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Speaker 1: Welcome to How to Money. I'm Joel, I'm Matt, and

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Speaker 1: today we're talking the Tao of Warren Buffett with David Clark.

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Speaker 2: Yeah. So you don't need to be a personal finance whiz,

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Speaker 2: you don't need to be an investing nerd to know

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Speaker 2: that Warren Buffett is the goat, like truly when it

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Speaker 2: comes to investing. He is the greatest of all time,

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Speaker 2: which is why we are so pumped to be speaking

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Speaker 2: with David Clark. David is the co author of the

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Speaker 2: New Tao of Warren Buffetts, which is a collection of

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Speaker 2: some of the wisdom that Warren has dispensed over the

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Speaker 2: many esteemed years that he's been at it. David's been

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Speaker 2: a friend of the family for decades now. He has

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Speaker 2: some amazing insight as to what life has been like

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Speaker 2: for Warren. He's also an expert on war Warren's investment methods.

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Speaker 2: I think he's got something like ten books that he's

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Speaker 2: written in the Buffetology series. And so, David, we're excited

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Speaker 2: to have you joining us today to talk everything from

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Speaker 2: value investing to according to Warren, what it means to

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Speaker 2: live and lead a good life. Thank you for joining

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Speaker 2: us today on how to money.

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Speaker 3: Well, thank you for having me, David.

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Speaker 1: We're pumped for this conversation, especially as to you know,

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Speaker 1: Buffett's enthusiasts over here. I think there's a lot we're

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Speaker 1: going to enjoy in glean from this conversation. The first

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Speaker 1: question we ask everybody who comes on the podcast is

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Speaker 1: what do you like to sporgeh on? Because Matt and

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Speaker 1: I we like to splurge on good craft beer, but hey,

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Speaker 1: we're not doing it at the expense of our future selves.

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Speaker 1: We're still investing in being smart with our money too.

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Speaker 1: Maybe it's the equivalent of Warren's egg McMuffin. I don't

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Speaker 1: know that's what our craft heeer is, but so what

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Speaker 1: is that for you? What do you like to sporgeh

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Speaker 1: on books?

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Speaker 3: Buck splurge on books. I never hesitate to buy a book,

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Speaker 3: and no matter what the price, well sometimes I stop

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Speaker 3: at the price, but.

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Speaker 2: First edition expensive.

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Speaker 3: It's the one thing about Warren Buffett that a lot

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Speaker 3: of people kind of some people know about and some

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Speaker 3: people don't know about, is he's addicted to reading. He

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Speaker 3: reads a lot of books, and he reads them quickly,

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Speaker 3: and many many years ago there's an an aquarium bookstore

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Speaker 3: in town and they were the purveyor of his books,

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Speaker 3: and he would send them a list and they would

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Speaker 3: get informed. This is before Amazon and you could go

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Speaker 3: online and find things on eBay and things like that,

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Speaker 3: and it was amazing. He reads a lot of business biographies,

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Speaker 3: and I read a lot of business biographies, but he

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Speaker 3: also reads on science and history and a lot of

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Speaker 3: business books in general, and so I tended to follow

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Speaker 3: that route and other things as well. But I like

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Speaker 3: reading and he loves reading. And Charlie Munger that his

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Speaker 3: kids used to say that what he was was a

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Speaker 3: book and two legs sticking out. Well, yeah, books never

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Speaker 3: hesitates splurge, yes, definitely.

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Speaker 2: So speaking of kids, and I guess I kind of

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Speaker 2: want to go back to maybe some of Warren's early years. Sure,

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Speaker 2: whether it's like the pinball machine that he purchased and

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Speaker 2: ended up selling. I think he called that actually the

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Speaker 2: best business that he was ever in, Whether that or

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Speaker 2: maybe his paper route as a kid. Can you kind

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Speaker 2: of describe, for maybe folks who aren't as familiar with

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Speaker 2: Warren and his upbringing, what life was like for him.

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Speaker 3: Warren as a very young age was obsessed with making money,

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Speaker 3: and he is the kid with who would go around

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Speaker 3: and shine people's shoes. He's a kid who he would

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Speaker 3: buy a six pack of coke and take them and

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Speaker 3: sell them door to door for a nickel apiece and

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Speaker 3: get them for like, you know, fifteen cents for a

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Speaker 3: six pack, and one run around selling them. He was

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Speaker 3: obsessed with making money. It's all he thought about. And

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Speaker 3: he was obsessed with getting rich very very early age.

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Speaker 3: And he got into many sort of business and ventures,

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Speaker 3: you know, childhood business adventures. And one of them was

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Speaker 3: he had a paper route that he made money on.

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Speaker 3: But he also, i want to say thirteen or fourteen,

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Speaker 3: he would write down to the local racetrack and he

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Speaker 3: printed up a sheet of paper and he called it

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Speaker 3: the stable Boy's Picks, And he learned how to bet

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Speaker 3: on on horses, and he learned how to do odds,

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Speaker 3: and he would be down there selling the Stable boy

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Speaker 3: Picks newsletter he had and he would do that those

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Speaker 3: kinds of things. And then one of those business ventures

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Speaker 3: was he bought a pinball machine and they convinced some

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Speaker 3: barber to put it in and they came back and

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Speaker 3: they found like fifteen dollars in it, and they thought

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Speaker 3: they invented the will and then they ended up owning

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Speaker 3: a couple of pinball machines, so they get early gaming business.

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Speaker 3: And he really didn't want to go to college, but

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Speaker 3: his dad sort of forced him into going. So those

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Speaker 3: were his early adventures business.

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Speaker 1: Is this like the did he just come out of

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Speaker 1: the womb like this or was this something that was

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Speaker 1: instilled in his family or did he meet somebody early

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Speaker 1: on who was incredibly influential. Can you, like, do you

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Speaker 1: have any idea where the roots come of that come from?

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Speaker 3: I think he hit it right on the head when

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Speaker 3: you said he came out of the womb trying to

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Speaker 3: make money and he was obsessed with it. I'll tell

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Speaker 3: you where it comes from. I'm Mary and I are

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Speaker 3: slowly working on a biography. It's called about him. It's

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Speaker 3: called Warren Buffett Tight in a Wall Street Volume one Millionaire,

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Speaker 3: Volume two Billionaire. He was born on the eve of

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Speaker 3: the Great Depression nineteen twenty nine, and he was born

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Speaker 3: into a world when there was no money and everybody

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Speaker 3: was struggling to find money, and that's where he got

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Speaker 3: his drive. No money was a worry in his family,

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Speaker 3: and it was a worry in everybody's family during the

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Speaker 3: early days of the Great Depression, and he was raised

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Speaker 3: in that, and I'm sure on some sort of deep

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Speaker 3: psychological level it was driven in him that if he

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Speaker 3: made money, he would save his family or something like that,

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Speaker 3: and they lived what you would call back then would

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Speaker 3: be a middle class lifestyle, but it was not. You know,

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Speaker 3: there was no mansion. That was a small house. And

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Speaker 3: his dad had been a stockbroker before the Great Depression

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Speaker 3: of the nineteen twenties, and then he lost everything and

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Speaker 3: they had to struggle to get it back. And so

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Speaker 3: there's that narrative in his early life. It shows up,

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Speaker 3: and I'm sure it drove a lot of people that way.

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Speaker 3: You talk to people who grew up in the Depression.

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Speaker 3: There's not many of them left, but they all talk

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Speaker 3: about the struggles with money and the struggles of making

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Speaker 3: ends meet, and families living with other families because they

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Speaker 3: couldn't find jobs and things like that, and that probably

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Speaker 3: drove his early childhood.

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Speaker 2: Yeah, I got to think, So I got to think

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Speaker 2: some of those some of those formative years, I mean,

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Speaker 2: they're just that, and they can kind of shape who

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Speaker 2: you are and what it is that you pursue. So, David,

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Speaker 2: can we go from I guess the early years of

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Speaker 2: Warren to how it is that he learned about investing specifically,

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Speaker 2: can you talk about value investing, what it entails and

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Speaker 2: why it has been Warren's strategy for so many years

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Speaker 2: and decades Now, Well, his.

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Speaker 3: Obsession with money took him to the library and he

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Speaker 3: decided he'd read every quick rich book he could find

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Speaker 3: on making money, and he read them all. And this

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Speaker 3: is the old library in downtown Omaha, which is one

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Speaker 3: of those Carnegie libraries and very big and very you know,

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Speaker 3: built out of stone and brick, like the.

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Speaker 2: Kind of library you think of when you think of

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Speaker 2: the first Ghostbusters.

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Speaker 3: Yes, definitely. And he ran all and get rich quick books.

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Speaker 3: And then he started looking at stock books. And his

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Speaker 3: dad was a stockbroker, so then he started reading stock

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Speaker 3: books and he got heavily into it. Then he where

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Speaker 3: do you go? He went off to Warden's to business school,

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Speaker 3: he hated. He went off to Penn and he hated it,

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Speaker 3: and he came back and went to the University of Nebraska.

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Speaker 3: And while he was at the University of Nebraska, he

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Speaker 3: read a book called The Intelligent Investor, which was written

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Speaker 3: by Benjamin Graham. And Benjamin Graham was like one of

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Speaker 3: the early hedge fund managers in New York City, and

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Speaker 3: we're talking in the nineteen twenties, and he was friends

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Speaker 3: with Bernard Baroke, who was a famous investor, and he

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Speaker 3: was sort of they called him the Dena wall Street

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Speaker 3: and he taught at business school at Columbia University in

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Speaker 3: New York City. Anyway, Warren read this book called The

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Speaker 3: Intelligent Investor, and basically it's a book of it basically

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Speaker 3: says this. It says, the market often undervalues great businesses,

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Speaker 3: just as it often overvalues businesses, and you want to

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Speaker 3: be looking for the ones that are undervalued. At that period,

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Speaker 3: which was in the nineteen fifties, there were still companies

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Speaker 3: that were undervalued from the Great Depression, believe it or not.

