[Music] my name's Ronan Smith I'm the chief operating officer of the Trinity student managed fund and I'm delighted to welcome you all here this evening for our fourth and final speaker series event of the year where we have the great pleasure of welcoming mr. Manish Papa to Trinity College Dublin this event is going to be recorded so please put your phones on silent or turn them off to really appreciate that and an event like this takes a lot of efforts to put together so I want to thank firstly our executive teams operations teams and the investment managers involved I also want to take this moment to thank our chief executive officer Miss Mary Therese O'Callahan for all her effort and leadership throughout the year it's something we don't acknowledge often enough so I just want to personally thank her for all her hard work and Rhapsody trail to be able to welcome Emma nice to Trinity College Dublin this evening he was just stopping by you it's an Indian investment conference so he was very good to spend the evening with us before he heads back to the states and monisha success isn't bounded within one arena of Business and Finance as an entrepreneur he started a IT consulting business with $100,000 of capital and sold that business for 20 million as an investor he started the most popular investment funds with 1 million dollars of capital he those funds now have over 800 million and as an officer he is paying two fantastic books at mosaic and AD and IO investor to books I read ooh encourage you all to have on your bookshelf and as a philanthropist he founded the - Ghana foundation in 2005 which helps students in impoverished circumstances who are really gifted to get the opportunity they deserve so ladies and gentlemen please help me in welcoming mr. Manish Parra Thank you Thank You Ronan so this this Irish guy John you know goes into the same pub every day and he orders three pints of Guinness and you know so the bartender asked him you know why do you ordered three pints again every day he says you know one for me and two are on behalf of my brothers at home and then one day he comes in and starts ordering only two pints instead of three so the bartender asked him you know how come you switch to two he says I've given up drinking so anyway pleasure to be here and and also want to thank Ron and the the student managed fund I think they've done a great job and so thank you very much for putting this together it's a pleasure and honor to be here I used to I used to come to Ireland quite a bit about 30 years ago mostly to Shannon sort of seen a bit of the countryside and once in a while I take the train to Dublin so it's always always the pleasure to be it's a great country and and and obviously nice to speak to you so I I have a few few slides I'll run through and and then I think what I'm hoping for is more of talking about what's on your mind so we can when we when we do our Q&A you can ask questions related to the slides but pretty much other than what I am buying right now everything is fine so we will we'll go through that and then take it from there so this book called bull came out I think in 2001 or 2002 about 17 18 years ago and actually was recommended by by Warren Buffett it's a it's a it's a really good book book to read written by Maggie Maher and what what Maggie had had chronicled in the book was she had looked she had looked at stock markets and specifically in her case she looked at the US market over a long period of time like almost a century and and what she what she noticed was that you know we are told that for sample that if you had invested over the last hundred years in the in the US equity market order averaged about nine percent a year which is a pretty good good return after inflation and such but that's kind of a half-truth in the sense that markets go through very long periods where they do nothing and equally long periods where they can be just spectacular returns way above the nine percent and specifically what what Maggie had honed in on in her book was so you know this is the chart of the Dow going back 1898 and so if you look at it for example you know when we won one period we can look at is like for example 1965 so the Dow was you know about 870 approximately in 1965 and in 1981 it was again at 870 so you know we went through a 17 year period absolutely flat I mean it wasn't flat in terms of the market going up and down but at those two end points it was completely flat so you didn't have a great result as an investor even if you were very long-term oriented and in that period 65 to 81 the US economy grew a lot so it wasn't like that the economy was in a bad shape or anything like that then you look at another period which is 82 to 99 and the Dow went from less than 900 to more than 12,000 and and the annualized return then was you know well above 9% we were doing about 15% a year and so that you know kind of was a quite a spectacular period in terms of returns and and and probably towards the early early part of 2000 there was a lot of euphoria especially because we had at that time we had the older of all the craziness of the.com the.com boom and the dot-com bust and so on so but even even non tech stocks got quite euphoric and and then if you if you fast forward from there let's say from 99 or 2000 until around 2012 we're again flat you know pretty much there's there's no movement and of course it's not exactly flat because you went down a precipice in 2008 and Oh 9 and then you know came back but but basically the 12-year period we didn't have much to write home for equity investors and then more recently it's been kind of somewhat similar to the 9 percent average and such and this is not this is not a a phenomena that is limited to the Dow or to the US it's actually a global phenomena so as you as you look at different markets at different times and they don't obviously go through the highs and lows at the same times they go through it at different times but the reason we get these you know and Maggie Chronicle there's a reason why we get these you know specifically let's look at 17 year cycles is that is about the length of human memory if you will so in in 1965 the stock market was a very euphoric place you know valuations were stretched and we had nifty 50 and all that sort of thing getting going at that time and by the time you got to 1981 people would look at you funny if you recommended investing in equities in fact you know Businessweek ran a headline at that time think that a cover the debt of equities you know basically it's done there's no point investing and generally when when people are extremely bearish and they give up they're just not interested at all that sets up the foundations for a pretty significant bull run from there so reason we get these cycles is that markets vacillate mckay between extreme euphoria and extreme pessimism and they reason they do that vacillation is because they're human driven and humans vacillate between fear and greed and so as long as humans are driving the buying and selling of different asset classes we will continue to have these these cycles and of course as a as an investor you know the value investor myself this is kind of a weird weird kind of presentation from it made me to make because I don't pay any attention to macro anything all my attention goes on figuring out a business and then figuring out what that business is worth and what that business might be worth in a few years and whether it makes sense to invest in it or not and generally speaking it's hard enough to figure out the future of one business I think it's almost impossible to feature of figure out the future of markets because that's just too complicated but but it is somewhat helpful I think to just understand a little bit about where we are in these in these cycles in different in different cases then and in my own case a brief on started in July of 99 and and I I realized when it started that there were many elements of a bubble when I was getting going and I also realized at that time even though Maggie's book was not out then that it was a terrible time to start a fund because I knew I'd be facing pretty significant headwinds because of of these so but but also the thing is a the market was really interesting so March 9th mm I think is when the Nasdaq peaked it peaked at little over 5,000 and the day the day the Nasdaq peaked was the exact same day that Berkshire Hathaway hit a multi-year low and literally people were pulling money out of Berkshire Hathaway and putting it in pets calm you know and so that you had that phenomena going on and so actually what I found when I started investing professionally was that there were lots of great opportunities even in this old heated market as long as you didn't participate in the euphoria so all the money was going into a very small sliver of equities and that small sliver was you know going crazy and and so so they were lots and lots of opportunities on lesser-known names and you know people thought Warren had lost it he wasn't in technology and all that sort of thing and so actually the first year in probe refunds for example we were up north of 70% and for the next several years after that 2002 2003 onwards we actually did all positive returns I think north of 15 20 % a year for us for a few years and part of that was because I just focused on stock picking and I had very little capital and it was it was easy to find a few good ideas so that worked and but but I think what was happening at this time and I think if you