Adam Mead (00:02:27):
I probably first discovered Buffett maybe when I was 18. If you spend enough time in business, you’re going to come across Buffett in one way or another eventually, right? That was my first encounter with him, and one thing led to another, and it was just fell in love with it, fell in love with everything he was saying, and made total sense to me. Here I am writing a book about Berkshire Hathaway. So, it’s been quite a fun journey.

Robert Leonard (00:02:54):
I think it’s pretty safe to say the majority of the people listening to this episode know who Warren Buffett is. TIP was founded on studying Warren Buffett, so probably most people know who he is, but not as many people know who Charlie Munger is. I’ve been studying both of these guys for over a decade. So, I’m quite familiar myself, but I’m always surprised by how few people actually know who Munger is.

Robert Leonard (00:03:18):
Knowing who both of these individuals are is going to be important for the rest of our conversation. So, let’s start there. Give us a brief overview of who Warren Buffett is for those who may not know him, and then tell us a bit more about the less popular Charlie Munger.

Adam Mead (00:03:34):
Warren Buffett, he’s been popularized, I guess, at this point certainly I think because of his wealth. So, Warren Buffett, generally known as a rich investor, right? He’s on the Forbes 400. He’s often quoted as being one of, if not the richest person in the world or the country. So, that’s the popular Warren Buffett.

Adam Mead (00:03:56):
What a lot of people don’t fully understand or maybe appreciate, certainly the popular world, is just how much he is in our daily lives and has built up this incredible organization whose companies are in our daily lives, Fruit of the Loom or Benjamin Moore. He’s known as this old rich guy at this point. That’s Warren Buffett, world’s greatest investor, world’s greatest value investor at least to us in the inner circle here.

Adam Mead (00:04:22):
Charlie Munger, it’s interesting. I was recently listening to some old daily journal meetings and Charlie Munger is the chairman of this little tiny paper in LA, this daily law journal. Someone asked him the question, “Jeez! Why is Warren Buffett so much richer than you are?”

Adam Mead (00:04:39):
Charlie Munger is a billionaire. He’s just not worth the 84-85 billion that Warren Buffett is. So, Warren had this really early start. I mean, he was picking stocks. Age 11, he bought his first stock. So, his introduction to the business world was much earlier. I mean, he simply had a quicker start. So, by the time they met in 1959, Buffett was well on his way to investing for himself. He had already started this compounding. So, I think it’s really just a matter of Buffett getting ahead of Charlie at the beginning and this just compounded over time.

Adam Mead (00:05:14):
Warren had his partnership in the 1950s. Munger eventually started a partnership of his own. So, it was simply a matter, I guess, of where the two started at the starting point. Charlie Munger is someone, he doesn’t seek the spotlight, and I think just by virtue of Buffett’s headline wealth, that catapulted him ahead in terms of popular culture and so forth, and he’s on TV. Munger is much more behind the scenes and he had his law practice for a while, and then the two became business partners in the 1960s. They bought this department store, Hochschild Kohn. That was ultimately part of this company called Diversified Retailing.

Adam Mead (00:05:59):
So, the two were attracted to each other immediately, this famous story of them meeting and talking all night and both falling out of their chairs at their own jokes. They were kindred spirits. So, I guess it was only a matter of time before they joined forces, and in 1978, Berkshire Hathaway and Diversified Retailing merged, and Charlie Munger became vice-chairman of Berkshire Hathaway, and the rest is history.

Adam Mead (00:06:23):
I guess I would attribute Buffett’s relative popularity compared to Charlie Munger just from that starting point, just the character of the man not quite seeking the spotlight, and probably avoiding it, if anything.

Robert Leonard (00:06:36):
Buffett originally invested by following a strategy taught to him by his mentor, which was Benjamin Graham. Who is Benjamin Graham, and what was the strategy he used that Buffett started with?

Adam Mead (00:06:48):
So, Benjamin Graham, he’s called the Father of Value Investing. So, Benjamin Graham was born, I forget the exact year, late 1800s. So, he lived, he grew up World War I, the Roaring 20s. That was his start. Graham had a setback in the 1920s when the market crashed, and he was forced to reevaluate everything and just turn inward and then ultimately outward in writing his first book, Security Analysis.

Adam Mead (00:07:18):
So, what Security Analysis, which came out first in 1934, sought to do was essentially take the mystery, if you will, out of the stock market and it was a quantitative approach. Back then, remember, this was a much more inefficient market, and so there were companies that were trading below cash on their books, but, really, Graham’s contribution and the genesis that sets the stage for Buffett is recognizing that stocks are first and foremost a business, and then taking this quantitative approach to say, “Well, if the stocks is a business, let me see what they own, and if I’m an owner of this business in part or in whole, I have a claim to these assets and oh, jeez, here in the 1920s, 1930s, I can buy these companies that are trading for less than their working capital, subtract all the debt out.” So, that’s Buffett’s early years, which is following Graham’s footsteps as this quantitative value investor.

Robert Leonard (00:08:19):
They were also looking for what has now been coined as cigar butts. A cigar butt, you could typically get one, maybe two more puffs out of it, and that sometimes what Graham was looking for is he would look for these companies that didn’t necessarily have a great future. He was looking for to get one more, two more maybe pumps out of the stock or puffs out of the cigar, if you will, and ideally make some money and then sell it. So, he wasn’t necessarily thinking long-term like we’ve come to know from Warren Buffett.

Robert Leonard (00:08:46):
Adam, how would you define value investing? Has the definition of value investing today changed from back when Graham was investing?

Adam Mead (00:08:54):
I guess the short answer is no. Value investing, and I’ll use Buffett’s example of Aesop. 2,600 years ago, a bird in the hand is worth two in the bush. That’s the basic notion in one of Buffett’s letters, and I think at the annual meetings he says, “Well, jeez, Aesop forgot about the time elements. So, it’s bird in the hand, two in the bush, but when are you going to get it?”

Adam Mead (00:09:17):
So, that hasn’t changed ever. All investing is value investing to quote Buffett or Munger or both again. So, it’s really just what are the cash flows, when are you going to get them, and what is that worth in an interest rate environment. So, it’s a fair question to today and certainly looking back right, Robert, from the 1920s and this mysterious casino-like atmosphere of these inefficiencies in 1920s today where algorithmic rating, all this stuff, you have now all the second evolution of the tech companies.

Adam Mead (00:09:55):
So, I guess my feeling is that it hasn’t changed. It’s more of how that basic fundamental framework is applied to today’s environment. So, I guess, one example that comes to mind is just basic communication, right? I mean, think about us communicating today or communicating something to the world 2,600 years ago with Aesop, some guy would have been scratching something on a wax tablet and somebody else reads it to the crowd and that’s their podcast, right?

