WEBVTT - Thomas S. Gayner on Things That Matter in Markets (Podcast) 0:00:02.040 --> 0:00:07.160 This is Mesters in Business with Very Results on Bluebird Radio. 0:00:07.280 --> 0:00:11.520 Here this week on the podcast, I have an extra 0:00:11.560 --> 0:00:14.880 special guest. His name is Tom Gayner, and he has 0:00:14.920 --> 0:00:18.920 a fascinating position in the world of investing in finance. 0:00:19.280 --> 0:00:23.639 He is the chief Investment Officer and co CEO of 0:00:23.760 --> 0:00:28.600 Marquel Corporation, which he describes as a publicly traded family office. 0:00:29.240 --> 0:00:33.000 They have an insurance arm that's the genesis and history 0:00:33.000 --> 0:00:35.800 of the company, but he also has been running the 0:00:35.840 --> 0:00:39.440 investment portfolio for quite a while. That's their second arm. 0:00:39.479 --> 0:00:41.720 And they have, for lack of a bitter word, of 0:00:41.800 --> 0:00:46.920 venture or private equity group that purchases companies, really a 0:00:47.000 --> 0:00:51.320 fascinating history, a tremendous track record, and really a very 0:00:51.360 --> 0:00:55.200 interesting gentleman. I found this conversation to be fascinating and 0:00:55.320 --> 0:00:59.040 I think you will also so with no further ado, 0:00:59.600 --> 0:01:05.320 my discussion with Marquel Corporations is mesters in Business with 0:01:05.520 --> 0:01:11.679 Very Results on Bloomberg Radio. My extra special guest this 0:01:11.720 --> 0:01:14.240 week is Tom Gainer. He is the c i O 0:01:14.880 --> 0:01:20.480 and co CEO of Marquel, a diversified financial holding company. 0:01:20.600 --> 0:01:24.319 He has been dubbed the next Warren Buffett by no 0:01:24.480 --> 0:01:27.600 less an expert than Jason's wide of the Wall Street Journal. 0:01:28.040 --> 0:01:32.640 From two thousand to Gainer's stocks have averaged a return 0:01:32.760 --> 0:01:36.800 of eleven point three percent annually, while the SMP five 0:01:36.880 --> 0:01:40.399 hundred returned a mere four point two percent counting dividends. 0:01:40.800 --> 0:01:44.479 Tom Gainer, Welcome to Bloomberg. Thanks so much for having me. 0:01:44.840 --> 0:01:47.960 So I've been looking forward to having this conversation. You're 0:01:48.440 --> 0:01:51.240 kind of an interesting guy working in kind of an 0:01:51.240 --> 0:01:54.240 interesting company. I don't think a lot of folks know 0:01:54.880 --> 0:01:57.400 what Marquel is and does. Why don't we start by 0:01:57.480 --> 0:02:01.320 just give us the short version? What is Marquel? Sure? 0:02:01.400 --> 0:02:03.440 And in fact, not only do a lot of people 0:02:03.520 --> 0:02:05.640 not know what Marquelle does, a lot of people don't 0:02:05.640 --> 0:02:08.280 know how to pronounce it. So uh, it's an easy 0:02:08.360 --> 0:02:12.480 screening uh technique. When somebody asked for Markel, they probably 0:02:12.480 --> 0:02:15.440 don't know who they're talking to. So yes, Marquelle to 0:02:15.520 --> 0:02:18.120 some degree. I think the shorthand way of describing it 0:02:18.280 --> 0:02:22.080 in the usage of today's words is, we're a family 0:02:22.160 --> 0:02:26.119 office that happens to be publicly traded. Now, the way 0:02:26.160 --> 0:02:29.080 that business started was in the nineteen thirties as a 0:02:29.120 --> 0:02:32.680 specialty insurance company. It's kind of an interesting history in 0:02:32.840 --> 0:02:37.040 that Sam Marquel was in Norfolk, Virginia and he was 0:02:37.080 --> 0:02:39.520 on the city council there, and Norfolk, Virginia was a 0:02:39.560 --> 0:02:41.920 place where a lot of veterans would be getting off 0:02:41.919 --> 0:02:44.600 the boat from World War One, some of whom decided 0:02:44.639 --> 0:02:47.480 to stay. And it was the early days of the 0:02:47.480 --> 0:02:51.320 automobile and trucking industry. So Sam Marquel had been an 0:02:51.360 --> 0:02:54.560 insurance agent. Uh, there were veterans getting off the boat. 0:02:54.639 --> 0:02:58.640 They were they were providing cab rides which were unregulated, 0:02:58.680 --> 0:03:02.720 unlicensed Nicola Ride Jitney's was the name of the term. 0:03:02.800 --> 0:03:05.239 Of course, accidents