take a example of something like coca-cola for example so Coke was selling in I think the early 2000 that's something like forty five times earnings and recently it's been at about fifteen times earnings so basically if you invest in the Coca Cola Company in in 2000 from then till now you've made like 2% a year not a great investment the the business has done really well no problem with the business but anytime you're buying at forty five times earnings then eventually that earnings number comes down to fifteen times you're gonna have not such a great experience so it's not enough to just buy great businesses price matters and and I remember in I think it was in in 2000 right when my funds had had just started I think been about a year or so that one of my investors was a had been an employee of Microsoft and in fact he was one of the very early employees of Microsoft he had retired from Microsoft but with the stock options etcetera it done really well and so he told me listen mounish if you're ever coming to Seattle I can introduce you to a bunch of Microsoft guys and you know many of them may have an interest in putting money with you and so I told him you know as a matter of fact day after tomorrow I'm going to be in Seattle what a coincidence you know and so he said oh yeah come on down you know so of course at that time I was you know very happy to be raising assets especially with someone saying I've got a bunch of customers lined up for you and so I visited I visited Microsoft headquarters and I met made a whole bunch of folks and some of them were actually were you know 460 employees at the company and such and and of course a number of them became investors but I remember telling them at that time that and I think they just thought I was some cheesy salesman saying this but I told them that it was a terrible idea for them to be holding Microsoft stock and and and they just thought well how stupid is this guy because you know all Microsoft had done until then had gone straight up you know 30 40 percent a year for a long time and the market cap I think at the time was over 600 billion and I think eventually I think it went all the way down to under 200 billion and then of course now recently it's gone but even even with Microsoft from 2000 almost still just maybe two thousand thirteen or fourteen you had almost no returns and in fact you had a rough ride because you would have gone down and then come up so and that wasn't even a dot-com it was real business with real cash flows but with very euphoric placing I think that in 2000 Microsoft was making something like 10 billion around 10 billion a year or so and you know trading at 600 billion and that matter then worked so well so if we look at the S&P over the same period similar story where we again go through these periods of you know flatline and so basically if I just go back to the Dow for a second you know 65 1965 extreme euphoria 1981 extreme pessimism then you again get to 1999-2000 extreme euphoria and so on and so forth and that will just continue and and and and if you if we look at it in in terms of some other markets I mean the Nasdaq is a great example you know went through a 20-year period from 1980 to 2000 between 20% a year and then the ride from 2000 was quite a brutal ride because you went from 5000 to 1250 you know 75 percent decline on a major index this is not one stock going down the whole index going down and and so we went 16 years so it took the Nasdaq 16 years to come back and that's with having Amazon and Apple and Netflix and all these high flyers in there even with all of that it took 16 years to come back and then more recently we've had somewhat better ride so we've had a similar situation if you look at the indian indian market the Sensex which is the kind of like the dow in india you know the indian government actually liberalized the economy in 1982 in 1992 basically india had a huge balance of payments problem and they were running out of foreign exchange and and such so they opened up the economy but even though there was a lot of growth that came from 92 onwards for 12 years the market was flat and so we see the same kind of pattern of flat and then doing well the the German DAX similar story in fact last 11 years it's completely flat no no returns and the Japanese the Nikkei is is interesting because this was the mother of all bubbles you know so 19 1990 the Nikkei peaked at 40,000 and here we are 2019 it's been 29 years and it hasn't come back yet in fact it's it's at about 50 percent of the of the peak level so if you just think about even a a company or an economy growing you know two three percent a year or four percent a year some not that higher number of maybe 3% a year I mean in 25 years things should double you know rule of 72 here we are down to like you know 29 years and we have a negative return and so 1990 Japan had a number of incredible bubbles and one of the one of the bubbles it had going on there was the mother of all property bubbles you know real estate in fact the the Imperial Palace in Tokyo was valued at the time more than all the real estate in the state of California and and in fact when I read that I found that incredulous I just said that's not possible so I actually went and studied it and you know I live in the state of California I mean we have phenomenal coastline thousands of miles of coastline and we have incredible real estate and to have one small palace in the middle of Tokyo and it actually exceeded the value of all the relationship California is just stunning and of course like our man in the pub with the three pints the bigger the party the greater the hangover and they're not done yet you know the hangover continues after 29 years and so Japan is is kind of interesting because the the property bubble seeped into the the equity markets and and and it just took a long time and in fact if you look at the Japanese market today the the equity markets probably amongst the cheapest markets in the world I think the one thing that dissuade me in terms of gesture at Japan is there is a culturally Japanese companies do not put shareholders first so usually employees are first and then their various other stakeholders that come after that and shareholder somewhere in the bottom and so you find a lot of Japanese companies trading below cash so if you just look at you know net net assets net current assets and subtract all liabilities and look at the market cap basically those they exceed market cap wishes which is basically Ben Graham era but the issue is that the companies are not willing to let go of the cash and and so in some ways the cash from my perspective is an illusion because to unlock unlock that value that cash needs to come out and I don't think it's coming out so that's that that's that's an interesting market another one that is acting probably one of the most interesting is the Kospi in South Korea and so if you look at the Kospi actually you know even though you see this 19 year period and then two years in eight years but if you take the entire period from 1989 to 2019 which is 30 years basically what has happened in 30 years the Kospi has gone from 1,000 to 2,000 so over a 30-year period it's about little over 2% a year and if you think of Korea going back to 89 I mean this is before the rise of Samsung and before the rise of Hyundai and before really the rise of South Korea as we know it today so incredible growth huge economic growth and nothing in terms of equity returns in fact I'm I I'm making a trip next month to to Seoul and Busan and basically I'm within asou businesses I have one I have one investment in Korea but I probably one of the most fertile hunting grounds of course the impediments are the language of the impediment cultures in a paramount and and and such but plenty of stuff trading at you know three times earnings and that sort of thing and so you know if you want to go fishing where the fish are I think this is where the fish are and so these are these are some of the thoughts I just wanted to share in in terms of and you know with equity markets we we usually cannot tell for the most part where we are unless we get to extremes when we get to extremes then it's obvious like I think we can you can look at Japan and you can tell it's a cheap market you can look at Korea and you can tell it's a cheap market when I look at the United States all I can tell is a kind I can't find much to buy but it doesn't things are overvalued just just be there either fully valued even if there's slightly above fully valued they could grow into that so I don't I don't quite you know see signals one way or another in most of the markets and most markets at most times don't get to extremes you know they get to extremes at you know like one in one ten to fifteen or twenty years and such and and and then we can we can take advantage possibly if again within like the fact that Korea is cheap all that means to me is hey maybe spend more time looking at Korean companies but doesn't mean that I cannot obviously make an investment if we can find businesses that we can understand within circle of competence they're cheap and so on then I think can look at them so those were those were some of the comments I wanted to to share share with all of you in terms of formal remarks and I think maybe if you have anything related to this or anything else on your mind we can we can certainly talk about it and so we have a couple of mics so you just ask for a mic and if you could just tell me or tell us your