Let me be clear from the get-go: I’m not against business schools or formal training of any sort. You have to learn the basic tools and they will underpin all of your assumptions and decisions about investing and the market. But, and this is a big BUT, the way and the talent you may develop to make money can come from a different education as well.
I have a completely different and unconventional education in business if compared to any professional investor out there. You can also say that I’m an amateur. As long as my results for my partners and me are way beyond average and/or outstanding, I really don’t care. I rely upon the Graham’s line in the “Intelligent Investor” in which more or less he said that some regular non-professional investors are able to beat professionals at their own game. How? Basically, if they are equipped with the adequate attitude towards the market. The famous temperamental quality that Buffett stated very clearly decades ago and still he will confirm today. Human nature will not change now and fifty years from now. And so the human animal. The “academics” will still be teaching you all kinds of things to make you look like a “high priest” and not an amateur; but how about to make money? How about make 20, 30 or 50percent a year from your small portfolio? That’s another story.
When I was in Warsaw I took a course to prepare for CFA, and one of the “academics” was frequently lamenting how amateurs were acting in the market. Clearly he was so keen in calculating a duration of a bond that he simply forgot about all the rest to make money in the investment world, and he neither was himself an amateur or a professional. It was just clear to me as a lifelong Buffett student that he never managed money in his entire life.
I’m reading the wonderful book of Guy Spier: “The Education of a Value Investor” and I’m happy to find in his story that Guy learned the hard way what I taught to my son since a very young age. Actually my son was born in a Buffett World because of me. He knows Buffett and Graham have been my only business school. Studying him and Berkshire relentlessly is my only university. He knows since he was 8 or 9 that he will be better off staying away from Wall Street, and learn how to think and analyze with his own mind. We read together 2 pages a day of chapter 8 and 20 of the Intelligent Investor when he was 11 and decided to buy his first stock: Sony Corp around 33 dollars. BRK.B followed and after 4 years he is very well aligned to my results. At 13 I passed him a copy of “The super Investors of Graham’s and Doddsville” (one of my favorite Warren’s pieces of work of all time) and from that day we speak of “flips of the coins” and “orangutans” in the “Zoo of Omaha” like it’d be our own special lingo. Funny and educational (K Graham will approve immensely). I taught him that “piling up” doesn’t make sense if it is not meant to give back to society. And if not coincides with happiness in the “journey” it is not worth your while. Never trade agony for money. Never.
Now at 15 he wants to be a pilot, of which I’m thrilled as it should be every good father. The Zoo in Omaha in which I fed him after 15 years seems to have already paid off. He will be applying most of the analytical “Investor skills” while flying safely around the planet. And I’m sure he will underspend his income and become a hugely successful “amateur” in investing in common stocks. So great a pilot that he will beat the market over the long term. Needless to say, he will not need anymore my money to educate himself or paying back the loan of the flying school. If so I wish at that point I can give it all away. Regardless of the amount left.
Things will come full circle. I’m so curious how much an 11 years old value investor’s portfolio will grow when he will be 65. It will be the year 2071, time in which his net worth will probably explode. Berkshire will be still there as our permanent holding, and I may be not and I really wonder now how much a A-share will be worth in 2071. 4M? 5M? Hard to say. I’d ask Warren and Charlie if they have a clue. One thing I’m pretty much sure: my son will not get any dividend yet and neither there would be any split of the stock. Charlie would add: “..and rightly so”.