ensued, as would be the case and 0:03:05.320 --> 0:03:08.240 anything like that, and Sam Marquel got a law passed 0:03:08.639 --> 0:03:10.520 that said, if you're going to operate one of these jydneys, 0:03:10.520 --> 0:03:13.560 you had to have insurance and just the people would 0:03:13.600 --> 0:03:17.040 provide it. And well, no insurance company would was willing 0:03:17.080 --> 0:03:20.160 to take that sort of risk. So Sam markl said, well, 0:03:20.160 --> 0:03:22.959 I'll started an insurance company to take that risk. I 0:03:23.000 --> 0:03:24.960 don't know what the chicken and egg was, whether Sam 0:03:25.000 --> 0:03:27.679 had the chess moves all laid out before you proposed 0:03:27.720 --> 0:03:30.520 the proposal of the ordinance. I would not be surprised 0:03:30.520 --> 0:03:32.480 if he did. But that was really the start in 0:03:32.520 --> 0:03:35.240 the genesis of the company, and they caught a mega 0:03:35.280 --> 0:03:39.840 wave in the sense that the automobile trucks, the highway system, 0:03:39.840 --> 0:03:43.800 the internate interstate highway system for thirty or forty years, 0:03:43.800 --> 0:03:46.760 you really had this tail wind of epic growth in 0:03:46.800 --> 0:03:51.200 the underlying business that that they would ensure. Um. We 0:03:51.240 --> 0:03:53.160 could go on and on with this conversation, but I 0:03:53.200 --> 0:03:57.360 think the hallmark that still matters today is you look 0:03:57.400 --> 0:03:59.760 at problems, you look at something that somebody needs, You 0:03:59.800 --> 0:04:01.960 try to be creative. You try to figure out a 0:04:01.960 --> 0:04:06.680 way to solve it. And that's what Marquell does historically, 0:04:06.760 --> 0:04:10.280 largely through insurance products and ensuring things that a lot 0:04:10.360 --> 0:04:12.960 of other companies choose not to do for a variety 0:04:12.960 --> 0:04:16.919 of legitimate reasons. But then also we've expanded into a 0:04:16.920 --> 0:04:20.240 lot of different products and services, industrial products and services 0:04:20.520 --> 0:04:22.280 over the last fifteen years with the growth of mark 0:04:22.279 --> 0:04:24.480 El Venture. So we we can we can do anything 0:04:24.480 --> 0:04:26.080 and everything, and if we can figure out a way 0:04:26.120 --> 0:04:28.400 to make the customers and the employees better off by 0:04:28.400 --> 0:04:31.320 doing so, we'll do it. So the interesting thing about 0:04:31.360 --> 0:04:37.280 the insurance side is insurers taken cash against the future 0:04:37.600 --> 0:04:41.640 potential liability, but between when the policy is sold and 0:04:41.720 --> 0:04:44.600 want to pay out has to be made. Hey, we 0:04:44.680 --> 0:04:48.159 have to do something with all this capital, which brings 0:04:48.279 --> 0:04:53.200 us to your job, your essentially c i O of 0:04:53.200 --> 0:04:56.040 of market al assets. How do we describe your title? 0:04:56.400 --> 0:04:58.760 And we'll get to the co CEO thing in a bit, 0:04:58.839 --> 0:05:02.240 but technically what is your job description? Well, the c 0:05:02.400 --> 0:05:05.400 i O in terms of chief investment officers post chief 0:05:05.480 --> 0:05:09.320 information officer. That is exactly the job I had prior 0:05:09.360 --> 0:05:12.000 to becoming the co CEO, and effectively it is still 0:05:12.400 --> 0:05:15.640 a job that's embedded in my role. Now, again, if 0:05:15.680 --> 0:05:19.120 you're a business historian and you have a sophisticated listening base, 0:05:19.520 --> 0:05:21.840 if you think about insurance, first off, set it up. 0:05:21.920 --> 0:05:25.000 Your your initial point is correct in that an insurance 0:05:25.040 --> 0:05:28.479 company collects premiums today and they're gonna make a payment 0:05:28.800 --> 0:05:32.080 to for a claim sometime in the future. So embedded 0:05:32.120 --> 0:05:36.599 in every single insurance company is an investment operation. And 0:05:36.839 --> 0:05:40.640 historically it's not been unusual for insurance companies to make 0:05:40.680 --> 0:05:45.760 the vast majority, if not the totality, of their earnings 0:05:45.800 --> 0:05:48.520 from what they make on the