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Speaker 3: And what happened in the Great Depression it drove the

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Speaker 3: stock prices down to nothing. And as things started to

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Speaker 3: come back up through the forties and into the fifties,

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Speaker 3: there were still many, many companies that never came back

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Speaker 3: up because people didn't want to own stocks. And Benjamin

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Speaker 3: Graham was highly skilled at looking for them, finding them

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Speaker 3: and investing in them. And that's what Warren did as well.

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Speaker 3: There was no internet and you had to do your

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Speaker 3: own investigations, and Warren was very skilled at that. Anyway,

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Speaker 3: he read it when he was in college, was really

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Speaker 3: really taken by it, and then when he went to

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Speaker 3: go to graduate school he ended up going to Columbia

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Speaker 3: where Ben Graham was his professor.

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Speaker 1: It makes me think too, You're talking about him having

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Speaker 1: to dig in and do the investigating to see which

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Speaker 1: companies were undervalued so that he could, you know, make

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Speaker 1: those smart investments. It makes me think of like writing

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Speaker 1: a book report when I was a kid versus my

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Speaker 1: kids having to write a book report, and how easy

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Speaker 1: it is with the Internet. Do you think the but

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Speaker 1: that ease the Internet essentially making information accessible to all instantaneously,

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Speaker 1: does that make it more difficult to be a value

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Speaker 1: investor these days?

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Speaker 3: That's a really interesting question. I like that question. In

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Speaker 3: some ways yes. In some ways yes, because in the

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Speaker 3: in the old days, you had to be an analyst

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Speaker 3: to go look and find these companies and get the

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Speaker 3: research reports, and you know, you'd have to get the

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Speaker 3: animal reports. You just couldn't get on the internet and

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Speaker 3: click away and pull up an SEC ten K or

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Speaker 3: something like that in ten seconds. Or you know, you

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Speaker 3: can go shopping for companies and you could read about

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Speaker 3: ten companies tonight if you wanted to. He had to

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Speaker 3: find the companies, and then he had to get the reports,

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Speaker 3: and then he'd have to read them, and then he

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Speaker 3: had to figure out what it was worth. Now, back

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Speaker 3: in his day, they had Moody's, which was Moodies developed

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Speaker 3: the investment manuals, mostly for bonds, because a whole lot

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Speaker 3: of bund understand, the bond business was enormous and always

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Speaker 3: has been enormous, and you would look for he would

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Speaker 3: thumb through the Moody's Investment Manual and he once said,

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Speaker 3: they said, how did you get so knowledgeable? He said,

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Speaker 3: you get the Moody's Investment Manual, which is about, you know,

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Speaker 3: maybe twenty five hundred pages long, or you know, there's

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Speaker 3: multiple ones of them. And he says, you start at

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Speaker 3: A and you go all the way to Z and

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Speaker 3: you just keep reading.

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Speaker 1: And most people can't bear to read twenty five hundred

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Speaker 1: pages of this.

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Speaker 3: Yeah, and that's what his obsession was. It's amazing what

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Speaker 3: he knows, and it's amazing the companies he knows. And

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Speaker 3: you could say to him you know some iron company

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Speaker 3: in Wisconsin, he know about it. Pain company that was

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Speaker 3: publicly traded in Chicago, he know about it. And it's

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Speaker 3: amazing what he knows and remembers. Yeah, he's got a

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Speaker 3: phenomenal memory too. He's a really, really, really bright guy

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Speaker 3: on top of it.

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Speaker 2: Yeah, you had to be an incredible analyst to kind

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Speaker 2: of find that edge, and so it takes a whole

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Speaker 2: lot of work. But do you think that there's a

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Speaker 2: difference between Warren's pursuits and some of that natural talent

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Speaker 2: that he had as opposed to what most normal folks

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Speaker 2: should be doing when it comes to their investments, Like

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Speaker 2: this makes me think of when he's just like, yeah,

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Speaker 2: you know, for most folks out there, they should be

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Speaker 2: investing in the S and P five hundred VU specifically,

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Speaker 2: And that one's always stuck with me ever since I

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Speaker 2: read that quote. Then this is years ago. Do you

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Speaker 2: think a lot of folks should they be taking that path?

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Speaker 3: Right?

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Speaker 2: Should they be doing as Warren says, not necessarily as

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Speaker 2: he does, I would.

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Speaker 3: Say yes, for most people. Yeah, it's unless you want

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Speaker 3: to go into the world to be an analyst. And

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Speaker 3: there's still wonderful there are wonderful events that happen. Warren

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Speaker 3: Buffett is a man waiting for something bad to happen,

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Speaker 3: and he's very patient about it. He doesn't have to

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Speaker 3: predict when it happens. Like a black Swan event, you

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Speaker 3: don't have to predict it. You just have to know

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Speaker 3: some day it's going to show up. And he's right

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Speaker 3: about that. It shows up and when it beats security

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Speaker 3: prices down. He's in there looking at what is a

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Speaker 3: bargain buy and not always so much a bargain but

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Speaker 3: a fair buy, because there are wonderful companies that never

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Speaker 3: become bargain buys, but they do often become fair buys,

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Speaker 3: and through like the pandemic, created buys two thousand and

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Speaker 3: eight created a ton of them. And you know it's

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Speaker 3: open season when that happens for him because he comes

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Speaker 3: into it with a lot of cash.

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Speaker 1: You could maybe even classify it like some of his

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Speaker 1: Apple buys in that fair price. It's not like this

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Speaker 1: bargain basement deal, right, But he kept investing in Apple

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Speaker 1: even though Apple was the most valuable company in the world,

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Speaker 1: because he thought it was still a fair price.

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Speaker 3: Correct and it was a fair price.

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Speaker 1: What about like where market evaluations are right now, David, Like,

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Speaker 1: there are a lot of banks out there, investment banks

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Speaker 1: are saying, oh, the market overheated, even some of the

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Speaker 1: vanguards of this world thing. When you're thinking about, you know,

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Speaker 1: expectations for returns over the coming decade, don't get your

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Speaker 1: hopes up, Like, how does he think about investing given

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Speaker 1: kind of specific market conditions.

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Speaker 3: Well, this market is high, and you're looking for a

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Speaker 3: quality company at a fair price. And in this market

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Speaker 3: you're not going to find a quality company at a

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Speaker 3: fair price. But something weird might show up. And this

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Speaker 3: kind of market in a down market is much easier

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Speaker 3: to find it. But things do show up because companies

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Speaker 3: individually have problems and odd things happen, and it creates opportunity.

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Speaker 3: It's just not as much opportunity as like in a

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Speaker 3: pandemic or a two thousand and eight kind of situation.

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Speaker 3: I have to take you back in time for a minute.

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Speaker 3: In the late sixties, the market was roaring like this

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Speaker 3: one was, and Warren woke up one day. He had

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Speaker 3: a hedge fund, and he woke up one day and

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Speaker 3: he said, I can't find anything to buy. And he

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Speaker 3: told his investors, I don't want to go to a

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Speaker 3: different strategy, and I'm just going to quit. And he

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Speaker 3: folded up his hedge fund and took his money and

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Speaker 3: he sat on it and as he said, I sat

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Speaker 3: on it for years, and you know, this is the

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Speaker 3: late sixties. And he sat on it until I think

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Speaker 3: it was seventy three seventy four, and there was suddenly

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Speaker 3: a market crash and he said, you know, I woke

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Speaker 3: up and there I was. You know, I woke up.

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Speaker 3: It was like I was an over sex man who

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Speaker 3: woke up in the middle of a harem. And he said,

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Speaker 3: everything was selling dirt and I had all this cash.

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Speaker 3: And Charlie Munger, who had a hedge fund during that period,

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Speaker 3: lost his investors half their money in the seventy three

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Speaker 3: seventy four crash. He regained it over the next three

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Speaker 3: or four years, but as he said, it was like

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Speaker 3: the most horrible woman in his life. Where Warren walked

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Speaker 3: into seventy three seventy four loaded with cash, today Berkshire's

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Speaker 3: loaded with cash, which tells you Warren thinks that somewhere

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Speaker 3: and then not too distant future, there's going to be

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Speaker 3: some kind of correction on the downside. Dramatic and it

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Speaker 3: will be an opportunity for him to buy.

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Speaker 2: And that makes sense, right if you are a hedge

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Speaker 2: fund manager. For most folks listening who are just looking

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Speaker 2: to dollar cost average into their fore one case, sure,

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Speaker 2: I mean we say to not time the market, you know,

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Speaker 2: so like on one hand, you've got Warren who's always

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Speaker 2: waiting for an opportunity to you know, to snatch up

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Speaker 2: the next deal. And then on the other hand, it's

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Speaker 2: just like, hey, just keep investing no matter what, just

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Speaker 2: keep buying. Is there any overlap there or do you

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Speaker 2: feel that these two sort of schools of thought when

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Speaker 2: it comes to the average investor as opposed to like

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Speaker 2: the greatest investor of all time? Are those mutually exclusive in.

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Speaker 3: Some ways yes, in some ways no. And I think

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Speaker 3: we talked about this. This is in the book. You

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Speaker 3: would sit on your cash and then buy the S

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Speaker 3: and P five hundred and in a down market and

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Speaker 3: not go in and like, you know, buy an index

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Speaker 3: fund in a down market as opposed to averaging it

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Speaker 3: in all the time. So there would be periods you'd

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Speaker 3: be sitting on cash in periods you would be buying.

