest this week. He is the author of Buffett and Munger Unscripted, scripted three decades of investment and business insights from the Berkshire Hathaway annual shareholder meeting. He is also the founder of TSOH Research. So so let's talk a little bit about their relationship before we get to the post Buffett. And we're already in the post Munger era. What what did Munger contribute to Buffett's thinking that Buffett probably wouldn't have developed on his own.

45:05They really had kind of a unique partnership. Yeah, they did. And Dale, Charlie will say he didn't have as much of an impact as Warren says he did. So I guess you got to pick which one you want to agree with or believe. You know, I think Warren's strategy that he ran up into the point in time where they became, you know, friends with each other in the decades after, it was a cigar butt strategy and a traditional value investing strategy. The main constraint it was going to run into over time with size. And that's a problem they have now, even as they've adjusted the strategy. And I think Charlie changed his mindset a little bit towards buying businesses that they're going to own, as opposed to things that are going to be liquidated or sold, whatever it may be.

45:43When you say buying businesses, completely like a full takeover, not just, we don't want 10 % of Geico, we want all of Geico. Yeah. I think one of the prominent early ones was See's Candies, where they were getting a little bit, they were getting a little touchy on the price, and I think they had someone who worked with them who said, if you guys don't buy this because the price is 10 % higher than what you wanted, you're idiots, basically. Really? Yeah. Who says that to Warren Buffett? I'm just curious. I think it was Charlie Munger's part. I want to say Ira Marshall for some reason, but I could be incorrect.

46:14But anyways, they told him, if you don't buy this business because it's 10 % higher than what you want to pay, you're not being very intelligent because this is a really good brand, and it's going to be a really good business over time. And thankfully, they listened. You know, I have a buddy, Jonathan Miller, who's not only a data junkie with the back end of real estate and an appraiser, but he was saying if you're buying a house that you're going to live in for 25 years, this is the house. If you pay 10 or 15 percent over, who cares? Yeah. Just look at it from houses sold 25 years ago. What would have happened if you paid 10 percent more for that?

46:53It's meaningless. Listen, Mark Andreessen said the same thing about Facebook. All right, it was a 40x or a 50x. Imagine if we paid 25 % over. It wouldn't have made any different. And yet, this is coming from people with a value background. How do you reconcile that? Yeah, personally, my personal experience taught me to, or in some ways taught me to, just to get past that way of thinking. And again, I said before, I bought Microsoft in 2011. It was a very traditional value investment. X cash, it was trading at high single-digit PE and, again, very traditional value investment. You get forward to 2015 or 2016 in that period, and now the PE, as opposed to being in the high single digits, is, you know, call it mid-teens.

47:35And I can remember that point in time, a lot of the, again, more traditional value investors, they were at a point where they go, okay, we've had our run here, it's time to sell. And it's a situation where I looked and saw, I saw what Satya Nadella, who was recently named the CEO at that time, the strategy they had in the cloud business, and not that I have any great technical knowledge on this, but the way they explained where they were going and what the opportunity was, just seemed clear to me that to sell it simply because the P.E. was a couple turns higher than what the quote-unquote fair price was for it, just didn't make a ton of sense.

48:07If you found a business that has a really long runway with a person running it that you think is the right person for that job, And to let that go easily is a mistake. And it's funny to look back now. I didn't know this because I was updating on Microsoft the other day. Over the last decade, the stocks compounded at a mid-20s annualized return. This happens all the time with companies like this where people, if they become too focused on the valuation, they go, this can't. This isn't going to generate more than 12 % a year over the next decade or whatever. What's the line? Price is what you pay.

48:37Value is what you get. Exactly. So clearly, even at an elevated price, Microsoft turned out to be a good value. You have to consider both at all times. If you become overly focused on price as the driver of your decision making, I think that's kind of a flawed way to do things. And the same goes for, you know, theoretically, you have, let's say, you have a portfolio. And theoretically, you could re-rank it every single day on expected five-year returns, whatever it may be. And the answer is going to change based on what those positions did the day before, obviously. I think that mindset, while it makes sense theoretically, it guarantees you're never going to own anything particularly in size.

49:13You're going to be trimming it as it goes up 20, 30, 50%. Because suddenly it's fully valued. The IRR is three points lower than it was six months ago. And I just think if you look back, again, like the last 15, 20 years and your example of Facebook, selling it because the IRR was down slightly was a mistake. Understanding what the business was in some sense, what the opportunity was. Again, you can deal with this through position sizing, but be really thoughtful about selling businesses that you actually think are worth owning. You know, that makes a lot of sense. Both Buffett and Munger have emphasized staying within one's circle of competence.