your name and what you're studying and so on then ask the question that'd be great or if you're working someplace where you work that'd be great - Hamish glad to have you here and my name's Owen I work in research and kind of options and I was just wondering you're talking to Microsoft's investors are coming on board possibly as limited partners how do you balance that with value investing is you know behaviorally more longer-term and then you have these more tech based people that you know I've made a lot of money how do you balance kind of the permanency of capital where your investment time frame yeah well that's a good question actually the the the Microsoft crew that has been with me I think now they've been between for like almost almost a couple of decades I haven't seen them exhibit any behavior that would we of the kind that you're suggesting in the sense that I hardly ever hear from them and maybe they've forgotten they have money with me who knows and and actually no they have not been trigger-happy and they have not in fact some of them have consistently added over the years I think many of them probably just see well they see probably my world is somewhat a weird world if you will but they probably also see well one thing that has played out is what I told them came to pass you know so so I don't I don't rub it in their face by telling them I told you so but but I think they probably just said hey this is a kind of different asset class than what I have most my money in and that's fine so I have not seen them really exhibit any type of short-term type thinking they might be doing it in other parts of the portfolio that I don't see but that's been a way it is but I I also don't think any of them took my advice and unloaded Microsoft then pull Macmillan I just managed my money my question is around from the beginning how your process might have changed in any way if maybe you could talk a little about some of the challenges you've had in the journey thus far and realizations etc you you've had sure yeah I think one of the one of the things that I really like about investing and specifically value investing is that well there a couple of things one is it's the Broadus of any discipline that you can be in because you know any business you might look at it kind of touches on I mean the factors that can affect the future of a business touch a number of different disparate disciplines and the second is the the learning never stops so it's kind of continuous learning if you will and and so I think as I look at so I think hyphens is almost 20 years old and then before that about probably five years before that I was managing my own money the value style if you will and so this 25 year journey there has been a lot of learning I mean if I if I look at mounish as an investor 25 years ago versus today there's there's plenty of comment allottee in terms of core principles those core principles don't change but there's a lot of learning and and especially a lot of learning from the mistakes so so for example if I look back and especially if I look back at the areas I've had trouble in right one of the big areas that I've had trouble in is levered institutions so I've had a few few few picks go to zero because because they were leveled and and sometimes it's been leveraged company so so what I have learnt is that for whatever reason I tell myself mounish maybe you just don't understand these things so just stay away you know even if it looks good just stay away and and actually if you if you study books you're hathaway for example so one of the things about investing is that john templeton used to say that the very best investment analysts will be wrong one third of the time and so even if you look at Warren Buffett and Berkshire Hathaway and you know for example if you look at the board like eighty businesses over the last 50 years there's probably at least a third of them maybe even 40% of them that didn't turn out so well and so if you if you weight it by dollar spent the record is great so they've been right on the big ones but if you equate them all the record wouldn't be great because because they were there were a lot number of them so Berkshire Hathaway for example bought a lot of retailers a lot of furniture retailers and so most of them have not worked out so well a lot of so they had a lot of success with borscht Iams which is the jeweler a lot of success in Nebraska Furniture Mart subsequent to that a lot of other rulers and other furniture operations most of them didn't do so well those are very tough businesses in general retail is tough and but if you look at Warren Buffett in certain areas let's say if you look at him on let's say levered institutions banks etc almost no blemishes in the record you know close to a hundred percent batting average I think he had trouble the only time he had trouble with banks was only invested in Irish banks you know but a few people got into trouble with that so but but I think if I look at banking for example to the 50-year record almost no blemishes I mean they almost hit it out of the park on that front so so I think that all of us as investors or if I look at Warren Buffett in media he's done really well historically really good at media he's done very good at consumer packaged goods very good at brands not so good at retailers right and and such so so all of us have our I would say our circles of competence and where we are really good and where we might not be really good and so one of the things that I am trying to continue to learn is you know what where to where to go hunting and where to avoid and so one of the things I have learned over the years is there's some misfiring in my brain that makes me miss the issues with leveled institutions so try to avoid going there the other thing is I think that in this business the continuous learning you start seeing patterns and you you you can many times you can connect dots that are not obvious to many other investors because they may not have seen all the all these different things play out and and sometimes when you can connect the dots in a manner that the market can't see you can do really well with that because you can you can exploit it in efficiencies there so it's a journey it's continuous learning it's trying to figure out what to avoid and and just keep the humility to know that four out of ten times at a minimum you're going to be wrong and go from there will sparks my name from a company called quilter and I manage ambassadors myself and my question is kind of out of the investment sphere I mean you're a big subscriber in the wisdom of Charlie Munger Warren Buffett what are the kind of what are the daily notes that you tell yourself every day that you've learned from the two of them yeah so I think that there are there are two or three I think very big lessons to take away from them so one of the biggest lessons the most important trait to be a good investor is patience and and extreme patience you know which is difficult for humans so the interesting thing about equity markets is you know we if we look at our phones or look at screens got flashing lights red and green and things are changing by the second and such real change in businesses takes years and sometimes decades and changes in market prices of equities happens in seconds and so the two are in many ways disconnected from each other and so I think fidelity the big brokerage house in in the in the US and the mutual fund shop they had done a study so they have a lot of clients who open accounts with them and then manage those accounts themselves they buy and sell stocks themselves so they studied all these accounts that people were running on their own to to try to figure out which of their clients were really good investors and so they found that there were a set of accounts which was sitting like in the top 10% performance of all the accounts and the overwhelming number of the people who owned those accounts they later found fell into one of two categories either they were dead which means that they had the account and then they were no longer there was no pulse okay and people forgot that this account was there and it just kept going doing really well or they had forgotten they had the account okay so the two best performing criteria was either you were dead or you'd forgotten okay and and so generally speaking activity in investing is likely to hurt you more than help you so that I think the most you know Charlie Munger mentions that he's been he's been reading Barron's for 50 years you know it's a weekly magazine in the US and he read it from like the 1960s onwards and in 2003 after 50 years of reading Barron's he got a stock tip from Barron's so each issue of Barron's has about probably ten stock tips and so you're getting about 50 issues a year over 50 years is 2500 issues 25,000 stock tips okay so he goes through all the 25,000 stock tips fix one okay after 50 years which was a company called tentacle Auto Parts and service centers and such and in three years so he puts ten million dollars in Roatan ago in 2003 by 2006 it's what 80 million 80 X in in three years and then he gives that 80 million to for the first time in his life an outside manager Leeloo you know investing in Chinese equities and the 80 million is now I think sitting missed estimating at around 800 million so if you think about it you know I mean I can't think of more extreme patients where you know 50 years someone is throwing ideas at you 10 a week and and you decide no no I'm not interested