Greenwald Li Lu CBS 2006

[Music] after the wife's hand out what you win for next Tuesday and there is a ball socket hand outage that I get from how [Music] are you good I'm glad you're making all the classes oh good very welcome okay [Music] [Music] [Music] [Music] all right this is where the course really begins you should have a sense of what the fundamentals involved in value investing our water understands that we want an appropriate search strategy where you're going to look that's going to put you on the right side of the Train where you're going to be better informed than the people on the other side of your trade or at least making a more extensible decision that's the first thing second thing is you want an approach to valuation and Industry understanding that is what a degree of judgment goes about how to process the accounting information and how to figure out the context in which the nature of the industry and that economic model the industry puts that accounting information that leads to superior valuations to the run-of-the-mill performance of your competitors because this industry is by its nature a zero-sum industry beyond that want to be good and systematic at looking at the collateral information are the insiders buying or selling have you made this mistake before is this an area where somebody with your particular makeup should be competing and finally you want to have an idea of either the demand at risk the people you're going to hear from for the next 16 sessions are all the evidence of their performance indicates outstanding at doing all those things are you're implicitly or explicitly I take no credit for that despite the fact that some of them are actually a product of earlier versions of this it is their ability to take that basic model and build it into a way they don't know nobody I think over the last how many years have you been wearing the fun eight nine years have over the last eight to nine years has done that significantly more successfully than our speaker tonight who is Lilu graduated from the business school went immediately into the business of bringing the hedge fund get it first for julian robertson with extraordinary success and a six moved on did you think that for himself and his old professors with even I have to admit more extraordinary but beyond that I think what you want to pay attention to is how basically get support all the developments together in his own inimitable style and with that by the way let me actually say one more thing the speakers are going to hear from have very different attitudes towards risk and very different degrees of optimism which our particular night out and particularly the way in which they do invest we lose background is having survived as a leader of the gentleman square protests and escape with his wife in some sense eight he's very optimistic and he after living with that kind of risk I would keep that in mind as you listen how he goes about dealing with this environment in being a professional investor and having to outperform all the rest of the world [Applause] Hey well what Bruce said about me must be true because my evidence is my wife actually showed up to listen to me tonight now I can guarantee that is not happy in our home [Music] and also I really felt terrific coming back to this class I mean this class in many ways is really what to meet my career about 15 years ago at the time actually I wasn't even as students at business school I was accidentally brought into a lecture I think of basically part of this class and the speaker has a funny name that really reminds me of some kind of bull fail entries anyway in the middle of this speech listening to Warren that light bowl kind of just went off and I figured that I can do something in this business and of course at the time I was a pretty desperate you know recently escaped from China I didn't know it anybody have a very little you know connection whatsoever and didn't have any money in fact I was deep in debt and it was a horrible he worried about how do I ever make a living in this country and I really didn't go up with a capitalist culture either so and so in the middle of his speech I thought well what he said about investing really just so different from my perception of a stock market and and the more I think I've thought about it I'm more I thought oh well gee this may be something that I can do now I suppose that most of you who chose this class I understand is very difficult to get into this class at least it was when I was a student it's maybe kind of a self-selected group of people who are already somehow by is due to all the value investing how many of you really consider yourself a value investor or more predisposed into manually investing how many of you sort of know for sure you're going to be kind of asset management business so roughly the same number of people who really want to be an asset management business have sort of a already consider yourself as a value investor so who can really tell me what are the one or two things that really sort of defines a value investor from everybody else anybody yes chase usually right there so another way to think that you sort of feel yourself is more of a owner of a business in the sentence and therefore your fortune rise up and down with the nature of the business a how things to add please yeah you're sort of you demand a margin of a safety in the sense anybody else right right right well that's pretty summarizer that they're basically three attitude streak out of the teachings of a Ben Grimm that a you think yourself has basically not a paper shuffle or in the sense you you really think yourself as as owner of the business and be you sort of you know you you would demand a huge margin of safety when approaching investment and see that somehow you sort of think everybody else is different so this this is where the mr. market analogy come in this is three things actually kind of a they all you know come in to really coming from one perception which is you know is you you think yourself is an order of business rather than kind of a kind of owner of a piece of a paper and and and and you own a small piece and therefore you really don't control the business and therefore a sort of is almost self-defense to demand a large margin of safety because whatever value you perceive them you know to be there because he can't control it and then because you thought you're really owning the business and therefore you really don't care you know if you're older business you don't treat that all the time and so therefore you think that you are somewhat different from just about everybody else in the market participant but then the question is we really feel your owner of business why do you want to be the stock market the stock market is not created for this type of a people is that right the stock market is a created is a freshly so that everybody can go in and go out is that right anybody have a view on that one who can tell me that acity you think is really kind of managed by value investors anybody have any guests with that kind of a perception we just talked about there's no real study but there are a number of attempts of a study including one actually by a professor next door in the law school a low a low esteem yeah and which really kind of put it a roughly under 5% of all asset that actually is consistent from what we just talked about it now you are really nod to the majority you are actually a very very minority and the stock market is really not created for you it's created a for the ninety five percent of all the other people and that's really where your opportunity is and that's where your challenge is so to understand that before I go into a management in your business is it really short nerely important and that's really when I that's what I first learned when like when I came here and listen to above it that's one thing that's stick in my mind and that really sort of helped me to position where I am because I really know by then what kind of a person I am I think most of your challenge especially those of you who really want end up in the managed management business and I'm actually tonight primarily address to that group of people sorry for those people that are not you were your biggest challenge is really to understand whether you are that 5% of the PERT people or you were the 95% of the majority and you might think that because of the training because you do this you sort of you know intellectually or theoretically bias or to also that small minority group of people you'll be amazed you know how much it would have change you know my career is sort of a take a little yeah twist as well I always kind of arrived my own fun you know part of the time when Bruce automation was Julian was really a sort of when he invited me to really share all of it with him because he sort of invited a whole bunch of a fund managers that he invested him and also share a story ideas and that's when I sort of get a much better understanding of how the ninety-five percent of other people really operated and you know it is tempting because you know why 95 percent of the people don't do you know what you guys are here try to do despite the spectacular success of Warren Buffett Charlie Munger why is that anybody have a reason why is that why there's only yes yeah what emotionally is a very difficult but if you think of that you know it's very convincing that value investor is over a long period of time really have much