William Green - Author Interview - Richer, Wiser, Happier
William Green is the author of RICHER, WISER, HAPPIER: How the World’s Greatest Investors Win in Markets and Life (April 20, 2021; Scribner). Green has written for many leading publications in the US and Europe, including The New Yorker, Time, Fortune, Forbes, Barron’s, Fast Company, Money, Worth, Bloomberg Markets, The Los Angeles Times, The Boston Globe Magazine, The New York Observer, The (London) Spectator, The (London) Independent Magazine, and The Economist. He has reported in places as diverse as China, India, Japan, the Philippines, Bangladesh, Saudi Arabia, South Africa, the US, Mexico, England, France, Monaco, Poland, Italy, and Russia. He has interviewed presidents and prime ministers, inventors, criminals, prize-winning authors, the CEOs of some of the world’s largest companies, and countless billionaires.
While living in London, Green edited the European, Middle Eastern, and African editions of Time. Before that, he lived in Hong Kong, where he edited the Asian edition of Time during a period in which it won many awards.
Green has collaborated on several books as a ghostwriter, co-author, or editor. One of them became a #1 New York Times and #1 Wall Street Journal bestseller in 2017. He also worked closely with a renowned hedge fund manager, Guy Spier, helping him to write his much-praised memoir, The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment. Green also wrote and edited The Great Minds of Investing, which features short profiles of 33 renowned investors, along with stunning portraits created by Michael O’Brien, one of America’s preeminent photographers.
Born and raised in London, Green was educated at Eton, studied English literature at Oxford, and received a Master’s degree from Columbia University’s Graduate School of Journalism. He lives in New York with his wife, Lauren, and their children, Henry and Madeleine.
Album art photo taken by Mike Ando.
Thank you to Mathew Passy for the podcast production. You can find Mathew at @MathewPassy on Twitter or at thepodcastconsultant.com
+ Transcript
Bill: Ladies and gentlemen, welcome to The Business Brew. I am your host, Bill Brewster. Super, super happy to be reunited with William Green. The catalyst for the conversation is his new book, Richer, Wiser, Happier. I've read it, it's fantastic. But selfishly, I have been looking for a reason to talk to William because he and I met at Berkshire after the Markel lunch. I asked him if he would be willing to grab lunch with me. Two and a half hours later, I almost missed my flight, it was one of the more enjoyable conversations I've ever had. One of the great reasons, and just one of those spontaneous connections that comes out of Berkshire that I've always remembered, and I'm really happy to be able to reciprocate some sort of favor in having him on the podcast, and I can't recommend the book enough. I think it was a great read. William, how you doing?
William: Thank you so much, Bill. I'm great. I'm really happy to be here with you. I have very fond memories of our lunch. In a way, it's a perfect example of what I write about in the book about the compounding of goodwill. This is a concept that Guy Spier, my friend who I helped write his autobiography, talked to me about where if you just go through life, kind of trying to be relatively decent, despite all of our flaws, it works out better. We had this lunch, where neither of us had any agenda, we were just really happily chatting, giving each other life advice, talking about investors and just having a good time. Then, here we are years later, and you're a big shot podcast host with this great podcast-
Bill: [laughs]
William: -and you feel goodwill towards me, and I feel goodwill towards you. It's a really beautiful example, actually, of how things work when you just surround yourself with decent people, and you try to treat them decently. It just works. It's a kind of miraculous thing to discover. I'm serious about this. I'm not just trying to be charming to you. It actually it is a miraculous thing. You start to feel like you're surrounded by really lovely people who are very high quality and who are all looking out for each other. It makes life a hell of a lot easier. I think we were brought up thinking that we should all have sharp elbows because life is tough, and it's Darwinian, and maybe that's true, I don't know, but I think this is a better model. I think Tom Gayner actually embodies it, so it's kind of nice that we met at the Markel lunch because I think maybe that's part of it is that he surrounds himself at Markel with people who were pretty decent because he embodies that himself.
Bill: Yeah, Tom, he's a cool guy. I know Saurabh, I'm sorry if I said his name wrong.
William: Yeah, Saurabh Madaan, who's wonderful as well, very lovely guy.
Bill: He's a great human.
William: Yeah.
Bill: He had me to Markel once and I got to spend some time with Tom, and who Tom is behind closed doors is exactly who he is in front of people, which is a nice thing to be able to say about somebody.
William: There was a wonderful thing while I was reporting this book, I went and spent a couple of days with Tom. People who don't know Tom is the co-CEO of Markel. Here's a guy who's running a company that's in the top 350 or so in the Fortune 500. I go hang out, we've probably spent a day and a half in his office. There are no phone calls, is just completely quiet, completely peaceful. Then, I wanted to see him in his natural habitat. I asked if I could come home for dinner with him, which is a somewhat impertinent thing to do. You wouldn't ask many CEOs of Fortune 500 companies if you could do that. We drive out at the end of this long day where I've been grilling him all day. He goes to the supermarket in his little Prius, his sort of tiny, not very grand hybrid car, and walks around the supermarket shopping for salmon and stuff.
Then, we go home, we keep chatting while he's making the salmon himself. Then, his wife comes, who runs one of the businesses at Markel. Before the dinner, they reach over and hold your hands to say grace, and then you sit and chat and they're super candid, incredibly welcoming. I just was thinking how many CEOs of Fortune 500 companies would go shopping like that, would cook you a meal like that? There's something really understated about him. I think he's a very, very smart, incredibly driven, and successful guy and a terrific investor, but I think what really stands out is his quality as a human being. I think that infuses everything that he does really.
Bill: Yeah, I hope he will come on at some point. I'd love to talk to him a little bit about what would be different if you were running a book of a fixed portfolio as opposed to investing insurance float, and I'm certain he's got thoughtful answers, but I couldn't agree more with you that every interaction that I have had with him, and I'm not presenting myself to be close to him or anything like that, but he's just a gem of a man.
William: He did this lovely thing a couple of months ago, where I’d posted something on Facebook of my kids who are 19 and 22 playing a song together, it was a John Prine song, really beautiful, very soulful song. It was during Hanukkah, so I'm Jewish, and we had a menorah, these candle lights, it's kind of beautiful. They would sit at the table and just play guitar and sing together. They're singing this kind of soulful song. You can see they have, thank God, a lovely relationship, the two kids, and they sing beautifully. Then a few days later, I get a call from Tom saying, “I just wanted to tell you how touched I was by that video. I really loved it.” Then the next thing I know, I'm getting an email from Saurabh, who's his right-hand man saying, “Oh, Tom, I'm not on Facebook, but Tom showed me the video.” Again, there's something just really, really nice about that, and really thoughtful.
Tom said something really interesting to me while I was interviewing him, he said, “Because I'm a nice guy, I'm just surrounded by people who want to help me.” He repeated it and he said, “And they just help.” There was something really interesting, because I don't think he was being self-flattering by saying, “Oh, such a nice guy.” I think he was just being candid, because he's a candid person. I think there's a deep secret there, and I coined this phrase that I was overly proud of which was the mensch effect, that I think if you're a mensch, if you're just a decent human being, there is a certain advantage. Tom is highly capable, he is a very capable investor, but I think one of the reasons why he's surrounded by people who want to help him is that he's decent. If you think about it, he got, for example, to be on the Washington Post board with Buffett for years. He's there surrounded with these extraordinary people who he's learning from.
Josh Tarasoff, a friend of mine who is a very, very smart hedge fund manager helped Tom at one point to understand Amazon. I think at the Markel meeting that you and I were at, Tom announced, he said, “My friend, Josh Tarasoff, who's here explained to me why I needed to own Amazon.” Then, similarly, there's another great investor that I write about, Chuck Akre, who's made something 100 times his money on Markel stock over the years. Chuck Akre had a really huge impact on Tom by explaining, really the overwhelming importance of investing in companies with a high return on investment that have this ability to keep investing, to keep reinvesting at high rates of return. I think this is something that Tom naturally understood. Anyway, it's been one of the four principles that guided him through all of these years.
At the same time, I think what he said is that Chuck Akre intensified his belief that that's the most important of the four principles. He said if you look at something like Berkshire Hathaway, you just see that Berkshire originally was this crappy textile mill company. The advantage that you had was that there was a genius allocating your capital. Because he was able to keep doing it at high rates of return, over many, many years, you ended up going from whatever it was, $15 a share, or $30 a share or whatever, to 300 and something thousand.
I think it's really interesting that Tom describes himself as a node in a neural network. There are all these people in his network who are helping him. It's a very interesting thing, because then there are all of these great investors that I write about, who actually have very low EQ. Their advantage is that they're kind of machines. They're really great thinkers and calculators of odds and probabilities. Then, you have this other model of people who actually have high EQ, and that's an advantage. I think if there's a takeaway from this long and rambling monologue of mine, it's that you have to know yourself, and you have to be aware of whether you're wired in a way that EQ is an advantage, or whether you're wired in a way where your lack of emotion and your ability to calculate odds and be super rational and dispassionate is an advantage. There's not a better or worse. It is just you’ve got to be self-aware so that you're playing a game that you're equipped to win.