and then you finally get interested and you actually really cream it you know hit it out of the park Cricut Terms hit a sixer out of the stadium and and then you do it to for you know 8x and then a 10x and and and and he did that in 2003 he's 80 years old you know so this is an 80 year old so if you think of mongers track record in the last 16 years it'd be in the top 1/10 of 1% of 1% globally you know I don't know anyone else who's run 800 X 80 X in in in this last 15 years and so so you know the willingness to wait for a really fat pitch is is is a very very important trait almost equally important is sticking to Circulo competence so making sure that we're investing in things that we understand really well so you know there's a there's a friend of Charlie Munger's John Arriaga and he's a he's a billionaires on the Forbes 400 and all John Arriaga has done in his entire career is invest in real estate within a mile of the Stanford University campus in in Northern California just around the campus right and that's all he's done and so his circle of competence what he understands is not real estate it's not even us real estate or California real estate or Northern California real estate none of those things it's actually just real estate within a very small geography it's like someone understanding real estate within a mile of the Trinity campus you know it's a pretty limited expertise so the interesting thing about investing is that the size of your circle of competence is not that relevant in terms of how well you do sticking to it being inside it is critical right and so so you don't need to know a lot of things to do well and investing as long as you stick to the things that you know really well and so I think those are those are I think some of the and I'm you know I think I could be better with patients like I think Munger is the gold standard you know that's what we should aspire to and and I think with even circle or competence I think many times you know if we have any doubt that we don't understand the business or we don't understand some nuance of the business we should stay away you know so those are those I think important traits to to try to get good handle on did you have a question I'm just wondering for the students in the audience do you have any particular advice when we start out in a career and maybe you're investing or in any career anything that you could just nearly give us as we as we go out and stars Cheers sure well I mean I think first of all you you already made a great choice coming to grade school getting a great education at a great price you know so so on all fronts you've hit it out of the park which is which is really good I mean I think what one of the one of the important things when you as you go into your careers is if if I were you I would not take the highest job offer you know or even though the most blue-chip employer that that comes calling or what I think probably is more relevant than that is the people you would work for and work with I think that is that is the most important criteria of looking for is that so the person you if you're going to report to someone it should be a person you like admire and trust and and you know like admire trust there's nothing in there about compensation you know so don't focus on the compensation it'll take care of itself and but I think I think compromising I think what what I notice with a lot of people just entering the workforce is they they get swayed by the big names you know I mean there are very good brand names and if you tell people you work for them or you tell people that you've got a offer for them etc you know obviously everyone will applaud that but what actually really matters is going a couple of layers deeper into those into those places to who you'd actually work for and whether you think that the team and people you work for is what you would want to do another thing that I think what Buffett advises a lot of young people is that many times people will say that I'll do banking for three years and then I'll go get an MBA and then I'll start my business and this and that so they have this kind of laid out plan and he always says that's like saving sex for old age you know not such a good idea and so so I think that basically if you have goals just go at them you know don't take this path because you don't you don't really need to follow a path to get your goals so I think I think I would I would I would definitely encourage more kind of more direct approach towards getting to the end points you want to get to I host day and investing podcast here in Ireland called inform decisions you might not have heard of it now I had I had the great pleasure of interviewing guy spear your friend on the hundred episode there last year and super super interview a super person I think as well as investor am i suppose for you what is what does success look like for you obviously very successful as an investor in its business but is there more to it or what's what's your legacy I guess if I can ask that broad question yeah so I I don't I don't tend to focus so much on that I think I might my take is just one put one foot in front of the other and keep going so so one of the things is that you know and this comes I mean part of this is I think it's you could say it's part about this philosophy or even part of in the bhagavad-gita and in the Hindu scripts is that we are not to focus on the reward it is that Duty just focus on the effort and give that give it the best effort so the idea should be you know the the task at hand really beyond not not a particular end point and and such and I think the the definitions of success can be very broad you know and it's sometimes it catches you by surprise I mean I'll give you an example you know run and mentioned we have a family nonprofit called the Dutch China Foundation and a couple years back my older daughter tattooed the logo of the foundation on her back I can't think of a higher form of success for me personally you know in the sense that I mean if if your son or daughter is you know tattooing an organization you created they can't easily reverse that decision you know and and it has to have had some act on them to do that and and such so I wouldn't have defined it that way but you know I was very happy to see that obviously and I I would have never guessed she'd do that I think for the longest time we would have discussions where she would tell my wife and me that she's gonna get a tattoo and we would just always dissuade her going down that path and then next thing you know you know there's this tattoo and this is what it is you know so so I think that there are many definitions I think what what I have focused on is that I like to play you know I think if I look at my own psyche I like to play mathematical games like I like to play bridge a lot of investing has has some math and it so generally I enjoy that and one other kind of what I would say interesting math games I'm playing over a long period is that I have one engine which is hopefully going to keep compounding wealth and I have another engine which is trying to focus on giving it away optimally and I want to end up you know whenever I'm leaving planet Earth that I'm at zero you know where the two engines have matched and and of course I think giving money away effectively is more difficult than then making it but for me the the game is fun and there are some interesting side effects you know people get helped and so on so forth which is fine but the game is fun so I I I don't I don't focus on end points so much I just say let's just keep going and and as long as you set up keep making on some progress every day you know monger will say you know try to go to sleep a little wiser than your new woke up things will work out hi - my name is Paul Nerium anniversa manager a quilter as well one thing that I have read about your your philosophy is your your your fee structure and and you know how I suppose aligned it is with the client could you tell us a little bit about this and I suppose why you chose this particular structure and have you had any periods or it's been quite difficult as a result oh sure yeah so you know I when I entered the investment business I had never worked in the investment industry so actually I didn't even fully understand the industry you know for so I I I knew a bit about mutual funds and I I was aware of the buffett partnerships in the 1950s and and I liked the rules that Warren Buffett had for his partnership so I tried as much as possible to replicate them in fact what I did is when I was starting in 99 Roger Lowenstein hundred to one of the Buffett biographies I I photocopied a few pages of the biography I took it to my lawyer I said read these pages and create the structure you know that's basically what I told them to do is there because I just didn't exactly understand how to how to put it in place and so to a large extent I I copied many of the Buffett rules and made them part of the rules of the pariah funds and what I have what I've learned between then and now is that that one of the things I've learned over the years is that cloning is a very powerful mental model and the second thing I've learned which is very I still don't know exactly why this is the case but humans are really bad at cloning so what I repeatedly notice about humans is they'll see something great going on somewhere and they live in technology oh that's wonderful but they won't clone it and so it is a I mean the inversion of that is that