investments while they're holding 0:05:48.520 --> 0:05:50.599 that pool of money. That that's the case. If you 0:05:50.600 --> 0:05:53.880 can if you can run the the insurance side as 0:05:53.920 --> 0:05:56.520 a break even and then just be free to do 0:05:56.560 --> 0:05:59.400 what you want with that capital over until those potential 0:05:59.440 --> 0:06:02.279 liabilities come home to roost. That's not a bad source 0:06:02.279 --> 0:06:05.640 of capital. It's very cheap, exactly, and a lot of 0:06:05.680 --> 0:06:09.279 minds have figured that out and and and known about that. 0:06:09.560 --> 0:06:12.600 There's some interesting sort of financial history episodes. If you 0:06:12.640 --> 0:06:15.920 go back to the nineteen sixties or seventies when conglomerates 0:06:15.960 --> 0:06:17.880 were sort of the hot money things of the day, 0:06:18.400 --> 0:06:22.480 many of those had an insurance company as the financial 0:06:22.520 --> 0:06:25.680 core of the business. In the Gulf and Western teleedi 0:06:25.760 --> 0:06:29.000 and things like that. Now, I think there's an interesting 0:06:29.200 --> 0:06:33.840 cultural circumstances that's at play there in that if you 0:06:34.000 --> 0:06:37.360 look at insurance companies that are run by investment people, 0:06:37.920 --> 0:06:42.440 oftentimes that that movie didn't end that well, uh, because 0:06:42.440 --> 0:06:45.000 you know, investment people have a certain mindset, a certain culture, 0:06:45.080 --> 0:06:47.880 certain way of doing things, a certain lifesty, sort of 0:06:47.960 --> 0:06:51.400 lifestyle they'd like to to lead. Insurance people probably not 0:06:51.520 --> 0:06:55.800 wired that way. And most insurance companies are run by 0:06:55.800 --> 0:06:58.480 people who came up through the discipline of insurance, so 0:06:58.520 --> 0:07:00.840 they were claims people. They were at stuaries, they were 0:07:01.160 --> 0:07:05.400 salespeople whatever, But the realm of insurance is what they're 0:07:05.440 --> 0:07:08.720 wired to do and how they understand life. Uh, they 0:07:08.839 --> 0:07:12.480 may or may not understand capital allocation and investments quite 0:07:12.480 --> 0:07:15.640 so much. Similarly, and and as such, since they don't 0:07:15.720 --> 0:07:17.960 understand it, I don't think they appreciate it and the 0:07:18.040 --> 0:07:22.760 discipline and what's required to be really top league in 0:07:23.080 --> 0:07:27.720 that requirement. Similarly, investment people when when they run an 0:07:27.760 --> 0:07:30.720 insurance based organization and they came up through the realm 0:07:30.720 --> 0:07:34.040 of investments, I think sometimes there's a tendency not to 0:07:34.120 --> 0:07:39.680 appreciate the detail work and the daily discipline of what 0:07:39.720 --> 0:07:43.400 it takes to to run a very good insurance operation. 0:07:43.720 --> 0:07:46.760 So if you look at organizations that have successfully been 0:07:46.800 --> 0:07:49.640 able to balance that tension and have both sides of 0:07:49.640 --> 0:07:53.640 the house not have one overwhelmed the other side, that 0:07:53.800 --> 0:07:57.120 list is very very short. Yep, And we're gonna talk. 0:07:57.160 --> 0:08:00.240 Let's talk a little bit about that list, um. And 0:08:00.280 --> 0:08:04.040 part of the reason you're implying is, Hey, some groups 0:08:04.080 --> 0:08:06.800 are a little too safety first and to risk averse 0:08:06.840 --> 0:08:10.320 if they're overly waited on the insurance side. Other groups 0:08:10.360 --> 0:08:13.800 are too aggressive and risk embracing you need that balance, 0:08:14.080 --> 0:08:18.520 which leads us to the comparison that I have to ask, 0:08:18.600 --> 0:08:23.720 when did you start first hearing yourself described as the 0:08:23.760 --> 0:08:27.560 next one Buffett, a mini one Buffett. He used Geico 0:08:27.680 --> 0:08:32.480 as a giant source of inexpensive capital, and obviously did 0:08:32.520 --> 0:08:35.120 okay with it, right, did pretty well with it, better 0:08:35.160 --> 0:08:38.320 than pretty well. Um, when did you first start hearing 0:08:38.320 --> 0:08:44.079 these noises? Because you've been with