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  • MALE SPEAKER: So today we're here

  • to talk about a special book.

  • This is a book that has lots of pictures, lots of profiles,

  • lots of wisdom in it.

  • And you just wish that when you're

  • reading this book that you didn't

  • have to pay as much as the sticker tag,

  • because it's prohibitively expensive.

  • But part of the reason is it's also a fantastic book.

  • It's a great book.

  • And we have the author of that book here with us today.

  • William Green has been writing about investing

  • and other topics for over two decades now.

  • And as you read the words in the book.

  • "The Great Minds of Investing," you

  • realize that he has tried to talk

  • about the wisdom of great investors,

  • but not restricted it to investing alone.

  • He's taken it beyond that.

  • And he's put it together in a very, very authentic voice.

  • I'm very honored and very happy that he

  • has decided to come here in person

  • and talk to us about his thoughts.

  • So without any further ado, ladies and gentlemen,

  • please join me in welcoming William Green.

  • [APPLAUSE]

  • WILLIAM GREEN: Thank you so much.

  • I'm delighted to be here.

  • And I'm so grateful to you all for taking time off

  • during your lunch break to come here.

  • And I'm actually particularly happy to be here

  • because I'm actually a shareholder in Google, or now

  • Alphabet.

  • And it's pretty much the only investment

  • that I've had over the last year or so that's done really well.

  • So keep it up.

  • My retirement is in your hands.

  • But I feel happy because I've rarely been in a room

  • where there are so many IQ points.

  • So thank you for all of your ingenuity and hard work.

  • When I was 15 years old, I became

  • obsessed with gambling, and specifically

  • actually with horse racing.

  • And at the time I was at this very posh English school,

  • a school called Eton College that had been founded, I think,

  • in 1440 by Henry the VI I think.

  • And this is a school where people

  • like Prince William and Prince Harry went

  • and the current British prime minister, David Cameron.

  • And so I was supposed to be becoming

  • this posh English gentleman, and instead I

  • would go off to gamble in this turf account

  • in this betting shop in Windsor, the neighboring

  • town next to Eton College.

  • And I actually had this illicit account because I was only,

  • I guess, 15.

  • So I had an account under a fake name,

  • which was Mike Smith-- not a very creative name.

  • And at first I did pretty well.

  • And I made some money, totally randomly.

  • It wasn't because I knew what I was doing,

  • although I think at the time I thought I did.

  • And then after a while, I sort of started to lose.

  • And I realized-- basically the reason

  • I had started in the first place,

  • it wasn't because I loved horses.

  • It wasn't because I thought this is an incredibly

  • beautiful sport or anything.

  • I just liked the idea that here was

  • something where you could make money just by using your mind.

  • And I was kind of lazy.

  • And I thought well, I don't want to mow lawns or anything.

  • And here if I can just sort of invest a little bit of money

  • on a horse race and make some money, that's fantastic.

  • And when I started to lose, I just thought,

  • I'm going to stop cold turkey.

  • And literally I stopped at the age of 16.

  • And I haven't had a bet on a horse race,

  • I haven't been to a casino and gambled in more than 30 years,

  • because basically it's a mugs game.

  • You're just losing.

  • You're just doomed to lose.

  • The odds, unless you're particularly brilliant at sort

  • of figuring out odds, you're just kind of doomed to lose.

  • And so I stopped completely.

  • And then when I got to my 20s, I discovered the stock market.

  • And then I thought wow, now this is what I was really after.

  • This is the real game.

  • Because again, this is somewhere where, if you're smart,

  • you can use your brain just to make money

  • without really getting your hands dirty in any way.

  • And I just thought this was magnificent.

  • Now I was very fortunate, you know, that-- thanks.

  • That was a very good move.

  • That was impressive.

  • I want to see that again if you could do it.

  • And then I was very fortunate in that I

  • was writing for these magazines back then

  • like "Forbes" and "Money" and later for "Fortune" and "Time."

  • And so I got to interview all sorts of famous investors.

  • So I would, for example, I would get

  • to interview Peter Lynch or Jeff Vinik who

  • was managing the biggest mutual fund in the world

  • when he was in his early 30s, or Seth Klarman or Marty Whitman,

  • Bill Ruane who ran the Sequoia Fund for many years,

  • some of these extraordinary investors.

  • And I would go off to Houston, for example,

  • and I'd meet Fayez Serofim, who is

  • this Egyptian multibilllionaire known as the Sphinx.

  • And he has an El Greco painting, a 430 year old El Greco

  • painting on one wall, a de Kooning on another wall,

  • and he's got this 5th century mosaic floor from Syria

  • that he's imported from a Syrian church.

  • And I became really fascinated by the fact

  • that there was this tiny minority of people

  • that managed to defy gravity by performing extraordinarily well

  • for many years as investors.

  • And I sort of figured, what if you could reverse

  • engineer these people and figure out why

  • it is that they win this game?

  • How do they stack the odds so that they win as investors?

  • What characteristics do they have

  • in terms of temperament, in terms of principles,

  • in terms of insights?