Adam Mead (00:10:24):
Then you fast forward through the years and you have radio, and you have TV, and now we’re talking miles and miles aways through video, I can see you, but we’re still communicating. So, I think it’s still very much the same thing, still laying out cash today for something that will ultimately give you cash tomorrow in some form, and it’s become more challenging now that there’s more people doing it simply, as well as this element of try to determine what these cash flows look like. It’s not as stable as it was in certain industries. There’s more rapid change. So, that fundamental problem, if you will, for the analysts of Buffett is printing out those coupons on the bond, what they look like in the future and bringing them back to the present. That hasn’t changed. It’s really just the flavor.

Robert Leonard (00:11:15):
For me, that’s exactly right. Then what’s changed for me over the years is when I first started investing, it was more following a Graham approach. It was purely quantitative. I always thought you could invest in a tech company and still be a value investor, but I’ve come to, and maybe my thought process on it is process, but at least the way that I think about it now is if you’re buying a company with a margin of safety for less than what you think it’s worth, you’re a value investor. It doesn’t matter if it’s a tech company or if it’s a manufacturer.

Robert Leonard (00:11:44):
Maybe some people don’t agree with that definition, but that’s at least how I’ve changed my approach to value investing over the years is less focused on industries and types of businesses and more so on margin of safety and what I think the value is of that company.

Adam Mead (00:11:59):
That’s right. We all have to adapt and Buffett uses the example of, which I’d go back to frequently, of car companies or airlines and how many you can get the product for the major shift right but still be wrong on the individual company. So, today, that might be solar. I’m very confident that solar and electric vehicles and some of these other new technologies are going to “win” and be part of our everyday lives, but I don’t know who the winners are. So, if you don’t know who the winners are going to be, you just pass.

Adam Mead (00:12:32):
I was talking to somebody else about Apple recently, and with the growth of some of these companies, where they’re so exponential, you think about Berkshire Hathaway, they were “late” to Apple, but when you have this exponential growth rate, you can still do very well and make hundred billion dollars in Berkshire’s case and still be late.

Adam Mead (00:12:54):
I think there’s room for, certainly us today, we’re going to be forced to grow and change and adapt and learn, but we don’t have to be the early birds. We can be late. We can still stay true to these fundamental value investing principles and foundations and do okay over time. So, that gives me confidence that value investing is just out of vogue at the moment, and we’ll be back in fashion pretty soon here.

Robert Leonard (00:13:18):
I agree in terms of looking at trends and not knowing necessarily who the winner is going to be. One of the approaches that I’ve taken, too, that is to create a small basket for my own small index, if you will, of those companies. So, for me, a few years ago, I worked in banking similar to you and I understand fintech companies and just eh financial world. I think a little bit better than probably an average person. So, I felt I had a good advantage there. It was within my circle of competency, and I’ve felt for a while, for years, that we’re going to a cashless society, moving towards cards and things of that nature, but I didn’t know who the winner was going to be. Is it Visa, Mastercard, PayPal, Square, Green Dot? Who is it going to be? I don’t know.

Robert Leonard (00:13:58):
So, what I did was I created a small basket of all these companies that I thought would essentially be a winner and I’ve done it that way. I don’t know if I’d quantify that as value investing per se, but that’s how I’ve approached these types of trends that I know are going to be worth more in the future, but I don’t know which company specifically it’s going to be.

Adam Mead (00:14:16):
You haven’t strayed from the fundamental belief that they’re all going to generate cash and earnings for owners. Berkshire is taking that approach from time to time, think pharmaceuticals or even airlines recently with, “Okay. We know the industry is going this way. It looks generally like this. We’ll just buy a basket of it.” So, I don’t think it’s too far from the Buffett-Munger approach. It’s just recognizing reality and you’ll learn things over time. You’ll learn that maybe the payment systems certain companies use, the “plumbing” of the system and they’re using Visa and Mastercard anyway, and so you adapt.

Robert Leonard (00:14:49):
Taking Visa and Mastercard specifically as examples is Warren Buffett talks about toll bridges and he loves toll bridge businesses. So, for me, again, going to this basket. I don’t know who the specific winner is going to be, so I’ll include them, but also they’re toll bridge businesses. You can’t typically get around historically, and this may change in the future with crypto and blockchain and that, but that aside, these are toll bridge businesses, where if you’re spending money, it’s probably flowing through Mastercard or Visa with a few exceptions. So, it’s not purely a value play like you’ve said, but it’s touching on all these different principles that Buffett has been teaching for decades.

Adam Mead (00:15:26):
Again, you adapt and you learn over time. One thing, I often go back to again is this concept of business as a movie and not a picture, right? I mean, you’re constantly saying, “Okay. You’re going in even understanding that things are going to change,” and so the act of even if you just pick those companies and held them for 10 years, your active investing is going to be following these companies over time and not trading. So, I think from that perspective, you’re staying true.

Robert Leonard (00:15:54):
When Buffett met Munger, Munger was able to change Buffett’s approach to investing and really changed Buffett’s philosophy towards business. Tell us how Munger changed Buffett’s approach from what he was taught from Graham and the ultimate impact this had on Buffett’s future.

Adam Mead (00:16:11):
Buffett says it himself. I mean, he credits Munger with this tectonic shift in his thinking. So, when we think back to Graham and where Buffett really grew up, it was that quantitative approach, and it works so well, which is why it’s so hard to get rid of it. One year, you’re using it for so long, and it’s working well, and it’s made him a millionaire. So, here comes Munger and says, “Hey, I don’t come to the table with this baggage. I think quality is the way to go, and it’s easier, and it’s more fun, and you can sit around and the business will do well, and you don’t have to worry about trading it for the next thing.”

Adam Mead (00:16:46):
So, Munger represented this shift from quantitative to qualitative. I think Buffett would have come to that eventually, but Munger expedited that process. It was really opening his eyes and you have to credit Munger or this force of personality who we know he is today, but to change the mind of who we now know here to say is one of, if not the world’s best investors. Munger in his own right is a world-class investor and to have this change on Berkshire or on Buffett and ultimately for Berkshire is no small feat, and that’s why in my book I’ve credited him as the architect, if you will. It’s really the Buffett and Munger Show even though the wider world does not fully appreciate Munger’s contributions.

Robert Leonard (00:17:31):
Of course. You can’t really answer this next question with certainty. It’s impossible. I know, for sure, but in your opinion, do you think Buffett would have become as successful as he has if he never met Munger?

