This is our fourth year and I think it's our best year. For those joining us for the first time, my name is Jane Leo. I'm the assistant professor of economics here at UNO and it is my genuine honor to be your moderator today. Every year I walk in this room thinking about what question I most want to ask and every year I leave wishing I had more time that I think is the mark of a truly exceptional conversation partner. Our guest this morning came to investing not through Wall Street but through entrepreneurship. He built and sold a technology company and did something most people only talk about. He actually studied the greatest investors who ever lived Buffett Mer and build a framework from what he learned. He's the founder and managing partner of Pabrite Investment Funds where he has delivered outstanding long-term returns by following a philosophy that is deceptively simple, low risk, high uncertainty, and the patience to wait for the right pitch. He's also the founder of the Dakshenna Foundation which has transformed the lives of thousands of students from India's most disadvantaged backgrounds by giving them a access to elite higher education. The shna is itself a mental model in action. Find the highest return investment, concentrate resources and let compounding do the rest. applied not to capital but to human potential. Please join me in welcoming Mr. Mones Pabaray. >> It's a pleasure to be here and thanks for taking the time to attend. So Charlie Mer gave a talk a few decades back at Harvard psychology of human misjudgment and then that talk is also in poor Charlie's almanac and he modified that talk a little bit kind of updated it when it was going to be printed and I try to reread the talk every year and every year I think I'm reading some things that I've never read before so I always pick up things that I feel I'm kind of encountering for the first time. I think it took me a long time more than a decade or more to understand what Charlie was talking about. So I think it was a journey to really understand how he was looking at mental models and how he was kind of using the lattis work of mental models. And so I'm going to give you kind of my take on it today. I had given a talk somewhat similar to this a few weeks back at South by Southwest. That talk focused more on mental models for startups and for entrepreneurs. So this is a little different. It's going to focus on capital allocation. The important thing about mental models is that when you start overlaying models on each other at the same time, that's when you know 1 + 1 becomes 11 or 1 + 1 + 1 + 1 becomes over a thousand and what Charlie calls getting lula effects. And so effectively you get results that are better than someone who may work harder than you may get or someone who's smarter than you may get. So the mental models hack gives you a leg up in life. So I think it's very much worthwhile. The first model which I call the bedrock model which is what Munger says. You take a simple idea and you take it seriously. None of the other models work if you don't go all in on this one. So basically the mental models only work if you kind of go hook line and sinker just all in on it and so this one is always a baseline has to be there. Let's go to the next one. Obviously we with capital allocation we start with Ben Graham but one needs to calibrate so we can't overdose on Ben Graham. And in fact one of the big problems I had in life was there was too much Ben Graham and too little Charlie Mer. So Ben Graham you know the three important tenants that he came up with there three very important models which are very important which is you're not buying a stock you're buying a piece of a business Mr. market is there to serve you, not to advise you. So, we're not take trying to learn something about a company with the stock price. And the third is the margin of safety. We always want to be buying things well below what the underlying value is. And again, the thing is that Ben Graham talks about a lot of other things and I think my suggestion is to not focus on the rest of it because it might hurt you more than it helps you. So, I think we take those core principles from Ben Graham. We bring in poor Chadi Almanac and then we go Phil Fischer and then more recently with Pulak Prasad with what I learned about investing from Darin. So these books I think overlaid with the core Graham principles are a great framework to start with and then you know Buffett talks about the 20 punch card. You know he says that if you think about that in an investing lifetime you only get to invest in 20 stocks and each time you invest in a stock you punch the card once. kind of like at Subway or something and when you're done with 20 that's it. If that were a rule that you had to apply then all of us would be very careful about what we invest in because basically in an investing lifetime of maybe 70 or 80 years of investing on average you'd be making one bet every 3 to 5 years. And so fast is slow. And so you're better off slowing things down and you're better off looking at things from a perspective where we want to make very few bets and we want to be very thoughtful about how we make those bets. Then we get to the circle of competence you know and the importance of circle of competence is what Warren says which is the size of the circle is not very relevant but staying in its epicenter is very relevant. That picture you see has two gentlemen and a lady. The guy on the left is Mark Andre. The lady in the center is his wife and the guy on the right is her father John Ariga. So Johnga is a he passed away I think two three years back and he was a