much better kind of returns you know you think that's where the money is you know even if is emotionally difficult you think they wouldn't change it any other reason right right right right we actually are very close to the point I think that the real answer is that's really where the money is why that's where the money is because the market is really created for those group those kind of a people we're really thinking of trading in and out all the time and therefore that they will pay attention to the short term and therefore that if you put up with that requirement that's really where the asset is going to find you and so as a result that's a statistic de SPECT it's a huge different disc rumba see of a performance of that 5% have a spectacular return consistently over a long period of time 95% of the money or something close to that probably would always reside to somewhere else and it's if that's where the money is you know most people would naturally would end up there so my first kind of a point I want to leave with you is really to understand who you are because you won't be tested through all this period of time do your future career development that you're going to really have to really face this to to ask yourself whether you're value investor you're not mad even faster now if for whatever reason that your personality is a build to be a value investor that probably means that you somehow you know genetically mutated through out of the the process of evolution that a are very comfortable being in a minority which is not really very natural to human beings you know throughout our human evolution process the most of us survive it because we stick with the group in phase of large memos that's the only way we can we can survive and so it is really over you know tens of a thousands of years of evolution it really need a deeply ingrained into the your genes but occasionally you will find a small percentage of people really survive despite the fact that they really have a different kind of a gene is almost through a mutation process that that group of people survived so there's the first thing you have to really be very very comfortable you know being very much by yourself and therefore you would naturally adopt an attitude you're right not because other people agree with you but because your reason your evidence or right it is common sense but of course as people said common sense is at least a common commodity most people don't think that way and secondly that you would have probably spend most of your time truly be an academic researcher instead of so-called a professional investor most of the time you're going to spend as a professional investor as a value investor not a professional investor is really to be an academic to be a researcher to be a journalist actually to basically be have insatiable curiosity to really and try to figure out how just about everything works because investing really the more you know and the better of you are as an investor and so you you just have to be naturally interested and occurs just about everything any kind of a business politics science technology and humanity history poetry literature everything really affected to your business basically so you almost have to wait it you you know I don't want to scare you don't have to it will help you it will help you and then occasionally you want to find a few insight that all of those studies that really gave you tremendous opportunities than other people just for whatever reason couldn't deal with either psychologically somebody said or were because of the limitation for the thinking or because of the institutional imperative of the institution that belonged to all sorts of a different reasons and then you go through find out is the business that opportunity you're given is that cheap is the business a good business is the management to somebody that I can trust either because they're good or because the external checks are sufficient and what else is missing and that why this opportunity presented to me so you go through all this checklist and you feel comfortable and then you'll just have to really go over that last a psychological barrier to basically do it so let's just go through a couple of examples unfortunately what I'm doing today you know I no longer talk about what we own so I pick up a couple of examples of what I owned in the past you know I started this business in late 97 and you know along the way being through a couple really traumatic events you know one is sort of the Asian financial crisis and then the technology bubble a couple of the different things but you know those period of a time you tend to have more interesting opportunities let's start with the let's go back to 98 so it was a fall in 98 and I tell you the search that I go through are very simple because I'm interesting all sorts a different business I usually just get in menus you know I got hooked a tube annuli while I was a student here you know every issue as it comes out I just you know love to read the whole thing from beginning to end because that's really the best kind of education if you want to have an encyclopedia knowledge base and database which you have to so just go through that to page after page after page is just enormous ly helpful and the first thing I always check is sort of the new low list you know that the new kind of a low is the bloke low is a PLO is available that we attract me more than the new high list now this actually I don't have any more of my copies I get rid of that so I asked them for reprint and the number is not right I mean I was looking more of somewhere around I think is a September or something August that when the stock was roughly around 28 so this is a 46 it's not right so this roughly call that 28 to 30 now you look at this one you know what is the first thing jumps to you somebody give me a quick read yes right yeah yeah anything else yes right right anything else now if you're in investors you don't really care where it was traded to before actually oh hi Carol I tell you what I look for is that first look at evaluation and if the valuation doesn't fit I don't even want to really kind of a go beyond it so what do we know about the valuation yes yep yeah that's a good point and what is the Constitution of the book value so everything you know every time you'll see is a below Book value you want to say what what's in the book what's in the book how much is the book what now that's simple you can just you know call it a 28 and then you've got a what eleven and a half million shares roughly three hundred something low three hundred million just to approximate you don't have to really do all the quick was and he'll see where it is now the the working capital is almost a three hundred million in a sense and of course it was the end of the q3 and in retail what would you know about kind of an end of a q3 in retail is that this is really where you know you're you're kind of a quick encyclopedia knowledge it really helps you all retails have built up a huge amount of immigrants the last quarter so you look at back to the previous years to say what is it normal like because is it going to really collect a lot of a cash at the end of the year so you say okay so there's a 300 million it's almost the entire book value roughly 275 million is in the is in the working capital everything else cancel each other and so you'll probably collect about a hundred million cash at the end of the quarter if you look at the other two years so roughly you got a 200 million liquid ass and applause 100 million no fixed asset and if you do you know a little bit more study you're gonna see there's entirety buildings real estate basically so 300 and you're treating roughly 300 million and so 200 million is is a liquid asset and then about 100 million is is in real estate so you've got a pretty decent protection on the downside so what do we know about the earnings the cash flows and the ones you want to really pay most attention is basically kind of the the pre-tax and pre interest earning the unleveraged and you want to compare that it was unleveraged capital that is needed in the business against your sense of what kind of business you're having how much of their making give me a quick sense how much is that well if you're skilled it shouldn't really take you more than one second to find that out you got 13 percent roughly of operating margins of 800 what 800 850 million so you get roughly 100 million hundred ten million and what is your deployed capital how much capital is deployed in the business roughly you you wouldn't have roughly about say 200 million in the in liquid asset and then about a hundred million in buildings and then the 200 million of liquid has a probably a hundred millions cash so you'd roughly have a 200 million deployed a capital and roughly returns about a hundred ten million dollars so your return on your deployed of capital roughly around fifty percent at that point so that's not a bad business so you shouldn't read it I mean you start with say you give a five second look at me you say hey the business I don't care you know all the other things the business was trading roughly you know read around the book value book that it was pretty claim is basically consists of a tangible the quit asset working capital plus you know a hundred billion real estate and and the deploy to capital is basically 2/3 of that and and for that 200 million you'll return roughly 100 million or so and so they shouldn't