#254 Guy Spier- Compounding Good Will and Capital
Key Takeaways:
Capture Habit: Write down your thoughts
“Our ability to think clearly about the world and what are the places where it starts is this idea of the capture habit. So when you have a thought, wherever it is in the shower, write it down real quick, the idea that the thoughts are going to stick around, we all know what happens. It just floats into thin air and then disappears. Capturing thoughts is a bit like capturing butterflies, you’ve got to grab them and preserve them while you still can. And then later on you can kind of take them out and review them and new things will come out of your thoughts as you review them.”
Emotions Are Calls To Action
Our initial reactions to the emotions are not the actions that we need to take, but our emotions are the clues for decisions that we have to make and things we have to do.
Build Goodwill
“You’re filling a bucket but the only way you can fill the bucket is with drops of water from shaking a cloth, you can’t switch on a tap. And when that bucket is full and there’s water sloshing over the sides, every time you carry it somewhere, that kind of a bucket is overflowing with goodwill. That’s when your life really takes off. But, the first thing that one has to do is just fill that bucket. And there’s a very, very long time that filling that bucket could take, could take 20 years before it’s full and it’s overflowing with goodwill. And most people give up. And, but if you can just keep going, if you could enjoy the process, the rewards at the end are really just extraordinary.”
00:52 Playing the Infinite Games
Guy says that it took him a while to realize the importance of playing the infinite games.
“If people see that you’re willing to play by the rules and not skirt by the rules, that makes you a trusted player in many other games”
7:48 The Education of a Value Investor
Guy talks about writing his book, The Education of a Value Investor, saying that he was terrified because “this was going to be my perhaps only book that I’ve written for the world and would set my reputation with the vast majority of people who would never meet me.”
Guy says that reading the autobiography of Mahatma Gandhi, the book David Hawkins: Power vs Force and Mohnish Pabrai, were all incredible influences in his writing journey.
“So with those mentors as guideposts, I ended up by some miracle in my state of terror writing in an honest way about myself”
13:09 The Impact of Handwritten Notes
One of the ways that Guy builds goodwill is through writing 3 handwritten notes a day.
Guy: “The way I tried to describe it to my interns is that you’re filling a bucket but the only way you can fill the bucket is with drops of water from shaking a cloth, you can’t switch on a tap. And when that bucket is full and there’s water sloshing over the sides, every time you carry it somewhere, that kind of a bucket is overflowing with goodwill. That’s when your life really takes off. But, the first thing that one has to do is just fill that bucket. And there’s a very, very long time that filling that bucket could take, could take 20 years before it’s full and it’s overflowing with goodwill. And most people give up. And, but if you can just keep going, if you could enjoy the process, the rewards at the end are really just extraordinary.”
19:35 Bouncing Back From Failure
In the beginning of Guy’s book, The Education of a Value Investor, he describes a failure of his life which was working for DH Blair, which Guy describes as a “sleazy investment bank.”
Guy: “I was disgusted at myself and I was disgusted at the world. I had to find a new way of developing success. The approach that I’d taken, which you could maybe summarize as a young, arrogant man in a hurry. And the world appeared to me to be full of young arrogant men in a hurry who had succeeded. There’s an element to that, which is a lottery ticket. Yeah. If you have a million people of a certain age doing their very best to succeed by “raping and pillaging” or by burning their relationships, there are going to be a few who are going to stumble across a lottery ticket and succeed. And those are the ones you’re going to read about. You’re not going to read about all the ones who fail and the vast majority do fail.”
23:29 Non-Negotiables in Guy’s Life
Guy talks about a non negotiable that he hasn’t held himself to but he ought to hold himself to and that is having the discipline to put himself through painful work to reap the rewards.
Guy: “The question of how to live life in the most meaningful way possible and holding myself to that standard, that is something that I’m still figuring out. And actually, I think it has got to do with sort of making the world beautiful in your own image. So finding ways to interact with people in such a way that they leave the world or they leave the interaction feeling like you know, they’re happy that I’m in the world and they’re happy that they’re in the world.”
33:14 Work-Life Balance
Work-life balance is dependent on who you marry, Guy says. Him and his wife are very different but he believes that celebrating the differences and learning from each other is a key component to achieving work-life balance.
Guy: “Finding that kind of the ability to move between those two worlds and find a dialogue between those two worlds is actually what sets the relationship up for success. It also sets your children up for success because they kind of see the stereo vision. And I actually think that’s true of teams.”