billionaire. So his daughter is a billionaire to the power of billionaire. So you know she's she starts a billionaire and then she married a billionaire. Anyway, the thing is uh John Arriga was a friend of Charlie Mongers and his circle of competence was extremely tiny. He only invested in real estate within a mile of the Stanford campus and his whole life that's all he did. He never ventured beyond that. And starting with nothing, he became a billionaire. And if you walked with John Arriga around the Stanford campus, every single building, he could give you the history of when it was built, who owned it, what the rents were, what were the different transactions, when it was bought and sold. He knew everything about every piece of real estate around. And basically, he acted on these properties when there was distress. So usually whenever there were downturns and people were distressed and these properties came up, he would he knew which were the ones he wanted and was always underlevered loaded up when everyone else was feeling pain and then just kept these properties forever and did extremely well. We should always remember that we don't need to know everything about everything. If we know a little bit, we can do a lot. It's guaranteed that we're going to have a very high error rate in this business. And John Templeton used to say that the best analyst is going to be wrong one/ird of the time. I think one/ird is very low. We're going to be wrong more than half the time. And when you look at this, you know, 30% or 50% error rate in reality, if we look at US equity markets over the last 90 years that basically about 4% of companies have delivered all the market returns. So it was very important to be invested in those 4% companies. And if you miss those then things won't work out and which is why the index does so well because the index owns the whole thing and so it gets the benefit of that. So most equities that are publicly traded are not good investments. The overwhelming majority of them are not good investments which again goes back to the 20 punch card. And the 4% is actually very similar to what Warren pointed out a few years ago where he said that 12 ideas that he had over time had led to the creation of Burkshire Hathaway. And I took a stab at what I think those 12 ideas are, you know, with Raleigh Ajit being number one and so on. But basically, if you think about Burkshire Hathaway over the last 60 years, Warren has made, I would guess, at least three or 400 different investments and key hires. And out of those three or 400, it has been 12 according to him that has led to the creation of Burkshshire Hathway. So even for someone like Warren Buffett, it has been a very low hit rate. It's been a 4% approximate hit rate, maybe a 3% hit rate. We have to remember that very few ideas that we come up with are actually going to end up moving the needle. What the second what this 4% implies is that when we own a great business, you know, we get into the wonderful situation of owning a great business. We should be very reluctant to sell the business. We should be reluctant to sell the business when it's fully priced. We should also be very reluctant to sell it when it's overpriced and we should be possibly the only time we should think about selling those businesses is when they are egregiously overpriced. And so this is where we depart from Ben Graham and it's a very important departure to make. One of the things to remember about Ben Graham is he was very smart but his entire security analysis came from the experience of the 1930s and the 1930s were a very extreme time in US market history where we had severe dislocations right 25% unemployment and so on. We did not see that level of unemployment in the financial crisis or during the pandemic or anything else that's happened since then. So, it's possible it may happen in the future, but we really should not be investing with the framework of assuming it's happening next week. The risk of owning a great business above what it's worth in my opinion is lower than being in a constant jin and ramy game of buying and selling all the time. I think this is a very important departure that Munger influenced Buffett on that we need to keep these things forever. And the interesting thing is that if we look at Burkshire Hathaway, longest held public equity that they owned is Coke, Coca-Cola. They bought Coke in 1988 and so now it's 38 years. And if you think about Warren, Warren is going to be 96 this year. So the first buy and hold forever stock in Burkshire Hathway came when he was about 57 or 58 years old. You know, it didn't come very early in life. Now he was he started doing buy and hold when he started buying the businesses like Seas Candy and so on. But on the public equities that discipline came fairly late in life and so many of you in the room are well under 58. You don't need to wait till you're 58 to figure this out. We've got it figured out now. These are some examples of businesses that I used to own and that I wish I still owned and I no longer own because there was overdosing on Graham and underdosing on Munger which we're trying to balance off here. So the main reason I'm giving this talk is to just educate myself. Do not cut the flowers and do not water the weeds. When I look at an investment manager and I'm trying to understand, okay, you know, what are the frameworks they're using and how they're operating, one of the things I look for is if they've been running things for a while, a few decades, then their top two or three positions should make up 70 80% of the pie. And of course, the reality is that I'm hardly able