Bill: First of all, we're not going to have this conversation without telling people about your time at Time magazine and your early career, but I'm going to follow-- and people you have to stick around for that because it's awesome. I can't think of a better time to have this particular conversation because I have really been struggling with this exact issue that you describe. What's going on in my life is, I'm a guy who is trying to manage my own money, fundamentally that's what I'm trying to do. I don't have any interest in managing outside capital. I've happened to network my way into a bunch of emerging managers, I found myself in some rooms of some people that I really respect, in large part because of Berkshire and because of the network that I've met there. Now, I've got this podcast. I owe a lot to Toby Carlisle for putting me on his podcast to sort of start some of the flywheel going, for lack of-- I hate that I said flywheel, but I did.
William: I said that last week as well.
Bill: [laughs]
William: I said it on some podcasts and then suddenly realized, “I have no idea if I really know what that means.”
Bill: Sounds so douchey. [laughs]
William: I have vague memories of reading those Clayton Christensen kinds of books then I'm like, “No, probably misquoted that.” Yeah, I'm glad that you're uncomfortable with it too.
Bill: Yeah, it's just so overused, I think. Anyway, what I'm worried about now is, I find myself getting inbounds from people that I just have so much respect for that want to help me, but on the other hand, I am intrigued by advanced investing concepts. I do play special situations. In this business, people, I talk about some advanced concepts and I worry that people that are not as advanced, listen to some of what they hear on this and then follow me in. I am feeling like it is really, really hard for me right now to deal with feeling the pressure. I think the reason that I feel that is I am high EQ and have a lot of empathy. I actually just got a therapist, I'm going Thursday for the first time because I really need to figure out how to harden my skin, because it almost was like a disease that infested my mind two weeks ago that I almost got paralyzed by it a little bit.
William: Why do you want to harden your skin?
Bill: I think I need to either figure out whether or not, I need to change the way that I'm operating or whether or not I need to be more like buyer beware and just tell people do your own work. A lot of people that I've respected have said, “Look, man, the way that that you approach things, they don't perceive me to be on the side of--” if anything, I've heard that I err too far on caveating what I say. I think I just need to be more okay with putting information out there and telling people to do their own work, that part of me needs to get a little bit harder.
William: Yeah, it's a complicated question. I have so many thoughts on it that are sort of competing to come out first. I've spent a lot of time thinking about things that Josh Waitzkin has said, who wrote this wonderful book, The Art of Learning, and then has done a few amazing podcast interviews with Tim Ferriss and then disappears into his cave and doesn't really talk to anyone. Waitzkin, who I think is a truly brilliant person, really interesting. He has this wonderful phrase, I don't think was in his book, but it was in one of his podcasts where he talks about unobstructed self-expression. That's what you're trying to get to, is unobstructed self-expression. I talk about this in a different sense in my book about being in alignment with who you are in a deep way. I think when you see someone like Mohnish Pabrai, who I write about a lot in the first chapter, he's someone who's deeply in alignment with who he is. That was one of the great lessons that he got from Warren Buffett and the Guy Spier also got from having their $650,000 charity lunch with Buffett, is that Buffett truly lives by this inner scorecard. He's aligned with his own weirdness and idiosyncrasy and doesn't do things that aren't right for him.
When I had this flight back from Irvine, California, one time when I'd been interviewing Mohnish there, I wrote down these lessons from Mohnish on the way back, and it literally there was a piece of paper-- I was very excited by being with Mohnish because he has such an extraordinary mind. There's something very energizing about it, and you have this sense of revelation. I didn't want to miss this moment. I scroll down Lessons from Mohnish, and I write down in the first chapter what they are. One of them is literally “Don't do what's not right for you.” This sounds like a digressive way to respond to what you're saying, but I think part of the secret in the way that you do your podcast or in the way that you invest or in the way that I write or the way that I talk to you, it's just to be deeply true to who you are, and to your strengths and your priorities. If you're inclined to caveat a lot, and to be candid, and to have EQ and to have a soft exterior rather than a hard skin, those are superpowers. I would say you want to be more and more deeply aligned with who you are, while also working on the things that are flaws, so you're in two places simultaneously. It's being happy with who you are and accentuating those positive characteristics.
At the same time, being aware, “Well, I need to work on this because I do this too much.” Or, “I talk too much, so I have to listen more.” I keep thinking, like, here I am doing a book promotion tour and I’m -- really consciously thinking how do I stop myself becoming full of pride and start to think that I'm actually like a big deal or really smart or anything. You're consciously trying to think about where you could be screwing up but also at the same time really trying to be true to yourself and play the hand that you've been dealt, in terms of your situation with managing money, in terms of your situation with your podcast, and having this tremendous pulpit and ability to have conversations and share wisdom and spread ideas. Your characteristics and your temperament, play to those strengths rather than trying to play someone else's hand. I think going to a shrink is great, and self-awareness is really fantastic, but I don't think it's so much to try to change. I don't know, I don't have full confidence in what I just said, because obviously, we all want to change.
Bill: Well, I've got some other stuff I need to sort of deal with at the moment. I guess that that some of what you said there of, when you're doing the book tour, how do you prevent yourself from feeling-- I'm just going to say this shit, because that's what I have struggled with feeling at times. I'm in a weird place right now where I had, for, me a good year, last year, I had some pretty contrarian calls that worked out. Now, I'm doing this podcast, and people seem to like it. There's a big part of me that just constantly needs to be like, “You are nothing in the world. The world could go on without you, don't start thinking that you're bigger than you are.” But there's also the part of me that acknowledges that through a podcast platform, there is-- distribution is ubiquitous. It's hard to know who's listening. I do feel some responsibility to protect people. Then, again, you can't really protect people from themselves, but it's been something that I'm struggling with.
William: You're responsible for them. You had that story with your cousin, or your wife's cousin who was hurt by people who were unscrupulous?
Bill: Yeah, he committed suicide.
William: Yeah, I'm so sorry. I actually think that's a deep part of who you are as wanting to protect people from exploitation and deceit and themselves, the darker side of the investment business. I actually think you're being deeply true to yourself in wanting to caveat and wanting to protect people. I think, in a sense, you're honoring your relative by doing that. I would go big on that. I think that's a big part of your mission, actually, whether consciously or not, is to spread information that's not self-serving, and that helps others, and that's not deceptive, because there's so much deception and self-serving information in the investment business. If you can be a force for spreading real information, yeah, you'll be wrong at times but at least people will sense if you're trying to be truthful. I think that's a very powerful thing to do.
The other thing I would say, just if I could go back to a thing that you said a minute ago, that I think is really, really important, where you said, “You have to remind yourself that you're nothing.” There's a really wonderful insight from a great sage and Kabbalist called Reb Bunim, I think was his name of, Peshischa. It came up when I was interviewing a great hedge fund manager called Paul Isaac, who I actually don't write about in the book, but he was an utterly brilliant guy with a wonderful mind. He quoted this line to me, and it's a line, it's always had a big impact on me. And what Reb Bumin, Reb means teacher, what he said is that you should have one piece of paper in one pocket that says, “I am ashes and dust. I'm nothing.” In the other pocket, you should have a piece of paper that says, “The whole world was created just for me.” He said, “Depending on your mood, and which of those things you need, you take out one piece of paper, or the other.”
One of the great truths in life, is that both of these things are true. We are absolutely nothing. We're like these tiny, tiny cogs in this much bigger thing. We're like little ants. At the same time, we have such a profound importance and we have such an enormous impact on other people's lives. You can see that you can save a person's life. I quote this in the chapter that I write about Mohnish, when I think about all of the stuff that he's done with Dakshana, his charitable foundation, that's really yanked thousands and thousands of families out of poverty, where he's basically taken this strange ability that he has to play this game where he sits quietly in a room and occasionally finds a mispriced stock. He's used this strange ability to change thousands of lives. In sentimental moments, I see, for example, Ashok Talapatra, who's a guy I write about in that chapter, who Mohnish helped yank out of poverty, who's this brilliantly clever guy who's now a rising star at Google, and was part of the Dakshana program. I say, when I see something like that with Mohnish and Guy and Ashok at Berkshire Hathaway together, and I see how Ashok’s life has been changed. I'm reminded of that line about, “If you save one life, you save the world.” Then, I talked to Mohnish about it. He's like, “Yeah, life's meaningless. I'm just trying not to screw people up and just to help people and do a good job with my kids. Everything else is just the game.” I don't know that he's totally sincere about that. I think there's a surface of Mohnish that's really funny and brutally frank, and I think there's a softer side of him that's really kind and caring, and generous and really wants to make a huge difference in people's lives. Maybe it's a little bit like Charlie Munger, who has this tough exterior, but I think underneath it is a very special, very lovely guy.