if you are a cloner you get a huge advantage in life because the rest of humanity is not good at clone and and and I mean I mean I see it repeatedly the foundation we have duction of foundation it works well because it's a clone model I could never come up with that model but I could copy it the pub refunds fee structures and the way it's set up I could never come up with it but I could clone it and I never realized how powerful that cloning was so the buck so one of the things the buffett partnerships did was Warren Buffett charged no management fee and he only charged a performance fee so he told his investors that the first six percent of returns every years go to them and then above that he gets one fourth and they get three fourths so for example if the fund is up 10 percent Buffett would get one percent whereas in a let's say a normal two and twenty hedge fund the fund is up ten percent well two percent is already gone first to the investment manager and then you're left with eight and another one point six would go so instead of one percent go into the manager in this particular example it would be three point six percent and if if you have just in terms of math because when you get to you know these geometric series if you have one investment with a manager who does ten percent a year and keeps taking one percent and another investment with another manager of just 10 percent a year and keeps taking three point six percent the Delta in those two after thirty years is not going to be twenty or thirty percent it may be 80 or 90 percent there'd be a massive difference in the because because the power of compounding you'd be compounding lower lower numbers significant lower number over time so so the the zero fee structure that Buffett use I I cloned it because I thought that sounds very fair and it took me a few years to realize probably like more than four or five years to realize that not only was it a very fair structure but it gave me a competitive advantage that hardly any competitors could copy and so the interesting thing is so what happens in most investment shops is that they are set up with a one and twenty or two and twenty or it's a mutual fund one percent fee or whatever else and if you have if you have for example one hundred million dollars under management and you have a two and twenty structure for example you're guaranteed to get in about two million dollars a year and what a lot of these investment shops will then do is they'll have teams of people because they can afford to have one or even one and a half million a payroll and that's covered the zero fee structure means that you could easily have one or more years where there is no revenue to the form if I'm if I'm a four percent in a year there's no revenue you know it's zero there are some expenses but there's no revenue and so the second part of what what this fee structure enables which is also part of the Buffett and Munger system is investment teams are an oxymoron so investment value investing is not a team sport it is a individual pursuit and it should be an individual pursuit and so when you start having teams of people generally speaking the results will suffer so so like I think like like John Bogle used to say that in in investing you get what you don't a four okay so so the bottom line is that this is it's a very bizarre industry it's one of the only industries where eighty percent of the participants in the industry add no value you know the subtract value so the industry would be better off if it was smaller there are few people in it and so the the rules are copied from above offered partnership one of those was the zero fee structure the zero 6:25 and as it happened with pub refunds is that we had no down years from 99 to 2007 it was just straight up in fact I think before fees we did kind of mid thirty percent a year so even after fees were doing high 20s a year and then when the financial crisis hit the funds got hit pretty hard we were down one of the funds was down 70% so pretty significant drawdown which meant that for me to collect a fee I had to first come up to par and then the six percent a year for as long as it took to come get up and in one of the funds that I ran it took ten years so I collected a fee in 2007 in that fund and the next time I collected a fee was 2017 and but but that was the covenant I had with my investors so it never crossed my mind that I should shut down and restart I think that's kind of unethical and I didn't also neither did I go to them to change the terms so we kept to those terms and but but but the thing is that you know this is a this is a business with some spectacular economics so if I am if I am for example managing five hundred million and for example if I'm up twenty percent in a year my fee would be three and a half percent which is you know sort of like almost 17 million dollars and at public funds there are no full-time employees other than me because you know I already told your team is an oxymoron and so it's a business where there isn't much expense and so almost all of that 17 million would drop to the bottom line you know maybe we'd have half a million or something in expenses so the thing is that when it works it works really well and if you made seventeen million one year well you can have a few lean years you know so I don't have any complaints about the structure or any of that and I think it's very fair I think it would it's worked out very well and no no issue so so I but also the interesting thing about this fee structure is I interact with a lot of young managers and they'll come to me and ask me you know I'm setting up a fund and blah blah and I know at the back of our mind humans are terrible at cloning so I play a game with them right now that they'll see it on video it'll all be over so sad okay and so I'll tell them you know zero fees and you know no team blah blah give them all the pointers of what to do and then I just sit back and observe what actually happens no one does zero fee and no one does no team they it's like they listen from here it's out here and yeah whatever and and and I even had to explain to them why it's a competitive advantage and why it's worked for me and so on so forth and they can see that it's it works but still because cloning is not part of the human genetic framework they can't handle it and so I have to sit here with my competitor manage unblemished which is fine so such is life yes so I love the Beaufort partnership model I've actually seen that in the past as well I think it's aligned the sentence perfectly and which could put just on aside there so you managed your own business and you sold that business so you weren't if you lost money the first year you could probably survive I don't know what commitments you had between housing and family etc but if you if you were weren't financially at that stage could someone do that or do you have to have some yeah so actually I started pub refines before I sold my business so so what had happened before I started pub right funds was in in 94 I had sold a small portion of my business and I after taxes everything I had 1 million dollars and by the time I started for Bry funds that 1 million was sitting at 12 million I'd average about 70 percent a year well done never to be repeated after that and so Charlie Munger says that why should you give your money to an investment manager who is not already wealthy and if they're any good at investing once they're in their 40s they should already be wealthy and and actually that is a very true statement because if you are working someplace and you're saving some part of your money and you're compounding at ridiculous rates with small sums that you should be able to do if you're a great investor 30 30 40 percent a year at small sums that will add up very fast and so so the thing is that one should not one should not need the 1% fee and the second the second reason I tell these young managers why the 1% fee is a stupid thing to focus on is they don't have assets so I said you know you've got like two million in assets and I'm asking you not to charge the fee you want to charge a 1% fee that's $20,000 you know that's fine it'll pay for your Starbucks coffee and maybe not that much else beyond that so it's it's anyway not going to help you make ends meet and but what it will do it will make it more difficult to raise money and also what it will do is make you sleep slightly less well at night because you're somewhat out of alignment with the universe so I think that I think that it is an issue that there's some chicken and egg involved but but to give the example of let's say Li Lu who manages Charlie Munger's money so Li Lu you know he was at Tiananmen Square and the Chinese government wanted to get their hands on him and he escaped with some help to Hong Kong and then finally made his way to Columbia and when he arrived in the u.s. he had an undergraduate degree from China but he spoke no English and I think the only guy at Columbia who did 3 simultaneous degrees at the same time an undergraduate degree and an MBA and a law degree all at the same time and and while he was in school as he was getting these student loans he kept investing that money and I think he graduated with a quarter million dollars okay so this guy comes from China with no no English skills of any kind and three degrees at the same time and you know doing investing on the side as well and you know using his student loan money and he's multiplied that and and he just went from there so and