to find those managers. I don't find managers where top two or three things are 80% or 70%. And the reason we don't find that is because they've cut the flowers and because after cutting the flowers they did something worse. They watered the weeds. So we don't want to be cutting the flowers and we don't want to be watering the weeds. We want to water the flowers. And then you know I'm the shameless cloner and I have no original ideas. In fact, the other day I had my annual meeting for my fund a few weeks back and someone asked me at the meeting. I think the person who asked the meeting is hiding there in the back. So he asked me that you know why do you call yourself the shameless cloner when you have all these interesting ideas and you know good investments and I had to actually state that when I look at the portfolio everything is cloned. There is nothing I own that has not come from someone else. So I don't even know why you guys are here. There are no original ideas there. It's all recycled stuff. So basically, we don't need to come up with investment ideas. In fact, I think it is dangerous to come up with investment ideas on your own. Please do not come up with investment ideas on your own. Not a good idea. So there are, you know, the best things in life are free. So we have value investors club. How many of you have a login for value investors club? Such few hands. It's free. You don't have to pay anything. They're not going to bother you. You can sign up. But even if you don't sign up, you can look at all the ideas posted there. So the membership requirements to become a member of value investors club are so stringent that the universe of people posting ideas there is significantly above average. So usually when I encounter something, you know, I'm looking at some business, the first thing I go look at is is there a wick write up, a value investors club write up because there's a wick ride up, that's the first thing I print that off and start reading that because that accelerates things a lot. Data Roma publishes every quarter an update to what good investors have bought over the quarter and so on. Another great resource and Sum Zero. Sum Zero unfortunately requires a subscription but also has great resources. And then the picture on the right is Turkeykey's Costco, which you may not have heard of yet, but now you have. So that's my latest cloned idea. So we're now model 10 doing pretty good actually. History doesn't repeat itself, but it does rhyme. And what I found is that when I talked to Charlie and he's mentioned this several times and you Warren's mentioned this several times publicly that the opportunity set that they had in the 60s and 70s even in the early 80s just doesn't exist today and he said that what they were able to do in fact they have said repeatedly that if they were starting today they would not be able to build Burkshshire Hathaway. It's just that at that time they faced a much less competitive world with far fewer brain power applied to security analysis. But what I have found is that there are other parts of the world where similar situations still exist. And so for example, what I found is that the Turkish stock market has a lot of parallels to what was going on in the US equity markets in the mid70s and early 80s etc. in terms of disparity between price and value. So we may not be able to find things exactly the way they were before and things may not go back to the way they were, but you may able to find it somewhere else. So it's just important to just keep that in mind. If you can't explain your investment thesis to a 10-year-old in about four sentences, it is a useless investment. Please don't make it. If you cannot like in four or five sentences explain it so a 10-year-old understands it, we're done. And a 10-year-old is not going to understand an Excel spreadsheet. The four sentences don't need too many numbers, you know, they just need something very simple. The model 12 might take a little bit of time. So you always need a rope to get out of the deepest well. So why do I say this? So my dad was an engineer, rational guy, and he started many different businesses and he was very good at getting businesses off the ground. He'd come up with great ideas, get them off the ground. But then he was very aggressive with leverage and everything else, want to grow as fast as possible, and invariably when the first storm showed up, the businesses couldn't stand up. I mean, they would fail. So, and my parents were very poor financial planners. So, when the business failed, we didn't have money for rent, we didn't have money for groceries, we're borrowing from relatives and friends and so on. So, it was a lot of roller coaster up and down when I was growing up. And so I was about I think 11 or 12 years old and my dad had just gone through pretty intense bankruptcy of a company and he was just kind of you know lost if you will. Let's kind of figure out what to do next. And I noticed that there was this guy in saffron robes with all these marks on his head who would come to our house on Sunday and he was astrologer and my dad would sit with him and this guy would tell my dad you know what's going to happen in the future and my dad would pay him and then next week the guy would be back again. So I mustered up some courage and I talked to my dad and I said you have to know whatever he's telling you is utter nonsense. nothing of what is going to happen in the future is known to that guy right and we don't have money you know we like the money is tight you know giving it to this guy is not the best thing so my dad said to me I'm at a bottom of a very deep well