38:00 Guy’s Investing Approach
Guy: “I feel like the vast majority of what I’m doing when it comes to my investment practice is another way of describing it as bowling, with when you go to the bowling alley and you’ve got the cartons up for children, I’m just constructing those cartons. I just want to find a way I’m not trained. I’m not working on the quality of my bowling. I’m not working on my technique. I just want to go bowling. I just want all of those rails up there so that they kind of lead the ball right to where it’s going. The assumption that my bowling technique will never be any good. And so for what it’s worth, I think that that’s just the approach that has worked for me. I think there are some people who are absolutely brilliant in being able to judge risk and to time when they buy something, when it’s extraordinarily cheap to buy when others are fearful. And I’m not one of those people.”
40:40 Self Correction Comes From Self Knowledge
Guy references the fairytale of Tristan and Isolde which left a lasting impact on him and the importance of self introspection.
Guy: “Even better than psychotherapy is writing, but writing is this very powerful way. You have to examine your insights before you write anything properly. Once you start on that journey, if you’re honest about that journey, you can’t really stop.”
45:31 Guy’s Style of Writing
Guy says that self-reflection is the only style of writing that he knows how to do. Part of him wishes that he kept more of himself hidden from his writing.
Guy: “The work of being honest with the world, each time you do it, is a vote for having that honesty and the muscle gets stronger. And so I think that becomes easier to do. And I think that actually a muscle that I would really like to strengthen in myself is one in which I just write something every day, because I think that there are probably some things I’d be sad if I had not shared with the world, that would be valuable.”
52:22 Collecting From Different Domains
Guy: “Our library is a bit like a cocktail party. So you know, there’s a, if you’ve got a thousand books in your library, there are a thousand people at your cocktail party. Some you don’t want to talk to, you don’t want to take every single person you meet at the cocktail party home with you to have like an eight hour conversation. There are some people that just want to have a five minute conversation. They’re not the right person for you. That’s the book that you flip through and put back on the shelf. And so what fun to have that cocktail party of books available to you.”
57:20 Capturing Thoughts
Guy buys any book that peaks his interest and underlines passages while he is reading. He uses Evernote as a way to write down his notes and capture his thoughts. Guy also creates an index within the notebooks that Guy writes his thoughts down on.
Guy: “Our ability to think clearly about the world and what are the places where it starts is this idea of the capture habit. So when you have a thought, wherever it is in the shower, write it down real quick, the idea that the thoughts are going to stick around, we all know what happens. It just floats into thin air and then disappears. Capturing thoughts is a bit like capturing butterflies, you’ve got to grab them and preserve them while you still can. And then later on you can kind of take them out and review them and new things will come out of your thoughts as you review them.”
1:08:01 Having Rules for Yourself
Both Guy and Sean have rules that they have set within their daily habits and practices to make sure that they follow through with certain things. These rules are subject to change according to what best serves your current life, but they serve as an accountability partner.
Guy: “The rules can change. You know? Actually it’s an interesting study to ask, well, you could already have a limited number of rules for yourself. What are you going to choose?”
1:13:05 Resource Recommendations
Essay:
Unreasonable Effectiveness of Mathematics
YouTube Channels:
Books:
1:21:45 Emotions Are Calls To Action
Guy talks about how emotions are clues for decisions that we have to make and things we have to do. Our initial reactions to the emotions are not the actions that we need to take.
Guy: “We feel envy when there’s some part of us when we know that we actually could in some way be similar to that person, but we haven’t achieved it. And so one of the unproductive responses to envy is to be spiteful towards somebody, but to say, “wow, I’m envious of that person.” I need to go and examine my own life and see what changes I need to make and what things I need to try and do. Because I think that once you get going on your own path and in dealing with that envy, you no longer feel envy, because you’re the man in the arena now, and you’re out there figuring out your own future.”
1:26:57 Guy’s Interview Choice
If Guy were going to spend the evening having a conversation like this, just talking to anyone dead or alive, just not a family member or friend, he would choose Charlie Munger.
1:28:29 Nelson Mandela
Guy: “Nelson Mandela shows an extraordinary mind. Somebody who is in prison and he’s figured out a way to empower change far away from his prison cell. And to get societal change. And I think that somebody who’s capable of thinking in terms of that kind of deep strategy… And if we go back to the act of writing thank you notes, or when you expand the envelope, it goes from thank you notes to maybe founding entrepreneurs, organizations or something else. And there’s a guy who’s sitting in prison encouraging songwriters to write songs for some unknown future that he has no idea will ever happen. He may have spent the rest of his life in prison, or if he’d have been a worse regime, he might’ve been executed. And so what is the mind that does that?”
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