Adam Mead (00:17:44):
Yes and no, right? I think, like I said before, I think he would have come around to it eventually, but I think it would have been later and the magnitude wouldn’t have been as great. So, maybe we’re looking at in 2021 a Berkshire Hathaway that’s a $250 billion market cap because this qualitative shift didn’t happen until the ’90s, right? So, I think he would have gotten there eventually. Buffett is, as Munger said, a learning machine. He would have figured it out, but I think Munger’s contribution is no small one.

Robert Leonard (00:18:21):
There are a lot of books about Buffett that have already been published that have been quite successful. Why did you think another book was needed about Buffett? What made you want to write it?

Adam Mead (00:18:31):
It’s a great question. It’s in fact probably the first one most people who see the book for the first time are going to ask themselves. The short answer is, Robert, it was the book that I always wanted but never found, which was I’m a numbers guy. I’m a financial nerd, geek, whatever. I just never found this A to Z chronological numbers heavy history and year by year, and my friend Chris Bloomstran, who wrote the forward for me, actually looked up and found that in the Library of Congress, there are over 200 titles on Berkshire, Buffett, and Munger.

Adam Mead (00:19:06):
So, why another one? I wrote it for myself. It was almost by accident. Again, it was the book I never found, and I said, “Well, jeez! I’m just going to go ahead and start writing it.” So, this was five years ago, roughly. So, it’s the first, I believe, that incorporates all of Berkshire’s history from the predecessor companies, literally the textile companies in the 1800s, all the way to today. I had calculated the number of pages of text and hours of video and the pages total over 10,000, and the video of the annual meetings are over 140 hours. I read about 3,000 pages of the transcript there.

Adam Mead (00:19:44):
So, I would encourage anyone to take this journey. I mean, I learned so much digesting all of this, and the subsidiary reports, and all of that. I suspect a lot of people have already taken this journey, but it’s basically this 10,000 pages through my own experience and viewpoint condensed into 800 pages of narrative, essentially.

Adam Mead (00:20:06):
So, I hope having written it, I hope there’s a few nuts like me that want this quantitative approach, but I really hope that the new student of Berkshire, because so much of it is timeless, the new student of Berkshire, even if 20 years from now can really get up to speed on the company and say, “Okay. What was the evolution year by year?” You can see the changes in the business and what’s happening in the economy, in the stock market, and Buffett’s thinking over time as that evolve, really get that student up to speed and provide them a great introductory education of Berkshire.

Adam Mead (00:20:44):
I hope for the existing shareholder that it provides a fresh look and maybe it serves as a reference guide of sorts, where you can flip to a decade, you can flip to a chapter, you have in each chapter which covers 10 years. At the end of each chapter is the financial statements for that year, including some other things like the history of the growth and float, breakdown of the insurance business. So, if it plugs that hole I guess in the bookshelf, I’ll be happy.

Robert Leonard (00:21:12):
There are a lot of things about Buffett’s life that have been publicized and even popularized. Tell us a few fascinating things that you learned about Buffett before his Berkshire Hathaway days that just aren’t as well-known?

Adam Mead (00:21:25):
The book is really a biography on Berkshire Hathaway, right? So, it’s textile days all the way up to today. So, others have written some really great books about Buffet personally and his partnership days, and I really don’t go into much detail on the partnership days. One thing I’ve found fascinating, Robert, was, and maybe a lot of people don’t know this, Buffett had this entrepreneurial zeal in his younger days. He was buying six packs of Coke and reselling them at a profit. He was having his friends dive for golf balls and reselling them. He was setting up pinball machines, I mean, all these schemes. I mean, he read that book, A Thousand Ways to Make A Thousand Dollars, and I think tried to do them all.

Adam Mead (00:22:09):
So, when you look at the history of Berkshire Hathaway, that never changed. This entrepreneurial zeal that Buffett had just stayed with him. So, when you look across the history of Berkshire Hathaway and, again, I would encourage everyone to take this journey of digesting all this material, having a relatively short 800 pages can zoom in, but you can see this broader ark. One of these arks is this entrepreneurial spirit. So, you have the entry into insurance in 1969 with National Indemnity, but then you have this history primarily through the 1970s of trying stuff, the Homestate Companies, some of them don’t work, Lake Wind Fire and Casualty Company, which was a Minnesota company formed in 1971. It gets closed down in 1982.

Adam Mead (00:22:57):
Insurance Company of Iowa, formed in 1973. It’s merged into a Corn Husker Casualty in 1980. They bought this home and auto business in Chicago, great little business run by this guy Victor Rabb. Let’s try to replicate this in Miami. Another city completely fails. So, he’s had these number of different things even more recently.

Adam Mead (00:23:20):
When you think about GEICO’s case, Buffett’s reasoning was that great auto drivers are great credit risks, and he ends up losing $15 million and even says that, “GEICO’s management told me not to do it, and I overrode them, basically.” So, he loses $15 million. He’s constantly this entrepreneurial spirit pushing Berkshire ahead, “Forget about today. Let’s invest. Let’s push forward. Let’s try these things.” I think that’s underappreciated, and it comes directly from his early days, and it’s just manifesting itself differently in Berkshire over time.

Robert Leonard (00:23:55):
Speaking of his entrepreneurial spirit, a very common misconception I hear from people is that Warren Buffett founded Berkshire Hathaway, and it doesn’t only come from new investors. I’ve even had some very, very successful entrepreneurs that have mentioned this during a story that they’re telling me that wasn’t related to Buffett. It was just a different story they’re telling me, but they mentioned, “The founder of Berkshire Hathaway, Warren Buffett,” and they’ve mentioned that and I’m like, “Wait, wait, wait, wait. Buffett was not the founder of Berkshire Hathaway. I just want to make sure that’s clear. I know a lot of people think so, but he’s not.”

Robert Leonard (00:24:29):
For those listening that are hearing me say that and are hearing this for the first time might be a bit confused. Tell the audience what I mean when I say Buffett wasn’t the founder of Berkshire Hathaway.

Adam Mead (00:24:40):
It’s interesting. In a sense, he is, and I want to touch on that in a minute. So, Berkshire Hathaway as we know it today, you go back to 1955 and it was the merger of Berkshire Fine Spinning Associates and Hathaway Manufacturing. That was 1955. So, Berkshire Hathaway existed from 1955 to today. That’s the current name, but the predecessor companies, and I guess the best way to think about this is almost like a rope, I guess. So, you have a single strand, you unravel it. So, the Berkshire Hathaway of 1955 and it finally becomes this merged entity is made up of all these different textile companies that came together.

Adam Mead (00:25:23):
So, the Berkshire comes from Berkshire Cotton Manufacturing, which was formed in 1889, and Hathaway Manufacturing, which just coincidentally also formed in 1889, but the furthest back that you can go is this company called the Valley Falls Company, which was associated with the Chase family, who ultimately became part of the board and owners and so forth, but that was 1839.