and I asked Charlie you know why do you give your money to Li Lu he said it was obvious you know there was there was nobody else it one wasn't that guy had five choices he said it was just obvious I just looked at the track record and it was pretty easy to to go there you know so there's a there was a friend of mine in high school Desmond D'Souza you know two percent of Indians are Catholic and so Desmond kind of a below average student you would hardly ever notice in class you know one of those backbenchers and so he came he came to the US for his undergraduate degree came to New York and his parents he and I both finished high school in Dubai and so most of us are leaving to go to places which had colleges and so when he was coming to the u.s. to New York to study his parents basically said look here's four years of living expenses and tuition we're putting it in your account we we trust you and don't bother us for money for the next four years you know we're done with your education expenses right so he had a decent amount of money that he was sitting on and without telling his parents he bought this single-family home right across from campus in New York I think I know five bedroom home or something and he filled every nook and cranny of that home with students I think they were like six of them in the living room okay I mean he had like 40 people living there and he was the slumlord you know collecting rent right and and of course you know he had borrowed eighty ninety percent of the of the purchase price from a bank and in a few years I think the I think in a couple of years prices had gone up you know I think they've gone up like 20 percent or something so he pulled equity out bought two more homes and filled those up with students as well and and then after that he got to know this so you know I was I was studying engineering I was in the top 1% of my class I remember I visited Desmond in New York just right after I had graduated I thought that I'd done well and I'd gotten a nice job etc and Desmond is telling me he's got no interest in taking any jobs you think that's like for losers you know it's telling me that and and what he did when he graduated what he made friends with his banker and there was this neighborhood neighborhood this Haitian neighborhood in Long Island so the banker told him listen so Desmond asked and listen I instead of buying regular homes I want to buy foreclosed homes because you know those are beat-up and nobody wants to buy them and so the banker told him listen I can actually give you a great deal if you take 20 of them you know he had like you know all these and you know these foreclosed homes in the u.s. I'm not sure what happens in Ireland but when these guys are leaving the house even though the plug sockets are gone I mean the appliance of the gone plug I mean the homes destroyed you know for all practical purposes or no woman's gonna go in and say this is the one I want you know and so Desmond buys these 20 foreclosed homes and he has this whole crew closed homes and he has this whole crew of contractors who immediately go in to fix everything change appliances and and then he used actually the same people who were fixing his homes all this these Haitian contractors who were all renting apartments and he convinced the same banker to give them loans to buy the homes that the banker had given him on foreclosure at a significantly higher price and and he told the Haitians mission bring me all your uncles and cousins and everyone else I'll get them all into homes right and he convinced and so all these all these people he's getting them homes were black right and they'd face some discrimination bankers etc so Desmond sat down with his banker and said look these are hardworking people they've got skills they've got income they've got everything don't mess with them and let's get them through the through the pipeline and the bank was happy he said yeah they fit all my profiles and I'm happy so he had this whole engine going right I mean he's buying from the bank foreclosed within about six weeks the property is all done and another month he sold it back to the same bank and just on and on and and Desmond you know a few years is worth a few million dollars no job and never never had any great GPA in college and didn't care so so I think that what I'm saying is that the bottom line is that you know if if you've if you've got the skills of a good investor I think you can generate the capital you know it might take some chutzpah if you will more question and you talked about being and the only player in power iPhones and there's been a lot of talk about halfway correct me if I'm wrong who's like like Warren Buffett success or Gregor Abel and not judge John do you have any ideas are you gonna have a successor in Popeye phones and when the day comes or whatever or you just would you wind it up straight away or do you have any thoughts on that are designed in fact in the fun documents we've written that if I get mentally disabled or I pass away whatever it's designed to liquidate so these are these are really not you know I would say they're not designed to be sustaining enterprises even Buffett put his you know ended his partnership so I have not at this point thought about you know any type of a continuation if you will so it's just it's designed because I think the the investors have made a bet on the investment manager and I think in any case even if we tried to if the investment if I told my investors by the way I'm I'm retiring and here's John Smith who's going to be taking my place I don't know how many of them will stick around you know so I mohnish my name is Connor I'm an accountant and I recently started my own business and I was wondering you said earlier that it was it was maybe a little bit more difficult to of money away effectively than it needs to make money and I was wondering you know what principles you might be following in the Dutch on a foundation that might be making a little bit easier or you know how are you giving away the money via the foundation yeah that's a good question so I think that what we try to do when we are entrepreneurs or trying to build businesses is contrary to what people think is entrepreneurs try really hard to minimize risk so they look for they look for offering gaps and they look for sure bets as much as they can I'm talking on non venture backed businesses you know so for example there's a new town coming up let's say 20 kilometres from Dublin there's no Barbara's there Barbara and Dublin might open up a small shop and go there totally two days a week and then gradually build up from there that sort of thing so most entrepreneurs look for opportunities and minimize minimize the risk when we are trying to give money away so again what under the other hand who knows do is they look for the best opportunities you know they look at all that kind of range of things you could do I mean if you look at something like like what Desmond did he didn't have much risk you know he bought a home he was pretty sure he could get the students should rent it because himself was renting and such if it didn't work out he could have sold the home it would have been much more lost and so on so forth so he just didn't have much downside and he could pick what area wants to go into you know he didn't he didn't go and buy a commercial office building or anything like that when you go into charity in philanthropy you got like a few choices you know you know deal with poverty drug abuse alcoholism you know homelessness I mean you're dealing with core problems you know early childhood education all kinds of things so you with problems that government spending billions of dollars have had difficulty dealing with and a lot of other humans for a lot of decades have had difficulty dealing with so these are not easy problems these are difficult problems and you don't get to choose so much because there's just five or six choices and they're all problems because no one's been able to solve them in the past and also take your choice you know and so the the rules for philanthropy are different so one of the rules for philanthropy is you have to swing for the fences so when we are when we are an entrepreneur we try to minimize risk when we go into charity we have to go extreme risk so we have to say I will try extreme stuff to try to get a different outcome I will not and I'm willing to lose all the money and putting in to try to get that so if you take a very safe approach in in charity it very likely to fail because a lot of safe approaches in the past have been tried so you have to think outside the box and you also be have to be very willing so I would say like if you look at the if you look at the Gates Foundation for example they spend a lot of money on vaccines developing vaccines vaccines is high-risk high-return you know most of what they've been doing for more than a decade or two has not worked but they know that there are moonshots right you get one to work you get polio to work and has a huge impact on humanity you get malaria to work huge impact on humanity and so those are like you know I mean if they're working on a malaria vaccine it could be a billion-dollar bet and it could be nothing happens doesn't work but it's worth making that bet that's a great bet to bake so I think that in in philanthropy we have to go high-risk high-return and we have to be willing very willing to fail and so it's in many ways it's the opposite of both value investing and entrepreneurship because