be bad business to begin with so next thing you check sort of a why this whole thing sort of fall apart at that point sort of a missing I mean whenever you see something like that you say wow that's not a bet you know if I owned the whole business remember you're always sort of a think as yourself as business owner if I owned this business if I can't buy the whole business at this price you know you probably want to own it and it's actually is not a bad name right most people recognize Timberland as a brand right so what is the reason at a time was torn out is that that was the height of the Asian financial crisis that all their competitor is especially Nike and Reebok see their sales especially in Asia falling out of a cliff and so the whole contingency sort of all their perils that all the retailer's of shoes and international brand anything that has exposure to Asia all fall apart but what else is going on so you try you try to check you know what other people are thinking about this mm-hmm you know you you you you may not really listen to the advice but you want to really know what other people are looking at so you check to see whether there's any analyst report it turn out there's no enemy's report nobody covered this well for a company is doing about a billion dollar in sales is always a reasonable company is a big brand so why nobody kind of a cover about this any possible reasons you can speculate yes which is a good or bad for you fabulous for you fabulous for you and you go back to see 10-15 years the good thing about Value Line is you go back to 10-15 years and you see whether they ever really need to that money what did you find in the business over the last whatever years it's been growing the profitability has improved dramatically over the recent years but has always been pretty profitable and therefore they're neither full financial market is very limited any other reasons what's the ownership structure yes yes what do you mean my family owned they own 40% of it how much voldie control they have a hundred percent vote basically ninety-eight percent right so immediately that turn off a whole bunch of people and then you see what you know how the investor has been basically reacting to them in the past you can do a quick kind of a data search and this is what really why you know I say that a a investor should really investigative a journalist because we have a journalist here I'm sure if I ask the journalist look at this question you know there the first thing you were to say would it go through all of this question I just asked and pretty easily you confine all the answers and very quickly and so you've got to have a very active Eric hearers mind and you just can't would it really satisfy was Eddie bogus answers otherwise you can't really be in this business so you go and you'll find there's actually a whole bunch of a different shareholder lawsuit now you have owner owns a forty percent owns an almost a hundred percent of the vote and those of a shareholder doesn't have a vote and you have no analysts cover them and there are a whole bunch of shareholder lawsuit so immediately that if you don't know anything about the business if he or the 95 percent of the other investor what conclusion you would have jaw what will be your conclusion if you were kind of you know a normal mutual fund or a hedge fund trading oriented investment manager what would you say to this situation now that you'll find all this information please yep right anything else yes right right anything else yes yes anything else you guys are not skeptical enough what would you really worried about ooh that that management might be milking money from the company might be manipulating their books because they control everything there is virtually no there virtually no constraints on what they do and the fact they're a whole bunch of a lawsuit it tells you they're complaining about something right so what do you do next what do you do next well yes that's one thing anyway out what absolutely you download every single piece of the document of the court cases every single case and read them from page and that's why I was saying that if you don't have a curious mind if you just if you just want to do it because you want to make money out of the chances are you're not going to do this you have to really figure that I just you know I'm just so curious is what's happening this this doesn't add up and you have to dig every single thing as you read everything as I did the first apart it takes a less than you know a couple minutes you look at that one you say that's really wanted there'll be all the questions you read it leaves you to all of that so upon possibly find all the cases I can find you know all the cases really it would be one thing actually there's basically one complaint is just multiple filings that you know somebody really say well they used to provide to some guidance and they didn't deliver and the investor get pissed off and so the order also get piss off you can you know vividly see his defense you can get a sense of his personality by reading those document he said you know what I'm not gonna do this anymore I'm not gonna talk to the street I'm not gonna give any guidance I don't need a damn dollar from anybody else the business is wonderful okay so that remove a big cloud so the next thing what do you do well if they really run this run this way the next question is okay maybe there are not crooks but are they good managers how do we know that other decent people how do we know about that how do we go about to find that what do you do sure anything else you can do how do you know either personality yes good idea great what do you call what do you tell the neighbors what do you just say go to hell you'll hung up but most people will tell you what go to hell but it's nice try anything else yeah that's right there was no Google back then but that's a good idea now you want to the point is you got to really go no I says again again you know just happen to have a journalist here but I always view this job as investigative a journalist most people who have build businesses also have a big personality have a history you can go to audit never leave the trail of evidence of what kind of person they are and what they have done how they deal with the different situations it is not that difficult but you have most professional managers wouldn't really consider that as a part of the business but I'm telling you you're the 5% if you end up to be the 5% maybe you're not but if you try to be that 5% that's what you do you go to see their community you go to the Church of synagogues and you goes you know you go visit everybody you sort of get yourself to be part of that and you introduce yourself to all their friends and families and neighbors don't just call them go there spend a few weeks there it's worth it it's worth it just to spend as much time you can possibly be to try to find him find what he had done to his a community what does neighbors and friends tell about me to say about him that tells you more about this personality and you want to find the family dynamics this fellow actually only graduated high school never really wouldn't have a college relatively simple guy but a nice decent guy has been very philanthropic go to synagogues but not terribly devoted but a more interesting thing has a son who actually went to business school as well it was actually my age at the time was in the mid 30s early to mid 30s and as the time already assumed to be a CEO of the company so I did all the things that suggest to all of you I did it further and I find that what this Suns all the board of the Father and the sons on and I find a one of the board the site of a song actually is a run by a friend of mine so I invite myself to be on the board so I join on the board along with the son and would become very close friend and then I really know in that family is turnout this is one of the most Anna marring family I've ever met there are people of the highest integrity they're wonderful and they also happen to be brilliant businessman so after all of that and the stock actually still trading right around 30s and so that's sort of you kind of answered you sort of an oh you know did I miss anything you sort of a same probably not I didn't miss anything the other 95% just don't know or their industry imperative does not allow them to do anything about it so what do you do at that point what do you do by how much you want to buy let's suppose we have $100 what why how much is that 200 okay well I like to talk to this class because you guys are not polluted it yet now if you go to join the fund the first thing people were to tell you is oh gee don't do anything more than 25 basis points and then your goal is maybe 50 basis point and you do one percent as 100 basis when they use a basis point so every number sounds big you know boy we're gonna do 50 basis point there's a big deal that's what is it like that's what is it like so keep your innocence because right now what you're thinking is the common sense think about how much effort you put in together stem thing right think about how good it is you have virtually no downside you're treating roughly about five times and the next thing I did is I actually have been to all the different store to see why in the last few years the margin improved substantially it's turned now there was a fad going on in the in the especially in the inner cities that all the little kids want to have