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Speaker 3: The problem with that analysis is that when things start

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Speaker 3: going down, people freak out, and they freak out, and

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Speaker 3: even though they're sitting on a lot of cash, they

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Speaker 3: hoard it. And my own personal solution to that is

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Speaker 3: is that I just make myself allocate. And it goes down,

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Speaker 3: I allocate twenty percent in. It goes down again, I

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Speaker 3: allocate twenty percent in. And if it starts going up

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Speaker 3: and I've only gotten forty percent of the market, it

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Speaker 3: still turns out well. And so I work it like that.

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Speaker 3: So you you don't get in the market goes down

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Speaker 3: and you get in, and let's say you put all

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Speaker 3: your money in, and then it keeps going down, you know,

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Speaker 3: then you go throw up your lunch. You know, you

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Speaker 3: think in those terms and stockpile your cash. And when

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Speaker 3: things go bad, and things do go bad, not almost

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Speaker 3: on a regular basis, frankly, then you go looking for

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Speaker 3: things to buy. You know, I look for companies, But

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Speaker 3: you could just put your money in this and P

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Speaker 3: five hundred. I have a friend who's done really, really

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Speaker 3: well doing that over the years. He hoards up on

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Speaker 3: cash and things go to hell, he just goes in

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Speaker 3: and buys he has and P. Five hundred buys an

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Speaker 3: index fund and he's become fairly rich. I mean rich

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Speaker 3: and in the context of investment rich, which is, you know,

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Speaker 3: tens of millions of dollars.

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Speaker 1: So, yeah, what do you think, David, from a perspective

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Speaker 1: of what it takes to become wealthy? Some people would say, Oh,

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Speaker 1: I wasn't born on third base. I don't have like

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Speaker 1: tens of thousands much less. You know, maybe I've only

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Speaker 1: got a few thousand dollars a year that I can

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Speaker 1: be investing. And Warren Buffett, it seems like he doesn't

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Speaker 1: think you need tons of money in order to build

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Speaker 1: wealth in this country. Do you agree with him?

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Speaker 3: Yeah? Completely. I started with nothing, and I started with

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Speaker 3: nothing and got something and then invested in and for

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Speaker 3: many years the main source of income was investing. And

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Speaker 3: I live frugally like he did. I mean, he was

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Speaker 3: a multimillionaire driving around in a Volkswagen bug You know

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Speaker 3: what that is? Oh? Yeah, okay, they're still cool.

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Speaker 2: We grew up playing punch buggy David.

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Speaker 3: Okay, And he still lives in the same house he

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Speaker 3: bought when he came back from New York City. But

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Speaker 3: you go into the early numbers on Warren Buffett and

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Speaker 3: you're not talking a millionaire. You're talking about a guy

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Speaker 3: with you know, like fifteen thousand dollars and twenty thousand

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Speaker 3: dollars and and things like that. And he started managing

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Speaker 3: people's money when he What happened is he got out

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Speaker 3: of business school. He came back to Omahaa Rasca, worked

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Speaker 3: as a stockbroker. Finally got kept writing Benjamin Graham saying,

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Speaker 3: you know, I'd like to come work for you, and

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Speaker 3: Ben kept saying no, no, no, no no, and Warren said, well,

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Speaker 3: I'll work for free. Da da da da da, And

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Speaker 3: finally Ben said, okay, you can come work for me.

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Speaker 3: And two years after Warren went to work for him,

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Speaker 3: Ben decided to retire. But he started with a small

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Speaker 3: amount of money and he just kept growing it. And

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Speaker 3: that's how I did it. And then he started managing

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Speaker 3: people's money. And that's like the magic formula if we're

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Speaker 3: getting super rich, is managing other people's money. But you

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Speaker 3: can make yourself a millionaire over time. And you're not

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Speaker 3: going to do it overnight, but you can easily do it. Yeah.

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Speaker 2: Okay, So, speaking of Warren Buffett living in the same house,

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Speaker 2: we've got more to get to. We're actually we might

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Speaker 2: even be able to talk something about crypto, talk about

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Speaker 2: a little more about McDonald's as well. We've got more

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Speaker 2: to talk to with David Clark about Warren Buffets.

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Speaker 1: We'll get to all that right after this. All right,

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Speaker 1: we're back from the break. We're still talking with David Clark.

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Speaker 1: We're talking about Warren Buffett and the newly updated The

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Speaker 1: Tao of Warren Buffett book.

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Speaker 3: I want to talk.

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Speaker 1: More, dig in a little bit more on Warren's frugality, David,

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Speaker 1: And I think that is kind of People think of

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Speaker 1: it as quirky, but it really is quirky. I guess

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Speaker 1: when you think of somebody with that amount of money

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Speaker 1: being as frugal as Warren Buffett, is the fact that

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Speaker 1: he pinches pennies when those pennies are essentially insignificant, like

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Speaker 1: he famously eats at McDonald's mornings. He seems frugal to

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Speaker 1: the extreme right given his net worth, but he also

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Speaker 1: encourages people to enjoy their money. So how what would

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Speaker 1: you say like his ethosubfrugality.

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Speaker 3: Is having witnessed it over the years. In the early days,

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Speaker 3: he was a big believer of compounding interest and Mary

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Speaker 3: has this great story where he's in an elevator and

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Speaker 3: he sees a penny on the floor and he picks

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Speaker 3: it up and he goes the beginning of my next million.

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Speaker 3: The feudality he believed strongly in that. He his wife

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Speaker 3: went and bought a new carpet once and he came

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Speaker 3: back and it was home, and he goes, you have

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Speaker 3: no idea how much money I won't make because you

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Speaker 3: bought carpet. And I mean, it was that obsessed. And

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Speaker 3: he saw everything in terms of compounding. And if you

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Speaker 3: take a penny and you double it like thirty two times,

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Speaker 3: you know, you keep doubling it over and over and over.

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Speaker 3: You know, it ends up a fabulous sum of money.

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Speaker 3: And that's how he saw it. He just saw it

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Speaker 3: in that context. He didn't see it as today. He

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Speaker 3: saw it as you know, twenty thirty years down the line.

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Speaker 3: And for that reason, he was very, very cheap and

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Speaker 3: very tight with his money. And he lived and he

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Speaker 3: lived in Omaha, which was fairly inexpensive to live, and

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Speaker 3: he lived in what was I mean, he was worth

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Speaker 3: forty million dollars and he's living in basically it would

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Speaker 3: be considered an upper middle class neighborhood. Our middle class neighborhood.

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Speaker 3: To this day he lives in a house like that.

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Speaker 2: So as I hear you say that, like, on one hand,

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Speaker 2: you can think, oh, it sounds like he's incredibly content

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Speaker 2: with where he is. But what I hear you saying

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Speaker 2: more is that it's less of like contentedness, and perhaps

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Speaker 2: it's more, like you said, more of like that cheapskate mentality,

434
00:23:53,880 --> 00:23:56,399
Speaker 2: where he's looking ahead to the future and knowing what

435
00:23:56,440 --> 00:24:00,320
Speaker 2: that could turn into, and therefore he's sacrificing in the

436
00:24:00,359 --> 00:24:02,719
Speaker 2: here and now. So if you disagree with that, let

437
00:24:02,720 --> 00:24:04,840
Speaker 2: me know. But that's what I'm hearing you say. But

438
00:24:04,920 --> 00:24:07,480
Speaker 2: as he has gotten older, has he kind of come

439
00:24:07,520 --> 00:24:11,879
Speaker 2: to terms with that where you're forsaking the present for

440
00:24:12,000 --> 00:24:14,560
Speaker 2: the future. But I think as you get a little

441
00:24:14,600 --> 00:24:18,159
Speaker 2: bit older, I'm curious if that sort of changed his

442
00:24:18,200 --> 00:24:18,840
Speaker 2: tune a little bit.

443
00:24:19,600 --> 00:24:21,639
Speaker 3: I think it did change his tune, and it shows

444
00:24:21,720 --> 00:24:23,720
Speaker 3: up in some of the things he says, and he

445
00:24:23,760 --> 00:24:26,040
Speaker 3: says them at the annual meeting. He says things like,

446
00:24:26,480 --> 00:24:29,960
Speaker 3: being frugal is smart when you're young, but you shouldn't

447
00:24:29,960 --> 00:24:33,440
Speaker 3: deny your family, you know, fun things like take them

448
00:24:33,440 --> 00:24:37,480
Speaker 3: to Disneyland and education and things like that. Which he

449
00:24:37,960 --> 00:24:41,960
Speaker 3: never denied his kids anything that they needed in the

450
00:24:42,000 --> 00:24:45,520
Speaker 3: way of that. However, he didn't spoil any of them,

451
00:24:46,040 --> 00:24:48,639
Speaker 3: and they all grew up, you know, wanting things that

452
00:24:48,680 --> 00:24:52,080
Speaker 3: they didn't get. And however, when it came to education

453
00:24:52,200 --> 00:24:54,560
Speaker 3: or something like that, he wouldn't hesitate to spend money.

454
00:24:55,119 --> 00:24:59,560
Speaker 3: But no, he was tight and tight for a long

455
00:24:59,600 --> 00:25:02,320
Speaker 3: long time and it just went on and on and

456
00:25:02,359 --> 00:25:03,359
Speaker 3: on with him.