in both those cases we try to reduce downside and we don't go for moonshots we just try to get singles if you will and so that's the that's the difference in and I think the the problem a lot of charities have is that the the third issue is that so let's say I open a barber shop right and I provide terrible haircuts okay I won't be around for very long okay the shops gonna close down or if I open a coffee shop and the coffee is not so great it's not gonna be around for I mean capitalism is a feedback loop and it's pretty quick and good pretty quick and brutal and all the riffraff businesses are gone right and what we're left with other guys who can actually deliver in if I if I have let's say the Rockefeller Foundation or the Ford Foundation and let's say I've got a billion dollar endowment a billion dollar you know sitting in my bank account and I'm spending 5% a year whatever I have I spent 5% a year which is the US law for foundation so I have a billion in the account I spent 50 million a year it doesn't matter what kind of haircut I provide okay I'm never going out of business okay so that the problem that charities have is they have no feedback loop that forces change the end result is useless work done by charities and what I always find which is the the problem I have with a lot of charities is to do it well you need a combination of heart and head you need to have heart but you also need to have head you need to basically I always tell by staff at Dakshin ah we are not a charity we are a business and the only difference between us and uh any other businesses we don't have a profit motive but we have very tight measurements of outcomes that we have to make so one of the things that duction I decided to right at the beginning is because the lack of a feedback loop for charities is a real serious problem because in entrepreneurship is just naturally taken care of so most charitable ventures that you would engage in have no feedback loop so let's say for example in San Francisco there's a large homeless population and let's say I decide this is terrible I want to give blankets to the homeless for example so I buy a bunch of blankets and I distribute them and every few weeks I go out and see who's missing blankets and I give them blankets let's say that's my charitable endeavor that's really good so how do you measure the outcome I mean what would you use as a measure to tell you that this is great or how would you measure that it is the best use that you could have had of that money so for example let's say someone else said that instead of giving blankets to the homeless I'm going to get homeless off the streets right and they create housing and they take some homeless folks and they move them into that housing so you could say you could say for example that okay this year I move ten homeless people into you know off the street but the one of the problems we run into is what if because of the ten people moving into housing fifty more move into the city as homeless because they know San Cisco provides great services to the homeless so you just attract more people coming in so the problem is that there's no it's very hard to answer these questions it's very hard to answer the question is it better to give the guy one person a versus 5,000 blankets which is better I don't know which is better I have no idea so what I did with duction I was I inverted the problem so manga always says in word always in word so the inversion of the problem duction I did is we will not engage in any charitable activity which cannot be measured so I looked at the range of charitable activities and 99 percent cannot be measure is through my way okay and we focus on a sliver where there's a very tight feedback loop and lo and behold Dakshina works really well because we continuously get the feedback just like a business and that feedback tells us exactly how well or poorly we're doing and all of that works because we applied inversion so these are some of the the things I've learned about about charity of course it doesn't solve humanity's problems because I'm not dealing with 99% and there's a lot of other charities dealing with stuff which cannot be measured maybe they're doing a good job but we just can't tell you know it just becomes really hard to tell hello sir my name is Shu hung and I'm currently a second year business student if my memory is correct you used to mention that a might be a good idea to invest on those companies who can maintain themselves on risky even when there's a huge level of fluctuation and uncertainty in financial markets so I'm wondering if this if there's any specific aspects or indicators you will look at or specially emphasize when trying to identify those companies yeah so I'm not sure exactly got your question but one of the things I do focus on is the nuance of low risk and high uncertainty is that what you are asking yeah yeah so basically the thing is that stock markets hate uncertainty so what they want is you reduced $1 in earnings this year please produce a dollar 10 next year $1 22 years from now $1 35 3 years from now and please go non-stop like that ok and the reality is that the business world is very messy it just doesn't work that way you know things just don't go in a straight line and they go up and down and and and such so stock markets have in my opinion a irrational extreme expectation of smoothness in in in in business operations and almost any business is anything but smooth and so if a business has a temporary hiccup you know they just say hey by the way next quarter might be slightly off taken out back and shot first let's take it out back and shoot it then we'll ask questions ok and and you know Buffett Buffett Buffett had mentioned that when he was buying when he was buying the Washington Post I think I think he was though the the market cap of the company was around around 80 million dollars and he said in any private transaction then it would have sold for 400 million so it was sitting at about one fifth of liquidation value in order or the sale of a private what a private buyer would pay and the 80 million market cap went down to 60 million because people just kept selling the stock and the the the sellers and Warren knew some of the sellers they agreed with him that the private market value was 400 million but they just didn't want to deal with the near-term uncertainty that that the business was facing so generally if you have a business which exhibits very high uncertainty then then that that business generally will get very extreme kind of valuations in a auction driven market and an investor can take advantage of it because markets get confused between risk and uncertainty they get just they get confused between these two and two to give you to give you an example I have made an investment a few years back I think this was like in 2004 or so maybe it's been 14 15 years there was a steel company in Canada called EBSCO and the kind of the the nuances of this company were as follows that the stock was trading at $45 a share the company had no debt it had fifteen dollars in cash and it had contracted revenues and certainty of earnings in cash flows for the next two years which was $15 a share each so the company would make after-tax $15 in each of the next two years so in effect I was paying $45 and if I just held the stock for two years I would have $45 sitting in the company but I would still have all the plants and everything else but the but the business was extremely volatile with extreme cyclicality so after two years there was no certainty of any kind of what earnings were going to be you know wide range unknown and markets don't like that so what did the market do it priced it at 45 and from my perspective I said okay why don't we just buy the stock and wait for two years and because I have all the plants I have everything else you know I just want to see what happens after that because they don't have doesn't look like they have too much downside and so we bought at 45 a year later the company announced that they had one more year of visibility they want to have another year of 15 15 dollars in earnings so now we were in the money you know and the stock the stock went to $65 because we now had in effect $60 coming in and and then in a few months it drifted close to $90 because I think markets probably started realizing this is ridiculous because you're not giving any value to the the plants and all of that and some Swedish firm came and offered 160 dollars for the business and the stock immediately went for 1 to 153 or something I didn't even wait for the deal to close you know we were out of there and and I still don't understand why that Swedish firm didn't come and buy them two years earlier you know but that's the way it is in life you know like Mark Twain says to two strangers and friction because friction has to make sense so so uncertainty really bothers markets there was another company I had invested in I think this was about four years ago in India called rein industries and this company had borrowed a lot of money bottle plants taken on a lot of debt and all those plants everything else they bought was barely able to cover the debt service they weren't really contributing to earnings and so the market gave no value to like 90 percent of the assets of the business so to two billion in revenue two hundred million market cap that those plants had cyclicality in them and we were kind of close to hitting bottoms on the cyclicality if they got to somewhat normal environments