you know the Timberland shoes and jeans and poor the things that you know all the store manager tell you they couldn't really get enough stock and you look at how much of their international business which is actually in shoes in in Asia less than 10 what they make out of that less than 10 10 percent out of the 10 percent of the 27 percent so you calculate all day you say that all of them are gone you're losing money so what it reduce your earnings by less than five percent so I put a shitload anybody know what happens afterwards in the next two years I mean you guys all have the internet you can check right away really you should do that yes sure that why do you want to listen to all the you just do whatever you want to do as I said you know you're right not because other people tell you to agree with you we're right because you need to do that you need to check on that all of those things should come to you in no less than five minutes otherwise you're just not a good analyst if you're not going to handle you never be a good investor seriously so you have to at least technically train yourself to be very very proficient with all of that well the next two years this damn thing went up seven times and the truth of the matter is doing all those time it was a propellant of our earnings and so you do all this time you still did not have any risk it's not like you're hiding you know writing some technology company after they doubled tripled you expose yourself to a huge amount of attacks it was an ever more than 15 times earnings never but if you treat them from five times to you know to 15 times and the earning who's been growing in that period of time 30% a year I mean they're that up that add up and the other Gover as a CEO and he had the entirely different ideas about how to run a company it was very articulate it's one of the most articulate person ever met Stu is so he doesn't mind to talk to general analyst he initiates not earning guidance but analyst meetings and the first immediate guys who you know how many people showed up it was him me and another analyst three people three people and the last analyst when I sort of a woods kind of you know somewhere in mm you know mm the room is just absolutely filled with nearly 50 60 people a major street burger house kind of initiate some kind of a cover issue so that's no I know when I have to sell so everything anyway let's go back and say hey you know time kind of flipping this is sort of a year and a half ago yeah because that's really when the lawsuit occurred they did have a period of a time well they do have a misstep at that point because their product wasn't right they bake they build their business really on the reputation of this kind of water proof that they're the first guy I would really come up with his counsel water proof and so they did you know sort of mix the Sun and mix it signals of both water proved to shoes and non waterproof tissues and any marketing that was a mistake that was a mistake and he confused the market and it confused the integrity of their claim and they suffered but even with that year the revenue pretty much has still gone up I mean they have a one year of a blemish most of the time they have executed their business quite brilliantly yes it does that's why do you really buy anything afterwards you don't have to you already bought everything of 28 you know did you know when they go up you don't you just have to sit your ass on it don't have to do a damn thing that's good thing about really buying a good business the business take care of yourself I mean has a chase set your writing up and down with the bow is with the strength of the business and it yes actually normally than a couple weeks I mean all of those surprisingly it doesn't take all that long but but when the things happens you just have to really give up day and night into it day and night into it that's why I'm glad my wife is actually here so let me know all this missing pie what I was doing you know the opportunity like that don't come very often so Winnie when it comes you have to seize it you have to do everything complete but you have to do it fast and that's why you have to train yourself all those time and you don't have to do a damn thing plug things into a bank that's okay you don't have to buy anything but when opportunity comes you have to jump on it and that's what I did when you finish all of the things it doesn't take all that long but you take intensive work for a short period of time yes well I'd like to read that one mostly because is in itself is a good activity I don't have to find anything I learned then I'm curious about all businesses and that's why when the opportunity to come within a few second you can tell you can smell it how can you really develop their smell the only way to do that is just reading page after page and value line is particularly good because it really puts you know all sorts of a different datas and all sorts of years you're not just one year and so that's the you know easiest way for you to really learn a whole bunch of different businesses yes I would really keep that confidential but I shitload of okay let's go back to a year and a half ago okay so this is a fall and you know this thing come from this book I mean this you know you know this is you know this is like a stop you know standard pour well you know every every you know every broker has a book in every country give you you know one page summary of every company you know it's just you know SMP has a book for US companies and which I use but I prefer to use value line as I said because of a US company just give you more information and for other countries they don't have value lies you go with this okay so I just flipping on that one at that point you know there's a one page you know jumps on so that's the page so what people can tell you about that page yes right what do you mean by cheap well if you really think about you your owner don't think about per shares okay so if you just treat yourself from now on they'll think about per share numbers think yourself as an owner so give me what is the market cap come on it's simple come on and I thought you guys all did a homework did you anybody did homework not a one hand raise your hand if you did it homework one hand how the hell you're gonna make in this business one head you did a job good tell me what is your what is a market cap okay no anybody else it's very simple what is the ratio between cream 1 $1 what yes just divide by a thousand so do that right now what is the market cap what 87 million roughly about $12 roughly about what five and a half million shares how much is that don't use that one don't use it you know use your could've do you know get used to if you want to read a lot of company you know there's a lot of a company this one okay each page it should take no more than five minutes and the only way to do that is don't use those calculator just get yourself into more of a mental little things you can really look at those things it immediately within five minutes you get a pretty good summary of the basic financial data so don't use all of that tell me the numbers twelve five and a half million okay so sixty-seven million dollars if I take five ten million doesn't kill you what is their earnings last year give me the kind of pre-tax number come on you guys you're the Columbia Business School class you're the elite you expect to make $150,000 as a base what do we people pay you for what well how much is that give me the protector knew how much is that pre-tax earning just to read a few lines before it's College what is a net income 12 as the six months double that and the year before is what 24 mln pre-tax 31 million you're treating had a sixty million dollars of market cap roughly about two times what's your working capital what's your book value what is a book value come on come on you guys have work to do this is not good Bruce I don't know what you're teaching them come on divide by a thousand is 236 million it's simple 230 million dollars in book sixty million market cap 25 million that earnings of 31 million pre-tax earnings how much is what is the constitution of the book value how do you really go about to do this we have to probably go to the basics okay who can tell me how do you really do those things quickly just as an analyst what do you say about it when people ask me with you how do you really within five minutes tell me the basic sort of structure financial in this company how do you go about chase n how about yours are roughly perfect simple what are you using businesses use some fixed asset as I'm working capital that's it and the goodwill Z can really not account on that but that's it that's what you need to operate a business that's what you mean by owner if your owner you look at something like that you should be able to tell right away and if you can't do this well that's bruises / fault I shouldn't really afford to go I mean that's a pain take you who you would learn right oh okay so now here is the basic thing you've come out of this one okay so this one is not a gave you a whole bunch of a different information right it tells you roughly is traded a sixty million dollars in market cap it has it roughly about thirty million dollars in pre-tax earnings and it has about 70 million roughly 180 million dollars in fixed asset come up with 100 to 140 or so million in Book value so what does it tell you what do you do next you look at that one took you five minutes