I think that idea that we're simultaneously nothing, that we're ashes and dust, which is actually a line that Mohnish quotes sometimes. He'll say, “I am just ashes and dust.” I think it's a good reminder not to get too full of ourselves. But at the same time not to get too down on ourselves, because if you start to think that you're nothing, then you don't take advantage of the incredible gifts that you've been given. I think there's a trajectory in our lives where-- this is something that the Kabbalists who had a great influence on my thinking, what they say is that you start with what they call the desire for the self alone, which is really just your ego. It's just wanting to look out for yourself, wanting to make money for yourself, have a bigger car, get respect, get adulation, have beautiful women or men interested in you, and all sorts of outer scorecard stuff, to put it in Buffett's terminology. Then gradually, over the course of your lifetime, you're supposed to transform that, that desire to receive the self alone into what this great Kabbalist, Rav Ashlag, actually called, “The desire to receive the sake of sharing.”
You still want to have the success of a good book or of a great podcast or of a great marriage or a beautiful home, but you're not controlled by the outer aspect of it. You're not so in love with the money or the fame or the reputation, or that external validation, that it controls you. I think that's a tremendous challenge. It's not a one-time thing. It's a constant battle. I'll still find myself constantly looking to see, “Well, did people like this?” “Did they review this well?” Then, I have to try to have a sense of humor about that. Try not to suppress those negative emotions, but to look at them with honesty.
There's a wonderful guy I've been studying recently, this Tibetan Buddhist, a guy called Tsoknyi Rinpoche, who’s extraordinary, and very similar to the Kabbalists in many ways. He has this beautiful expression where he talks about those negative characteristics, whether it's your vanity, or your pride, or your ego, or your anger, or your self-loathing, whatever it might be, he describes them as beautiful monsters. In his meditation practice, part of what you're doing is just being very aware of those beautiful monsters without actually trying to change them, or judge them, or dislike them, or suppress them, or oppress them or project onto other people, by blaming them for your idiosyncrasies or flaws, or screwups. Instead, you just abide with them. He has this beautiful expression where he says, “One day, we will be friends with all of our beautiful monsters.”
I've really been pondering this a lot recently, because on the one hand, there's the kind of Tony Robbins’ approach where you see a negative emotion and then you replace it in a sense-- I'm probably misexplaining it, but in a sense, you're replacing it with these positive emotions like appreciation and love and gratitude. I think that's a very, very powerful technique. He describes it in the last chapter of Unshakeable, a book of his. But I think this other technique is also a very interesting one, to accept that we have these flaws, these negative emotions, these negative patterns, and to be aware of them and be with them in a loving, accepting, slightly humorous way, and to snuggle up to our beautiful monsters.
One of the practices Tsoknyi Rinpoche talks about, Rinpoche means precious one, I think in Tibetan. He has this handshake practice. When these things arise, these negative emotions or thoughts, you handshake them, and so instead of repressing them or saying, “Ah, I can't believe I'm full of pride, or I can't believe I'm so hurt.” I sent out an email I was telling you about before, a mass email announcing my book, which is a very uncomfortable thing for me to do in multiple ways, partly because I'm technologically incompetent. Someone I actually really admire wrote back and he's someone I actually like and know personally, although I think he's forgotten, he wrote back and all it says is, “Remove.” All of these lovely emails that-
Bill: [laughs]
William: -I got back from other people have been trumped by this one guy who's a great writer and a lovely person, and a really close friend of mine, they've all been trumped by this guy saying, “Remove.” I have to see my reaction to that. In a way, handshake it and be like, “Yeah, okay, that's upsetting,” but he's a really good guy. Then I have to think, and actually, I'm really irritated by people marketing to me the whole time. What am I supposed to learn? Should I be a little bit more aware of my own irritation and intolerance of other people? Once you become aware of your negative patterns-- negative, it's not even a very helpful work that's too judgmental. Once you become aware of your beautiful monsters, you can be with them and respond to them more intelligently instead of trying to suppress them or instead of me turning to this guy and being like, “That bastard, I can't believe he did this,” which I think I would have been more inclined to do before.
In a way, this sounds like a big digression in some ways. If you react in these negative, very reactive ways, it messes you up in your relationships, in your investing, in your writing. I mean, if you overreact as an investor, it's very hard to be rational. I feel like when we were growing up, no one really taught us how to deal with our emotions, and part of parenting ourselves, it's figuring out, “Well, so what do I do, and I feel myself becoming arrogant and proud, or I feel myself having the sense of total worthlessness and despair, or just feeling angry and betrayed or jealous?” No one taught us how to deal with this, particularly for me growing up in England, that's not exactly something-- wayward emotions are not things the English are particularly good at dealing with. We repress them deep down and never talk about them.
I think this idea of how you deal with your sense of worthlessness, with your sense of vanity, with your greed, dealing with them intelligently, handshaking them being aware of them, and having a loving awareness of them rather than a “I can't believe I'm like that still. After all these years of working on myself, I can't believe what a schmuck I am.” You get in these spirals that I don't think are very helpful.
Bill: No, I think that's fair. I guess one of the things that-- I highlighted a person who manages some micro-cap companies. I also own the shares of those companies when I did it. I had a couple people that I knew that I respect, reach out to me and say that they didn't think that was a particularly great look. Then, on top of that, a deal got announced shortly after I had highlighted the person, and I have been struggling with whether or not I made the right decision to own the shares when the episode ran. Going back far enough, I had first bought the shares in January, and then I thought that I was going to interview him in February, and then I sold the shares, and then filing started to roll out, and I bought the shares, and I dropped the ball scheduling an interview, and then we scheduled an interview. I guess what I have tried to figure out over the past couple weeks is whether or not I have sacrificed something that I should not have sacrificed in integrity, because greed wanted me to win, and how much of that is, did I violate something that should be core to who I am or, did I do something that my inner scorecard is okay with?
As I've thought about it, where I've sort of landed is, I never promised anybody that I'm a journalist. This podcast is biased. It's people I want to talk to, it's people that I'm disposed to like. On the other hand, I do understand that maybe as my influence grows over time, I should adjust how I'm operating. I think that I need to deal with some of real things in my life from my past that I need to deal with, in order to actually make the right decision going forward, and I just don't know what the answer is. I'm pretty sure that I know what it is, but I just need to work through some of-- you refer to the monsters, I've got stuff that like-- I don't know, it brought up weird shit from my childhood, for real, that I need to work through, and that's really why I'm doing it. I'm not doing it why I'm going to talk to somebody. I'm not doing it because-- I think it's coming from a place of power. Not a place of weakness, but it's just--
William: Yeah. You're self-reflective. I think that's probably why we ended up spending several hours together when we first met, is because you're someone who's trying to grope towards some sort of truth, who's trying to figure out how to live, who's trying to figure out how to be a decent person and trying to figure out how to fulfill your talent, and play the cards you've been dealt in the best way. I think you sense when you're out of alignment, and you're trying to get aligned. I think that sense of discomfort and misalignment, which I feel often, is a very powerful thing. It propels you forward. There's a beautiful line from William Blake, great poet that I think about constantly and quote often, where he says, “Without contraries is no progression.” You need the darkness to force you to look for the light, you need setbacks. That sense the progression comes from these things that are in conflict, I think, is very powerful. It helps you during the times when you're in conflict when you feel this isn't working.
I would say one of the things that's been really helpful to me that has been clarified in the process of interviewing lots of great investors and thinking about what they figured out what their lives mean, is I think it's really helpful to have a few very, very simple filters that give you a true north that you can come back to a lot. One of the best filters is from Nick Sleep and Qais Zakaria who calls himself Zak, who I write about in this chapter called Nick and Zak’s Excellent Adventure, which is one of my favorite chapters in the book.
Bill: Yeah, that was an awesome chapter.
William: Thanks. They're just really remarkable.
Bill: Not many people have access to those guys. So, hats off to you.
William: Thanks. They're really special guys. They're really wonderful people. Again, like Tom Gayner, very, very good role models for life, extraordinary role models. One of the things that they did is Nick, when he was very young, when he was maybe 18-19, became obsessed with Zen and the Art of Motorcycle Maintenance, this book by Robert Pirsig, which is a very strange and brilliant meditation on values and quality. It was rejected by something like 130 publishers, and you can see why because it's a really strange memoir, and tutorial about how to live. I think its subtitle is An Inquiry into Values. One of the things that Pirsig writes about, which he capitalizes is quality. This very nebulous notion of quality, where he says, whether you're fixing a dress or mending a chair, or sharpening a knife, or working on motorcycle maintenance, there's a high-quality way to do it, a beautiful way to do it, and a low quality, ugly way to do it.