the company could be producing 200 million a year in in annual cash flows and I was paying 200 million for the entire business and so we bought the stock and for two years it just went straight down it didn't do anything it the two hundred market cap meant like 160 million and and then in the third year the earnings came in they came in at 200 million and the market cap went to billion and and then now recently again they hit a patch in the earnings so it corrected backwards I think we have like a two and a half times gain but we had a 12 times gain at the peak so the the risk and uncertainty is a very interesting thing to have in your toolbox because equity markets and especially auction driven markets hate uncertainty and especially they can be businesses where their uncertainty is only for six months only for nine months and markets will punish them for that and so that can give you an edge hi Tony O'Sullivan I'm a European banks analyst at an independent company called carry kill it's kind of related to the previous question and we're thinking about today Ben Graham and markets are there to serve you not to guide you throughout your career what tools have helped you when say stocks you own are gone down in value it's inside ticker value and going down market prices but you inherently think the company is intrinsically valued far above the market price what tools help you as an investor to stay the course and to not allow markets guide you sure so Tony it was great to see you in Omaha hopefully we'll see you again likewise 2016 yeah so you know I'll tell you a little story my dad was an entrepreneur who went bankrupt many times over his his career and he was really good at starting from scratch again it was amazing how many times he would these business usually his biggest flaw was too much leverage and then things would blow up but then he would find some new idea and get going again and so and my parents were very bad financial planners so they really wasn't any savings or anything so the business went down means we had difficulty making rent and groceries and so on so I think I was like 11 or 12 years old and my father had just gone bankrupt and the business had gone under and every Sunday there was this guy in orange robes with all these marks on his forehead coming to our house and he was a astrologer and my father was consulting him about the future you know what what's the future going to be and my dad was a very rational engineer you know so I I went to my dad said you know you have to know everything this guy is telling you is total nonsense you have to know that so my dad my dad says to me that I'm at the bottom of a well and I need a rope to come out at the bottom of the well and when I paid this guy to tell me about the future he knows that he's not coming back next week unless the forecast is really rosy okay so they it has to be an exuberant future and he also knows that the more rosy it is the slightly higher he might get paid so every week when I call him he paints this picture you're gonna start another business it's gonna do really well blah blah blah and I'm gradually coming out of the well right so that's so much that's how my dad explained this to me right and so let's say like the financial crisis when I was down 70 percent for example I thought about my dad and I thought about that astrologer and I didn't have his email address you know damn you know that's who I needed then you know tell me what the performance is gonna be and I'll pay you and I'll pay you more if it's gonna be more you know and but I couldn't find his email address so I had to I had to come up with my own rope to come out of the well and so what I did was one of my rules of investing is thou should not use Excel but I said what I said let's violate that rule to come out of the well because coming out of the well more important in Excel so I created an Excel spreadsheet which had my portfolio with the current prices and then I put down the price at the end of 2009 or end of 2010 2011 and all those future prices were much higher than the current price and then I looked at the value of the portfolio at those times those numbers look really good and that was the rope and so we we all need ropes to come out of deep wells and I don't have the guys email address so you need to you need to find your own rope in effect but I think that the nature of equity market is that we are going to find ourselves I mean things we buy things that are cheap we understand the business that's all fine they get cheaper and they can be cheaper because you made a mistake or they can be cheaper because it makes no sense you know the markets are mispricing it even more and until we figure it out we need some rope to what it would be a mistake to sell things just because they become cheaper you know I think you can sell things that they have cheaper if you're convinced that the current value of the businesses below where it's currently trading but if you're not convinced of that you're better off being like the fidelity dead clients and doing nothing so everyone needs a rope my name is John Carney I'm into life and pensions business here in Dublin and just want to ask - are you still are you fully invested presently you're fond we aren't we aren't fully invested but we don't have that much we don't have that much cash we are I think less than 10% cash how do you feel you know for the future into markets of a bit - goal still like I see in some of your earlier slides the Dow and the S&P like their poll rooms have the starting seven and eight years 17 years you know what I think I think the thing is that I almost never saw like I told you that the presentation I made is kind of weird presentation because I almost never have a view on the markets and even now so if I look at the US markets I actually don't know exactly what where they're going or what they're going to do what I do know is I find it hard to find stuff and in fact we have not had a investment in the US for four years I used to be one hundred percent u.s. and the last four years I found one stock to buy in the in the US so my portfolio allocations became really strange and it's not because I have a macro view of anything it's just we found stuff in other geographies so I feel that the at least the US markets are either fully priced or may even we possibly be overpriced but that doesn't mean they're going to correct they could grow into that you know we have no idea of all that I do believe that there are other hunting grounds that are better we've we've done a few investments in India in the last few years I think those are better than what we could have done in the US I'm going to poke around and Korea a little bit more I don't know whether we can actually get to I mean for me the biggest issue would Korea circle of competence you know so I don't know if I will be able to cross that cross that and actually be able to convince myself that I really understand this but if we can we will see if we can we can we can do that like you know I mean if I'm looking at something which is like the Moody's of Korea or credit rating agency or something I might really good moms around that so we'll see but yeah so I think I think the way I look at it is I do I try not to have views on markets or macro or anything because I think generally speaking that's a really hard game it's a really hard game for me it's I think it's just better to just look at individual businesses and go from there but then you know you you probably have the problem of huge amount of assets and it you know it becomes hard to put it to work in a few names so yeah how do you manage Thanks and yeah on the back bencher like Desmond maybe but thanks how'd you manage yourself on a day to day basis and what's your kind of routine like I suppose from day to day and how you look after yourself yeah so I take a nap every afternoon so afternoon naps are good actually have a like a nap room off my office which is uh which is nice so yeah so actually what I try to do and these are all things I've tried to pick up for Morin and Charlie's I tried not to put anything on my calendar so in a typical week I don't have anything on the calendar I don't set up meetings and and and and such and what I want is that every day there is reasonably large chunks of time available to read and to read no you know wide range of things so sometimes I may have a particularly investment I'm looking at and I might be drilling down on that other times I might be reading a book you know I read a few nice newspapers every every day and so on so the the key is to try to not have a lot of you know kind of obligations and such but to really have a kind of open calendar and and then ticket so that like you know I think my assistant told me somebody wanted to do some kind of podcast and I just told her find a week where there's nothing going on there's nothing on the calendar and we will put it in then and whenever that is and so so I think that's the key at least what I found useful is not to not a clutter of things too much and I mean in the investing business if you can find two or three things in a year or I think you're doing pretty well and and it's a great business because you get to you know spend your time thinking about all kinds of things which is which is great and reading all kinds of things which is also great but thank you very much and thanks for the for the Wonder wonderful hospitality and hosting me and I wish you all the best thank you [Applause] [Music] you [Music]