and I need a rope to get out of that well and when this guy shows up and I give him some money he is not going to tell me that the future is bleak because he knows if he tells me the future is so bad He's not going to be coming back next week. So, he's going to tell me the future is phenomenal. And I need him to tell me the future is phenomenal because that's my rope. And a few decades later, Steve Jobs called it the reality distortion field. And you know, the reality distortion field built Apple, you know. So, it's not so bad to suspend reality temporarily. Sometimes it's a good idea to suspend reality and so this deep well. So when the financial crisis hit in 2008 and '09 I used to be managing about 600 million and it went down to 200 million. It didn't go from 600 to 200 because people pulled money there was just reduction in asset values. So the fund was down 65 67% 2/3 gone and I remembered my dad and I remembered that I am now in a very deep well I didn't have that saffron guy on speed dial you know I couldn't find the guy he might have been dead by then you know so I needed to find my own version of a rope to get myself out and there's going to be a model coming up which I violated because the rope was more important than violating that model. So if you'll excuse me but what I did is I fired up Excel and you'll see a model come up later saying thou shalt never use Excel. Okay, ignore the fact that I violated the model and I fired up Excel and what I did in Excel is I put my portfolio in with the prices that I thought these things were worth, not the prices at which they were trading at. And that looked like a much better number, you know, well above 600 million. And I would just come every morning and just look at that number and say, "That's what it's worth." And everything felt great and that was the rope. So sometimes you have to use a rope that you really don't want to lose, but it worked well. So I always have a subscription to Microsoft Office just in case, just in case a rope is needed. Then we have my friend Nick Sleep. Some of you have heard of him. How many of you have heard of Nick Sleep? We have some Nick Sleep fans here. More than Value Investors Club fans, which is good. So Nick and his partner Zach were managing about 2.6 billion about I think maybe 10 12 years ago. And they're based in the UK in London and the British regulator was giving them grief saying you are too concentrated. You need to be diversified. And you know like I just said that 70% should be in two stocks. Well, the British regulators don't believe that at all. They were telling them that, you know, you need to kind of broadly diversify the portfolio. The two of them looked at each other and said, "We have more money than we ever thought we'd have. We are richer than we ever thought we'd be." I'm guessing they had a couple of hundred million each. And they said, "Why don't we just return all the money and we can then invest our money the way we want and no regulators going to tell us anything?" They said, "What a great idea." So they wrote a letter to their partner saying, you know, we had a great run, great ride, and we're returning all your capital. Nick told his investors that my own money, I'm putting one/3 into Amazon, one/ird into Costco, and one/3 into Burkshire Hathaway. And my suggestion for all of you is that when we return you the money, do exactly the same thing. And the good news is you don't need to pay anyone any fees anymore. And warm regards. Okay? And I get a panicked call from an endowment in the US telling me, "Did you hear that Nick is returning all the money?" I said, "Yeah, but he also told you what to do." So they said, "Yes, but we're not allowed to buy individual stocks in our endowment. We have a rule. We can we we can give the money to outside managers, but we can't buy individual stocks." So I said, "Let me just get this straight. I can set up a fund with the three holdings and then you can invest and you can pay me two and 20 and that's okay. He said yeah that would work. So I just want to let you know the way the world works. You know Nick put his money in these three stocks. I think if you calculated from 2014 till now he beat everybody. You know he's riding motorcycles in China and he's racing cars in Japan and whatever else he's doing. Not looking at his portfolio. But what happened is that after 2014, Amazon took off a lot more than the other two and Amazon became 80% of the pie. Nick forgot something. So one of the things I need to add to the mental models is he forgot something known as escape velocity. Once we get escape velocity, it doesn't matter if one stock is really high high portion. So he had 200 million, 67 million went into each of these three. I think if he just let it run till today, it's over a billion. Okay. So, how does it matter if 800 million is in one stock and the 100 million in the other two each? Because even at 200 million, he had escape velocity, right? So, it didn't matter. But what happened is he forgot this. No one talked to him. He hadn't attended his lecture and so on. And so he takes his Amazon position and sells half of it and he buys what I think is a useless company called ASOS. I actually told him that. I said, you know, you could have asked me, I would have told you it's useless. So anyway, he buys this company, ASOS, which none of you have ever heard of for very good reasons. ASOS, of course, goes nowhere. But even with the inefficiency of doing that, he still beat everybody. And then, you know, Nick loves this book, Zen and the Art of Motorcycle Maintenance. How many of you have read the book? Oh my god, we got some