That concept of quality, which sounds very vague, was tremendously helpful for Nick and Zak, because they could say, for example, okay, let's think about our fee structure. What's the quality solution? Well, the quality solution is to set it up in a way that doesn't really serve us but serves our shareholders. They kept making their own fee structure progressively worse for themselves. They got to a point where they actually put their incentive fee in a holding pen, so that if they then screwed up, they'd have to pay all of their fees that they’d owned, back to the shareholders. I don't actually write about this, but during the financial crisis, they at one point owed years and years of fees, so they had gone way behind the starting line, and would have to pay back all of those fees, and they actually liked that.
Bill: Wow, that’s crazy in the middle of the financial crisis to like that. That's wild.
William: Well, they liked the fact that they weren't screwing their shareholders. Zak said, “I quite like the feeling of wearing a hair shirt and being kind of righteous.” He liked the intellectual experiment of setting up the fund so that it was this almost spiritual exploration of how do you live life in the most high-quality way? How do you manage money in the most high-quality way? How do you treat your partner in the most high-quality way? Here they are, years after they wrapped up the fund and sent back $3 billion to their shareholders, and they still share an office. They don't go there that often, but they're really close to each other. What Nick said to me is, “Good behavior has a long shelf life.” The longevity of their relationship, of that partnership with the success of that fund, is built on this obsession with quality.
To get back to what we were saying in the first place, when you were talking about how do I know whether I should disclose this about my investment here or whether I shouldn't be acting as a journalist or whether I should be clear about my conflicts of interest, I think it's a really a helpful filter to say, “What's the quality move here?” Then, you just pause, and you say, “Well, okay, so this serves me really well, and so I'm going to be tempted to do it, but it may not look good. Or maybe I walk away from this.” I'm not saying that's what you should have done. I have this conflict in many situations where I have to say-- what's really helpful to me is when I say, “I need to be willing to let go of this. If it doesn't go my way, I need to be willing to let go and walk away.”
In a way, it gets back to that Buddhist notion. There's a beautiful line that I think I quote in my book from the Buddha, where he says, “To abide independent clinging to nothing at all.” I think the thing that gets us in trouble is the clinging. It's the sense of, “I must make this money.” “I must get this book on the bestseller list.” “I must have a bigger podcast, bigger guests.” The ability to abide independent and say, “Yeah, yeah, that would be really nice. I don't need it. I can walk away,” is really powerful. It's difficult because there's this great line from Ben Franklin that Charlie Munger quotes often, and Buffett quotes often, where Franklin said, “An empty sack can't stand straight.” When you feel empty, when you're having a difficult time, or when you're financially challenged, and something that's really lucrative comes along, it's very hard to have this sense of beneficence and this sense of, “Yeah, let me give to this charity. Yeah, let me walk away from this deal.” So, you're inclined to cling to it.
I think, just being self-aware, and knowing when we might be getting sucked into something, because we have a desperate desire for approval or for success, or we're afraid of money, those are the beautiful monsters that we need to befriend and not repressed because otherwise-- for investing, the markets are very brutal and they tend to expose these fault lines in our character. If you're greedy, or you're reckless, for example, or you're-- I mean, any character flaw, really, it comes up and bites you. When I look back to probably the single biggest mistake that I made as an investor, it was investing in a private company that was run by a friend of mine in Hong Kong. She was someone I really like, and she was married to a friend of mine I am close to. Goldman Sachs had invested a tiny valuation-- Sorry, I'd invested a tiny valuation compared to what Goldman Sachs had invested privately. Here I was thinking, “Well, I'm getting in at the bottom, I know these people, I'm an insider.” It made me feel smart and it made me feel part of the inside set where I had privileged access. Then, when things started to go wrong, I stood by my friend in a kind of very public way, which made me feel like I was protecting the damsel in distress with someone who was a very close friend of ours, who was having a terrible time. So, there were all of these ways in which my own idiosyncratic personality traits messed me up.
I remember mentioning it to Guy Spier at one point saying, “You should really look at this company, it's extraordinary technology.” He just looked at it and he was like, “No, I don’t do that sort of thing.” He just had a simple filter of like, “No, that's just not somewhere where I have a competitive advantage.” I lost of lots of money doing that, all because of these flaws in my personality. I think just being self-aware and having a sense of where your beautiful monsters are likely to mess you up, whether in markets or relationships. I think usually what happens that's really helpful, is if there's a pattern of things that recur in your life, where say you have the same sort of difficult relationship with difficult bosses, we have repeated situations where you lose money, make lots of money, and then you keep losing it, going back to zero, or you have the same failed relationships-- I have a friend who once said to me, “I've been married to the same woman three times, they just all had different names.” It's these things where you repeat the pattern, that's usually a pretty good clue that that's something you really need to work on, because otherwise, it's just going to come back and bite you again.
Bill: Yeah, that's interesting. I like that. My particular situation, I don't think is a pattern issue, but I just need to work through it a little bit. We'll see.
William: But it gets back to this issue of you wanting to be someone who's honest and honorable [crosstalk] to be doing a good thing and looking out for people.
Bill: I'm worried that I had clouded judgment from motivated reasoning. That's the only thing that I'm actually worried about. I'm not even sure that I'm worried about-- Well, actually, I do know. I'm not really that worried about what other people think. I am worried about whether or not I was true to myself, and whether or not I made a mistake in that moment. If I did make a mistake, then the reason is there might be something in me that's getting like-- even though I am a guy that I don't have a desire to run outside capital, I do want to win. There is a potential that I made us slip in judgment because I want to win badly. It would not be worth the trade of sacrificing integrity.
William: You probably have a family history of wanting to show your worthwhileness, within your family. You come from a successful family-- Look, I'm hazarding a guess, what do I know? I think, like all of us, you have reasons for wanting to be successful and appearing to be successful. That's neither a good thing nor a bad thing. It's just being aware enough of your own vulnerabilities that you're true to the better side of your personality, if that makes sense.
Bill: Yeah, that is true. I think the other thing is, I currently get paid on my investment portfolio, and I pretty much donate this podcast to society. At what point do I have to flip the way that I'm thinking? It's possible that I've hit exit velocity, and that I do need to rethink that equation. It's also possible I haven't, which is-- I've just been sitting with it a lot. I anticipate sitting with it for a lot longer until I know my answer.
William: If I'm honest about it, Bill, I'm always kind of sheepish about admitting this sort of thing privately, but maybe it'll help you and maybe it'll help other people. In the same way, as that filter about just saying, “What's the quality move here?” I again, and again, part of my internal monologue multiple times a day or week without wanting to sound self-righteous about it is basically to be saying, “Let me be a force for good.” It's not about being pious or sanctimonious or holier than thou, because I do lots of stupid things, you should see me getting bad tempered about whatever it is, my son's left this in the sink or whatever, I don't know, ridiculous stuff. I'm not making out that I'm this righteous individual. That's one of my true north is just to keep coming back to that sense of let me be a force for good. Let me be some-- there's a beautiful line that a great Kabbalist that said, where he said, “You're asking constantly to be a conduit and a resting place for the light.” It's really easy to sound sanctimonious about this when you say it. I actually think that's a really profound and beautiful idea that you want to be a conduit and a resting place for the light. However you view that, whether you think there's light, whether you think there's God, whether you think it's Mother Nature, I think there's some sort of benevolent force in the universe.
Another thing I think about a lot that, but again, without wanting to sound pious, is how do you give strength to love and mercy and kindness and compassion, because we also have this other side of us, which is anger and all of those things. I think what you're trying to do is constantly tilt the balance with your words and your thoughts and your actions towards love, mercy, kindness, compassion, truth, treating people with dignity, human dignity, whether you disagree with them or not, whether they irritate the hell out of you or not, and probably treating the side of ourselves that we dislike with dignity and compassion as well, which I find really hard. I actually think those filters and those kind of true norths that you can come back to where you just say, “Well, let me be kinder, Well, let me just be--” I talk about this in the chapter about Mohnish Pabrai, where he read Power vs. Force, which I think is a very important book, and came out of it thinking, “Well, there are certain characteristics that calibrate at a much higher level, and one of them is truthfulness. Let me just never lie, let me just be totally truthful.”
I say that I think there's tremendous power in picking a virtue like truthfulness, and just saying, “Yeah, that's going to be a guiding light for me.” We don't have to pick the same virtue. I would say there's a very strong argument for making the guiding virtue kindness, and there's no reason why it has to be only one virtue, we can pick multiple virtues. I think these very simple filters, get you through a lot of problems. One of the points that I try to make repeatedly throughout my book is when Munger says, “Take a simple idea and take it seriously,” this is one of the great failings I think of a lot of us as investors, but also in other areas of life is that when we come across a simple idea like this of say, quality as a filter, just saying, “I'm just always going to go for the quality.” The quality option, whether it's how you work, how you treat people, how you do your podcast, how you invest, or truthfulness, this idea that Mohnish gets from Power vs. Force. The key is when you find something that really resonates for you, you really go big on it. Mohnish says in that first chapter that most people when they find a really good idea, they dabble in it. He said, “They say, “Yeah, that's a good idea, whatever.” Then, they move on. He said, “They just don't understand. He says, “When you find one of these ideas, you’re 1,000% on it.”