49:48How can an investor expand that circle and how do you avoid fooling yourself into thinking you have some competence when you don't? This is classic Dunning-Kruger. Yeah, I think it's time. It's a willingness to learn. It's a willingness to feel around and not always have the answers right away. I mean, for example, at TSOH, a lot of my initiations on company, they very rarely end with, you know, this is my price target or this is a buy today. That's very uncommon for me. The conclusion is almost always, here's what I think is interesting about this company. These are the questions we kind of need to explore and get a better feel for over time.

50:25And it's just that continual learning process where sometimes you get, you know, three, four, five years down the road from there and you still don't have the answers. Other times you get a couple years down the road and things happen in a certain way and you go, wait a second, I think I'm seeing this now in a way that I didn't originally. And you find enough examples like that and you can have a portfolio. Really interesting. Interesting. What do you think of all the principles that Buffett and Munger enumerated over the years, often quoted but really infrequently practiced by professionals or just difficult to put into effect by mom and pop investors?

51:03Yeah, they've had things like permanent capital, which you look at an example like Terry Smith at Fundsmith right now, and when things go against you for a relatively short period of time, but your assets start going away, that's a huge problem. So things like that are just a prominent example of how thoughtfully they've constructed everything and what that then allows them in terms of their flexibility of being really patient or taking big swings, et cetera. What about avoid difficult decisions? Is that realistic? today? Again, I think it's more difficult over time. But I think if you're patient, you can, again, as you learn more and more, decisions that may appear difficult might be less so for you.

51:43I really like Buffett's comment about market forecasts. They tell you nothing about the market, but a great deal about the forecaster. They claim to have never made a Berkshire decision based on a macro prediction. How true is that? Well, I think you look at their cash position currently and and and wonder how much of that is, you know, maybe not a macro forecaster. There has to be some belief about markets or prices generally. I guess you could look at it at a micro level and say we can't find anything. And collectively, all the micro is the macro. Right. You know, I think it's I think the bigger point and it's something that we've all seen over the past 15 years.

52:23I mean, I'm sure you can remember well, 2011, 2012, people are like, OK, we're back to another bubble. We got past the GFC and now we're here we are again and stocks aren't going to go anywhere for the next decade. And good call. People overdosed on that have paid a very significant price. So, you know, it's funny you bring that up. I remember I don't remember if it was late 08 or early 09, but Buffett wrote an op ed. I think it was The Times by America. And that felt very much like a combination of a everything has gotten cheaper. So there's a valuation issue and we weren't quite down 56 percent, but we were on the way.

53:01Maybe we were down a third by that time. But it felt like a macro, hey, this is a temporary crisis and we'll get past it. Or was it strictly a valuation decision? Yeah, I think it was a little bit of both. I mean, as he as he said later on, you know, I wrote that and I think he said October of 08. And to your point, people are like, wow, it was a great call. It was like, well, it was down another 30 % six months later or whatever it was. So my timing wasn't particularly great. I think the bigger takeaway for particularly individual investors in my mind is understanding something like a structural asset allocation and having clarity on what you're trying to achieve.

53:40And again, coming back to this idea over and over of the mistakes you're trying to avoid. And we saw over the past 15 years people with big swings in and out of cash, running out of the markets. I think you're just making the game more difficult than it needs to be. And when you're wrong, it really hurts. So having studied every answer Buffett ever gave about succession over 31 years, what does the record tell us about how he set up his succession and what did his Thanksgiving letter last year add? That's kind of funny. Starting with the 94 meeting, they were asked every single year about succession.

54:21And he's what? He's my age back then. He's in his early 60s back then. It turns out he had another three decades to go. I think they've said over time that there's nobody who cares about the answer to this question more than we do. And a lot of the businesses at BNSF, the railroad, Warren's not really involved in the decision-making there. Same at GEICO, same at a lot of other businesses. A lot of the equity positions, like I said, Coca-Cola or Amex, all these other ones, they're just in there. and they're almost certainly not going to be sold by Warren or anybody else. So I think a lot of the pieces are in place.

54:55The biggest challenges Berkshire has, as I mentioned, there's some operational issues at businesses like GEICO that had to be fixed, and the massive cash pile is another challenge. Those challenges existed two years ago with Warren, and they still exist today, and solutions are difficult. But it seems like Greg Abel is starting to move in the direction of trying to resolve those issues. So let's talk a little bit about Greg Abel. He took over as CEO of Berkshire on January 1st of this year, 2026. You were at the meeting in Omaha, his first annual meeting, Buffett just sitting in the audience like any other Berkshire shareholder.

55:35Well, maybe not like any other Berkshire, but not on stage. What was that like? How was Abel? Are you confident that this was the right choice and Berkshire was in the right hands? Yeah, I think that this is also informed by writing the book. The questions over time, in the early days, the questions were really focused on Berkshire and investing. And I think as time went on, they became a lot more about life advice and other things that, while still interesting, are not really Berkshire specific. And when you got to things like I was saying with Geico and Telematics or at BNSF, where their results were lagging some of the other class on rails, I think Warren had a tendency to not want to point fingers at the managers, and he wouldn't really talk specifically about the issues there, which is, you know, for the people who are kind of the diehard Berkshire shareholders, we want to hear those things.