457
00:25:03,359 --> 00:25:07,000
Speaker 1: You've used the word obsessed or obsession a lot, yeah,

458
00:25:07,040 --> 00:25:09,320
Speaker 1: And I think like you're really pointing kind of at

459
00:25:09,320 --> 00:25:12,240
Speaker 1: the root of something with Warren, is this kind of

460
00:25:12,720 --> 00:25:17,160
Speaker 1: obsession with compounding and that that maybe kind of took

461
00:25:17,160 --> 00:25:19,560
Speaker 1: over his brain in a certain way, and then it

462
00:25:19,600 --> 00:25:22,800
Speaker 1: became the lenses in which he saw everything through. And

463
00:25:23,359 --> 00:25:26,240
Speaker 1: it seems like too, though, that he loves his work

464
00:25:26,359 --> 00:25:29,639
Speaker 1: right so that even having a certain amount of money

465
00:25:29,640 --> 00:25:32,480
Speaker 1: where he never had to worry about money ever again

466
00:25:32,680 --> 00:25:37,399
Speaker 1: for him, for his progeny, he's still like, hasn't really

467
00:25:37,760 --> 00:25:41,560
Speaker 1: changed his work ethic or his desire to kind of

468
00:25:41,680 --> 00:25:45,080
Speaker 1: be at the office most days. Is so, is that

469
00:25:45,359 --> 00:25:48,639
Speaker 1: just because he's in love with the idea of what

470
00:25:48,680 --> 00:25:50,960
Speaker 1: he does and with what his pursuits.

471
00:25:51,680 --> 00:25:54,360
Speaker 3: He talks about that he talks about being in love

472
00:25:54,400 --> 00:25:57,600
Speaker 3: with what he does, and he shows that he's in

473
00:25:57,640 --> 00:26:00,399
Speaker 3: love with what he does. Well, let me in on

474
00:26:00,440 --> 00:26:03,280
Speaker 3: something else. People say he doesn't spend his money, But

475
00:26:03,320 --> 00:26:06,800
Speaker 3: here's a guy who's I see him mostly as a

476
00:26:06,840 --> 00:26:10,119
Speaker 3: collector of great businesses, and he does never hesitates to

477
00:26:10,160 --> 00:26:13,760
Speaker 3: write a check for billions of dollars. And in the

478
00:26:13,800 --> 00:26:16,399
Speaker 3: early days, he went hesitate to write a check for

479
00:26:16,520 --> 00:26:20,520
Speaker 3: millions of dollars if he was buying a business. If

480
00:26:20,520 --> 00:26:22,359
Speaker 3: it came to buying carpet for the house, that was

481
00:26:22,400 --> 00:26:26,760
Speaker 3: another story I mean, and it's separated in his head

482
00:26:26,880 --> 00:26:30,280
Speaker 3: like that. I see him mostly as a collector and

483
00:26:30,400 --> 00:26:33,920
Speaker 3: a man who's out collecting things, and if he sees

484
00:26:34,000 --> 00:26:36,520
Speaker 3: value in it, he'll spend the money, and if it

485
00:26:36,640 --> 00:26:40,120
Speaker 3: becomes overvalued, he'll sell it and go on and buy

486
00:26:40,119 --> 00:26:44,680
Speaker 3: something else. He's very he doesn't hesitate to sell either

487
00:26:45,200 --> 00:26:47,840
Speaker 3: if he thinks it's overvalued or he thinks that he

488
00:26:47,880 --> 00:26:50,520
Speaker 3: could put the money to use somewhere else. He doesn't

489
00:26:50,560 --> 00:26:53,600
Speaker 3: fall in love with something, he'll sell it, and that's

490
00:26:53,640 --> 00:26:58,480
Speaker 3: an interesting aspect of his life. But he never hesitates

491
00:26:58,560 --> 00:27:01,399
Speaker 3: to spend money if he's getting a good deal on

492
00:27:01,520 --> 00:27:04,880
Speaker 3: a business. He collects businesses. It's like a guy who

493
00:27:04,880 --> 00:27:08,600
Speaker 3: collects art our guy who clucts cars or something like that.

494
00:27:08,680 --> 00:27:10,000
Speaker 3: But it's completely different.

495
00:27:10,800 --> 00:27:14,240
Speaker 2: David, what is Warren's take on financial advisors? We're going

496
00:27:14,320 --> 00:27:16,320
Speaker 2: to take more of a turn towards personal finance. Do

497
00:27:16,359 --> 00:27:20,480
Speaker 2: you think that most folks need outside advice outside of

498
00:27:21,080 --> 00:27:23,160
Speaker 2: maybe the bits of wisdom that they're able to read

499
00:27:23,160 --> 00:27:24,200
Speaker 2: from Warren Buffett?

500
00:27:24,480 --> 00:27:29,159
Speaker 3: Most financial advisors are highly overrated, most of them. I

501
00:27:29,200 --> 00:27:33,439
Speaker 3: don't know how they're paid anymore. They take a percentage

502
00:27:33,440 --> 00:27:36,640
Speaker 3: of what you have, and then they do things like suggest, well,

503
00:27:36,680 --> 00:27:40,280
Speaker 3: we're going to split your portfolio. It's, you know, a

504
00:27:40,359 --> 00:27:43,080
Speaker 3: third in bonds and the rest in stocks. And now

505
00:27:43,080 --> 00:27:46,520
Speaker 3: we've got an idea of two years later, they're saying

506
00:27:46,520 --> 00:27:48,400
Speaker 3: we're going to put it all in bonds and then

507
00:27:48,440 --> 00:27:52,160
Speaker 3: in stocks and things like that, and Warren never liked them.

508
00:27:52,640 --> 00:27:56,159
Speaker 3: I don't like them. I think you're better off following

509
00:27:56,200 --> 00:27:59,879
Speaker 3: his strategy of investing in it an index fund and

510
00:27:59,880 --> 00:28:02,280
Speaker 3: a down market as opposed to using one.

511
00:28:03,119 --> 00:28:03,399
Speaker 1: Yeah.

512
00:28:03,520 --> 00:28:05,879
Speaker 3: I mean, if you have no idea what you're doing,

513
00:28:06,119 --> 00:28:08,640
Speaker 3: that would be the best strategy for you. And if

514
00:28:08,640 --> 00:28:10,680
Speaker 3: you don't know how to do that, then you maybe

515
00:28:10,680 --> 00:28:13,000
Speaker 3: you should have an investment advisor. Like if you came

516
00:28:13,040 --> 00:28:16,240
Speaker 3: into a lot of money and you seriously had no

517
00:28:16,320 --> 00:28:18,560
Speaker 3: interest in it at all, then you would be better

518
00:28:18,560 --> 00:28:20,080
Speaker 3: off with a financial advisor.

519
00:28:20,320 --> 00:28:23,679
Speaker 1: Talk to us about how Warren's take on cryptocurrency has

520
00:28:23,720 --> 00:28:27,240
Speaker 1: it evolved at all, because, like especially in the early days,

521
00:28:27,680 --> 00:28:31,359
Speaker 1: he didn't mince words. His late partner Charlie Munger also

522
00:28:32,240 --> 00:28:34,639
Speaker 1: didn't really have anything good to say about cryptocurrency. I

523
00:28:34,680 --> 00:28:39,320
Speaker 1: think he called it rat poison squared, so like immediate death.

524
00:28:39,520 --> 00:28:41,920
Speaker 1: I guess is what cryptocurrency is up from their point

525
00:28:41,920 --> 00:28:44,440
Speaker 1: of view? Is that still how Warren feels? And I

526
00:28:44,440 --> 00:28:47,080
Speaker 1: guess the meme coin space too, has gotten kind of

527
00:28:47,080 --> 00:28:49,200
Speaker 1: out of control in terms of how much money has

528
00:28:49,240 --> 00:28:52,840
Speaker 1: gone in there and how much money just normal average

529
00:28:52,840 --> 00:28:55,600
Speaker 1: investors trading from the comfort of their home have been

530
00:28:55,640 --> 00:28:58,200
Speaker 1: able to lose in that space through a lot of

531
00:28:58,560 --> 00:29:01,240
Speaker 1: kind of grift and Scamminess what's his take on that

532
00:29:01,240 --> 00:29:01,960
Speaker 1: space right now?

533
00:29:02,960 --> 00:29:07,479
Speaker 3: His take on cryptocurrency is that it doesn't make any money.

534
00:29:07,640 --> 00:29:12,800
Speaker 3: It's not a business. It's like in many ways, it's

535
00:29:12,880 --> 00:29:15,480
Speaker 3: kind of like cash. It's not a business. The problem

536
00:29:15,520 --> 00:29:17,560
Speaker 3: with cryptocurrency. You can't even put it in a bank

537
00:29:17,600 --> 00:29:21,440
Speaker 3: and ear an interest on it, so it's it doesn't

538
00:29:21,480 --> 00:29:25,480
Speaker 3: make any money. However, it is a medium of exchange,

539
00:29:25,520 --> 00:29:29,600
Speaker 3: and it's largely a medium medium of exchange and sort

540
00:29:29,600 --> 00:29:34,080
Speaker 3: of nefarious world. You know, it's kind of the underworld

541
00:29:35,120 --> 00:29:41,240
Speaker 3: medium of exchange, and crypto converts into dollars. There's an

542
00:29:41,400 --> 00:29:47,400
Speaker 3: argument for crypto that, you know, it's not like the

543
00:29:47,440 --> 00:29:51,000
Speaker 3: Federal Reserve Bank can't print more crypto and inflate it.

544
00:29:52,080 --> 00:29:56,400
Speaker 3: But nobody really understands. Nobody really knows how much crypto

545
00:29:56,480 --> 00:30:00,480
Speaker 3: there is, and nobody really understands how it's made. People

546
00:30:00,480 --> 00:30:04,520
Speaker 3: do understand, but the public doesn't. People speculate on it.