Marquel now for twenties something. Wow, 0:08:44.360 --> 0:08:47.320 she's thirty one years. So how long was it before 0:08:47.520 --> 0:08:50.280 these silly comparisons began? Well, I guess the first time 0:08:50.320 --> 0:08:52.480 I really heard it was when I said it to 0:08:52.480 --> 0:08:57.120 myself looking in the mirror, and and and frankly, that 0:08:57.160 --> 0:09:00.319 would have happened even before I joined Marquelle. Really, the 0:09:00.559 --> 0:09:04.240 way that started was the first time I became aware 0:09:04.440 --> 0:09:07.400 of of Buffett and Berkshire was in eighty four with 0:09:07.440 --> 0:09:11.240 the seminal Carol Loomis article in Fortune. And I can 0:09:11.320 --> 0:09:14.839 remember I worked for a firm called Davenport and Company 0:09:14.840 --> 0:09:18.600 of Virginia. Wonderful firm. Um still there today, been in 0:09:18.679 --> 0:09:22.160 Richmond since eighteen sixty three. So uh, not going anywhere. 0:09:22.160 --> 0:09:24.560 I'm going anywhere. The head of the department was a 0:09:24.559 --> 0:09:27.240 gentleman named Joe Antram, and I read this article and 0:09:27.280 --> 0:09:29.439 here's how naive and stupid I was. So it was 0:09:29.440 --> 0:09:33.000 in eighty four. I was twenty two years old, and 0:09:33.320 --> 0:09:36.040 I went into Joe's office and I said, hey, Joe, 0:09:36.520 --> 0:09:38.760 have you ever heard of this guy named Warren Buffet? 0:09:39.679 --> 0:09:41.600 Had Joe was sort of a crusty fella, and he says, 0:09:41.840 --> 0:09:44.760 it's Buffet, you idiot, and threw me out. Well, I 0:09:44.800 --> 0:09:47.760 went to the cutting edge technology of the day, which 0:09:47.800 --> 0:09:50.599 was the standard and Poor's tear sheet and I and 0:09:50.720 --> 0:09:53.240 I looked at the Berkshire Hathaway page. And my training 0:09:53.360 --> 0:09:55.280 is as an accountant. I started out as a CPA 0:09:55.720 --> 0:09:58.319 with Price Waterhouse Coopers, and I looked at those numbers 0:09:58.640 --> 0:10:02.040 and I could tell, without resorting to four decimal point calculations, 0:10:02.160 --> 0:10:04.920 they were good. So I became a Berkshire. I became 0:10:04.960 --> 0:10:07.200 aware of Berkshire at that point. When did you first 0:10:07.240 --> 0:10:10.719 become a Berkshire investor? Not until which also points out 0:10:10.720 --> 0:10:13.160 how stupid one can be. Because when I first saw 0:10:13.240 --> 0:10:15.120 he was right when he when he said get out 0:10:15.120 --> 0:10:17.480 of here as exactly, he was right. So as a kid, 0:10:17.600 --> 0:10:20.920 and the stupid things you do as a kid. Now, i'll, i'll, 0:10:21.040 --> 0:10:23.679 i'll defer to the notion that at age two you're 0:10:23.720 --> 0:10:25.840 still a kid. So I asked for grace, and in 0:10:25.880 --> 0:10:28.160 that sense, so I looked at it. I could tell 0:10:28.200 --> 0:10:31.000 the numbers were good, and I made the Syrian mistake. 0:10:31.080 --> 0:10:34.360 I think the stock was dolls or something like that, 0:10:34.679 --> 0:10:37.880 so expensive exactly, and I said, no stock could possibly 0:10:38.160 --> 0:10:40.959 be worked that much. So I made the great mistake 0:10:41.000 --> 0:10:44.400 of oh mission, and sat there and watched it go 0:10:44.720 --> 0:10:47.559 from that to the first share we bought was five thousand, 0:10:47.600 --> 0:10:50.600 seven and fifty dollars. And by the way, that's still 0:10:50.600 --> 0:10:54.559 a pretty goodbye. But there's immense lessons to be learned 0:10:54.600 --> 0:10:57.880 from that. So the per share value as opposed to 0:10:57.920 --> 0:10:59.839 the per share price, it's do your math or do 0:10:59.880 --> 0:11:02.719 your homeworking about that. And by the way, getting back 0:11:02.760 --> 0:11:04.520 to Teleedin, which is one of those companies that was 0:11:04.559 --> 0:11:07.000 on the list of balancing out the insurance in the 0:11:07.040 --> 0:11:10.880 industrial sides of the business under the leadership Henry Singleton. 