  • And is there any way that I could learn to do this?

  • Then over the last couple of years

  • I was working on this book, "The Great Minds of Investing,"

  • where I had this opportunity-- in the end I interviewed

  • I think 22 of these guys and I wrote

  • profiles of 22 famous investors and edited profiles of several

  • more.

  • And by this time, part of what happens

  • I think when you hit your 40s is that you

  • start to suffer from all sorts of existential angst.

  • So instead of just thinking, how do

  • I get rich by reverse engineering these people,

  • you start to think, well how do I live?

  • How do I make better decisions?

  • How do I eradicate what Charlie Munger would

  • call standard stupidities?

  • How do we make good decisions in the face

  • of a very uncertain future?

  • How do I handle adversity?

  • How do I handle pain?

  • How do I handle stress?

  • How do I balance my family, who are here-- so obviously not

  • very well-- my family, my work, all of these things?

  • And so the question really became how to live.

  • And so what I'd like to do today is to share four lessons that I

  • think are really-- they're very useful in terms of investing,

  • or at least three of them are.

  • And I think they will help to make

  • you richer over the long term.

  • But I actually think they're also very

  • important in terms of life.

  • And really it seems to me that the goal

  • is to reverse engineer these people to figure out,

  • how do I become richer?

  • How do I become smarter and wiser?

  • And how do I become happier?

  • And so I think these are lessons that

  • help you in each of these areas

  • And we're going to talk-- I've got these four things up here.

  • Hopefully you can see if the technology is working.

  • The first idea we're going to discuss

  • is the willingness to be lonely.

  • And what we're really talking about here

  • is this idea that you have to take

  • what Peter Bernstein, the market historian

  • once described as uncomfortably idiosyncratic positions.

  • That if you want to outperform, you

  • have to diverge from the crowd.

  • You have to be willing to be lonely.

  • And this has powerful implications

  • both in terms of investing and other areas of life.

  • The second idea we're going to discuss

  • is the power of humility, which as we'll see

  • is a somewhat contradictory idea.

  • You have to have the self-confidence

  • to go your own way, but you also have the humility to say yeah,

  • but what if I'm wrong.

  • And then you have to build in safeguards in case

  • you're wrong.

  • The third idea-- sorry for these gloomy titles.

  • My son Henry said to me, man, that's a real downer.

  • The third title is the ability to take pain.

  • But what we're really talking about here

  • is emotional resilience, which I have come to believe over

  • many years of covering investing is really

  • one of the absolute keys to long term success as an investor.

  • And what we're talking about with all of these people,

  • we're not talking about being great

  • as an investor over one cycle.

  • We're trying to achieve success over many decades.

  • And so you need this ability to take pain,

  • because there are going to be times when you're hit.

  • And this obviously also relates to other aspects of life.

  • The fourth topic, which is slightly more elevated

  • in areas, is the key to happiness, which it strikes me

  • that one of the things you really

  • want to learn from these great investors is how do I

  • not just become rich, but how do I make the money work for me so

  • that it's not just sort of a short circuit in my life,

  • but is actually something that enriches my life?

  • So the fourth section is really about what

  • you could call true prosperity.

  • And what we're really talking about with all of these things

  • is the ability to stack the odds in your favor

  • so that you're kind of tilting the playing field so

  • that the odds of having a successful life in all

  • of these different areas is increased.

  • So the willingness to be lonely-- back in, I'd say,

  • the winter of 1998, I got this fantastic assignment

  • to go interview Sir John Templeton.

  • And as many of you know, Templeton

  • was one of the greatest investors of the last century.

  • At the time he was 85 years old.

  • If you had invested in the Templeton growth fund,

  • over 38 years he compounded a rate of about 15% a year.

  • And as a result, your $10,000 would turn into $2 million.

  • And in fact his returns-- that doesn't really

  • reflect his returns because he was an extraordinary investor

  • really for about 60 or so years.

  • So he defines this ability to have great success

  • over a long period.

  • Now Templeton lived in this gated community

  • called Lyford Cay in the Bahamas, which

  • was a fascinating place.

  • He had decided early in his life he

  • was going to save-- he saved half of the money

  • that he made early in his career,

  • and then decided with his wife, we're

  • going to be able to live anywhere we want in the world.

  • And so they took a bunch of pieces of paper

  • and figured out that Lyford Cay was

  • the place-- Lyford Cay was a place where people like Prince

  • Rainier of Monaco lived.

  • The Aga Khan had a house there.

  • Sean Connery had a house there.

  • I think part of "Thunderbolt", the Bond movie

  • was filmed there.

  • So this was a pretty sweet gig to go in the middle of winter,

  • to go interview Templeton, this great guru at Lyford Cay.

  • And I remember as I came up to his house, there's actually,

  • as you walked along the porch of his house,

  • an electronic dog starts barking.

  • And I had this quandary whether I

  • should out him in this article as having

  • this fake security, which of course I did mention

  • in the article.

  • And so Templeton is kind of this giant

  • of this period, this 85-year-old who

  • is really the pioneer of international investing.