547
00:30:04,640 --> 00:30:08,720
Speaker 3: Now I just said the word speculation. So now you're

548
00:30:08,760 --> 00:30:12,960
Speaker 3: speculating on something that doesn't have any true inherent value,

549
00:30:13,160 --> 00:30:15,480
Speaker 3: and so the price goes up, the price goes down,

550
00:30:15,880 --> 00:30:19,600
Speaker 3: and that the gambling aspect of it creates a problem

551
00:30:19,640 --> 00:30:22,800
Speaker 3: of it someday going to zero and speculative and the

552
00:30:22,920 --> 00:30:25,360
Speaker 3: zero part is what Warren never liked about those kinds

553
00:30:25,360 --> 00:30:25,800
Speaker 3: of things.

554
00:30:25,880 --> 00:30:28,200
Speaker 2: Well, I mean, I think that gambling aspect of it,

555
00:30:28,200 --> 00:30:30,360
Speaker 2: that's what worries me the most when it comes to

556
00:30:30,440 --> 00:30:32,720
Speaker 2: how it is a lot of folks are investing these days,

557
00:30:32,800 --> 00:30:35,880
Speaker 2: especially folks maybe got into it four years ago when

558
00:30:35,920 --> 00:30:37,720
Speaker 2: all of a sudden they found themselves with more cash

559
00:30:37,760 --> 00:30:40,920
Speaker 2: on hand, whether it's because of stimulus checks or whether

560
00:30:40,920 --> 00:30:42,720
Speaker 2: it's because of the fact that they weren't going out

561
00:30:42,760 --> 00:30:46,800
Speaker 2: and blowing money at restaurants and bars anymore. And I

562
00:30:46,840 --> 00:30:49,400
Speaker 2: think for I can see an argument going back to

563
00:30:49,480 --> 00:30:52,160
Speaker 2: financial advisors. I think that's some of the value that

564
00:30:52,680 --> 00:30:55,440
Speaker 2: some of those advisors are able to provide is the

565
00:30:55,480 --> 00:30:58,800
Speaker 2: fact that, hey, there's some folks out there that don't

566
00:30:58,840 --> 00:31:01,680
Speaker 2: know one in from the other, and for them to

567
00:31:01,760 --> 00:31:04,320
Speaker 2: have somebody to essentially kind of coach them through making

568
00:31:04,360 --> 00:31:07,480
Speaker 2: worse decisions. It's less about the I guess maybe the

569
00:31:07,520 --> 00:31:11,360
Speaker 2: optimization of their investing dollars as opposed to keeping them

570
00:31:11,360 --> 00:31:12,960
Speaker 2: from losing it completely.

571
00:31:13,000 --> 00:31:14,840
Speaker 1: Does that make sense and probably better than getting their

572
00:31:15,040 --> 00:31:17,600
Speaker 1: investing advice on TikTok, which is where some people get

573
00:31:17,600 --> 00:31:18,200
Speaker 1: it these days.

574
00:31:18,360 --> 00:31:20,000
Speaker 3: Well, that's a really good point, and I like that.

575
00:31:20,120 --> 00:31:21,880
Speaker 3: Thank you for sharing that with me. I like that

576
00:31:21,960 --> 00:31:24,440
Speaker 3: a lot. Yeah, you're right, And for those people, an

577
00:31:24,440 --> 00:31:28,080
Speaker 3: investment advisor would add value to their lives and stop

578
00:31:28,120 --> 00:31:33,080
Speaker 3: them from doing from something highly speculative. Like again, in speculation,

579
00:31:33,200 --> 00:31:35,560
Speaker 3: you can make an enormous amount of money very quickly,

580
00:31:35,840 --> 00:31:38,200
Speaker 3: but you can also lose an enormous amount of money

581
00:31:38,280 --> 00:31:43,320
Speaker 3: very quickly, and that's a problem. And Warren wasn't about

582
00:31:43,360 --> 00:31:46,400
Speaker 3: getting rich over night. He was about getting crazy rich

583
00:31:46,440 --> 00:31:47,680
Speaker 3: over a long period of time.

584
00:31:48,320 --> 00:31:50,800
Speaker 1: Yeah, crazy rich over a long period of time. Yeah,

585
00:31:50,800 --> 00:31:52,720
Speaker 1: that would if you were looking for an alternative title

586
00:31:52,800 --> 00:31:55,920
Speaker 1: for the biography, that would be a good one too.

587
00:31:56,040 --> 00:31:59,000
Speaker 3: I like that. Yeah, thank you, that's good. See, I'm

588
00:31:59,040 --> 00:32:00,160
Speaker 3: getting things out of this.

589
00:32:00,000 --> 00:32:04,160
Speaker 2: This isn't a total waste of time, right, No, No, you're.

590
00:32:04,000 --> 00:32:05,280
Speaker 3: Giving me ideas. I like it.

591
00:32:05,280 --> 00:32:08,200
Speaker 1: It's fun talk to us about how Warren thinks about inflation,

592
00:32:08,760 --> 00:32:11,800
Speaker 1: because that's I think the normal average American in these

593
00:32:11,880 --> 00:32:15,320
Speaker 1: days would be like, man, inflation sucks. My groceries cost more.

594
00:32:15,640 --> 00:32:18,360
Speaker 1: Look at the cost of eggs and housing and insurance,

595
00:32:18,800 --> 00:32:22,800
Speaker 1: and it certainly feels like it's this tax on the

596
00:32:22,880 --> 00:32:25,719
Speaker 1: average person. But Warren would also say that there are

597
00:32:25,720 --> 00:32:27,560
Speaker 1: certain upsides to inflation too, right.

598
00:32:28,040 --> 00:32:32,240
Speaker 3: Well, the upside to inflation is that raises asset prices,

599
00:32:32,480 --> 00:32:36,200
Speaker 3: including stocks, and it's sort of like built in we

600
00:32:36,280 --> 00:32:40,880
Speaker 3: live in an economy that is basically perpetually in a

601
00:32:40,960 --> 00:32:45,360
Speaker 3: state of inflation, and it's built into the federal reserves

602
00:32:45,400 --> 00:32:48,200
Speaker 3: projections they want, like I don't know, what is it,

603
00:32:48,240 --> 00:32:51,160
Speaker 3: two percent inflation a year. And the reason they want

604
00:32:51,160 --> 00:32:57,560
Speaker 3: inflation is because the opposite, deflation destroys everything. You understand

605
00:32:57,560 --> 00:33:01,360
Speaker 3: that the banks are highly highly leveraged businesses and they

606
00:33:01,360 --> 00:33:05,280
Speaker 3: only have about ten percent equity behind them, and if

607
00:33:05,280 --> 00:33:09,000
Speaker 3: you had fifteen percent deflation, you would deflate their asset

608
00:33:09,120 --> 00:33:12,880
Speaker 3: values by fifteen percent. Technically, you would wipe out all

609
00:33:12,880 --> 00:33:14,400
Speaker 3: the equity value in a bank.

610
00:33:14,680 --> 00:33:16,920
Speaker 1: Like the scene from It's a Wonderful Life, Right, Everybody's

611
00:33:16,960 --> 00:33:19,120
Speaker 1: going to get their money, and they don't have all the.

612
00:33:19,040 --> 00:33:22,760
Speaker 3: Money, yes, exactly, and that is because the bank has

613
00:33:22,800 --> 00:33:26,720
Speaker 3: loaned out all the money, but now it's not worth

614
00:33:26,720 --> 00:33:29,520
Speaker 3: as much. So that kind of thing. So it's built

615
00:33:29,560 --> 00:33:34,280
Speaker 3: in inflation wise, and that lists security prices over time,

616
00:33:34,960 --> 00:33:37,600
Speaker 3: and it's you know, it doesn't happen overnight, but it

617
00:33:37,920 --> 00:33:42,600
Speaker 3: perpetual inflation for security prices, which helps your index fund

618
00:33:42,960 --> 00:33:46,920
Speaker 3: constantly rise over a long period of time. Understand there's

619
00:33:46,920 --> 00:33:49,959
Speaker 3: going to be gyrations in there, but it's kind of

620
00:33:50,000 --> 00:33:55,640
Speaker 3: built into our economy that investment stock prices will rise

621
00:33:55,680 --> 00:33:59,200
Speaker 3: over a long period of time as a whole. That's

622
00:33:59,240 --> 00:34:01,160
Speaker 3: not individual but as a whole.

623
00:34:01,280 --> 00:34:04,640
Speaker 1: Yes, And it's actually beneficial to people with fixed rate

624
00:34:04,760 --> 00:34:07,280
Speaker 1: debt too. Right, Like I'm thinking about my three percent mortgage.

625
00:34:07,440 --> 00:34:10,120
Speaker 1: It only looks better and better and better as inflation

626
00:34:10,160 --> 00:34:11,680
Speaker 1: continues to continues the.

627
00:34:11,680 --> 00:34:15,880
Speaker 3: Sort definitely, because you're paying for it and inflated dollars

628
00:34:15,920 --> 00:34:19,520
Speaker 3: down the road. Yeah, my parents built a house in

629
00:34:19,600 --> 00:34:22,760
Speaker 3: the sixties. It costs thirty four thousand dollars to build.

630
00:34:24,400 --> 00:34:27,439
Speaker 3: I still own the same house and today it's worth

631
00:34:27,640 --> 00:34:32,279
Speaker 3: close to a million dollars. And you know, but it's

632
00:34:32,360 --> 00:34:34,840
Speaker 3: just the same house that they paid for thirty four thousand.