0:11:11.400 --> 0:11:14.960 Uh Phayus Seraphim is a famous money manager who made 0:11:15.000 --> 0:11:17.640 a lot of his reputation and returns by being right 0:11:17.679 --> 0:11:20.240 about tele dine in the early days, and people used 0:11:20.280 --> 0:11:23.400 to ask Sarahim what's the next tele dine and his 0:11:23.480 --> 0:11:27.960 famous response was the next tele digne is teleed. So 0:11:27.960 --> 0:11:31.440 when you got something right and you're gonna have exactly 0:11:31.920 --> 0:11:34.400 dance with a girl you brang with and keep dancing. 0:11:34.679 --> 0:11:38.559 But so answering your question about how the Berkshire comparison 0:11:38.640 --> 0:11:43.480 started to take place, So six Marquet went public and 0:11:43.960 --> 0:11:46.839 luck of the draw, I was the analyst at Davenport 0:11:46.880 --> 0:11:50.320 who was assigned to cover it. So I started covering 0:11:50.480 --> 0:11:52.320 Marquelle from the day of the I p O. And 0:11:52.360 --> 0:11:55.160 what I observed was here was an insurance company that 0:11:55.360 --> 0:11:58.679 made an underwriting profit. And at that time, in an 0:11:58.720 --> 0:12:02.000 era of meaningfully fire rates, you didn't really need to 0:12:02.000 --> 0:12:04.679 be disciplined about your insurance so much because you make 0:12:04.800 --> 0:12:08.760 so much from interesting income that you you could engage 0:12:08.760 --> 0:12:10.760 in cash flow underwriting. You just wanted to get cash 0:12:10.760 --> 0:12:12.320 in the door and we'll worry about the claims. Well 0:12:12.360 --> 0:12:15.920 a nominal basis, not necessarily real basis, but still, but 0:12:16.040 --> 0:12:19.440 this was an unusual discipline to stick to the idea 0:12:19.480 --> 0:12:23.920 of making an underwriting profit, even amidst the ability to 0:12:23.960 --> 0:12:27.319 earn epic investment returns. So what I saw and by 0:12:27.320 --> 0:12:30.200 this time, I'm twenty five or so from the I 0:12:30.320 --> 0:12:34.400 p O is that here's here's an insurance based organization 0:12:34.400 --> 0:12:36.720 which is going to make a dedicated to making an 0:12:36.840 --> 0:12:39.800 underrated profit. And Steve Marquell, who was the vice chairman 0:12:39.800 --> 0:12:42.920 at the time, was open minded and had already started 0:12:43.120 --> 0:12:47.520 making some equity investments with those pennies of underwriting profit 0:12:47.520 --> 0:12:49.559 out of each dollar. So they had a long term 0:12:49.600 --> 0:12:52.840 mentality from day one. So I saw that instantly. It 0:12:52.880 --> 0:12:55.360 was it was it was a lightbulb kind of realization, 0:12:55.760 --> 0:12:58.280 and I wanted to own some of that stock and 0:12:58.400 --> 0:13:01.320 be connected to the company. So from eight six through 0:13:01.440 --> 0:13:06.040 ninety four years Steve Marquelle became up friend, a client, 0:13:06.120 --> 0:13:09.480 a business associate, and he might tell the story differently. 0:13:09.520 --> 0:13:11.600 I might tell it differently depending on the point of view. 0:13:12.000 --> 0:13:14.160 But I sort of begged him for a job for 0:13:14.200 --> 0:13:16.120 four years because I just wanted to be part of that. 0:13:16.640 --> 0:13:19.920 In Marquelle did one of their famous double the size 0:13:19.920 --> 0:13:22.600 of the company deals or they bought they bought another 0:13:22.640 --> 0:13:25.280 company that was as large as what they were. Steve 0:13:25.360 --> 0:13:28.480 had been managing investments by himself. I thought he might 0:13:28.559 --> 0:13:31.560 like a wingman, and UH offered me the job at 0:13:31.600 --> 0:13:33.120 that time. I got to call it at that and 0:13:33.160 --> 0:13:35.800 I assume you jumped right at it exactly. And and 0:13:35.880 --> 0:13:38.160 let's let me just stay with Marquelle for a moment. 0:13:38.600 --> 0:13:42.840 They famously they don't hold analyst days. They don't give 0:13:42.920 --> 0:13:45.720 earnings guides or things like that. At least that was 0:13:45.760 --> 0:13:49.319 the reputation back then. Tell us a little bit about that. 0:13:49.400 --> 0:13:52.040 What was the thinking behind if you're going to cover 0:13:52.160 --> 0:13:55.280 us you figure it out? Well, there's a lot of 0:13:55.360 --> 0:13:57.880 layers to that, but but I think it makes sense 0:13:58.440 --> 0:14:00.760 think about it this way. If you if you really 0:14:00.760 --> 0:14:03.880 are as you said, the first definition of Marquel the 0:14:04.000 --> 0:14:06.760 family office, which is a very popular term these days, 0:14:06.800 --> 0:14:10.160 that was not a term so much when I joined. 