heavy duty fans here. Let me just tell you that it's difficult to get past the first three pages and it's really difficult to get past the ghost. You know, once the ghost shows up, that's it. A lot of you are going to give up. But what I would suggest to you is that even though it's going to be really really hard to read the book, please read the book and the first time you read it, it will make no sense to you. Then read it one more time and then you'll start to understand that basically the important thing over that book which is reflected in those three companies is you pursue the highest levels of quality in the businesses that you're investing in. And the highest level of quality in these businesses in terms of the management and the modes and how they do their business and all that is going to get you to the promised land. When we look at these three companies, they have those attributes. And so that's kind of where we need to be. Then here we go. Model 14, which applies in all situations except when you're in a deep well. So if you can't do the math quickly in your head, you need to take a pass because you know also if you need Excel then the 10-year-olds not going to understand. So we need to be able to do the math in our heads and if you can't do the math then there's a problem and then use a pre-investment checklist and I started developing my checklist about like 15 years ago and it used to have about 70 80 questions. Now it has about 213 questions. It really helps a lot because able to see up front what are the possible failure points and we can make a go no-go decision before we invest. And just continuing on the checklist. So when I had built my checklist I did not do it blue sky. What I did was I looked at investment mistakes that had been made by great investing minds and I wrote down the mistakes. So for example, Burkshire bought Dexter shoes and Dexter shoes eventually went to zero. That didn't bother so much that didn't bother Warren so much as the fact that he gave away 2% of Burkshire stock to buy Dexter shoes. And he said that it made him feel good whenever the stock went down that he didn't give away so much. But that was a huge mistake anyway. So Dexter shoes was done in by lower cost offshore manufacturing, right? So this question that comes up which which I put in the checklist is this a business that could be ne negatively affected by cheaper offshore manufacturing right so just we just put that in the checklist question and it may not apply to a lot of businesses we look at but might apply to some that we do look at when I did that whole checklist and then I recategorized that in buckets of where these failures were coming from the single biggest reason why investments did not work was leverage that was the biggest reason wife most investors did not do well. The second biggest reason was there was some misunderstanding of the moat where they thought they had a durable moat and it turned out it wasn't the case and the third was something to do with you know questionable leadership or ownership. There were also things like you know trade unions and different things but these were the three big ones in general. These are the three big ones that led to negative impacts. Some of you may not have heard of Arjuna. So we're going to go and talk about a story which I think you might enjoy. So back in the ancient times in India, these the royal families used to send their kind of adolescent kids to be trained by a guru or master in the forest and they would kind of get a you know kind of multiaceted education including martial arts and including becoming good archers or swordsman and so on. There was a guru Donachara and he was going to test all his kids on their ability to shoot the bow and arrow. How good were they at at archery? So the first student came forward and he said that there's a bird in the tree and I want you to shoot the eye of the bird out. And so he asked the first student, "What do you see?" He said, "I see the tree. I see the bird. I see the eye." And the the teacher said, "You're not ready. Sit down." Then he asked the second student to come up and he said, "Okay, what do you see?" He says, "I see the sky. I see the tree. I see the bird." And he was told to sit down. And then finally our hero Arjun comes up and he asks him, "What do you see?" He said, "I can only see the center of the center of the eye of the bird." The guru says, you know, fire at will and he takes the eye out. So we have to be singularly focused, right? When we're looking at a business, we really can't be distracted. You know, we've got the 20 punch card. So when we're looking at things, we have to go all in. We have to be like Arjun. We can't see anything else. And there's a horse on the left and that horse has a very unfortunate name and the name of the horse is Read the Footnotes. Do you know who owned the horse Read the Footnotes? So Read the Footnotes has passed away now, but used to be owned by Seth Clarman. And so Seth grew up in Baltimore right near the Pimlo racetrack which is one of the places where the Triple Crown is run. And he got interested in horse racing and got interested in bedding. And when he made some money at bow post he started buying thoroughb breadads and they all got these names read the footnotes margin of safety etc. And you know you can just hear the announcer read the footnotes by a nose. Read the footnotes. That's what Seth wanted is that the read the footnotes gets repeated over and over and over for people to hear. So, he has quite a sense of humor. And read the footnotes did actually really well. He's a good-looking horse. Okay. So, read