What's really interesting to me is that he basically took about three ideas. Long-term compounding, the power of long-term compounding, and not messing it up, not getting in the way of it. The power of truthfulness, and the power of cloning, of basically saying, “What if people are better and smarter and wiser than me figured out already, so that I can replicate the best of what they're doing, in a way that's true to who I am into my talents.” Those three ideas, they're probably more of them, but I think those are the three most important ones in a sense that I look at Mohnish. You combine them, and then you do it over time, and you do it 1,000%, it's a lollapalooza effect to use Munger’s term, because they compound and they reinforce each other.
I think one of the things that I'm trying to do in my book is actually to synthesize these ideas for myself, and to reduce it because I have a kind of messy mind where it's going all over the place, as you can see from our conversation. So, I'm trying to take this massive information and insights and interviews and reduce it to the essence of what's important, partly for myself to guide me through life. Partly, because I want to share it with other people, because I think it'll really help them. As I tried to share it with other people, it synthesizes and distills it for me to the essence. What may have sounded in our conversation like we were focusing too much on your issue, actually it's no, this is essential. These are filters where we're applying the insight to the great investors to guide us through everything that we're trying to figure out, how to write a book, how to pick your next project, how to do your podcast, how to invest, how to treat your shareholders, how to treat your family. These simple guiding principles that have served people like Charlie Munger, or Buffett, or Howard Marks or Mohnish who I interview all of these people who are key characters in the book, I think they're enormously powerful both in investing and life.
Bill: I agree. I think, just to wrap up a little bit of what I'm going through, and it relates to what you're saying about Mohnish is, one of the things that's a little bit difficult about having a podcast is when I mess up, it's going to be public. When I was reading your chapter on Mohnish, I feel bad saying this out loud, but it's the truth, so fuck it. I have had some issues with some of how he's pitched his morphing as an investor. I guess that for me, I projected things onto him that are unfair. When I read how much he was doing for those people in India, I was like, “What a schmuck I've been to have judgment on this guy that's doing so much good in the world? Who cares if I invest differently than him or if I have a different philosophy?” He is really public with how he teaches. For me to have an uninformed opinion on him is really unfair, and I'm sure people will have it of me too. It's reading that chapter for me, I was laying in bed, and I was just like, “I'm such a schmuck,” because I don't see what he's actually doing behind bars-- behind the scenes.
William: Behind bars.
[laughter]
Bill: No, I'm sorry. That one I might have to cut out. I don't know why that slip.
William: That's very funny.
Bill: You don't know who these people are behind the scenes. It's funny because you talk about commitment bias and stuff like that in the book. I would say that the hardest thing for me about being public is going to be assuming that I continue being public, just being okay with people misunderstanding what's really going on. I've had a peek behind the lens of a couple issues over the past 18 months or 12 months or whatever, that have been pretty high profile, that sort of the understanding is not exactly what's reality, that's the stuff that keeps me up at night-- or doesn't keep me up, I worry about it. It's not so much the commitment and consistency bias, but I really like that chapter a lot because I thought it showed a side of him and what he's doing that, at least in my mind, was underappreciated.
William: Also, with complex characters, there are aspects of-- I often feel this, when I hold a door open for someone and I haven’t got to do this for months because I've been holed up at home during COVID, but I'll hold the door open for someone. I'm this English gentleman with a great sense of manners, and then they don't say anything. I immediately feel the rage building up in myself.
Bill: Yeah, “How dare you?”
William: Yeah, exactly. You realize that you have both sides of you in this, both aspects in each of us. In situations where we're particularly stressed, it doesn't bring out the best in us. I think one of the things that had a big practical impact on me in this book that I've really tried to harness in my own life is the stuff that I wrote about with Ken Shubin Stein, he's friend of mine, who's a neurologist, but was a hedge fund manager, in this chapter that I write about Charlie Munger, and about not being foolish about how to avoid standard stupidities. Munger is not a very emotional man, so it's not difficult for him to count his emotions, he's not really feeling those emotions. For most of us, we're really vulnerable to our emotions. One of the things that Ken Shubin Stein, having studied a lot of the medical and scientific literature about the brain understands, is how to tilt the odds in your favor, so that in very stressful difficult situations, you're more likely to behave well and think clearly.
One of the things that he talks about is that there are basically four things that we know have a really powerful cognitive impact. They're sleep, good nutrition, exercise, and meditation. If you focus, especially during these very intense periods, but also before these very intense periods, because as he points out, you need to develop these good habits not when you're in the storm, but actually before you're in the storm. It's very powerful, because you're just tilting the odds in your favor that you won't become so flooded so that you make stupid decisions. Whether it's because the markets imploding or your marriage is in trouble, or your kids are playing up or whatever it is.
Another thing that Ken does that I think is very powerful is when there's too much complexity, when there's too much going on, and he feels himself under stress, he goes through his calendar just tries to cancel as much as possible, so he's really practically reducing complexity. Then, a third tool that I think is enormously important that I think about the whole time is he developed this mnemonic, which I think he got initially from a lot of the addiction literature that he'd studied, scientific literature on addiction and what makes people revert to their addiction, for example. What conditions emotionally are preconditions for cognitive screwups basically. What he does is he has this mnemonic, which is hold PS, which is when he knows that he's hungry, or angry, or lonely, or tired or in pain, or sad or scared, he knows that those are preconditions for messing up.
One of the things that was fascinating to me was when I interviewed him a few months ago, he'd quit the investment business couple of years ago and went back to being a doctor and did his residency in neurology. It's an amazing thing for a guy in his late 40s, to go from having 300 people at his company, being very wealthy and successful, to going back to be at the bottom of the medical field. He is a remarkable guy. As I said to him, I'm kind of proud of him for doing it. It's an amazing thing. One of the things in the last year is he's been treating COVID patients on ventilators, and he said again, and again, he was applying that hold PS technique in the emergency room. This technique that really helped him, as an investor, was also helping him to deal with, for example, the families of COVID patients when he had to call them and tell them that their relative was dying. You had to be aware, for example, that the PPE equipment that he was wearing, was physically painful. To wear that all day, these tight goggles and masks and all of these things, he was just in pain, and he was tired, and he was sad, and he was angry about how little equipment there was and how badly the country had dealt with this crisis. He needed to be aware that he needed to take a little bit more time because he was more likely to screw up and he was less likely to be compassionate towards the family or towards the patient.
I think there are these subtle techniques, that if you really harness them, a very, very powerful in terms of just making it more likely that you make a good decision, whether it's in markets or in life.
Bill: Hmm, that's cool. I really like how you summarize the learnings that you had at the end of each chapter. I like how the book you synthesize and try to wrap up, like I said, the learnings.
William: Yeah, thanks. That’s a very conscious--
Bill: Did you have a particular learning that has changed you more than others?
William: There are a lot of them. I'm trying to think what had the most impact on me. There's a reason why I end the book with Arnold Van Den Berg.
Bill: He's the man, I love that guy. I was fortunate to meet him once and I heard him speak once. He is just an incredible, incredible human.
William: He's a wonderful human being. I write about him at the end, because I'm saying, “Here I am. I've interviewed over 25 years all of these legendary investors. I've interviewed so many billionaires, and they've hit the jackpot in this financial sense, but what actually constitutes a successful and truly abundant life?” There's a wonderful line that I use as the headline for that section, of that epilogue of the book where he said to me, “I'm the richest man in the world.” That's not because he has as much money as Buffett or Bill Ackman or Carl Icahn, or whatever, but he's an extraordinary role model. When I think about why he's--
Bill: Can we frame who he is just in case people don’t know because his story is incredible?
William: Yeah. Arnold is a fascinating guy. One of the reasons I write about him at great length is because, as I say, he was dealt the worst hand of all of these investors. Most of these great investors, they came from backgrounds where they went to Wharton or Harvard Business School or Columbia Business School. They got great education, they were clearly really smart and then they made it on Wall Street. Arnold was born in 1939 in Amsterdam, right off, I guess very soon afterwards the Nazis invaded, and most of the Jews in the Netherlands were killed. Arnold’s from this Jewish family on the same street as Anne Frank. He spent the first couple of years of his life in hiding behind a fake wall in a Christian family's house where they risked their life to hide Arnold and his brother, Sigmund, and his parents.