0:14:10.440 --> 0:14:13.680 If you really want shareholders who are going to be 0:14:13.800 --> 0:14:16.120 there for a long period of time and have a 0:14:16.160 --> 0:14:18.120 sense of ownership and have a sense of partnership and 0:14:18.120 --> 0:14:23.240 really wish to be multigenerational investors, Well, I run a 0:14:23.240 --> 0:14:26.800 business and setting aside the investment side, but the markl 0:14:26.920 --> 0:14:30.480 ventures sides of things in the businesses that we run, 0:14:30.800 --> 0:14:34.720 which are long term established businesses, I don't think and 0:14:34.760 --> 0:14:36.960 the people who run those businesses do not think about 0:14:36.960 --> 0:14:41.360 their customers in a quarterly timeframe. We think about our customers. 0:14:41.520 --> 0:14:44.480 Once you're a customer of ours, in whatever business we have, 0:14:45.000 --> 0:14:46.720 we want to be doing a good enough job for 0:14:46.760 --> 0:14:49.520 you and delivering enough value and delighting you in such 0:14:49.560 --> 0:14:52.160 a way that you want to keep doing business with us. 0:14:52.560 --> 0:14:57.640 So cutting that into quarterly time frames and setting expectations 0:14:57.680 --> 0:15:00.160 that are tied to that, I just see it's like 0:15:00.240 --> 0:15:03.920 a bad idea and and contradictory to to how we 0:15:03.960 --> 0:15:06.720 would really run a business. So we didn't have to 0:15:06.760 --> 0:15:09.080 think up all these things ourselves. We got to observe 0:15:09.360 --> 0:15:12.400 the way Buffett did things. And we've been going to 0:15:12.440 --> 0:15:16.160 the Berkshire Annual Meeting since UH since nine, which had 0:15:16.160 --> 0:15:18.640 been the first year, the first year I joined, because 0:15:18.680 --> 0:15:20.880 what he said to Steve at that point was, in 0:15:21.000 --> 0:15:23.920 terms of investors that we wanted to get at Marquelle, 0:15:24.280 --> 0:15:27.080 the people who are most likely to understand what we're 0:15:27.120 --> 0:15:30.080 doing are people who already own Berkshire. So rather than 0:15:30.120 --> 0:15:35.720 try to get them to come to UH Richmond and engage, so, well, 0:15:35.800 --> 0:15:38.760 if you own Berkshire, you're already you're already qualified, So 0:15:38.840 --> 0:15:41.080 let's go there and start meeting people. So that very 0:15:41.080 --> 0:15:43.320 first year that we were there just because I've been 0:15:43.320 --> 0:15:45.240 in the investor business for a couple of years. There 0:15:45.280 --> 0:15:47.440 were there were six people that were willing to sit 0:15:47.480 --> 0:15:49.960 down and drink coffee and eat bagels with Steve Markette 0:15:49.960 --> 0:15:52.120 and I And we didn't have formal presentation or anything. 0:15:52.160 --> 0:15:54.920 We just talked and answered their questions and then went 0:15:54.960 --> 0:15:56.760 on for maybe two and a half three hours or 0:15:56.760 --> 0:16:00.440 something like that in that room, six people. Uh. Chuck 0:16:00.440 --> 0:16:03.000 Achery was one who's a legendary investor. I don't know 0:16:03.000 --> 0:16:05.240 whether he's been on your your your podcast or not. 0:16:05.400 --> 0:16:08.920 Wonderful guy and an introduction. Uh, he would be a 0:16:09.760 --> 0:16:12.480 well worthy person who's talking to and he's a meaningful 0:16:12.520 --> 0:16:18.000 teacher to me. I do indeed. Uh. Michael Lowenstein, whose 0:16:18.000 --> 0:16:23.240 father was Louis Lowenstein, the professor at Columbia Business School 0:16:23.760 --> 0:16:27.240 exactly Um, and one of his cousins I can't remember who, 0:16:27.240 --> 0:16:30.480 but one wonderful family and sort of the right kind 0:16:30.480 --> 0:16:34.280 of people, goteamed Peter Caman from Boston. Jonathan Brandt at 0:16:34.320 --> 0:16:37.760 Ruwayne Kinnef is one of the panelists that asks Buffett 0:16:37.840 --> 0:16:40.480 questions at the