the footnotes. Okay. Then there's Turn Every Page. Did you guys see the Netflix documentary? How many of you saw Turn Every Page? Oh, very few. So disappointing. Okay. So, Turn Every Page is a great Netflix documentary. It's free. You're already paying the subscription so you can watch it. And that's Robert Caro on the left and Gotautle on the right. Gotautle has passed away now. Robert Caro in my mind is the best researcher and the best writer the human race has ever produced. His first book was the power broker and then he did all the Lynden Johnson biographies and they're the best. So I would just say that if you have not read Carol the big upside is that you're going to have an orgasmic experience in the future when you read it. So start with the power broker and each one is like a thousand pages but extremely well done and then just keep going. But before that just to get yourself warmed up you can watch the documentary turn every page and it was a great collaboration between a great writer and a great editor. And that's what we need to do. We need to read the footnotes and we need to turn turn every page. And then model 17. So yesterday I went to this dim sum restaurant and that dim sum restaurant is in what used to be the Axarban racetrack. It got redeveloped here. So when I used to come to Omaha 30 years back, the meeting was at the Axarban racetrack. And Axarban is Nebraska spelled backwards. And Warren used to go to the racetrack when he was like 12 years old. And he would pick up all the tickets that the everyone had discarded, you know, when they're making their bets. And then he'd go home and look at every single ticket one by one to see if some drunk had thrown away a winning ticket. And of course, people think there'll be no winning tickets thrown away, but that's not true. He would find winning tickets and then he couldn't go to the counter to claim them because he was underage. So he gave it to his aunt Alice and aunt Alice was his favorite aunt. She used to go collect the money and then give it to Warren and that was that and aunt Alice was the first investor in Buffett partnerships and Aunt Alice died extremely wealthy you know. So anyway, she did very well. But the same kid who at 12 years was at Axarban gathering up these tickets was the guy at 24 going through the Moody's manuals. And the Moody's manuals were the same as the Xarbon tickets, which is basically he was turning one page at at a time looking at all these companies and looking at the very fine print financials that were given. It's kind of like the value line of the 1950s, but they were like, you know, five or seven companies on one page, very thin pages and very small small text. And he went through these multiple times and he found Western Insurance where the stocks at $15 and the earnings are $25, you know, things like that. And actually, Western Insurance, which he bought and sold because he didn't have the framework, but from then till now, if you kept it, it's like 19% compounded, like 70 years or something. And then the same kid at 12 when he's like in his late 80s or even in early 80s was going through the Japan company handbook which is the same as the Moody's manual except it's Japanese talks and Guy Spear and I had we had won the auction to have lunch with Buffett in 2007 and then we met him for lunch in 2008 and in the interaction of you know getting the lunch set up and all of that we had a lot of back and forth with his assistant Debbie and we got to know Debbie pretty well and so I told Debbie that I would love to have but both of us would love to have lunch with her and so she said you know Monish if you come to Omaha on a Thursday normally we'd come on a Friday but he said if you come on Thursday I'm normally free I can go to lunch with you guys and I said okay so we'll go guy and I would show up in Omaha like in 2010 2011 on Thursday and we'd go to lunch with Debbie and what I found actually was that lunch with Debbie was way better than lunch with Warren. I mean, that was just because I would tell Debbie, I said, "Debbie, us girls, can we talk?" And she'd say, "What do you want to know, Monish? I'll tell you everything." You know? So, we had a great time. So, anyway, one year, I think it was 2012 or 2013, guy and I go to Burkshire headquarters and for our lunch with Debbie and Warren is at elevator bank. So, I thought he was like leaving and we just kind of bumped into him. He says, "Do you guys want a tour of headquarters?" So I said, "If you want to like waste time with a couple of yo-yos, no problem." You know, so he gives us a whole tour showing us all the this is the letter I sent to Long-Term Capital Management and this is the first share of Burlington Northern, whatever, all this. And then he shows us the fountain machine in headquarters, the Coke Fountain where he gets his Cokes. So then I thought, you know, he doesn't have anyone to go to lunch with. So I said, Warren, you're welcome to join us. You want to join us for lunch, we don't mind. you can you can join us for lunch. It's okay. You know, he said, "No, no, they they got me my lunch, you know." So, she says, he asked Debbie, "Where's my lunch?" And there's this like, you know, really thick shake about this big in the fridge. That was his lunch that day, you know. So, anyway, we were in his private office and I see Japan Company Handbook on his desk, you know, he's been kind of leafing through it. And I had been going through the same issue of Japan Company Handbook. I just finished going through it. And I told him, Warren, I can actually tell you which companies you need to look at. You know, you don't need to