The Intelligent Investor...Hardcover

So that's why one of the most famous investing books is the Intelligent Investor by Benjamin Graham and it was first written in the 1930s and there is of course a lot of timeless wisdom in there but there's also a lot in those books that is like hyper specific to the economy in the 1930s and the 1940s that if you tried to implement those formulas today you'd lose everything.

Benjamin Graham, who wrote The Intelligent Investor, basically said what you should do is look for value companies and try to determine where the beer is.

You don't know who's swimming naked till the tide goes out.

I assume this is a joke He said either he would write a letter to them to plead his case to get into Columbia saying I thought you guys were dead I didn't realize you were alive in teaching classes Because he had like just picked up their book and was like this is that you know, he what the intelligent investor

So Graham's book the intelligent investor had just come out

The intelligent investor is like the Danny Kahneman thinking fast and slow You know a version of like, uh, you know, it's case studies. It's like distilled down for public consumption

And for listeners out there who have read the uh intelligent investor, you're probably thinking wait that was supposed to be the not dense one Different era different era.

So Warren's read, you know the intelligent investor and he's he loves it. He's like this is amazing and and what The intelligent investor and security analysis in a even more dry way before it what they did was they espoused they were like, hey You should think about stocks investing in stocks systematically and based on the fundamentals of the companies that they represent And as pieces of a business not like tickets on, you know, horse race betting here And they basically introduced the idea of the discounted cash flow Like this is the first notion that like stocks are You know the market cap of a company is representative of the sum of all future positive cash flows or I guess all cash flows discounted at a certain rate back to today and you know, this sort of Forcing you to look and say does the price of the stock today reconcile with what you actually believe the business will yield or produce in its full lifetime You know that that was frankly novel it was and

But also, you know guys like Richard Branson and people that knew how to build brands and systems and processes and just a student of it So I did that and I was having the time of my life I started my first company when I was 24 years old and had no idea what I was doing I had no resources didn't know how to raise money as matter of fact I never raised money my way of raising money was just to sell and Just go out and sell all day and if we needed more capital that meant I needed to close more deals But after I started my first business I kind of got into cadence and every time I had a fun idea It seemed like I was starting a new company and you know I remember people ask me kind of early in the process maybe five six years in hey Do you ever plan to sell your business? And I'm like this is the most fun anybody could ever have I mean, I'm finally making money having a good time And I was like, you know, I don't think I don't think I really ever want to sell these businesses I want to do this forever and through really a unique set of circumstances I had a a business partner that was not actively involved in the business, but was just a fantastic partner and He had a big business and three unique series of events In 2015 all of my operating companies were acquired by Berkshire Hathaway and And got to carry that awesome flag of being a Berkshire Hathaway company and you know, I think it was it was fun I mean, it was an amazing time and it was a great accomplishment But what I think it was really mostly impactful for is all the people on my team I had all these people like my buddies when I'm 24 years old that I'm like, man, I'm gonna go start this business I can't really pay you anything and we're gonna go sell into this industry and they're like Vic You're crazy, but I'll go do it and the ones that stuck around which were most of them. Yeah in 2015 All of a sudden, you know, we went from just Energetic passionate people that were selling into an industry and building companies to you know, we kind of had this stamp of maturity Of having that great, you know mantra and slogan and probably the most powerful brand in the world in my opinion Yeah under our brand which said, you know a Berkshire Hathaway company So it was fantastic. I think the the path of how we got there Was by no accident. It was really just all about the people that I surrounded myself with You know, I was one of these guys that when I was a young man You know, I took notes from people that were successful and one that I always heard people say is surround yourself with people smarter than you right and And I thought they meant it and so I really spent, you know all those formative years to build my businesses Just trying to find people. It wasn't all about IQ. Sometimes it was about EQ I mean just people that had a lot of passion and drive and understood how to be You know, compassionate and what they did and right up about it and next thing you know We've we've built a series of companies and Man, it is it's the funnest thing ever for me is to build businesses. I kind of love it And you know if I always tell the story of somebody invited me to go play You know around a golf on a Saturday morning at the most fantastic golf course in the world And I love to play golf every once in a while Yeah, but if they asked me to do that or said, hey Let's get in a room and let's figure out how to build massive enterprise value. Let's scale a business Let's build a great team and let's take something to market. It's like a love story I mean, I just fall in love with the process of helping people build businesses and hey That's really what I get to do. So I love that a lot of fun. What do you build in this year?

I remember when I was over 20 years ago and I first got interested in markets picking up the intelligent investor because of course Buffett and Munger ran into it and reading is like if you buy the Brooklyn Rail bond yielding 8% I was like what is this? I just thought it seemed so disconnected from it. I mean I'm sure there's a lot of deep wisdom and I probably should have internalized it but just in terms of what they were talking about it seemed so funny because of how antique it all seemed.

which is honestly it's kind of a dense read and it's kind of boring.

But there's a lot of it in there that talks about behavioral biases and how.

He went to Columbia Business School, especially so that he could go to attend a class in value investing run by Benjamin Graham, who wrote The Intelligent Investor and Security Analysis, basically the father of value investing.

And he published in the 1930s right at the bottom of the Depression and came up with these concepts for how, you know, the market might have gone down a lot.

One thing I would make... Benjamin Graham's book, The Intelligent Investor, which I did read, I don't know if you remembered his rule of thumb about what a proper PE is. It's 12 times plus 2 times the growth rate. That is in his book.

I'm just saying, when someone says they're a value investor and they're saying stocks are expensive, I know they didn't read his book because I read the book.