meeting, whose father was a roommate and 0:16:40.520 --> 0:16:44.560 buddy of a Buffett and Bill Rwayne. So we started 0:16:44.560 --> 0:16:48.080 off with just an absolutely wonderful set of people and 0:16:48.080 --> 0:16:49.640 and all Steve and I said at the end of 0:16:49.640 --> 0:16:51.880 that meeting was you know, we'll be back again next 0:16:51.960 --> 0:16:54.320 year and if you know anyone who would be interested, 0:16:54.600 --> 0:16:57.600 please let him know and we'll get together. So we 0:16:57.640 --> 0:16:59.520 started doing that, and that became an annual tradition, and 0:16:59.560 --> 0:17:01.480 we did that year after year after year. What started 0:17:01.520 --> 0:17:04.159 with six people. By the time you got to the 0:17:04.200 --> 0:17:07.399 year before last, which was the last in person meeting 0:17:07.400 --> 0:17:09.440 that Berkshire had, we had something on the order of 0:17:10.440 --> 0:17:14.040 people at that meeting, and again the same format. We 0:17:14.080 --> 0:17:16.720 open it up, we say thank you for being here, 0:17:16.720 --> 0:17:20.560 great to see you, what questions can we answer for you? 0:17:20.960 --> 0:17:24.920 And and there are more Marqueue shareholders in that room 0:17:25.040 --> 0:17:27.880 then typically come to our annual meeting. So it really 0:17:27.920 --> 0:17:30.480 is cultivating of the community that that's out there. And 0:17:30.800 --> 0:17:34.479 this year, uh, unfortunately, because the Berkshire meeting was virtual 0:17:34.480 --> 0:17:37.680 and and that the crowd wasn't there, I said, well, 0:17:37.800 --> 0:17:40.480 we have the opportunity to try to create some center 0:17:40.520 --> 0:17:44.080 of gravity in Richmond, Virginia, because that convening, that worldwide 0:17:44.160 --> 0:17:47.440 convening of people who are searching for certain values in 0:17:47.480 --> 0:17:50.000 certain ways of running a business. The world is hungry 0:17:50.040 --> 0:17:52.480 for that. So let's give him a forum and the 0:17:52.560 --> 0:17:56.080 venue to do so. So we found a concert arena 0:17:56.080 --> 0:17:58.760 and Richmond, Virginia that had a roof but open air 0:17:58.840 --> 0:18:01.399 to to try to, you know, meet people halfway that 0:18:01.520 --> 0:18:04.439 the pandemics are coming. We're getting better. We had a 0:18:04.480 --> 0:18:06.480 meeting we had My goal was to get a hundred 0:18:06.480 --> 0:18:10.440 and a hundred out of town professional investors to attend. 0:18:10.600 --> 0:18:12.920 We ended up with about a hundred and fifty professional 0:18:12.960 --> 0:18:16.639 investors and then between employees, associates, local people. We had 0:18:16.680 --> 0:18:18.720 five hundred people at that meeting and we tried to 0:18:18.720 --> 0:18:21.399 make it fun. We had we had food trucks, we 0:18:21.400 --> 0:18:25.240 had beer trucks, we had a band. And that makes 0:18:25.240 --> 0:18:28.080 seem minor, but it speaks to the culture of trying 0:18:28.119 --> 0:18:30.479 to connect with people in ways that you just cannot 0:18:30.600 --> 0:18:33.080 do in any other way than than be with them, 0:18:33.160 --> 0:18:36.080 and and to cultivate this long term sense of ownership 0:18:36.320 --> 0:18:41.640 where your time horizons are infinite, eternal, rather than than 0:18:41.680 --> 0:18:44.280 than cut into two quarterly things. It's it's just an 0:18:44.440 --> 0:18:48.040 entirely different way of approaching things and thinking about things, 0:18:48.040 --> 0:18:51.440 So it doesn't really comport a match up with the 0:18:52.119 --> 0:18:55.199 typical way that that major finance has done. Not right 0:18:55.280 --> 0:18:57.199 or wrong, just different. I like it. I love the 0:18:57.200 --> 0:19:01.320 idea of burning Man for finance exact it of oh great, 0:19:01.359 --> 0:19:05.000 another boring hotel conference room. I mean, the one good 0:19:05.040 --> 0:19:10.119 takeaway from the pandemic is those sorts of financial you know, 0:19:10.280 --> 0:19:14.840 just deadly meetings. They seem to be attenuating quite quite 0:19:14.880 --> 0:19:20.040 a bit. And I think people are maximizing their multitasking 0:19:20.080 --> 