56:26Greg took those questions head on, which was really refreshing to hear. And I think everything we've seen so far would suggest that, you know, as Warren and Charlie said, we've thought about this more than anyone else, and I think that's probably reflected in their decision. So you mentioned the huge cash pile, a couple hundred billion dollars just lying around. I know that's walking around money. What does capital allocation look like under Greg Abel? Is he going to emphasize buybacks or going out elephant hunting, finding some big acquisition or something else entirely? I think repurchases will surely be a big part of the strategy.

57:02um i thought and by the way munger and buffett have both been very explicit about buybacks hey when you're below your uh true value when fair value it's a deal absolutely do buybacks but if you're fully or richly priced it's a disaster waiting to happen yeah they made no bones about it and they acted on that where do you think greg falls on that yeah i think berkshire started buying shares more significantly in the last, I think they started in 2019. The pace has slowed down lately. Implying they're close to fully valued? Yeah, I believe that they have views about the market or the opportunity set more broadly, I think would be fair to say based on how they've been acting for some time now.

57:49You know, it would have been helpful if they started repurchasing shares earlier. I don't think Warren was particularly interested in doing that for a good amount of time. And it got to a point where they basically either had to or have to pay a large special dividend, whatever it may be, I think Greg will be a lot more open to leaning into these things. And as I said many times, I mean, obviously we haven't had huge shakeouts outside of maybe a brief period during the pandemic, but if we get a period where equities really trade off meaningfully and they can put a decent amount of dollars to work, they're willing to spend tens of billions of dollars or potentially even over$100 billion if the right opportunity is there.

58:25What's the cash holdings right now? I think it's north of$300 ,000. Yeah, it's crazy. number. That sounds to me like a war chest waiting for a disaster to happen. Yeah. I think the thing is you got to find a willing seller, which is if you're going to buy a whole business. Do you? Do you have to find a willing seller or can you wait for a era of distress where everybody's a seller and you're the, you know, you're, that's what I meant by war chest waiting for disaster to strike. Well, that would be, that'd be a nice way to deal with this issue. And we haven't seen it yet, But I'm sure the day will come where things look really ugly and I'm sure they'll be ready to act and will act.

59:02So the whole idea of the annual meeting taking place in Omaha was really built around these two men, Warren Buffett and Charlie Munger, one of whom is no longer with us. And the other one is now sitting in the audience. So the question that comes to mind is, does Omaha still matter today? What's it going to look like, you know, a decade from now? Yeah, it's funny. I think, and I said my experience here, and it's from people I know who are also Berkshire shareholders, it sounds like their experience has been similar, is it's become an event where people go there and there's so many events around the meeting now that aren't the meeting.

59:40And it's people coming together who are hosting their own meetings of one variety or another or having investor conferences. And I think that's become a really important part of this trip for a lot of people. So I sense for, I mean, the size of the audience will get smaller, as it has already, I believe. Oh, is that true? Yeah, I think it was smaller this year than it's been in the past. But for these core group of diehard value investors, I think they'll continue to show up for a while as long as those events keep going on. Do you have any insight into who the average Berkshire shareholder is?

1:00:11Is this primarily Main Street or is this more professional investors or some obvious combination? Yeah, I think it's a combo of the two. Yeah, it feels like a combo of the two. It feels a little bit more, they definitely attract a more Main Street audience than I think just investors do generally, or investment managers especially. And I've never made it out to Omaha. I'm curious, who goes to these events? Value weirdos. Really? Yeah. People always like to joke that I'm a contrarian and I'm sitting in here with 40 ,000 people who think the same way I do. It's the scene from Monty Python's Life of Brian.

1:00:48Yes, exactly. You're all individuals. You don't have to follow the crowd. And they just repeat in unison, we're all individuals. No, I think it's people who want to learn. And for myself, I've learned a ton from Warren and Charlie about business, but I've learned a lot more as well about life and other things that I think are as important as part of your development as an individual and as an investor. And I wrote them. It's funny. I wrote Warren in 2010. And I said, hey, I'm not asking you for a job. And I have fantastic parents who are my role models. But outside of that, you've been really important in my life.

1:01:25And I just want to say thank you for that. And he wrote a response. And it's framed in my office. It's like my one material possession that I care about. But I think it's people with that mindset who have come to really appreciate all they've taught people. And, you know, what obviously Warren through charity and other things has done a lot for the world at large as well. So, yeah. Really, really interesting. So I only have you for so much time. And we don't have the studio for so much time. And let's jump to our favorite questions that I ask all of my guests starting with, and I kind of have a suspicion as to the answer of this.