you got this what do you do next well how do we know it's cheap we think it might be cheap but you're not conclude it's not conclusive yet you have to you have to go you know next to find out and what exactly what is their earning what is the book what is the Constitution the working capital what is you that in the fixed right now I'm just basically using common sense a common logic I mean this is something you have to really think you don't have to go through any you know this is sort of a you're still kind of a you know savable if you will if you that's why all my employee ever had really never went to business school and never worked to free kind of established many management firm and some of them never had accounting because I find it easier to tween them that somebody who did clear it hasn't really demonstrated here I mean if you're sort of a goes through if they're teaching the right way you should be able to tell right there right away what it is okay so we did some work and it really takes enough know time of the 70 million in current asset you know how much is it's all cash Security's treatable securities of 180 million over the hundred eighty million so-called a fixed income well they recorded they owned a hundred percent of a hotel they recorded a thirty million is a book they also own thirteen percent of a department store we should record on the book of thirty million it just so happened that department store is next page so is easy for me to find I turn a pager on a violin depart the store I discover it it is roughly had a market cap of a six hundred million so thirteen percent roughly gave me what what roughly eighty million so the book can really enter estimated the value by another fifty million and they also all three cable companies MIT 10 percent ish and they also a whole bunch of real estate and next I look at it that department store they look at boy it has exactly the same profile they're treating roughly around the cash and security they own about two three times of their earnings and the Oh whole bunch of a different asset turn out they're the second largest cable operator as well and the next thing I learned is this department store really function is more like a hotel it's not a department store that we understand here they don't take any inventory it basically provide is more like a shopping mall and they charge you to buy taking a percentage off the top line of all the merchants sell their stuff there okay so you edit it all up here is what you have okay you're paying sixty million dollars you have a seventy million dollars in cash this is no debt seventy million dollar in cash you have another 100 million your stock as how much was that 170 million you have a 30 million dollar is a hotel the value hasn't been changed over the last ten years and real estate in Korea has it gone up dramatically over that same period of time I went to career and look at the hotel I look at all their department stores and looks quite decent to me I check the recent transactions of all the things in the neighborhood they all indicate me and that value is more like a two three four times of what is on the book but supposedly I take it on the book supposedly taken on the book let's add another 150 million how much we have right now roughly three hundred twenty billion oh so which I paid a sixty million and besides I'm earning of about thirty million dollar a year what did I miss what did I miss yes good question what about it any evidence oh that could happen right terrific point absolutely a great point anything else great point anything else right anything else what the liability because of lawsuit you know what kind of a lawsuit it could be lost to found a customer that could happen to any company right your reason that specifically for this company or any company anything else that's so far I haven't heard anything about local market as if the only thing I would really bother about those are foreign investors what about the local market what about what other investors is seeing and looking and thinking good point look at it that's why I give it to you I thought you're gonna do it yes what's that absolutely and how much is it owned by the insiders well you don't have a variance about 50% you've got a whole bunch of different things against you you also have a whole bunch of a different thing than really in your favor you have to go through all of it each one and think rationally carefully you have to add to that list of the attitude of the local investors the other people were buying because there's nobody from foreign that really owned this damn thing if you check that so you go through all of that and we don't have time to go through all of that but you should and then you'll come up with a solution I mean come up with your decision as I have now I sort of own it and what happens to the stock since well again nobody's have any competitor whenever you can check ok so I'll have to charge that that a printout directly from Bloomberg one is that the department store it was treated around to somewhere on 22 last I checked and went to about a hundred and then and this one star was 12 last their check is there on 70 or something each went up about five six times anyway well I give a couple of examples just tell you that this type of approach is not natural to an investor it's not natural to you however if for whatever reason you come to the conclusion that you yourself your personality somehow fit into this mutated gene pool that this is something that you might really and be looking to do the only thing that I can add to that is that there's a lot of money in it as has been completed been repeatedly proved by people from Ben Graham to buffin and everybody else and I have been the probably just most a grateful to this class to Bruce and actually many years of before I came to business school I took that class and really changed me fundamentally but one thing you do have to do is you got to do it I mean that's why I was somewhat disappointed if it would you know the amount of work you put into places I tell you I made hundreds of a thousands of dollars just taking this class just listening to the 14 15 people but it did a lot of work I'm telling you you can make a lot of money if you're really into this not only just listen but do it and we don't you guys you know how much you spend you know coming to school here how much you spent what is the tuition as a board and all of that stuff what is it now what seventy altogether well you need at least to make it that up I mean you should at least of $70,000 back right II you also have a two years you're not making anything you gotta make that up how do you make it up this is a terrific way to do it and so that's sort of kind of my last point I want to make is the only reason I've come back and really so I don't really talk about our holdings anymore this is actually we don't hold any of those two stocks anymore the only way I do that is because all that you know when I came here prior to business school and didn't do in the business school you know most people's do talk about names and I benefit hugely hugely just by listen and actually do it that's the difference and it back then that was more than you know 10-15 years ago I made you know roughly hundreds of thousands in one stock is more than a hundred thousand back then I think our cause was also a little bit lower than the seventy I think I mean it was I can't remember what was but but it was a lower and but that's professor you were into this class for this class is different from any other classes because there's no theory all everybody's telling you is what works is what works and if they don't tell you that one well asked them they should well yeah maybe they should but I did okay so this sort of you you guys have a terrific opportunity we'll be able to bid all the poisons that got into Bruce's class and if you don't really use this thing shame on you you've got to do it I mean those are things really there is so much gold in it that little pages the little books those value lies all of them you've got to use it you've got to do it I mean you're young you have energy you know what to lose there's nothing to lose yes yes go ahead well the most couple K so if your analyst okay I always tell my Alice I only need two things from you and if you want to be analyst you need to be analyst of course before you become a good investor you want to provide accurate and complete information accurate and the complete most people failed on both score big time and you just have to go to that extra length you order to get it done if you can't succeed on that one you can't succeed it succeed in this business because most of the time you're gonna stand alone basically against just about everybody else and if you're not really confident about what you know and you're confident about your prediction what other people know or don't know you can't possibly be putting that kind of a money when the things go into a free fall when it looks like are you're really losing all your money when everybody else is laughing at you all the smart guys so you must be able to first to do accurate and complete and the second thing in this business okay most of money are not made on those stocks I was just talking about your biggest amount of money you're gonna ever make is not from that those are things really get your brain and guess your basic business go and give you the basic returns they do not provide you outsized