633
00:34:35,440 --> 00:34:38,359
Speaker 3: I said to the guy I was having some work done,

634
00:34:38,360 --> 00:34:40,279
Speaker 3: and I said, let's just reside the whole thing. And

635
00:34:40,320 --> 00:34:43,120
Speaker 3: he looked at me and he said, David's cedar. And

636
00:34:43,160 --> 00:34:46,240
Speaker 3: I said so, And he goes, it's going to cost

637
00:34:46,280 --> 00:34:49,320
Speaker 3: thirty four thousand thirty. Who cost you forty thousand dollars

638
00:34:49,600 --> 00:34:52,640
Speaker 3: to reside your house today? And I said, the house

639
00:34:52,680 --> 00:34:55,400
Speaker 3: only costs thirty four thousand. He said, well that was

640
00:34:55,440 --> 00:34:59,839
Speaker 3: back in the sixties. Well, that's inflation it's the same. Hell,

641
00:35:00,640 --> 00:35:03,600
Speaker 3: it's worth more money, but it really it's just the

642
00:35:03,640 --> 00:35:04,200
Speaker 3: same house.

643
00:35:04,280 --> 00:35:06,719
Speaker 1: I'll looking back at those Sears Roebucks catalogs of those

644
00:35:06,719 --> 00:35:08,680
Speaker 1: like beautiful homes that they shipped your door for like

645
00:35:08,760 --> 00:35:12,120
Speaker 1: so like so little money in the nineteen twenties. Sure,

646
00:35:12,160 --> 00:35:15,440
Speaker 1: and they were gorgeous. And yeah, you can't get kick

647
00:35:15,480 --> 00:35:16,919
Speaker 1: get anything like that today for that price.

648
00:35:17,000 --> 00:35:19,480
Speaker 3: Right, you're right. Do you remember when McDonald's hamburgers were

649
00:35:19,480 --> 00:35:20,240
Speaker 3: fifteen cents?

650
00:35:20,640 --> 00:35:23,120
Speaker 1: I remember on like Tuesday nights they have twenty nine

651
00:35:23,160 --> 00:35:24,399
Speaker 1: cent Hamburgers when I was a kid.

652
00:35:24,680 --> 00:35:27,400
Speaker 3: Yeah, I remember when they're fifteen and fries were a

653
00:35:27,440 --> 00:35:31,239
Speaker 3: dime and a coke was a dime. Right, But you know,

654
00:35:31,760 --> 00:35:35,399
Speaker 3: you make more money today, and but you're paying off

655
00:35:35,440 --> 00:35:40,080
Speaker 3: your mortgage on a value that was you know, five, ten,

656
00:35:40,360 --> 00:35:44,000
Speaker 3: fifteen years ago. Yeah, yeah, your three percent mortgage is great.

657
00:35:44,520 --> 00:35:46,399
Speaker 1: Holding on to that forever. We get just a few

658
00:35:46,400 --> 00:35:48,080
Speaker 1: more questions to get to with you, David. We'll get

659
00:35:48,080 --> 00:35:57,680
Speaker 1: to those right after this. We're back for the break.

660
00:35:57,719 --> 00:36:00,080
Speaker 1: We're still talking with David Clark talking about one of

661
00:36:00,320 --> 00:36:03,399
Speaker 1: our heroes, madd and I's mutual heroes in the Finance Base,

662
00:36:03,480 --> 00:36:06,680
Speaker 1: Warren Buffett, and David has just updated the book The

663
00:36:06,719 --> 00:36:09,000
Speaker 1: Tao of Warren Buffett, which is definitely worth a read,

664
00:36:09,440 --> 00:36:12,640
Speaker 1: and we really like I guess I'm David. I'm curious

665
00:36:12,640 --> 00:36:16,440
Speaker 1: to know why you think Warren remains so culturally relevant.

666
00:36:17,200 --> 00:36:21,000
Speaker 1: We got some backyard chickens recently and my kids got

667
00:36:21,000 --> 00:36:22,520
Speaker 1: to name one, my wife got to name one, and

668
00:36:22,560 --> 00:36:25,120
Speaker 1: I got to name one. I named mine Warren. That's

669
00:36:25,160 --> 00:36:27,799
Speaker 1: how much I like Warren Buffett. So why do you

670
00:36:27,800 --> 00:36:31,800
Speaker 1: think he has become and then remained such an important

671
00:36:31,840 --> 00:36:35,000
Speaker 1: cultural figure as someone who's like just kind of a

672
00:36:35,000 --> 00:36:38,080
Speaker 1: good investor. What defines or what's the appeal?

673
00:36:38,440 --> 00:36:43,600
Speaker 3: Well, let's point something out. He never ever made anything, Like,

674
00:36:43,680 --> 00:36:46,960
Speaker 3: He's not Elon Musk. He didn't invent anything. He didn't

675
00:36:47,000 --> 00:36:51,359
Speaker 3: invent an Amazon. All he did was allocate money, buy

676
00:36:51,400 --> 00:36:54,920
Speaker 3: and sell things, and so that's a very unique position.

677
00:36:55,040 --> 00:36:58,320
Speaker 3: The other thing about him is he's really really funny,

678
00:36:58,719 --> 00:37:02,840
Speaker 3: really entertaining and very charming to listen to. And he

679
00:37:02,920 --> 00:37:05,840
Speaker 3: has been in his annual meetings have gotten bigger and

680
00:37:05,880 --> 00:37:10,360
Speaker 3: bigger and bigger. And I mean there were at times

681
00:37:10,800 --> 00:37:13,320
Speaker 3: in the early days there was like twenty people showed

682
00:37:13,400 --> 00:37:15,800
Speaker 3: up and then there were fifty, that it was one hundred,

683
00:37:15,880 --> 00:37:18,160
Speaker 3: that it was two hundred, there is five hundred. Then

684
00:37:18,160 --> 00:37:20,279
Speaker 3: it got, you know, a thousand. They kept going to

685
00:37:20,280 --> 00:37:25,120
Speaker 3: bigger and bigger venues, and people showed up to listen

686
00:37:25,160 --> 00:37:29,120
Speaker 3: to his wisdom. And he was entertaining when he was talking,

687
00:37:29,440 --> 00:37:31,799
Speaker 3: and he made a lot of sense to people. And

688
00:37:31,840 --> 00:37:36,480
Speaker 3: then he entered into a sort of the international world.

689
00:37:37,239 --> 00:37:42,440
Speaker 3: And this book that we just wrote, the newtw of

690
00:37:42,680 --> 00:37:47,040
Speaker 3: Warren Buffett, It's been translated into fourteen languages already. It's

691
00:37:47,080 --> 00:37:50,759
Speaker 3: in Chinese, it's in Japanese, it's Entai, it's all over

692
00:37:50,800 --> 00:37:55,600
Speaker 3: the world. And he is a cultural he's a worldwide

693
00:37:55,600 --> 00:38:02,279
Speaker 3: cultural phenomenon. Why. I think it's his folksy way of

694
00:38:02,360 --> 00:38:06,279
Speaker 3: talking with people, and he's funny and people like it,

695
00:38:06,360 --> 00:38:09,120
Speaker 3: and he talks about things. They're one thing they're interested

696
00:38:09,160 --> 00:38:14,520
Speaker 3: in more than anything else in which is money, and

697
00:38:14,520 --> 00:38:17,360
Speaker 3: and he makes sense and he got super super super

698
00:38:17,480 --> 00:38:18,239
Speaker 3: rich doing it.

699
00:38:18,360 --> 00:38:20,560
Speaker 1: I think authenticity is part of the appeal to.

700
00:38:20,640 --> 00:38:23,160
Speaker 3: Yeah, I like that authenticity. Yeah, it's very authentic, like

701
00:38:23,200 --> 00:38:25,400
Speaker 3: what you see is what you get. Yeah, what you

702
00:38:25,440 --> 00:38:27,080
Speaker 3: see is what you get. And Charlie, remember, was the

703
00:38:27,080 --> 00:38:33,520
Speaker 3: same way Charlie was caustic, and I mean that's to

704
00:38:33,520 --> 00:38:38,040
Speaker 3: put him mobly, and that had its own humor to it. Yeah.

705
00:38:38,239 --> 00:38:42,680
Speaker 2: I do wonder how Warren's folks see aphorisms translate stumanderin

706
00:38:42,840 --> 00:38:46,360
Speaker 2: and like if there's something lost in translation there. But

707
00:38:46,680 --> 00:38:49,560
Speaker 2: speaking of the book, there is one of the one

708
00:38:49,600 --> 00:38:52,319
Speaker 2: of the notes of wisdom was about writing your own

709
00:38:52,320 --> 00:38:55,319
Speaker 2: obituary and then trying to live up to it right

710
00:38:55,360 --> 00:38:58,320
Speaker 2: where you're setting those sort of end of life goals.

711
00:38:58,880 --> 00:39:02,120
Speaker 2: Do you feel that war Jarn has done a good

712
00:39:02,200 --> 00:39:03,920
Speaker 2: job in that regard.

713
00:39:04,200 --> 00:39:07,080
Speaker 3: Yeah, I think he's done a really brilliant job at it.