Then, his parents decided, “Well, if the Nazis come in and search the house, and Arnold screams or cries, they'll basically send us all to Auschwitz,” and the women and kids were the first to die there. Arnold was sent to a farm in the countryside, where he was-- actually to an orphanage, his brother was sent to a farm, and Arnold was hidden at this Christian orphanage. The girl who took him there who took him out of the house, and across the country, and hid him there, was probably 17 years old at the time. She didn't know him. She didn't know the family. She was Christian, not Jewish, and put her life at risk to save his life. Consciously, I name her in the book, and I name the family that hid them because I want to do them honor.
Many years later, when he went to a psychiatrist after his first marriage had fallen apart, and his wife had left him for another man, he said to his psychiatrist, he was talking to Dr. Rameljack. He’s talked about Dr. Rameljack many times where I don't name in the book. He said it had tormented him for years. “Why had this girl risked her life to save the life of a stranger?” Because she would have been killed and her whole family would have been killed if she’d been caught. The shrink said, “Well, it's simple. It's obvious.” He's like, “Yeah, what's simple about it?” Dr. Rameljack said, “For some people, their life is more important than their principles. And for other people, their principles are more important than their life.”
This had a huge impact on Arnold because he decided, “Well, I need to live my life in a way that's driven by principle,” partly to honor the people who had saved his life. Partly, I think it just resonated for him as a way to live. He was very full of anger and hatred after he came out of the Holocaust. I mean, I think 39 members of his family had been killed by the Nazis. So, he had a lot of rage. Then, his parents actually had been thrown into Auschwitz, because they basically had been snitched on by a storekeeper, who knew that they were Jewish and told the Nazis. His parents actually survived Auschwitz, and they were extraordinary characters. Life is not simple as [unintelligible [00:59:18] had said to me, and you would think, “Oh, well, they were these poor, downtrodden heroes and victims, and we should just feel empathy for them,” and we should. His father came out, and his father was a really tough guy. His father used to hit Arnold, and Arnold said he finally stopped hitting him when he hit his dad back, and his dad-- I don't write about this in the book. He said his dad was just slumped on chair in the living room just crying, he was like, “I cannot believe that my own son would hit me.” Arnold came out really tormented--
Bill: It's so interesting that that's the response to getting hit back.
William: Yeah. Arnold was like, “Yeah, you better believe it. If you hit me again, I'm going to hit you again. Next time, I'm going to hit you first before you hit me.” So, his father never hit him again. Arnold came out of the Holocaust as this kind of emaciated kid who could barely walk by the time he was six, he could basically only shuffle along on his knees because he'd been so malnourished. He wants heard a psychiatrist talk to his mom, because his mom was really concerned that as he put it, “There were signs that I was not too bright.” He overheard the psychiatrist say, “Well, maybe he's got brain damage because he was malnourished at this really important stage of his life.” Arnold comes out with a sense that he's kind of stupid, that he’s full of rage, his wife leaves him for someone else. Yet, somehow manages to gain control over his mind, over his inner landscape and transform himself from a rage-filled, angry victim into this incredibly loving, decent, kind, compassionate bloke. There's something so heroic about that. I think very powerful for all of us as a model of how to gain control over your thoughts and your emotions, but also what constitutes happy and abundant life because what I see with Arnold is, he gets so much joy out of helping other people. I see the quality of his relationships. I see him trying to help me.
I mentioned in the notes on additional sources and resources of the book, how many books we've sent to each other. He sent me a trampoline at some point because he was just worried that I was too slothful and wasn't exercising enough. Then, he would send me articles about how NASA had found that trampolining was the single best exercise. Then, he would send me information on dieting. I got a book the other day, and I can't remember whether I had bought it because of him, or whether he had sent it to me, I just don't know because we send each other lots of books. I can see he's someone who just is living his life in a way where he's just sharing all the time. He said to me, last week, we were talking on the phone, he said, “I just thank God every day for the money because it's just the most amazing thing that I can help other people. It doesn't hurt me. It's not like I eat any less,” because he's like a sparrow anyway. He basically, has like beetroot smoothies and celery smoothies. When I went and spent like two and a half days with him in Texas for this book, and I'm like this fat, lardass trying desperately to eat all day, and always wondering when my next meal is coming. He's sitting there, he's like, “Yeah, I haven't eaten in 18 hours” or something. Then finally, his assistant brings this awful looking smoothie out, and he's like in heaven, because it's got some celery in it. He was trying to get back to “my fighting weight of 155,” or whatever, because he was like, 158, or something. It's not spending money on other people is affecting his diet.
He said to me, even the other day, he said, “You know how you can tell what people are like? You see how they treat a waiter. You see how they treat the people who they can get nothing out of.” He's like, “That's a really interesting clue to what somebody is like.” You see with Arnold, I'll be emailing with someone, and they'll send me an email about something that Arnold has done for them. You realize it's a total stranger who's reached out to Arnold and he sent them some book that could help them or some idea that could help them. It reminds me a little bit of my late grandfather, Henry, who my son is named after, he just felt that this trail of kindness wherever he went.
In many ways, Arnold is such a beautiful embodiment of what a successful life means. He's had this very happy marriage to this lovely, lovely woman, and is very charitable, very decent. He's got control over his thoughts. He has sense of mission mean-- I write about how these people came and wanted to buy his company for what would probably have been more than $100 million. Here's a guy who come from absolutely nothing, just nothing. When he was at high school, he had a job working in a factory four hours a day. I mean, he just had nothing. From the age of 13, his father made him support himself, buy his own clothes, buy everything. Yet, when he was offered the opportunity to sell his firm and cash out, he's like, “I would rather close it down, then sell it to people who I thought might not take care of my clients.”
So deeply honorable, deeply ethical, deeply loving, deeply kind person, and then you see the impact of him on all these people around him, and you just think, “Well, that's a role model. That’s the one I'd like to be more like, if I can tilt the balance to become more like that. Then, at the same time, get control of whatever negative feelings, whatever patterns I have.” That's a pretty amazingly successful lifetime. I think what's kind of lovely in writing about him is, I see his happiness. There's this great paradox that in becoming kinder and more sharing and more loving, he's become totally joyful.
I don't dismiss the importance of making money. I mean, this is a book that does promise to make you richer. I do think that the principles we studied from people like Munger and Mohnish and Tom Gayner and Howard Marks, Joel Greenblatt, all of these great investors. They will make you money and they'll prevent you doing stupid things like I've done in the past, where I invested in things I didn't really understand for ego-driven reasons. They help you prevent a lot of stupidity, these principles, but I don't think you should lose sight of these deeper ideas about what actually constitutes a successful life. So much of that comes down to these questions like resilience, how you become more resilient, how you gain equanimity, what you focus on, whether you should become focused on getting bigger houses and bigger cars and the like, or something else. And here's Arnold, who bought a house in Texas for $350,000 many years ago. He said, “We would never sell it. We love this house.”
When one of his kids said to him, “Why don't you get a Mercedes?” He said, “Oh, I would hate to have a Mercedes. I don't want to identify myself with people who think that way.” Then finally, he had this crappy car that was like 10, 12 years old, and it was just great value. It was something like Mazda or something like that. He was just like, “It was the best value for money you could possibly get.” This is when he was already a very successful money manager. His wife, Eileen, said to him, she wanted to get him a Lexus, I think. It made him really uncomfortable. He was really uncomfortable driving it at first. But he said he saw how much joy gave her to give him the car, and so he got it. So, there are deep principles for how to behave and how to live, that Arnold just embodies.
There's something lovely about the fact that at some level, he's simpler in the way that he speaks about these things than some of the most brilliant minds in the book. But I feel like there are certain things that he says in the book, where I'm like, that's deep wisdom. There's a sense that he's a profoundly wise human being. For me, there are aspects of everyone in this book that I want to emulate that are eminently cloneable. But when I look at Arnold, I'm like, that's someone I really want to be like. He said to me a week or so ago, “I don't understand why you present me as the person you regard as the best role model in the book of all of the great investors you've met.” Even the way that he said that there's a deep humility to the fact that he couldn't believe that he would be held up as that.
When I explained it to him that it was partly because of his control over his mind and his thoughts and his emotions, partly because he gets so much joy and sharing with other people, he told me this wonderful story about a friend of his from high school-- he's now 81, and he's still best friends with his friends from high school, these three friends from high school. He's like, “Yeah, my friend was just saying, ‘you were always just really genuine even at high school.’” He told me this wonderful story about helping to repair this friend's car when he got smashed up when he was, I guess, a teenager. He said, “I got so much joy out of repairing his car with him.” They literally had to go to the scrap yard to get like a new fender or something. They had nothing, and they spray painted the car and fix it. He said, “You know what, I still have the photograph of that car, my friend next to it beaming after we fixed. I still have that photograph in my office.” Think of that, he's kept that photograph for probably 60 years, because it gives him such joy. That's a really beautiful human being, a really wonderful trait. I don't know, it's something to aspire to, to get that kind of sympathetic joy out of other people's happiness. That's an amazing gift to have that in life.