return even if both stock went up five six times they do not give you the outsized returns if you're a value investor in the truest de sense okay so there are two coos coos you mean you can do with the Tweedy bronze you can do the Ben Graham's or you can do the buff and longer type which is more of kind of what I'll interested in if you want to be that one your return is it going to come from a handful no more than no more the number on the two hand your entire life of maybe 50 years of tremendous insight tremendous inside you're gonna gain and no other people have how do you really build that insight there's no other way other than basically continuous curiosity intense curiosity continue as a study for your whole life anything that works yeah well I everytime I failed all those the three scorers I made a mistake time I didn't really get accurate information I made a mistake completely information being a mistake I do not I thought I have it inside it was an easy mistake every time I find all three scores I've made a mistake and they're plenty well on the big batch and I ever made yeah I don't recall we ever made a mistake I show on the big bed now my biggest a mistake actually is not making a couple bed because mistake I made is that during the course of micro that you know I had a spectacular returners but I couldn't read any money because every time I go out to talk to people people basically said what the hell you're talking about I want a monthly I want a to weekly I want a weekly returns I want you to go up you know in a down market that's what I wanted I want you to be a bank accepted yield it better well and you were hash fun aren't you anyway so but that's you know I couldn't really what in the end I sort of there was a couple you know a couple years not yes okay I'll do some of those commissioner stuff I'm moving into Julian Robinson's learn from the best practice of other hedge fund managers somebody else kind of work on the shorting all of that you know essentially is sort of useless things it turned out to be and are you sort of busy in my cell with all sorts DaVinci because if you're in shorting you just have to treat there's no other choices because you know you're upside 100 percent your downside is unlimited you have to treat and so so you really and your your your mentality changes and what you can't no longer really you you basically kind of put yourself into the well what Charlie says about kind of if you're doing things like that he was just as if you you know bonder your hands behind you in that ass-kicking game like that it's true it really is true and that was the period of time that I probably have the biggest opportunity of company that I have an absolutely insight management that I know that a treating below cash and it subsequently went up fifty to hundred times and I missed it I couldn't really bring myself into it it doesn't really fit into this monthly all this a that was the biggest biggest mistake I made is not how much money I lost it was how much money I forgot I make I lose money of course I do I do make mistakes from time to time and usually you made a mistake here when you haven't really quite a finish all your work but you like it you know enough so this is a timber well you know at 28 awesome but I haven't finished all the work and I said on itself the probabilities with me and but I added a lot long with the whole process well sometimes you know as you're sort of finding more and more you prove your face is wrong by then you lost twenty thirty percent you sewed it okay so you're wrong take the mistake run you know move on but as is with you if you buying stock at it with a sufficient margin of safety the probability is with you so if you do that long enough and with you know relatively small amount of bed of course you haven't know everything then you're okay you're not going likely to lose a lot of money but if you can't really bet on the things you know and you know you have inside no other people have it and that's the biggest mistake I cannot forgive myself for making that mistake know if I still might have a chance to do that yeah no seriously you go through your life you may not have no more than five ten inside and you develop that one over many many years with study some of the things I'm doing really I find myself doing that fifteen years ago a study of the American company and now fi the Asian counterpart and I find the valuation that I like I find I can really bet but I study that business for fifteen years in between I know everything about that industry and what really make that business ticks you need to have that kind of insight you order to really you can really swing with conviction and if you cannot do that either psychological or because you're ill-prepared you just will never really make any real mana money I mean you go through either you do what Ben Graham does with Tweetie Braun does it mean you're gonna have your 10 15 percent a year and you're likely to do much much better than most of the professional managers the 95 percent of other people but you're not going to make the outside return the Buffett have have been able to achieve and you may not have that opportunity throughout your life why should be easy opportunity of that kind that gives you a hundred thousand ten thousand times their biggest ideas it really give them ten thousand times opportunity if done ones your life your said why that could be why should I be easy but definition they're not and you require a whole bunch of a different factors to come together you know what's really Charlie would have called it what is it term a lot of lot of pillows him you've got all sorts of a different kind of the things working on the conscious level that subconscious level dislike psychological political whatever you got a whole bunch of a forces working together you got a huge wave behind you and you were the one who were the only one who have the insight and is willing to bet back to buy some complete accurate information and a huge insight and that's what you were sort of really drives me in this business this exciting is utterly exciting and you've got to learn everything you know my interest is just you know I started with the physics mathematics and it got in true with economic history law politics I like everything I'll be interested in everything and that's what you need it you might need models or from biology my wife has a PhD in biology and actually I'd you know I learned a lot from her over the years and actually some of them helped my University except she didn't know that's maybe why she's here to check but anyway so you could have learnt you have to learn from everything you have to be intensely curious about everything and occasionally you're gonna stumble into one big opportunity new law you still have plenty of things like you know the timberlands the Hongdae you know department store Asian is you're gonna find those opportunities from time to time give you a few times return that's not bad yes not bad yes depends you know there will be probably there's ever she said meaningless because the opportunities are different you know there might be years you don't really have a lot of opportunity and then there might be years you have a lot of opportunity it just sort of it all depends on what really become available to you but one thing I guarantee is they don't really come in steady pace I don't really have steady kind of once a month once a week type of idea I never had that throughout my career back into the times you know when I started this thing 15 years ago when I was at Columbia at the time I was undergraduate student when I bought um I think through all to that maybe five six years of what I was in school at college Law School in a business school maybe I haven't maybe three four big ideas then really pay off big and you know how do you average that out and then afterwards you know I get a little bit better you know the things about this progess you progressively get better and better and better to the point you look at page like that it takes you in a couple minutes to tell you right away whether something could jumps out you can smell it when you see something so you get better and better and better so you might actually have more opportunity or the market is just not cooperating and you don't have a lot of opportunity a good ideas a year ago was by that's okay but I do not want to a whole year goes by where as I did not learn anything I do not establish a good inside well at least I thought it was a good inside or destroy the inside I thought I had you want to go through every day and learning something it's a good mental discipline to have and a year goes by you have to learn a great deal well I wrote a book and it gave a little bit of advancement and somebody paid a small amount of money and they bought the movie right for that and but my negative in my war net worth is a negative because you have a whole bunch of borings but I have cash and so that was pretty good you know on balance you know my net worth I mean is a cash is just couldn't really offset it at that but I do have cash so I was very very lucky in that regard well I wouldn't say there's only two divisions all of the things you list that's all searching ideas okay so when I read a biologies and when I read physics when I read history which is really one of my favorite things it's all searching ideas or I do business and when I when I find an idea I want to read it but if I find an idea that are