Adam Mead (00:25:48):
Taking you back a little bit probably further than you wanted to go here, but the textile business comes from England in 1789, this guy Samuel Slater. It really gets kicked up and starts going in the mid 1800s and the late 1800s. So, you have half a dozen of these textile companies that are out there that ultimately merged in various forms and stages. So, this first big merger, if you will, is in 1929 when Berkshire Fine Spinning Associates is created, and that’s a small conglomeration of these mills, King Philip Mills, Valley, which I just mentioned, Coventry, Greylock Mills, Fort Dummer. There’s a whole host of this. I have a chart in the book that shows this evolution over time, and then a couple of others he had picked up in 1930.

Adam Mead (00:26:35):
So, that’s Berkshire Fine Spinning, and then Hathaway is operating at this parallel track until 1955 when the two come together and ultimately formed Berkshire Hathaway. So, the mills, when you look back and you see Berkshire Fine Spinning and then later Berkshire Hathaway, the mills that are listed on these old annual reports are really single predecessor companies were just merged into one, and then into another over time. That’s the genesis of Berkshire Hathaway.

Adam Mead (00:27:09):
So, technically, Berkshire Hathaway, it was this struggling textile company that Warren Buffett takes over, and that’s the C capital that ultimately he redeploys into other businesses’ harvest from the textile business and takes it into what we know today.

Adam Mead (00:27:27):
It’s interesting. The basic notion of Buffett as the founder of Berkshire Hathaway is not entirely wrong in the sense that he really is the modern founder. I mean, this business would have faltered ultimately and faded into history. So, it very well could be around that time they bought Blue Chip Stamps. You very well could be sitting around talking about Warren Buffett and Blue Chip Stamps, right? So, that pool of capital or diversified retailing, that pool of capital that he started with just happen to be Berkshire Hathaway.

Adam Mead (00:28:04):
In a sense, he is the modern founder, but technically not, and I think, I hope my book will help tell the world of this fascinating history of pre-Buffett, even pre-Berkshire Hathaway, a merger, and a lot of timeless lessons in that early history.

Adam Mead (00:28:22):
When I first sent Warren a chapter of the book, I had the idea of starting in 1965 and I said, “I’m going to go back 10 years and then I’m going to go forward in 10-year increments.” So, when I sent Warren this first chapter, he said, “Glad you’re writing the book. It would be interesting if you went back to the World War II days to see the profitability of these companies, this brief leading burst of profitability that World War II brought on.”

Adam Mead (00:28:48):
So, I said, “Well, if I’m doing that, I’m going to go all the way back, right?” So, that’s why I went all the way back, but there’s so many lessons in these early textile companies, working capital, and reinvestment into plant equipment and depreciation and the accounting, which they often under account the depreciations. So, it looked like they were more profitable and they were declining into oblivion.

Adam Mead (00:29:10):
All these are outdated examples, but just like the definition of value investing, still relevant today, still just applicable to different businesses. So, World War II creates this shortage, which the surviving companies are able to just have these huge run up in profitability because they were the only ones around. So, these themes, history, history doesn’t repeat, but it rhymes. It’s very much alive and well in Berkshire’s early history.

Robert Leonard (00:29:37):
What other misconceptions or misunderstandings are there about Berkshire Hathaway today such as the value of its float, for example?

Adam Mead (00:29:45):
Float is an interesting one, and it might be a little bit more technical for some, but I think that one of the biggest that I hear often is, “Jeez! Berkshire Hathaway, it’s a mutual fund,” or it’s an alternative. It’s really not true. The thing that people don’t quite understand is, yes, it has a big common stock portfolio. That’s one, which has been shrinking in importance over time, but Berkshire has the ability to move capital between subsidiaries tax-free. It has all these other advantages that a mutual fund just simply doesn’t have.

Adam Mead (00:30:17):
So, that’s one I hear a lot, but float, even among investors, I think is not as well-understood. So, float is simply moneys that an entity holds, an insurance. It’s premiums received and losses that haven’t been paid out or sitting essentially in an account and a company can do something with them and invest them for their benefit until ultimately the money goes out the door.

Adam Mead (00:30:42):
The first thing about Berkshire Hathaway’s float is that it’s of a high quality. So, what does that mean? That means that it’s written to an underwriting profit. So, Berkshire explicitly 100%, their first focus writing to underwriting profits over time. So, this pool of capital, which it’s no secret in the industry that you can write business. I write Robert a policy. He gives me $1,200 for his auto policy, and I get to hold that money and invest it until it’s possibly paid out. That’s no secret, but industry, you can immediately write a policy and get cash in the door, but the key is to have it being profitable over time.

Adam Mead (00:31:22):
So, if you have, basically, two forms of insurance, two forms of float in Berkshire Hathaway, you have the short tail revolving fund of GEICO, lots of policies, lots of premiums coming in the door, lots of losses going out, but it’s this revolving and growing fund.

Adam Mead (00:31:41):
Then you have the reinsurance business, which is more akin to borrowing money with a payment stream that’s not known and an ultimate dollar amount that’s not known. So, the reinsurance is lumpy. It comes in fits and spurts, and the accounting is weird, but over time, Berkshire has managed its reinsurance business very well.

Adam Mead (00:32:04):
So, float has currently constituted and as Berkshire Hathaway has created it really truly focus functions just like equity without the delusion. So, it’s listed as a liability on a balance sheet. The way it functions is very, very much like equity. In fact, in some cases, better than equity. It’s not dilutive, and it has the ability to grow. I even modeled this out. I have a chart in the book where Buffett says that float, if it declines, it will decline let’s say a 3% rate. So, you take their underwriting profits and across the board, if they’re able to generate a 3% underwriting profit or a 97% combined ratio and float declines at 3% a year, what you have is this steady state amount of capital that is available for shareholders, but what happens is the float declines, but the profits essentially make up this growing piece.

Adam Mead (00:32:57):
So, it’s better seen visually, but if Berkshire Hathaway, which I think it will, can generate a modest amount of underwriting profit, and even if it declines over time, this 135 billion plus in float is essentially equity capital, and I don’t think it’s fully appreciated even by those who follow Berkshire Hathaway.

Robert Leonard (00:33:20):
What is the risk exposure for Berkshire Hathaway’s underlying insurance businesses from COVID-19?

Adam Mead (00:33:27):
Well, in some ways, I think it’s probably modest, but in some ways, it’s not known. I mean, one thing that we’ve seen over time and looking through Berkshire’s history is this concept of social and judicial inflation. So, there’s always this risk that a judge or a series of judges or legislation retroactively changes the rules of the road. So, Berkshire could find itself liable, but I suspect the last SARS episode, a lot of insurance companies put these pandemic exclusion clauses in their contracts. So, that’s one element if Berkshire’s on the primary front there.