Bill: Well, and especially to come from where he came from, and to not turn into a bitter human being, but to be even a larger giver-- I don't know what he would have been in an alternative reality. I remember when we saw each other in New York at the MOI Global event, and here's a room of people that I respect from an investment perspective, and I saw a table sitting around somebody, and I went to sit down and I thought, “Oh, I'm going to hear some investment stuff.” And it was Arnold talking about life, and I was just completely enamored. There are some people that-- I don't know how to describe it, except for to say that there are some people who you can just tell have truly good souls. He was one of those guys that I just couldn't stop with listening to and admiring. He’s just an incredible human.
William: Yeah, and if you believe what David Hawkins writes in books like Power vs. Force, which I'm inclined to believe. I take David Hawkins very seriously, I read probably most of his books and they've had a big impact on me. He'll use the word ‘calibrate,’ Arnold will use the word ‘vibrate.’ You vibrate at a different level, as you become more loving, kinder, more compassionate, more truthful, more honest, more decent, more caring. The characteristics like anger and jealousy, just vibrate and calibrate at a much lower level. Hawkins’ terminology is that certain characteristics make or certain types of behavior make you go weak, and they make the other person go weak. Other types of behavior like truthfulness or kindness make you go strong, and people sense it. He did all this kinesiology stuff where he would measure the impact on your muscles of certain types of behavior. I don't know how replicable that is. I don't know if other people could do it. I don't know that it matters.
I think you find when you look at someone like Arnold, he embodies these characteristics, and it makes you go strong. I have this thing, literally it's on my wall here if I can look at it. It's a quote that I got from Power vs. Force when I glanced into it a few weeks ago. He said, “Wisdom can ultimately be reduced to the simple process of avoiding that which makes you go weak, nothing else is really required.” That's on a post-it near my desk, I have lots of post-its like this, where they suddenly catch my eye, and I'm like, “Oh, that’s interesting.” If you think about the things that make you go weak, curiously, those include things like guilt, which I often, as somebody who sort of looked at my characteristics and things, “Ooh, I don't much like that I need to change that.” I am inclined towards guilt and self-flagellation and remorse and stuff.
Bill: I like that too. I like to beat myself up. It's one of my favorite pastimes.
William: Yeah. What Hawking says is it actually things like guilt and shame calibrate, unbelievably low, way below the level of like 200, which is kind of his fulcrum, where things turn positive. What you're trying to do, whether this is metaphorical--
Bill: Shame is toxic stuff, that's some hard stuff to get over.
William: When you've done something that you're ashamed of, figuring out how to take responsibility for it, and when to let go of it, it's a very difficult thing. Part of what I’ve--
Bill: Can I just real quick-- I don't mean to cut you off. The thing about shame that I think is so insidious, is it's hard to even acknowledge. Almost by definition, how it manifests itself in me, it's almost hard to even talk to myself about, and because of that, it eats even deeper.
William: It’s one of your beautiful monsters that you want to work on, that you want to befriend. I think one of the reasons why I became close to Ken Shubin Stein, who I was mentioning before, the hedge fund manager turned neurologist, is that he had a terrible time during the financial crisis and more or less lost control of his fund, not really through any fault of his own, just because people-- he didn't have a gate, and people bailed out at the worst possible time. He felt a deep sense of shame, because he's a very candid, very honest person. We talked about it. I had the same thing, because I lost my job during the financial crisis, where I'd been editing the European Middle East and African addition of Time, and I got canned because they were moving all of the jobs back to New York, but not all, which made it even worse, because there was some people who survived, but I was really expensive and I did--
Bill: Yeah, you’d the one that didn’t make the cut, right?
William: Yeah.
Bill: That would be hard.
William: I'd had this very prominent job where I would get into presidents and prime ministers and the like, and I felt like kind of a big shot, and suddenly, I felt like this deep sense of shame and embarrassment and fear over the future. My industry is collapsing. I was living in London in a house that was paid for by Time. My kids were in private school paid for by Time. Suddenly, I'm like, “Where do I live? What do I do? What profession do I do? What if I can't take care of my kids?” This is one of the reasons I don't dismiss the idea that money is important, because the fact that I had no debt and the fact that I had saved money, and the fact that I didn't have to sell any of my investments, that I kind of knew that-- I mean, I'd survived five rounds of layoffs already, so I knew that we were always on thin ice as journalists. So, I had been fairly conservative in making sure that I would survive whatever came along. Still, it was a very painful and kind of shaming situation. I at least felt it.
I think Ken went through a similar sense, because Ken was someone who never really failed at anything. He was incredibly smart, good athlete, a doctor from a medical family, academic, taught at Columbia Business School. He just is a really, really smart accomplished guy who has about five degrees or something, very bright. For people like us, who'd been very successful suddenly to be laid low in a very public way, it's very hard to deal with. It is one of the reasons why I write about resilience so much in this book, about how you deal with setbacks and pain. I think these issues of shame over our own vulnerability or shame over our own failures, or shame over our own personal flaws, or things that we've done wrong, the ways that we've mistreated people, is a very important issue that I think it's very uncomfortable for most of us to deal with. For me, it was quite clarifying to read Hawkins and be like, “Oh, so actually, guilt and shame calibrate low.” What I really want to do, is as much as possible, flood the zone with things like compassion, kindness, love, mercy, self-compassion, not things that come easily to me.
There's another quote that I have on my wall here, that also is on the other wall, that's also from him, from Hawkins that begins, “Simple kindness to oneself, and all that lives is the most transformational force of all.” It goes on, it's an extraordinary quote, but that to me, was very hard to take in. I almost missed that. I start to think, okay, so simple kindness is to all this, is the most transformational force of all men, and then I'm like, “No, no simple kindness to oneself in all of this.” That's not something that comes naturally to me. That's something where I'm trying to rewire myself. When I look at someone like Arnold, who is able to take all of the anger, the victimization, and rewire himself, that gives me hope. There's a great Kabbalist called Rav Ashlag, who said that it's a spiritual law that any negative characteristic you have, you can transform, and my default position is to believe that anything Rav Ashlag says was just true, that he was just revealing truth. He was very, very extraordinary Kabbalist. I somewhat have that feeling when I read Hawkins, or when I read someone like Tsoknyi Rinpoche or his father, Tulku Urgyen Rinpoche, I'm not trying to be like a proselytizer for one particular path. I think one of the things that Arnold taught me is, he said, he would just go wherever the truth led him. He was perfectly happy. The book that he sent me or that I bought on his recommendation last week, seems to be by a priest. I don't think it matters where you're getting this wisdom, you want to go where the truth leads you.
I think in each of these parts, there are these very, very profound-- I was going to say thinkers, but I don't think-- it's different. My book is thought truth, I'm groping towards truth, and I'm trying to share things that I think are true that are approximately true that I've learned from people. I think then there are people like Rav Ashlag who are actually revealing truth, and it's not intellectually, it doesn't need to be argued.
Bill: Yeah. No, that makes sense to me that distinction. I like how your book is one that can spur these kinds of conversations. Then, also from an investment perspective, you highlight managers that did it through diversification, managers that did it through concentration. A lot of what I took from your book is what we've been talking about through this conversation, being true to oneself and executing a strategy that ultimately you can realize as the investor, as opposed to trying to put yourself in somebody else's box. I mean, I come from the Church of Berkshire, and I watched the Buffett clip where he says, like, “I would have 50% in my best idea.” I'm not him, and that doesn't mean just because I admire him, that doesn't mean that I have to force myself to do what he says he would do, because that would actually violate the fundamental principle that I think he's preaching, which is to be true to oneself. That's what I have really taken from Charlie and Warren is like, “Think for yourself and do what you need to do. Look in the mirror and be okay with it.”
William: Go back to that phrase, unobstructed self-expression. So, you have to be true to yourself but there's a great paradox here, because you're cloning people like Buffett and Munger and you're saying, “What did they figure out? What can I replicate?” But then, you're saying, “How do I clone in a way that's really true to who I am?” To having actually to take the best models in life, and the best insights and principles, and then know yourself well enough that you can take from this buffet. I think Mohnish is idea of going out on the truth variable as far as you can, as he puts it, just being really truthful, I think that's a really powerful idea. But as I say in the book, it may be there's more powerful to go as far out as you can on the kindness variable, but I don't know that I'm right. I think probably-- I don't know. I was going to say, I think it's probably tougher for me to go to-- I don't know. They're both a challenge to be truthful and to be kind, especially when we're in a bad state, it's hard. But what's your priority? I think you take these principles-- This is one of the reasons why Tom Gayner doesn't like the word ‘cloning,’ because he said it suggests that you're just mimicking.
Bill: Not thinking, yes.