actionable say if I kind of one of those things jumps out that's all I do okay if I don't have I do the other one and then the rest of the time is basically with my kid and my wife we got two little one little girl is one and a half and three and a half and they're really just you know I learn from them too because to see how human cognition really developed which is enormous ly important when you try to really figure out you see in my checklist is okay is that cheap is that a good business who's running it what did I miss you know I go through all the checklists when I go to the hooter what did I miss that is hugely important understand psychology to understand human cognition and no other places is better than really observing how humans develop those cognition from early on and that's why actually you know playing with my two little girl is really helped me tremendously as investor so I guess it's all work anything and in addition to all of that I would also add one more thing okay so you know I said there's a three things distinguish value investor okay so you've got business owner mentality you have a different to time horizon you demand a huge margin of safety but he's all come from one thing which is sort of a your business owner and you're cautious business owner you can't control the outcome of the management therefore you demand a compensation it's almost self defense of a margin of safety and then because your business owner you tend to be long term but they all the same now people would ask me okay if you're a business owner okay why the hell you double with the stock market stock market is now it's min is not min for the business owners it means for the people who can treat that was an attraction of a stock market that's one ninety five percent it would never buy into this idea because if everybody's supposed to everybody this would never happened because of human nature but supposedly a hundred percent of the people all are you know value investors would therapy a stock market no hell no who would it by IPO we thought I appeal where is the stock market come from whether we're the secondary market come from and Eve everybody demand a huge margin why anybody would have sell to you so that's why I started the lecture by basically saying that you are basically you you know you're not belong to the stock market and there's but you have to always always understand that perspective and therefore to position yourself properly and don't get carried away but if you're really really truly a business owner then you will be attracted naturally sooner or later into owning businesses and that's why Buffett really left it monger left it each of them runs a partnership for thirteen years and they buy businesses run a real company or if you're really kind of you know into that money if I do become sort of private equity but that's more like a real bit in a sense but there was a evolution but as long as humans eval universe with that kind of perspective to always find something to do something profitable to do in the market does not mean there's not designed for them one is that the people designed for a fundamentally flawed the people that basically they're attracted it because they want to treat and if you want to treat you're bound to make a mistake you're bound to really get your emotions carried over there's a fear greed or whatever the other emotion in between you're bound to make mistake and so when that happens there will always always be room for guys like yous you know supposedly you are that kind of that 5% they will always be opportunity for you okay what's that that's a very interesting question I evolved over that question I used to have a philosophy if I don't want to buy at that price myself that was used to be my philosophy and I find myself evolving a little bit from that one because occasionally I find the business a finite insight that I just like the business so much I all of a sudden find myself being a real owner but basically saying somebody tried to tempted to really get me to sell because the price is very good you know the sort of us it's not something I'm willing to buy put it that way to that price but my Hong tree this the probability is with me that over the next ten years and better and better and that's really the law of a distribution of a good businesses though leaders take a disproportion amount of capital and in certain industries that advantage the huge advantage and that's when I really began to think okay so now you got to do a different calculation okay you sell a you won't may not be able to find another opportunity to buy it back and be you have to pay huge amount of tax because at that point assuming you were right you already accumulated a giant amount of the tax which you have been borrowing from government interest-free essentially if you don't sell you're basically borrow your leverage in your position by a margin of a thirty percent or something I mean in my case will be fifty percent if you by the time you add twelve percent and this you know stayed all of the other stuff is like you know you're forty fifty percent so you're leveraging your position forty to fifty percent interest free and it's not a call upon and it's indefinite loan from the government to you and so if you can think and the business will be able to deploy that capital and it returned that roughly you know it's not even fifteen percent is super business I usually find is a fifty to 100 percent return on the play the deployed capital and they were able to deploy that boy that mathematics get very very interesting very quickly now the caveat for that one is you have to be confident or reasonably confident to be able to project that long and I would say there's only a handful of opportunities your entire lifetime you'll be able to project that far off if your investment banker all you do is really project into infinity and that's you know is a everybody else know is a you don't know you can't really project for the next day how do you know you can really go to you know assumption of the next five years and after another another five years and infinity terminal Valley all the it means nothing it means absolutely nothing however I predict if you are good if you're spending your entire lifetime study you might be able to come across over a course of a 50 years career maybe five to ten opportunities in which you can confidently project with overwhelming odds next ten twenty years at that point it'll sell why do you want to self you've got a government really lending your money 40 percent and compounded interest free and it would have never really kind of asked the money back and you can really project in the business that deploy in the capital in the order of 40 to 100 percent a year and also very tax efficient and that's what you do that's what you do because we don't have that none of the businesses are really fit in that category they're not that kind of business I do have some business in my portfolio they really kind of belong to that category that I was just talking about that's why I'm not talking about a business of love that kind and you have to really look for this you have to find that at a vendor should they'd established oh well whatever the reason they established is getting stronger and a stronger and stronger will be some examples like that could be some an example somebody studied us yes give me example ok anybody else anybody else give me some examples I mean that's really where we're that's sort of you know why the business school really kind of a cause you of this much this is why it may need you you you really get into the frame of mind at least a habit of a thinking about those things what really make one business more successful than the others what is their advantage why they're making more and more and more and more money as some is just doing less and really go up and down why is it have you discovered any business and by the way the only way you can find that is a by studying the ones we already established yep is ethany Oh what's that what really make for those Moors at Marlborough more than the other brands okay there's a good one that's something but I really prefer but and they also that's a good one why's that hey what's that what yep are you agreeing with all these so they're basically reciting the portfolio but yet other result has a grid I hope you'll read to agree with that the rosada have a great yes I do agree with that but I want you to read a comma something that Buffett haven't bought something that you think of something that it really is sort of he's already in other words I don't want you just get that one because you got a stand of approval from somebody who's really already firmly established as the reading agency value investor we gave me a name that he doesn't own but also share those characteristic give me a name bursar portfolio okay that's a good one why is that you're just oh you're already kind of online yeah what's that okay what tell me why cellphone towers yep given all the reason why the tower companies all failing virtually all of them went through bankruptcy no they came out American tower closed there's a good one one of my three company was American topper but I was a student as a good one any other one yes what Cory a rock quarry in they yep I find out why my yep mm-hmm good or what any other one hello bow to the ones everybody use go ahead what's that why is that and what about the competitors how many of them are there you