Adam Mead (00:34:08):
The reinsurance front is another interesting thing. So, at one point, Buffett makes the comment that it almost doesn’t matter what the reinsurance liabilities are. It’s only the amount and timing of the payments that go out. So, in I believe at this point, I’m fairly certain in saying this that every single reinsurance contract at Berkshire rights there is an upper limit cap on how much they can pay out.

Adam Mead (00:34:36):
So, if it’s asbestos or if it’s other long tail risk that they’ve off loaded or retrocessional policy, the biggest thing is, okay, they’ve received the cash premium upfront, how quickly will it go out the door if it’s capped, if it’s off the big AIG policy from a couple of years as an example, $10 billion premium, and they pay 80% of 25 billion, over 25. There’s a whole formula, but, basically, the upper limit is capped. So, what COVID might end up doing is accelerating those payments out the door, but that cap will still remain.

Adam Mead (00:35:11):
So, I think it will have in some instances unfavorable impact on Berkshire, but I think in other ways, it’s a risk that in some ways was almost anticipated in the sense of looking for these long tails and look for these out of the blue risks, which that’s what Ajit Jain is paid to think about, right?

Robert Leonard (00:35:30):
I remember back to March 2020, a lot of people were expecting a big deployment of cash during that time from Buffett and Berkshire Hathaway, and it didn’t really come. We were expecting maybe a big acquisition or maybe just even an equity position upwards of 10%, maybe ownership of a company, but it didn’t happen. Some people argued that it was potentially because of this exposure in risk that they had to underlying insurance businesses, and Buffett, he wasn’t to make sure above all else they didn’t lose money and keep solvency. So, there’s some debate that he kept that cash on his ballot to help with those things and didn’t deploy it because of that. What do you see is the reason as to why Buffett didn’t deploy more capital during the last market drawdown back in March 2020?

Adam Mead (00:36:15):
I guess I was among those that were a little bit disappointed in the lack of major buybacks. I would have liked to see them hand over fist and if they had 120 billion of cash, why not? They were doing fine with 50 billion of excess cash. Why not just let that go out the door and repurchase this or do some aggressive moves? You listen in to that last annual meeting, and I’m sure a lot of the listeners did. I really sensed a lot of fear in Buffett’s voice, and he and Ajit Jain and Munger and a lot of others spend their time thinking about worst case scenarios. I think the scenario that played out last year was one of many possible scenarios.

Adam Mead (00:36:56):
I think there was a genuine chance that we could have entered another depression, another major, major depression that even rival the 1920s. I think seeing those number one rule of live to see tomorrow just trumped everything else. I’m not sure if it was necessarily on the insurance front. I think it was more of just a catastrophic, worldwide shutdown. I mean, imagine if the support that was given to businesses wasn’t there, I mean, we could have seen, and even Precision Castparts, which they marked down by 10 billion, I mean, that business could have done completely out if airlines were completely shut down. A lot of the MSI businesses could have just completely failed.

Adam Mead (00:37:36):
I mean, the dark scenario that I think as a possibility was playing through his head very much could have come to play. So, I can’t really fault him knowing his thinking, at least what he said over time, and I suspect that those things were going through his mind and just led to, “We need to sleep at night, let’s not be too aggressive here, even with 130 billion in cash.”

Robert Leonard (00:38:00):
Yeah. I actually sensed some worry or him just being genuinely scared during that annual meeting as well. We’ll talk about how his approach to preserving capital right now versus growing it like he might have in his earlier days. We’ll talk about that a little bit later in terms of how that might have impacted his returns versus the market lately. Do you think he’ll ever deploy that capital before he passes, which we’ll, again, talk about later in the conversation?

Adam Mead (00:38:29):
I think there’s a good chance of it. The world can do crazy things, and he says that he can go from green to red without stopping at yellow. I mean, we’ve been lucky that the stock price has lagged as an owner, full disclosure, probably no surprise of Berkshire. What a blessing that the stock price has lagged and that has been an opportunity to deploy capital. So, I suspect before too long we’ll see something happen there.

Robert Leonard (00:38:53):
If he does deploy it, what do you think the most likely scenario is? What do you think he’ll do with it? Do you think it’s share buybacks? Do you think it’s acquiring a full business? Do you think it’s taking a major equity stake in one company, maybe smaller stakes in couple different companies? What do you think he’s going to do with the money?

Adam Mead (00:39:10):
The short answer is yes. He said this over. Berkshire’s strategy is one of opportunist. Our strategy is no strategy, and I’ve classified or thought of it as patient opportunism. So, I’m confident that something before long, humans make up markets. So, whether it’s repurchasing shares when that makes sense to do, if there’s a big acquisition that can be made, maybe another partnership with 3G Capital, another big stake in a public company, those things are certainly possibilities, and even a combination of those. I think it’s less likely that they pay a dividend. I think there’s other things that can be done before that, but I suspect within the next few years we’ll see something intelligent done with that cash.

Robert Leonard (00:39:51):
There have been some investors who have been successful by just cloning Buffett. One of the most popular is Mohnish Pabrai, but for the most part, investors likely wouldn’t do too well trying to just copy Buffett’s picks. I think this is one of the most common misconceptions around Buffett and approach to studying him. Why should most investors not try to just copy Buffett’s picks?

Adam Mead (00:40:15):
If you approach it as a learning opportunity, that basic notion is a good one. Being a shameless cloner as Pabrai says, 13F surfing, looking at the big positions of other well-known investors, that is a good practice. That is a way for you to study and really back in to certain decisions, why they’re being made, even looking at some of the mistakes. You and I cloning Buffett at this point, we’re giving up our advantage of being small and nimble for Buffett’s and Berkshire’s disadvantage of being large and having this universe of businesses, the small universe of businesses, which I don’t think that’s an intelligent thing to do, but following it and certainly studying why he makes a certain move is a smart thing to do, but simply writing coattails. If you don’t know why you’re buying something, how do you know when to sell and Buffett makes mistakes. I mean, let’s not forget IBM, for example, or some of these other ones, he makes mistakes, too. So, study, but you got to do your own thing even if it’s Warren Buffett you’re following.

Robert Leonard (00:41:20):
Whenever somebody is the greatest of all time or at least in debate, there are always people who have negative things to say about that person and that they’ve fallen from their once elite status. Adam, you’re from New England like I am. So, we’ve been able to witness one of the greatest quarterbacks of all time in Tom Brady, and we hear it all the time. People have been writing Tom Brady off for years and years now, then he goes and wins another Super Bowl this year. The same thing has been happening to Warren Buffett for years, but the big difference between Tom Brady and Warren Buffett is that Brady is continuing to prove the doubters wrong, whereas Buffett isn’t quite doing so well, and he continues to underperform the market. These two are playing very different games, but I think the idea is the same. Has Buffett lost his edge? What has been the leading cause for Buffett’s underperformance over the last decade?