William: Not thinking and he said what he was doing. It's interesting, because I actually think Tom is an incredible cloner and in some ways, Markel is a clone of Berkshire. But what Tom pointed out to me, which is the important nuance is that he was recombining what Buffett had figured out and applying it to his own circumstances and his own temperament. I think as with most of these truths, the truth is kind of simple, but then it's also paradoxical, like the opposite is also true. Yeah, clone like crazy, but also clone in a way that's true to who you are.
One of the things that I wrestle with in this book is that when you synthesize these things, and you distill them down to their essence, they can sound really simplistic, and quite banal and it's quite easy to-- what is living with a sense of quality really mean or what is trying to be more truthful mean, or what is trying to be kinder really mean or to share? It's very much like Munger’s description of investing ways, it’s simple, not easy. The concepts themselves are absolutely simple, but living by them is very hard. I write about this a lot in the chapter on Joel Greenblatt, where he's a master of simplicity. He says, really, after all these years of teaching, and investing and writing bestselling books about investing, and managing money brilliantly, what he figured out is, it all comes down to one thing, which is basically value an asset and buy it for much less than it's worth. That's it.
But then, all of the applications of that, and all of the different ways to do that, and the challenge of doing it, despite our own behavioral glitches and the pressures of the market, and our fear of missing out, and our intellectual blind spots, all of these things, and the difficulty of valuing things and the difficulty of predicting the future, predicting what cash flows will be down the road, all of these things make it incredibly difficult. But the insights and the principles themselves underlying these things are surprisingly simple, I think. One of the things that David Hawkins says is the truth is simple. If you really understand something as simple as the idea of Rav Ashlag, is that you're trying to transform the desire to receive the self alone into the desire to receive for the sake of sharing is a very, very simple idea, but it requires you to spend your life transforming, me, me, me, me, the ego, into something more sharing, which is what someone like Arnold Van den Berg I think has done.
Even those negative characteristics like fear and anger, and a sense of victimization, those are all about me. It's like, “Well, this person makes me feel this way.” So, part of letting go of that anger, the rage that he felt towards his parents, towards the Nazis, actually, that's a letting go of ego. One of the things that he did is he just said to himself over and over again, “I'm a loving person.” He really believed in the power of affirmations, he hypnotized himself. Then, he also told me this really wonderful story that transformed him that I tell in the book, where when he was about 16, he had no money at all. He was working incredibly hard to save up for a car so that he could take girls out on dates, so he was selling flowers on the street corner. He was such a good salesman, and he's a very charming guy. He was such a good salesman that he finally--
Bill: I could see that. He does have a way with-- the ability to communicate, right?
William: Yeah, what the English would call the gift of the gab.
Bill: Yeah. I bet he was a dapper dude back in the day.
William: He was handsome, I think.
Bill: Yeah, I bet he was smooth. Yeah. All right. I digress.
William: He was given the best street corner to sell on, I guess this must be in Los Angeles. On the day that he goes to sell these flowers, there is like this biblical storm, and it's just a deluge and he's just totally soaked. This woman is driving past, and he refuses to stop selling, and he's just can't believe his bad luck. Who wants to buy flowers on a day like that? And he's standing there by the side of the road selling his flowers. This stranger stops in her car and says to him, “You need to get out of the rain.” He's like, “No, no, I'm just going to keep selling, it's fine.” She says, “How much are these flowers? How much are they?” He tells her. She says, “How much for all of the flowers?” She buys all of the flowers so that he'll come out of the rain and says to him, “Get in my car, I'm going to take you and get your dry clothes.” She drives him to her home. She takes a dry sweater or shirt of her husband's and she makes him hot soup.
Basically, I tell this story in the book, but I don't tell it as fully. He said, “When somebody touches your heart like that, it changes your whole life.” He's never forgotten that woman. What I don't say in the book is-- maybe that it would get in the way, but also that I was doing it too slowly. He said, “She was not Jewish.” It was the first time he saw someone not Jewish do something so kind to him. Here he was a 16-year-old kid who’d come out of the Holocaust, full of this sense of rage and betrayal and victimization, totally naturally understandable. My family comes from the same background. He sees this act of kindness for no reason, just total kindness for no reason. He said that totally changed his life. There was a story that he's totally forgotten that I reminded him of recently, where one of the times that I interviewed him, he told me, “I was just in a line in, I think, was a phone store. There's this girl, and she's talking about how she's about to leave Texas for the first time ever,” because I think it was her brother-in-law cousin or her brother or something was graduating as a marine and she was going to celebrate. He took out $100 bill and said, “I want to give you this, so you can take him out for a meal and celebrate.” She's like, “I can't take this from you. You're a total stranger, how would I?” He's like, “No, no, it's a real gift for me to be able to give it to you.” She took it.
Sometimes, when he would do something like that, he would tell the person about the woman who bought the flowers. Here he is, 65 years later, transformed by an act of kindness by that woman. If you think about what we were saying before about, “I'm ashes and dust,” or “No, the whole world was created just for me,” that woman’s one act of kindness transformed the life of this extraordinary guy.
Bill: That's an incredible story.
William: And you know what's extraordinary? He went to give her a box of chocolates later in the week. He took multiple buses to get there. She was in her garden, she was talking over the fence to her neighbor. It was a really big deal for him to go give her the box chocolates. She was like, “Yeah, thank you,” and didn't want to talk to him. This is another of those things, like the complexity of life, like the person you want to lionize as having saved his life. He's like, “She just wasn't interested. She was just a really nice person. On the day, she bought all my flowers and took me out of the rain.” It complicates the story, and in a way makes it more beautiful, because she wasn't even aware of what she did to transform the life of this extraordinary young guy. Likewise, that 17-year-old girl who saved his life, by taking him out of hiding to an orphanage, she totally changed this guy's life. Actually, decades later, Arnold and that girl talk to each other. She survived and he survived. I don't think either of them knew that the other survived, and they ended up having a phone call, probably 10, 20 years ago, something like that, not that long ago. On the one hand, we're irrelevant and we're just ashes and dust. On the other hand, the way we behave, even these little things, like buying the flowers for the kid who is in the rain getting poured on, actually reverberates out over 65 years. That's kind of humbling and beautiful.
Bill: Indeed, it is. I'd love to keep going but I think that's a beautiful place to stop this particular conversation. I hope that you will come back and we can talk a little bit more about your career. Your career was amazing. I loved talking to you the first time, but we got lost in some important stuff there.
William: This was delightful.
Bill: Hopefully, you’d be willing to come back on the podcast sometime.
William: Anytime.
Bill: Where can people find you, and where can they get the book?
William: The book, you can get anywhere. It's called Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and Life. It came out on April 20th, so it's very new. Please write to me, let me know what resonates with you, because I feel like I'm on this journey with you. It's not like I'm super rich and super wise and super happy. Most of the time, I'm pretty happy. Thank God. I'm on this journey as well. If there's stuff that resonates and that you feel has helped you or if there are things you feel I should be reading or people I should be interviewing, let me know. I'm on Twitter @williamgreen72. You're welcome to visit my website, which is williamgreenwrites.com. You're welcome to connect with me on LinkedIn. If you message me on LinkedIn or Twitter, I tend to reply sometimes. I get a little overwhelmed with all the complexity of it all, but--
Bill: Yeah, he's not an emailer.
William: Well, as of this morning-- [crosstalk]
Bill: According to the current technical problems. [laughs]
William: I’ve been kicked off email because of some technological glitch or failure of mine, but yeah, keep in touch. I feel like we're all on this journey together, if we can help each other in different ways to figure things out and to find our way through the fog, it's very helpful. One of the things that I've really loved about this book process is that I found, I think, this tribe of people who were grappling with the same issues, as I am.
One of the things that really strikes me is, I think, most of us are trying to find a slightly more enlightened way to do capitalism. We're not just trying to line our pockets and behave in the most self-seeking way. One of the things I'm trying to do in the book is to highlight that there's a different way. I think Munger in his own way embodies it, Buffett embodies it, Nick Sleep, Tom Gayner, Arnold Van Den Berg. I hope that people look at these people and think, “Ah, yeah, it's not just that they won the game. It's the manner in which they won the game.” That's hugely heartening to think that there's a different way of winning the game, where it's not a zero-sum game, you win and you help others. I think that's part of what may be touched you in the chapter about Mohnish, is that he took his weird ability to sit alone in a room, quietly gathering information and waiting for a mispriced bet, and then took it to transform other people's lives. That's a wonderful model to take your talents, your very unique talents and use them in a way that helps other people, while also giving you a joyful life.
Bill: Yeah, no doubt. I've found the more that I give back, the more happy I am.
William: Yes, it’s this wonderful paradox, right?
Bill: Indeed. Thank you very much for joining me. Ladies and gentlemen, William Green. Now you know why I enjoyed talking to him for so long the first time we met and I enjoyed-
William: And why you almost missed your flight.
Bill: -[crosstalk] Yeah, that's true. All right. Well, take care and thank you very much. Good luck with the book release.
William: Lovely to see you. Thank you.