0:19:22.600 skills when they're listening to something like that on a 0:19:22.640 --> 0:19:25.400 on a zoom. God, I don't out have the patience 0:19:25.400 --> 0:19:28.640 for the endurance to do that with the without fidgeting 0:19:28.680 --> 0:19:31.159 and looking at something else too. I'm with you on it. 0:19:31.880 --> 0:19:34.360 Let's talk a little bit about your background, which has 0:19:34.400 --> 0:19:39.280 some really interesting things about it. You've described yourself as 0:19:40.359 --> 0:19:44.280 knowing that you're just good and not great. Explain that 0:19:44.359 --> 0:19:47.040 who who goes out and says I'm not great? I'm 0:19:47.400 --> 0:19:50.960 good and I'm aware of that. Well. I was in 0:19:51.000 --> 0:19:54.760 a discussion last night with an absolutely fascinating person, absolutely 0:19:54.880 --> 0:19:58.800 high end quality on every measure you could you could 0:19:58.800 --> 0:20:03.280 think about, and and that excellence shown through and the 0:20:03.320 --> 0:20:06.679 discussion took this twist and turn where the distinction between 0:20:06.920 --> 0:20:11.760 an optimizer and a satisfier came up. And and I 0:20:11.760 --> 0:20:16.760 think there is a tendency among type A people, extraordinarily 0:20:17.160 --> 0:20:22.000 high accomplishment people, high achievers, to really latch onto the 0:20:22.040 --> 0:20:25.720 idea of optimization. And there's nothing wrong with that, But 0:20:25.920 --> 0:20:31.680 sometimes there can be a hidden, intangible, unquantifiable cost to 0:20:32.240 --> 0:20:36.760 focusing entirely on optimizations all the time. Einstein says that 0:20:36.960 --> 0:20:39.960 you know, not everything that counts can be counted, and 0:20:40.000 --> 0:20:43.840 not everything that counts. Einstein smarter to me. Here's a 0:20:43.880 --> 0:20:47.199 perfect example of how you can remember not not everything 0:20:47.240 --> 0:20:49.720 that counts can be counted, and not everything that can 0:20:49.760 --> 0:20:52.760 be counted counts. There you go, my special guest, Very Riddles, 0:20:53.200 --> 0:20:55.359 thanks for the pickup. And the was that Einstein? I 0:20:55.359 --> 0:20:59.040 thought that was I thought that was some management consultants. 0:20:59.359 --> 0:21:01.359 I'm gonna go with line stuff, but I'll defer to 0:21:02.240 --> 0:21:04.880 I'll defer to the fact checking experts on that. But 0:21:04.880 --> 0:21:09.120 but the point is there there's an element of intuition 0:21:09.720 --> 0:21:14.720 of of the the intangible sense of spirit and culture 0:21:15.000 --> 0:21:18.000 that I find extraordinarily different difficult to matter that sometimes 0:21:18.000 --> 0:21:20.560 you got you gotta to let people have some room 0:21:20.880 --> 0:21:23.520 to make some mistakes and look at outcomes that are 0:21:23.640 --> 0:21:27.639 not optimized and what you get in design thinking and 0:21:27.920 --> 0:21:30.200 in systems approach, if you're dealing with the right kind 0:21:30.200 --> 0:21:33.000 of systems, there there's there's a bit of an evolutionary 0:21:33.040 --> 0:21:37.439 process where um mistakes that you make start drifting away, 0:21:37.480 --> 0:21:40.400 and things that you did right start compounding and and 0:21:40.400 --> 0:21:43.399 and and magnifying themselves. And and as such, if you 0:21:43.480 --> 0:21:45.359 just if you just leave a little slack in the 0:21:45.440 --> 0:21:47.560 system and you don't try to press it to the 0:21:47.640 --> 0:21:51.439 last red line of what's there, you allow time and 0:21:51.560 --> 0:21:56.280 space and muscle and rest and energy to create things 0:21:56.359 --> 0:21:59.199 that you you couldn't have thought of beforehand, and that 0:21:59.280 --> 0:22:04.560 happened somewhat through serendipity. So I think, I think humility. Uh, 0:22:04.680 --> 0:22:07.840 And it's it's an epic challenge. I'm fifty nine years 0:22:07.880 --> 0:22:11.439 old now, and fortunately things have worked out well, and 0:22:11.480 --> 0:22:14.399 I have credibility because my record is pretty good. I 0:22:14.480 --> 0:22:17.760 have a lot of empathy and and understanding of the 0:22:17.840 --> 0:22:21.080