Adam Mead (00:42:13):
Just talked about this basic disadvantage of size and Berkshire Hathaway not paying a dividend. It just supercharges the amount of capital that they have to deploy. That becomes a problem. So, I guess I look at it as two basic problems. One is their growing size and the shrinking universe of opportunities because of that size, and the other is just the simple abundance of cheap capital out there with interest rates being as low as they are. Who would have thought that the fed, maybe someone would have, but that the fed would have stepped in the way they did and lent the companies last year versus what Berkshire was able to do in the great recession, which was lend out a bunch of capital ad exorbitant punitive rates. So, that opportunity was spoiled by the fed. Those are the two main causes, I think, Buffett’s underperformance. It’s certainly a great analogy, and I guess you got to watch out, again, being from New England, say Tom Brady outside of New England, you might lose some listeners because you’re bringing up Tom Brady, but maybe it’s just the case of we’re early in the season, and we’re not quite at the Super Bowl with Buffett.

Adam Mead (00:43:21):
I think he is more likely than not to be proven right at the end of this within the next couple of years, this extreme conservatism and prudence managing a strong balance sheet I think will shine through. I think we’ll have one of these moments, “Oh, okay. This looks great in hindsight,” but who knows? Those opportunities, because of their size, are really shrinking.

Robert Leonard (00:43:42):
Even more than just the underperformance that Buffett’s had, what I think is more important or more valuable than copying him and his stock picks is learning from him and his principles like you said. For me, one of the biggest reasons for that is because every investor has a different circle of competence than Buffett. So, it doesn’t really make sense to invest exactly the same way he does. You don’t have the same temperament he does. You don’t understand his thesis. Those are probably pretty obvious, but more importantly for me, I don’t have the same circle of competence as Mr. Buffett does, but I can take his principles of investing and that principle he has of circle of competence and apply it to my investing.

Robert Leonard (00:44:22):
He applies it to energy. He applies it to insurance. He invests in these two industries and businesses a lot. I don’t really understand the insurance business all that much. Maybe if I study it a bit more, I probably could, but I don’t think I really do, and I really don’t think I could understand the energy business. I just don’t think either of them are really within my circle of competence, but I know that fintech is.

Robert Leonard (00:44:42):
So, I personally have positioned my portfolio that way. I don’t copy Buffett’s picks, but I take his philosophies and his strategies and his principles and apply it to my portfolio that way. What other principles of Buffett’s have led to his success that investors listening today should follow?

Adam Mead (00:44:58):
Oh, one of the biggest ones that I’ve learned over time again and again is really patience. Well, we’re just talking about eventually coming through this long episode of underperformance and frustrating environment of opportunities is patience. I mean, when I look back on my own investing career, there were certain times where my patience gave up, went down the quality scale, and just said, “Well, I’m going to buy this,” in various degrees over time.

Adam Mead (00:45:24):
So, what I’ve learned over time is really that patience really pays off. A lot of times comes back to temperament and being active in your searching and thinking and reading versus trading. I often stop and think about, “Okay. Well, if it takes me three years of searching to find an opportunity and it doubles in the next two or even if it takes four years to find, waiting three years and a double in two, that’s a double in five years. That’s 15% a year.” The math checks out. If it takes you seven years to double, so it’s four years of searching and three years to double, that’s a 7% return. It’s not terrible.

Adam Mead (00:45:59):
So, this idea of patience is so powerful and the math and the reasoning behind it is so powerful. One thing that comes up over and over again in Berkshire’s history is this idea of economics over accounting. So, you see you would look through earnings, which with Berkshire having such a heavy investment portfolio, it’s just simply looking at this company and saying, “Well, jeez! Not all of them are paid out as dividends. They don’t show up in the accounting. What would our share of these earnings be if we just look through? If they float all the way through to the bottom line, what would they look through?” So, separating the economics of the situation from the accounting is so important. That’s another one I think would benefit everyone listening today.

Robert Leonard (00:46:41):
I saw a post on social media. I think it was yesterday or a couple days ago. The post is basically talking about celebrating your small wins and talking about how small wins build up momentum for you. I commented a quote, one of my favorite quotes of Warren Buffett where he says, “I don’t look to jump over seven-foot bars. I look around for one-step bars that I can step over.” I commented that on the post and then I didn’t really think much of it because that’s a quote that I love.

Robert Leonard (00:47:07):
Then I was checking my phone this morning on social media, and somebody commented and said, “Yeah, the same guy who sold all of his Apple shares for Chevron and Verizon? No, thanks.”

Robert Leonard (00:47:18):
I found that funny because I think it speaks to the patience that you just said. You talked about how we might be at the beginning of the season for Buffett. Sometimes that’s hard to believe because he’s older. I would say he’s on the older end of the spectrum, so it’s hard to think that he might just be at the beginning of the season, but to the comment that that individual made, it’s like I think I believe in Buffett and his track record deserves that reputation, and maybe he did. Maybe we don’t understand why he made those trades or those investments right now, but I think in the future, if you have patience, like you said, we’ll see if he was right or wrong. We’re not guaranteed that he’ll be right, but it’s just interesting to see that so many people have been writing him off already, and just illustrates how we don’t necessarily understand why he’s making the picks he’s making.

Adam Mead (00:48:03):
I suspect he wouldn’t be too offended to call a 90-year-old and Munger’s 97. I guess they’d like to think they’re middle age, but the actuarial signs might call them old if they don’t use that technical term. One thing, again, with Buffett and the patience is thinking long-term. So, I think the mindset that they have and Charlie Munger with daily journal making these investments that are very likely to not come to fruition until they’re gone is mindset of thinking very long-term.

Adam Mead (00:48:33):
I mean, he literally thinks in decades, if not longer and just says, “Okay. Take this, the principle from economics of ceteris paribus, everything else is the same and just extend our viewpoint to infinity what do things look like,” but he’s really thinking in at least decade stretches. So, if you’re someone like Warren and you’re the head of Berkshire Hathaway, you’re thinking 10, 20, 30, 40, 50 years in the future, even though you know you’re not going to be around. So, I’d almost say that your age doesn’t preclude you from thinking very long-term. In fact, I think Buffett and Munger proved that.