714
00:39:07,239 --> 00:39:12,359
Speaker 3: As he's gotten older, he's gotten more reflective. But he's

715
00:39:12,400 --> 00:39:16,920
Speaker 3: always embraced the world with a kind heart, and he

716
00:39:16,960 --> 00:39:20,399
Speaker 3: has always been generous in giving away his money. And

717
00:39:21,280 --> 00:39:23,440
Speaker 3: he didn't give his way as much as in the

718
00:39:23,480 --> 00:39:26,200
Speaker 3: early days, but he gave money away locally, and he

719
00:39:26,239 --> 00:39:30,960
Speaker 3: gave money away. It's remarkable how much money he's given

720
00:39:30,960 --> 00:39:34,400
Speaker 3: away and how much money he's given away and not

721
00:39:34,560 --> 00:39:39,200
Speaker 3: had his name put on the building, and anonymously so

722
00:39:39,239 --> 00:39:42,920
Speaker 3: to speak. I mean, the university has got things in it,

723
00:39:42,920 --> 00:39:44,840
Speaker 3: and I know he paid for them, but his name's

724
00:39:44,880 --> 00:39:49,759
Speaker 3: not on the building, And there's a scholarship fund in

725
00:39:49,840 --> 00:39:54,000
Speaker 3: town in Omaha for any indigent person who wants to

726
00:39:54,040 --> 00:39:56,000
Speaker 3: go to college that he pays for. But nobody ever

727
00:39:56,000 --> 00:39:59,800
Speaker 3: writes about it. It's just the university dolls out the

728
00:40:00,520 --> 00:40:03,759
Speaker 3: and he pays for it. Yeah, he's extremely generous, and

729
00:40:04,080 --> 00:40:05,759
Speaker 3: as he's gotten older, even more so.

730
00:40:06,239 --> 00:40:08,799
Speaker 1: When when you think about people in our country who

731
00:40:08,880 --> 00:40:12,400
Speaker 1: have been highly successful, sure made billions and billions of dollars,

732
00:40:12,800 --> 00:40:16,400
Speaker 1: the typical route for most of them has been to

733
00:40:16,560 --> 00:40:19,440
Speaker 1: give away the vast majority of that money as they

734
00:40:19,840 --> 00:40:23,160
Speaker 1: get older and especially when they pass away. It's like, man,

735
00:40:23,239 --> 00:40:25,919
Speaker 1: ninety nine percent of my money is going to such

736
00:40:25,960 --> 00:40:30,600
Speaker 1: and such organization, whether it's like you know, Bill Gates's arm,

737
00:40:30,680 --> 00:40:35,400
Speaker 1: philanthropic arm that oversees, you know, the disbursements of money

738
00:40:35,440 --> 00:40:39,479
Speaker 1: to really need the organizations across the world. How does

739
00:40:39,520 --> 00:40:42,440
Speaker 1: Warren think about this vast sum of wealth that he's

740
00:40:42,440 --> 00:40:44,799
Speaker 1: built up and what kind of good it can do

741
00:40:45,840 --> 00:40:48,120
Speaker 1: for not even for his legacy, because it sounds like

742
00:40:48,200 --> 00:40:49,759
Speaker 1: he doesn't care about that as much, but for the

743
00:40:49,800 --> 00:40:51,120
Speaker 1: good it can do when he's gone.

744
00:40:51,680 --> 00:40:54,399
Speaker 3: He's always said that he didn't like thinking about it,

745
00:40:55,560 --> 00:40:58,040
Speaker 3: and so he's always left it others to others to

746
00:40:58,160 --> 00:41:01,759
Speaker 3: think about how to allocate it, and he's allocated it

747
00:41:01,800 --> 00:41:04,160
Speaker 3: to his three children at the end of his life,

748
00:41:04,200 --> 00:41:06,200
Speaker 3: and it's no longer going to Bill Gates. For a

749
00:41:06,200 --> 00:41:08,479
Speaker 3: while it was going to Bill Gates. But his three

750
00:41:08,560 --> 00:41:12,120
Speaker 3: kids he's been giving money to allocate over the years

751
00:41:12,320 --> 00:41:15,680
Speaker 3: and they've done a brilliant job with it. All three

752
00:41:15,719 --> 00:41:18,400
Speaker 3: of them are really great kids. You know, they're older

753
00:41:18,440 --> 00:41:22,040
Speaker 3: people now, but they're you know, they're all three of

754
00:41:22,080 --> 00:41:24,480
Speaker 3: them are hard working. All three of them are real smart,

755
00:41:25,120 --> 00:41:27,879
Speaker 3: and all three of them have a really kind heart.

756
00:41:28,600 --> 00:41:32,000
Speaker 3: So you know, they and they they have a spect

757
00:41:33,480 --> 00:41:36,200
Speaker 3: they cross the spectrum to one of them is extremely

758
00:41:36,280 --> 00:41:40,600
Speaker 3: liberal and one of them is very conservative. So they

759
00:41:41,040 --> 00:41:43,560
Speaker 3: they'll do a good job with giving his money away

760
00:41:43,840 --> 00:41:47,040
Speaker 3: and it will benefit society as a whole. But it's this,

761
00:41:48,080 --> 00:41:51,440
Speaker 3: it's his children and the kindness in their heart that

762
00:41:51,520 --> 00:41:53,279
Speaker 3: will dictate where the money will go.

763
00:41:54,360 --> 00:41:57,200
Speaker 2: That's cool, very cool. Well, David Clark, we really appreciate

764
00:41:57,239 --> 00:41:59,120
Speaker 2: you taking the time to speak with us today. We'll

765
00:41:59,160 --> 00:42:02,680
Speaker 2: definitely make sure to link to the book that you

766
00:42:02,840 --> 00:42:06,760
Speaker 2: and Mary Buffett have co authored together. But thanks again

767
00:42:06,800 --> 00:42:07,560
Speaker 2: for taking the time.

768
00:42:07,680 --> 00:42:09,600
Speaker 3: Oh, thank you for having me. It was a real pleasure.

769
00:42:09,640 --> 00:42:12,440
Speaker 3: I enjoyed some. I enjoyed the conversation and your ideas

770
00:42:12,440 --> 00:42:13,400
Speaker 3: are great. Thank you.

771
00:42:13,440 --> 00:42:16,560
Speaker 2: Thanks David, take care all right? It almost kind of

772
00:42:16,560 --> 00:42:19,080
Speaker 2: felt like we were talking speaking to the man himself,

773
00:42:19,160 --> 00:42:20,960
Speaker 2: Warren Buffett. Did it Did it feel feel that.

774
00:42:20,960 --> 00:42:21,239
Speaker 3: Way to you?

775
00:42:21,520 --> 00:42:24,239
Speaker 1: Mean, you've been rubbing shoulders that long with him as

776
00:42:24,320 --> 00:42:26,240
Speaker 1: as David has with him and his family.

777
00:42:26,280 --> 00:42:28,560
Speaker 2: He's there in Nebraska, he's he's at the epicenter.

778
00:42:28,640 --> 00:42:31,319
Speaker 1: We were joking before we started recording that like, have

779
00:42:31,360 --> 00:42:33,200
Speaker 1: you have you ever did you ever think you would

780
00:42:33,200 --> 00:42:36,120
Speaker 1: know more about another individual human being than you know

781
00:42:36,160 --> 00:42:38,240
Speaker 1: about Warren? And he was like, yeah, it's pretty insane.

782
00:42:38,640 --> 00:42:40,399
Speaker 1: By the way, I cannot wait to read the two

783
00:42:40,400 --> 00:42:43,520
Speaker 1: part biography on Warren and then the three part biography

784
00:42:43,520 --> 00:42:44,160
Speaker 1: on you, my friend.

785
00:42:44,280 --> 00:42:47,560
Speaker 2: Oh sure, sure. What's your big takeaway from our conversation

786
00:42:47,640 --> 00:42:49,320
Speaker 2: with David about Warren Buffett? So?

787
00:42:49,400 --> 00:42:51,960
Speaker 1: I loved when he was talking about Warren's depression roots

788
00:42:52,440 --> 00:42:54,640
Speaker 1: and and when he talked about kind of.

789
00:42:54,600 --> 00:42:57,120
Speaker 2: The macromitive years. Yeah, the macro.

790
00:42:57,040 --> 00:42:59,759
Speaker 1: Events that were influencing who he became. I think the

791
00:42:59,800 --> 00:43:03,080
Speaker 1: true is for all of us, there are either macro

792
00:43:03,239 --> 00:43:06,680
Speaker 1: or micro events that influence significantly who we become. And

793
00:43:06,719 --> 00:43:08,480
Speaker 1: I talk about this in my own personal journey with

794
00:43:08,520 --> 00:43:11,279
Speaker 1: money about how my parents' money struggles when I was

795
00:43:11,280 --> 00:43:14,160
Speaker 1: a kid. I was just at this particular age where

796
00:43:14,320 --> 00:43:17,840
Speaker 1: the impression was strong, right when my parents were having issues.

797
00:43:18,120 --> 00:43:21,480
Speaker 1: And I do think why I do what I do

798
00:43:21,880 --> 00:43:24,360
Speaker 1: has a lot to do with kind of that history

799
00:43:24,640 --> 00:43:27,600
Speaker 1: and my experience there. And so it's a good idea

800
00:43:27,680 --> 00:43:29,520
Speaker 1: for all of us to kind of maybe take a

801
00:43:29,560 --> 00:43:31,640
Speaker 1: look back and say, well, what are those things that

802
00:43:31,680 --> 00:43:34,399
Speaker 1: might have influenced who I am and why I think

803
00:43:34,440 --> 00:43:36,080
Speaker 1: about money the way I do, Because some of it

804
00:43:36,160 --> 00:43:38,560
Speaker 1: might be good, some of it might have actually led

805
00:43:38,560 --> 00:43:40,520
Speaker 1: to good money habits, but it might actually be bad

806
00:43:40,560 --> 00:43:43,480
Speaker 1: in some ways. And over time, hopefully we can tease

807
00:43:43,480 --> 00:43:46,319
Speaker 1: some of those those things out so that we can

808
00:43:46,400 --> 00:43:50,520
Speaker 1: have a healthy relationship to our money. I don't know,

809
00:43:50,560 --> 00:43:52,439
Speaker 1: And just that struck me too. As he was talking

810
00:43:52,480 --> 00:43:54,160
Speaker 1: about that, I was like, oh, man, I feel like

811
00:43:54,160 --> 00:43:55,040
Speaker 1: I have struck a chord.