answer my question anything else anything else what do you use every day to do your research was that a deal I okay what else you use make sure you use computers and there's millions of them say was a booty materials what capital I feel what good for and what Bloomberg was introduced there was a bridge and Reuters why they succeeded why Bloomberg succeeded sir you are interpret that they have to looking for me so you can pretty much track everything the only thing is that they fail a little bit sometimes in there we are good answer anybody else could come up with us well let's talk about Bloomberg a little bit because this is something you everybody use any other reasons you can think of what okay okay anything else what kind of research he was a partner in Salomon Brothers the bond trading department so they're their analytics were far more detail okay okay I switching cost-wise high switching cost the people who use the machine of a high opportunity cost of their time it takes a long time to learn all the functionality of Bloomberg for all the offers I've heard this is the best answer all of the things you talk about is true but this is the really the most important reason this is why that there will be moment there will be in any businesses well it reason this example is because it's really you virtually all business you are observe not all of them really went through this dramatic example but they all went through a similar type of an examples of transformation and sometimes something has just happening in certain industry that if you really went through different industries you can almost tell where that outcome is gonna come out this is why you got a study this is a fabulous case study of how you know a company really come from nowhere going into an industry that already half of number of established long-established players and somehow really began to make it you know to little by little and a certain point crossed a model stone point after that that become a monopoly where is the bridge where are the reuters they're gone they're go partially because partially because a certain point exactly as you said at a certain point anything that is a hard to learn that is a highly highly highly highly kind of a relied upon to do your daily work what is your learn that then thing you do not want to learn that again and besides everybody else using the same thing you have to be able to communicate with your partners or your colleagues anybody you collaborate with big business the winner takes all now how do you really get to that point is interesting question the suppose do you have an opportunity to observe how this industry evolved early on supposedly you really observe an SC at a certain point they have across that line maybe it is the time when they're really introduced them to every business school so that you know when you graduate it okay so you well okay I have this one available cheaply to me I'll learn this thing but once I graduate going into the word I don't want to learn that again and everybody else are you who that whatever is the time there will be a time that that ayah has been crossed and supposedly there is a public company mostly you have a develop of that insight that inside worth a shitload of money that's the kind of insight I was talking about and that is a virtual monopoly business and you find that again again again all sorts of different business this is not a little why Microsoft succeeded real ensley over Apple when Apple was one hundred percent of a market share at the time when they came in but little by little they crossed that line so that when you'd be baited between Apple or or Microsoft I say okay I learned this thing because I have to go to work and all the company that I want to go they use I don't have a choice do you even have a choice today of not using Bloomberg what is the cost of Bloomberg what is the cost anybody know nothing you can almost call that zero they put some calls because they pay themselves well what do they do do they do research they don't do any research what do they do they come to visit you periodically almost every month and ask you what do you use on daily basis you're a traitor you're 95% of the people uses you know superstitious I mean if the certain numbers works for you I look at that number all the time active all of a softwear for you only for you how many functions Bloomberg has tens of thousands does Bloomberg have a menu hell no they don't want to give you a menu they won't you get you individually hooked on the two three or four or five five six things and they can charge who's that every day you're in the business every treaty can redeem its minions of again a law so you don't care pay them a thirty thousand dollars a year and you feel really charged with ten percent every year more you don't have a choice you don't have a choice and they keep coming back to you because they know you're a trader you're gonna look for different things and so they continuously to provide you the surface and therefore you're hooked and a hooked and a hook you're hopeless you're absolutely hopeless beyond repair meanwhile they would never give you a menu but would never let you know the cost is not a cost applies Waldo that's why it's a fabulous business fabulous business and then make each one of you individually hook to one product which cost them nothing and to the poor they can really dictate and bully their suppliers they pay them another all they have is software's to get you hooked and who gave them that information you don't even do research they come to you what do you need I give that to you think about a switching from that think about a competitor coming up with another product that each individual you know we're talking 100,000 profession individually in a hundred thousand different way how do you compete how do you compete I don't know what do you really why you set for I don't know there's no menu now supposedly you know that suppose it is a public company supposedly you know the moment of the inflection point do you want to invest I would that's what I mean by either side okay you'll study every business every business I guarantee you they all going through up and I think in terms of the result as this one but they all have more or less this type of emit dynamics your job as a good financial analyst as an investor as value investor as a business owner is to study that business all the time and observe those trend and once you're alive maybe yours you'll be able to come up with opportunity like that that is actually available alike Bloomberg now he's in that position of a selling Alex he doesn't want to sell why does that don't need his self always I have a huge premium price they will always be 30 times earnings but he'll him lose a whole bunch of a lot every time you want to sell it doesn't need to sell that's when I really began involved with my philosophy from if I don't buy ourself into something that I just said when you have things like that you don't need to sell you don't need to sell any other questions oh sure any whatever questions yeah after you making your investment right honey mwah are you with the business and management well it was all different you know I've made a whole bunch of private investment I serve other chairman of two of them and on the board of several including capital I kill you know I don't when we build a capital idea we intentionally copied the Bloomberg business model and I'm really building another model and then really copied the same one for the engineers basically any high professionals the needs of that kind of things so you know you know all the inside you learn can be applied for different businesses in that case I'm very active none of the work a lot of the time and the largest shareholder and a lot of other was you know this how Native artists are I couldn't even get a call I couldn't even get a receptionist to really take my call I went to their and visit everything I so all the properties but couldn't get anybody to talk to me a by and large I like to know as much as I can possibly know I want to be with their friends you know there's a Timberland situation will become such a great friend the CEO the son actually become a my investor so that's the kind of relation I want to have turn Eddie but you always try it you're always try that everyday business decisions you can learn you can observe you wouldn't know the dynamic of that particular industry at that particular moment and nothing is constant that's the interesting about business nothing is constant and that's why I have to keep relearning things the things you sort of you concluding all the ones the analysis we just went through with it with Bloomberg maybe a couple years is different I don't know what will cause the difference but it could be and I have also there observed you take an example of Microsoft the dynamic is different it's no longer the same now you got a free software it posts a completely different scenario every business constant all sorts of different things couldn't cause that change and that's good thing that's a good thing that's why people who is active mind and really actively prepared and have the psychological temperament to be able to act when he really sees inside an opportunity will always always have a chance to be fabulously rich and that's the note [Applause]

Channel: Darwin Munger

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Length: 106min 51sec (6411 seconds)

Published: Thu Apr 23 2020