Robert Leonard (00:49:08):
It’s no secret that Buffett and Munger are getting older. We’ve both talked about that. Although I wish they’d be around forever, we know that’s not a possibility yet. Science isn’t there yet. So, what does the future of Berkshire Hathaway look like after Warren Buffett and Charlie Munger are gone?

Adam Mead (00:49:25):
A little bit of the same, a little bit different. I think that the future is capturing incremental value. So, just simply by virtue of their size, they are not going to have these massive gains that they’ve had in the past. I have a chart in the book of the rolling 10-year outperformance of Berkshire’s book value compared to the S&P 500 and it’s a very clear downward trend from double digits in the earlier days down to just a few percentage points more recently.

Adam Mead (00:49:56):
If you do the math and you calculate it out over a 10, 15, 20-year period, even a 1% to 2% performance compounds into something very meaningful. So, I think that won’t change how do they get that incremental return. I think it’s really taking advantage of these infrequent perhaps but meaningful upside opportunities and avoiding the downsides. If they can just not do something dumb, on the flip side they can repurchase shares when it makes sense to do so, when they’re trading at a modest discount to intrinsic value. They could lend to different businesses, service this merchant bank over time. They can buy stocks when the market panics and pick up value that way. So, I think it will definitely, without a doubt, be less than the glory days, but I think that’s not to say that Berkshire Hathaway’s future doesn’t look right.

Robert Leonard (00:50:53):
Does this change at all if one person leaves before the other? We’ve heard couples sometimes infrequently pass within a very short period of time of each other, but not sure if Buffett and Munger have quite that connection. So, it’s probably likely that one will leave us before the other. If that’s the case, do you think that this is going to have an impact on Berkshire Hathaway? What if Munger leaves before Buffett? Does that mentally impact Buffett so much that he leaves the investing game forever or what if vice-versa? What if Buffett leaves first and Munger stays? What is the future of Berkshire Hathaway in terms of one of those different scenarios happening?

Adam Mead (00:51:32):
First thing that comes to mind is Buffett’s equipped that Charlie Munger’s main purpose is he’s the canary in the coal mine because he’s seven years older, but I would argue that Berkshire’s course, again, retaining all this capital, it’s accelerating in a larger size, its course was probably set 10 years ago. So, in other words, if either one or both of them had left 10 years ago, we probably would roughly be in the same place we are today.

Adam Mead (00:52:02):
In many ways, and I’ve mentioned this at the end of the book, Berkshire after Buffett, I didn’t completely steal the book by the same name, but, basically, Buffett’s greatest accomplishment is that Berkshire Hathaway can live without him there, and I think we’re at that point now, but I think we would have been there many years ago. You go back even the early 1990s when Berkshire has their Salomon investment almost blow up and Buffett has to become interim chairman of Salomon and he says, he basically proves the Berkshire model of this extreme decentralization, this delegation just shy of abdication.

Adam Mead (00:52:37):
So, Berkshire’s always been ready in many ways for Buffett and Munger to take off or leave the scene in one way or another, but I would argue that where we are today I don’t think much will change. I really think its course has been set, and we see Greg Abel taking up additional responsibilities and we see Ajit Jain taking up additional responsibilities. Don’t forget that all of those subsidiaries still have this basic advantage and operating structure of operating in a decentralized manner. So, in many ways, saying that Berkshire Hathaway can operate without Buffett and/or Munger is indeed a compliment to both of those men.

Robert Leonard (00:53:17):
Jim Collins in his book, Good to Great, talks a lot about this principle is how a real leader is judged based on how the organization continues to do once they’ve left, not so much by just the results that they’ve had when they were there because there are plenty of people that have done great organizations then they leave and everything crumbles. So, he argues that the real test of a true leader, good leader, is based on how the organization does once they’ve departed.

Robert Leonard (00:53:43):
So, it would be interesting to see what happens to Berkshire Hathaway post Munger and Buffett. Do you think it’s possible, given how much Buffett talks about individual investors and people investing in the S&P 500, do you think it’s possible we ever see his $100 billion in cash just go to an S&P 500 fund and really not much individual equity investments anymore?

Adam Mead (00:54:06):
You mean essentially trade the investment portfolio for a hands off, we can send Todd and Ted home and they’re just going to invest in a low-cost index fund and that will be that? I don’t think so. I don’t see that happening. I mean, really, I think this decentralization happened because Buffett and Munger came from a background of picking stocks. So, what’s the difference whether they own 10% of a company or 100% of a company that could be managed in a decentralized manner? They’re always looking at businesses.

Adam Mead (00:54:33):
I think if that were to happen, that would be a complete admission that they can’t do well, and it would be extremely inefficient. I mean, at that point, that capital would have been better served, distributed to shareholders because you would have this horrible tax situation of owning this index and paying a corporate tax, and then going to the shareholders. So, I’d have to start to question management if I saw that happen. So, the short answer is no.

Robert Leonard (00:54:59):
What role do you think Ted and Todd play in the future of Berkshire Hathaway when Munger and Buffett are no longer around?

Adam Mead (00:55:06):
I think they will serve as part of that inner team and part of that … Their primary function will be to find investments and manage the investment portfolio, the whole thing, not just pieces of it, but as business owners, again, why they wouldn’t have an S&P index is they’re buying businesses, and it really doesn’t matter whether they buy a part of it or all of it, and we’ve seen this Todd and Ted serving as chairman certain subsidiaries. So, I think they will serve as a primarily operating the investment portfolio, but then serving as a consultant, an idea generator for I’m assuming Greg Abel, who’s going to be the next CEO and I think Greg is someone that would appreciate that input. He doesn’t have an ego, and then 20 years in the future, those investment people I think would serve, if it’s not Todd and Ted, will serve this primary function of being capital allocators and really astute business observers. I think that will benefit Berkshire both explicitly through the investment stuff they have, as well as managing the internal wholly on subsidiaries.

Robert Leonard (00:56:22):
I know for me personally, Buffett has had a big impact on my life, not just as an investor, but just even as a person, as a man. For me, it goes deeper than just his investing principles, such as when he talks about reputation. As a younger kid when I was 14, 15 and I found Buffett, I truly believe learning about his principles around reputation kept me out a lot of trouble that some of my friends might have been getting in to, and I think it’s really had an impact on how I live my life. From your time studying Warren Buffett and Charlie Munger, investing-wise or personally, what have you learned that has truly changed your life?

Adam Mead (00:57:01):
Yeah. It’s a great question. I mean, all those things, right? I mean, I feel so fortunate to have found these guys and to have lock whatever it might be to be receptive to their ideas and I agree. I mean, it’s almost incalculable. Where would I be today without these two guys? Taking the high road, which almost paradoxically or counterintuitively is actually the easier way to go as they say. Thinking long-term, which doesn’t just apply to business, it applies to your relationships, it applies to your personal life or your personal habits.