812
00:43:55,239 --> 00:43:55,399
Speaker 3: Yeah.

813
00:43:55,400 --> 00:43:57,439
Speaker 1: I didn't go through the depression, but I went through

814
00:43:57,480 --> 00:43:59,520
Speaker 1: like a micro familial version of.

815
00:43:59,480 --> 00:44:02,160
Speaker 2: It, YR own version of it. For sure. My big

816
00:44:02,200 --> 00:44:05,000
Speaker 2: takeaway is going to be the fact that David kept

817
00:44:05,080 --> 00:44:07,319
Speaker 2: coming back to the fact that Warren is just this

818
00:44:07,400 --> 00:44:10,719
Speaker 2: brilliant investor. And it's true, but if you want to

819
00:44:10,760 --> 00:44:14,120
Speaker 2: outperform the market, you have to be an analyst essentially,

820
00:44:14,160 --> 00:44:15,840
Speaker 2: like you have to be willing to dig in. And

821
00:44:15,880 --> 00:44:17,960
Speaker 2: we do know some folks who do that and have

822
00:44:18,000 --> 00:44:21,239
Speaker 2: found success. But otherwise, most people who are listening to this,

823
00:44:21,400 --> 00:44:24,480
Speaker 2: they've got another job, they've got a life, they've got kids,

824
00:44:24,480 --> 00:44:26,520
Speaker 2: they've got other things that they are interested in. Even

825
00:44:26,719 --> 00:44:29,640
Speaker 2: if you do have the time to and the skill

826
00:44:29,680 --> 00:44:31,200
Speaker 2: and knowledge to be able to dive into it. And

827
00:44:31,280 --> 00:44:33,239
Speaker 2: so if that is you and you still want to

828
00:44:33,280 --> 00:44:35,880
Speaker 2: invest your money, will index it an S and P

829
00:44:35,960 --> 00:44:39,319
Speaker 2: five hundred fund the ability to overtime a mass large

830
00:44:39,360 --> 00:44:41,480
Speaker 2: amounts of wealth. He mentioned a friend of his and

831
00:44:41,520 --> 00:44:43,160
Speaker 2: all he does is invest in the S and P

832
00:44:43,200 --> 00:44:45,520
Speaker 2: five hundred and he's got tens of millions of dollars.

833
00:44:45,920 --> 00:44:47,680
Speaker 2: That's more than me, Joel. So I'm going to keep

834
00:44:47,680 --> 00:44:52,040
Speaker 2: at it by come on, please, But yeah, I want

835
00:44:52,040 --> 00:44:54,279
Speaker 2: that to be the biggest take away at least that

836
00:44:54,280 --> 00:44:56,080
Speaker 2: you hear from me, because I think a lot of

837
00:44:56,120 --> 00:44:59,200
Speaker 2: times you kind of get carried away with this notion

838
00:44:59,400 --> 00:45:02,680
Speaker 2: of it's an overly romanticized sort of idea, right of

839
00:45:02,719 --> 00:45:05,200
Speaker 2: like pouring over books, you're diving into the financials. You're

840
00:45:05,200 --> 00:45:07,200
Speaker 2: going to find the next up and coming business to

841
00:45:07,239 --> 00:45:09,440
Speaker 2: invest in, and you're going to ten x, one hundred

842
00:45:09,600 --> 00:45:11,520
Speaker 2: x your money just in a few short years. As

843
00:45:11,520 --> 00:45:13,640
Speaker 2: folks are trying to get rich quick, but most folks

844
00:45:13,680 --> 00:45:14,440
Speaker 2: aren't going to be able to.

845
00:45:14,480 --> 00:45:14,839
Speaker 3: Pull that out.

846
00:45:14,920 --> 00:45:17,560
Speaker 1: I do think this conversation revealed that Warren has like

847
00:45:17,600 --> 00:45:20,520
Speaker 1: this secret combination that's really hard to come by. It's

848
00:45:20,520 --> 00:45:24,320
Speaker 1: like the depression roots, the superior intellect, the hard work ethic,

849
00:45:24,480 --> 00:45:27,080
Speaker 1: the boring twenty five hundred page analysis of bonds. Yeah,

850
00:45:27,320 --> 00:45:29,080
Speaker 1: nobody in their right mind wants to read, but he

851
00:45:29,120 --> 00:45:32,480
Speaker 1: finds it fascinating. No wonder he's such an incredible investor,

852
00:45:32,840 --> 00:45:35,960
Speaker 1: and most of us just don't have that inclination or

853
00:45:36,040 --> 00:45:40,239
Speaker 1: the intelligence level myself included, to invest in the way

854
00:45:40,320 --> 00:45:42,960
Speaker 1: Warren has. So maybe we should be like, Wow, amazing

855
00:45:43,040 --> 00:45:44,840
Speaker 1: that he can do it, but I'm probably not going

856
00:45:44,920 --> 00:45:45,560
Speaker 1: to replicate it.

857
00:45:45,680 --> 00:45:47,640
Speaker 2: That's right. The beer that you and I enjoyed it

858
00:45:47,719 --> 00:45:50,640
Speaker 2: during today's episode is called Space Broccoli, which is by

859
00:45:50,800 --> 00:45:54,319
Speaker 2: Other Half. Another half has to make more of my

860
00:45:54,360 --> 00:45:56,840
Speaker 2: favorite beers than any other brewery out there. Like every

861
00:45:56,880 --> 00:45:58,680
Speaker 2: time I drink an IPA by them, it just tastes

862
00:45:58,719 --> 00:45:59,840
Speaker 2: like the most perfect.

863
00:46:01,080 --> 00:46:02,560
Speaker 1: I would love to try them side by side too,

864
00:46:02,560 --> 00:46:04,399
Speaker 1: because I just always think of them in the same vein.

865
00:46:04,880 --> 00:46:07,360
Speaker 1: They all taste similar to me, but they're all fantastic,

866
00:46:07,560 --> 00:46:07,959
Speaker 1: so good.

867
00:46:08,080 --> 00:46:11,400
Speaker 2: This one so space broccoli. They've got a regular broccoli,

868
00:46:12,080 --> 00:46:15,359
Speaker 2: but I'm pretty sure this is the double dry hot version. Yeah,

869
00:46:15,520 --> 00:46:18,200
Speaker 2: of that IPA. But which also makes me think of

870
00:46:18,600 --> 00:46:21,799
Speaker 2: a local brewery, space Lettuce wait by Monday Night, which

871
00:46:21,840 --> 00:46:24,360
Speaker 2: I wonder which one came first, Space Lettuce or Space Bccoli.

872
00:46:24,360 --> 00:46:25,960
Speaker 2: It's a good a question makes me think that maybe

873
00:46:26,000 --> 00:46:28,440
Speaker 2: Monday Night did some ripping off one of the most

874
00:46:28,480 --> 00:46:31,200
Speaker 2: delicious beers in the country. But yeah, did you dig it?

875
00:46:31,680 --> 00:46:34,560
Speaker 1: I loved it, and I only wish this coul account

876
00:46:34,560 --> 00:46:37,359
Speaker 1: as my vegetable serving for the day. Sadly, no, I'm

877
00:46:37,360 --> 00:46:40,560
Speaker 1: gonna have so so good veggies for dinner tonight. But yeah,

878
00:46:40,600 --> 00:46:44,600
Speaker 1: I mean, this is basically IPA perfection. Other half continues

879
00:46:44,640 --> 00:46:48,279
Speaker 1: to just I mean rocket every time they make beers so.

880
00:46:48,320 --> 00:46:51,920
Speaker 2: Super dry hopped a war that you use to describe it.

881
00:46:51,960 --> 00:46:54,680
Speaker 2: Before we started recording, was like chalky, and it does

882
00:46:54,719 --> 00:46:58,120
Speaker 2: have like not chalky as in not bad powdery, but

883
00:46:58,160 --> 00:47:00,839
Speaker 2: like almost like this dryness that you get when it's

884
00:47:00,880 --> 00:47:03,360
Speaker 2: dry hop like this, there's a sharpness.

885
00:47:02,760 --> 00:47:04,560
Speaker 1: Like the hops are sticking to the sides of your mouth.

886
00:47:04,840 --> 00:47:07,960
Speaker 2: It is so freaking good. It's so hard to describe.

887
00:47:08,040 --> 00:47:10,080
Speaker 2: But of course I'm glad that you and I got

888
00:47:10,080 --> 00:47:12,640
Speaker 2: to share one of these during our episode today while

889
00:47:12,680 --> 00:47:14,759
Speaker 2: we talked with David Clark, and we'll make sure to

890
00:47:14,840 --> 00:47:16,759
Speaker 2: link to his book as well, The New Tale of

891
00:47:16,880 --> 00:47:19,719
Speaker 2: Warren Buffett, that was co authored of course by him,

892
00:47:19,719 --> 00:47:23,560
Speaker 2: but then also Mary Buffett, daughter in law of Warren Buffett.

893
00:47:23,960 --> 00:47:26,600
Speaker 1: Yep, all right, Matt, we'll link to that book. We'll

894
00:47:26,600 --> 00:47:28,279
Speaker 1: put up in the show notes on our website at

895
00:47:28,280 --> 00:47:30,640
Speaker 1: howtomoney dot com. That's gonna do it for this episode.

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00:47:30,719 --> 00:47:33,600
Speaker 1: Until next time. Best Friends Out, Best Friends Out,