1:01:58Who are your mentors who helped shape your career? I know you have the letter from Buffett. So I want you to address Buffett and Munger as well as anybody else who might have shaped the curve of your career. Yeah. My start was with Peter Lynch, actually. Oh, really? I think I read One Up on Wall Street. It was one of the first books I read, which even to this day, when younger people ask me, what should I read? I think that's a perfect book for getting a feel for what investing is, and it's very approachable. So I've always liked Peter Lynch. There are other investors like Chuck Ockrey and some of these other fund managers that I – Don Yachman is another example.

1:02:38Fund managers that, at least in the early 2010s, were names that – at least the world that I track in, they were well-known and people that I learned a lot from. obviously Warren and Charlie are at the top of that mountain for me. Let's talk about books. What are some of your favorites? What are you reading currently? Currently reading the Jeremy Grantham book, which I thought is an interesting book. I'm reading a book about Fairfax. What else am I reading right now? About Fairfax? Yeah, Fairfax, Canadian and sure. It's called The Fairfax Way. It's a good book. I have two young kids, so my reading time has been changed in for 4 a.m.

1:03:16walks with my daughter and podcasts. So I listen to a lot of podcasts now as opposed to reading as many books as I'd like to. Well, that's my next question. What are you streaming these days, either Netflix, Amazon, Disney, or podcasts? What's keeping you busy? I've been listening to your podcast. I love the Haggerty's episode was really good that you had here recently. So interesting. I mean, your knowledge of cars, that helps the podcast. You know, I go out of my way to learn as much about each guest and their business as I can before the podcast, but that was easy. I didn't have all that much research to do for that one.

1:03:53You could tell you love that topic. It was fun. I've had a few really interesting automobile people over the year, but still, you have to do the deep dive because you'll find stuff that you wouldn't have without doing the research, and I just think it makes a better conversation. What else? Give us some other podcasts. My buddy Bill Brewster has his podcast called The Business Brew. That's a great podcast. I listen to a ton of, as part of my research, I listen to a ton of old interviews and things like that that I find. Like I'll listen to Reed Hastings from 2005 and listen to him talking about Netflix and what their strategy is.

1:04:27I find those, along with old articles, is so helpful in terms of getting your mind to what were people seeing and what were they thinking at this point in time. And how does that translate from then to now as an investor? I think that's like a fascinating way to learn about businesses and people. So our final two questions. What sort of advice would you give to a recent college grad interested in a career in investing? I mean, I think it's become harder with Twitter and some of these other tools over time in terms of getting your voice out there. But I recommend people writing is the greatest thing for me that I ever did in investing because it helped me to, one, build my audience.

1:05:06But, two, it helps you learn how to think, which might sound weird to people. But when you put something on a piece of paper and you read it and you go, okay, well, there's no defense for that part or this doesn't even really make sense. What am I trying to say here? When you sit down and go through that process, I think there's so much learning. And to the extent that you do it, and I find this as well, when you reach out to people who are established in the business, you say, hey, I did a one-pager on XYZ. I really worked my butt off on this and I'm a college grad. Almost everybody is willing to respond if you're really showing the effort and you're conscious of their time.

1:05:38so take advantage of that while you're young and people are willing to talk to you and our final question, what do you know about the world of investing today, might have been useful 15, 20 years ago when you were really first starting up yeah I know that I don't know everything I know that I've learned a lot along the way, as I said before that there's different ways to play the game and I've kind of found the version of this game that I want to play and that I think I can do well at and just continuing to try to get smarter every day That sounds like you're bringing it back to the circle of competence.

1:06:09Yeah. A lot of things come back to what Warren and Charlie have said. They're pretty smart. They had some good ideas on investing in business. Those guys are definitely onto something. It was hard to get this to 500 pages. Oh, really? Yeah. Because they just repeat. Well, I went through 1 ,700 questions, and I was like, okay, I tried to keep 1 ,100 of them. I think we've got to cut this down a little more. What was the original length of this monster when it first? Oh, it was a huge Word document. I think it was 700 or 800 pages, but then I had to go through, okay, which of these comments on value investing do I really need to keep?

1:06:41So that was one of the harder processes of writing the book. I could imagine. Alex, thank you so much for coming in. I have really been enjoying it. I'm like halfway through, and this isn't like a book you pick up and read three or four chapters. it's just dense with knowledge and information and you really have to chew on everything on the way through and i've very much been been enjoying it we have been speaking with alex morris author of buffett and munger unscripted if you enjoy this conversation well check out any of the 659 we've done over the past 12 years you can find those at itunes spotify bloomberg YouTube, wherever you get your favorite podcasts.

1:07:28I would be remiss if I didn't thank the crack team that helps us put these conversations together each week. Alexis Noriega is my video producer. Sean Russo is my researcher. Anna Luke is my producer. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.

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