Adam Mead (00:57:39):
Charlie Munger, I very much relate to Charlie just, again, personality quirk-wise. This idea of worldly wisdom and the liberal arts and just synthesizing wisdom from all different areas of life has really helped me and even his counsel of no self-pity, right? He’s one where he went through a divorce and he went through his child dying of leukemia.

Adam Mead (00:58:05):
I mean, when he says, “Don’t feel pity on yourself even if your child dies,” I mean, he has earned the right to say that, and I found myself drifting in that direction in terms of … It’s the story philosophy, really. One, I would also add to your question, Rob, and almost use a Mungerism and invert it and say, “What from their life would I not do?” I’ve thought about this, and it’s a question not a lot of people ask, but when I’ve studied Buffett, his life, two things come to mind. One is he was just so obsessed with business.

Adam Mead (00:58:40):
One of the reasons why he’s so successful is he’s just laser focused and just obsessed with business and investing and making money. His relationships with his kids, his family, it’s all worked out for the good, but I’m personally not willing to trade that time with my family for some extra money or few extra percentage points. That’s one choice I’ve made. The other is I don’t think you can live off of a diet of cherry Cokes and See’s candy. I feel like to take that long-term view and to be around for the next 50 years, 60 years or whatever I’m blessed with, I have to take care of my body, and that will take care of my mind. So, family time and eating well are some two anti-lessons or things that I don’t want to follow Buffett, which, again, I don’t often hear that question asked.

Robert Leonard (00:59:38):
Don’t forget all of his McDonald’s.

Adam Mead (00:59:41):
That’s right. Along that with it are ice cream and Oreos for breakfast or whatever it might be, which, I mean, there’s a certain degree of truth to being happy, but I think you can be happy eating Cheerios instead of Breyers for breakfast. Todd and Ted are runners. People might not know that. They’re big runners.

Adam Mead (01:00:00):
If I ever get the chance to ask them that question, I’d certainly do that, but even the food thing, it illustrates this Buffett is certainly, I mean, he’s not a genius, pretty close to it, but, really, I mean, he simplifies so many things, and I’ve heard him. One comment he made was, “Well, jeez! I can eat,” whatever it is, “2,000 calories a day or 2,500 calories a day. If I have a cherry Coke and it’s 210 calories, jeez, that’s just part of my daily calorie allocation.”

Adam Mead (01:00:28):
So, he’s broken it down to something very simple, but I would almost say, “Well, jeez! If a younger Charlie Munger were looking at his diet, maybe he would introduce some science of nutrition and molecular or cellular biology or something into the mix to convince him to maybe try broccoli once in a while.” I don’t know.

Robert Leonard (01:00:49):
What I love about this last few minutes of the conversation we’ve been talking about in terms of what we’ve both learned and taken from Buffett and Munger is probably one of the most common things I get asked from people is, how do I find a mentor? I think I can safely say neither you nor I have been one-on-one mentored by Warren Buffett or Charlie Munger, and we probably never will be, but I still feel like I have been in a sense. I feel like I have Buffett as a mentor.

Robert Leonard (01:01:16):
So, that’s one of the things I try and tell people and teach people is with technology, the way it is today and books and podcasts, you don’t need a one-on-one mentor to get the same mentorship or pretty close to it that you would get even if you were one-on-one with them. So, this, I think, just drives that point home even further for me.

Adam Mead (01:01:35):
Oh, absolutely. I think Charlie Munger has called it. You can converse with the eminent dead. You can have a conversation with Benjamin Franklin or Cicero if you wanted to or anyone from the past. It’s a blessing. Buffett and Berkshire and Munger, they were great teachers. Buffett has even said he wants to be remembered as a teacher, but when you look at all of the material that’s out there and the things that he’s shared, we’re so lucky. I was so lucky to have all this material to go through and writing a book about it, timeless wisdom or if you want to become a better investor, he said it all. It’s right there for the taking.

Adam Mead (01:02:13):
So, what’s fun about today and especially like you said with technology is we can all learn together and I think it really is just the willingness to do it. We’re all on this journey together, and there’s a lot out there to learn.

Robert Leonard (01:02:26):
I think too often people want to be able to reach out to someone and get the direct answer even though that answer might already be in a book or a podcast. They don’t want to have to do the work to find the answer. Rather, they just want to be able to call them or text them and say, “Hey, what’s the answer to this?” and not necessarily put in the work. When you look back to when you first started investing, what do you know now that would have helped you grow your wealth quicker if you had known it back then?

Adam Mead (01:02:53):
Let’s see. Buy Apple, buy Tesla, even though I wouldn’t. No. Buy bitcoin. Other than a crystal ball scenario, I would reiterate the patience, I mean, really. I think the best analogy that Buffett is talking about is the punch card analogy, which if you had 20 punches in every investment decision that you made in your entire lifetime, you take a punch out of that card, you only had 20 decisions to make, you’d think a lot differently. I think that would just help crystallize and incorporate a lot of different things that make a successful investor. That patience would definitely be there.

Robert Leonard (01:03:33):
Adam, thanks so much for joining me today. I’ve really, really enjoyed this conversation, and I could have kept talking for hours. I’ll definitely have to have you back on the show again soon to talk about Buffett and Munger and Berkshire Hathaway more. For those listening that want to learn more about Buffett, Munger, Graham, any of the guys that we’ve talked about today or even yourself, where is the best place for them to go?

Adam Mead (01:03:57):
Yeah. So, thanks, Robert. This has been extremely fun. We have decades and decades and Berkshire’s history. I’d love to dig in and even take some questions from listeners or however you want to structure it. I would go decade by decade. There’s just so many great lessons. So, as I was going through my research, I’ve realized I wanted to have a place to put this, and as a way of giving back and as a platform for the book, I created this website called TheOraclesClassroom.com. I also have the domain brkbook.com. So, you can go to either one of the two. There you’ll find, you can contact me. You can browse through a lot of Berkshire’s archives, a lot of it really material, some of the even Moody’s reports dating back to the 1920s and 1930s. If there’s stuff I’ve missed, I mean, there’s a glossary there. There’s all kinds of stuff. It’s a work in progress. If you go there, you can find me and I’m not going away. Love to come back on the show. Look forward to the next time and from hearing from folks. It’s a lot of fun.

Robert Leonard (01:04:56):
Thanks so much, Adam.

Adam Mead (01:04:58):
Thank you, Robert.

Robert Leonard (01:04:59):
All right, guys. That’s all I have for this week’s episode of Millennial Investing. I’ll see you again next week.

Outro (01:05:05):
Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast network. Every Wednesday, we teach you about bitcoin, and every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.