go look at all of them. Like, you like to go to every page. You don't need to do that. I can just So, without really waiting for him to answer, I took his copy of Japan Company Handbook. And then I dogeared a few pages, you know, mutilating his copy without his permission. And then I told him, you know, Warren, the good stuff is in the back. It's going to take you a while to get to the good stuff. He said, the good stuff's always in the back. So I said, "Why do you start with the A's? Why don't you start with the Z's?" So anyway, he's been reading the Japan Company Handbook continuously. Every 3 months, there's a new one that comes out. And then when he's in the late 80s, he finds a five Japanese trading companies. And then this thing is like less than 100 bucks. Then he puts $5 billion into those five trading companies. And what he does is he doesn't want to use his cash because he loves his cash. So he borrows the entire 5 billion in yen in Japan even though Burkshire is drowning in cash. And they give it to him at half a percent interest rate. So 100% levered. The trading companies are giving a 8% dividend. So he's collecting 7 12% just by making the investment because it's like 16 times the amount of interest he's paying. Then in a few years they double all the dividends. So now he's getting 16% still paying half a percent and then the stocks double. So the 5 billion becomes 10 billion and then he's collecting like almost a billion dollars a year in dividends on top of that. And then he goes and meets the companies you know with Greg Ael and then they bump up the investment. Now, now they I think own they've gone over 10% on a couple of them. Two or three of them they've gone over 10%. So, all of it started at Akxarban. It's the kid at Axarburn who made the Japanese investment. And so, we need to enjoy hunting for needles and hay stacks. Now, we go 2,700 years back to the Upanishads, which some of you may not have read yet. So they say in there, as is your desire, so is your will. As is your will, so is your deed. And as is your deed, so is your destiny. And then the punchline is your deepest desire is your destiny. Now, one of the things about these mental models is they only work if you believe them all in. You got to go all in on them. So if you really want something to happen, if you desire something deeply, it is going to happen. So if I were to say for example, I only want to invest in stocks that are PE1's. There's 50,000 stocks in the world. Trust me, there are plenty of them at a PO1. On my first trip to Turkey in 2018, I had told my friend Haidther that I wanted to visit companies in his portfolio. And so he'd send me a list of companies we were going to visit and I never looked at these companies before because they meant nothing to me. I said I'm going to meet them and then if I like meeting them and then I'm going to study them. So as we were driving to these businesses I would ask him questions so I didn't appear totally idiotic at the meeting. So the first company we were visiting I said what's going on here? He said well it's at a P of 0.1 not a P of 1. a P of 0.1, which means that the market cap of the company was equal to one month's earnings. What they were making in one month was what you could buy the whole business for. So I said, "What do they do?" I said, "Wow, this is going to be a great trip." Like, you know, we're starting with 0.1. This is awesome. He said, "It's one of the largest banks in Turkey. It's like a blue chip bank." So I said, "Why are they at a PE of 0.1?" He said, "Well, the chairman of the bank decided to ignore UN sanctions." and he was doing all these wires in and out of Iran in violation of the all the laws and everything else, all the sanctions that were in place. And New York Fed got word of this. And so the CFO of the bank had traveled to the US to go to Disney World with his family. And so when he when he landed at JFK with his family, they put him in Riker's prison in New York and they sent the rest of the family on to Disney World. And then Erdogan was calling Trump asking to please release the guy. And Trump is explaining that it wasn't the feds who did it. It was Southern District of New York which does not care about him at all. So he couldn't get him out. And then the stock is trading in Turkey and all this stuff is hitting the news. So I told my friend that this is too much hair even for me. Let's go to the next company. We had that meeting. It was it was a good company but I I could never get there. So anyway, if you want PO ones, you can find a lot of PV ones. If you want to find great compounders at bargain prices, you'll find those. And if you want to find great compounders at le less than 3% of liquidation value, you can find those, too. Like I invested in this company in 2019 in Turkey, RESA, which was super cheap. So whatever you desire, if you're allin, it's going to happen. Then we get to model 19. You should always have someone to discuss your investment ideas with. So this came from Charlie and I told you don't come up with ideas on your own. They're going to be useless. You know the brain is a very dangerous place. And so if you do come up with ideas, you need to have somebody else to talk to. And so when Charlie told me this, he said, "Mish, it's really important that when you have investment ideas, you have someone to talk to." I said, "You mean like Warren Buffett?" And he said, "It wasn't always Warren, but I always had somebody to talk to." So when I first met Charlie in 2009, he said to Leelu and me, "I want you guys to meet each other once a month for lunch, right?" I told Charlie, "If Leelu wants to hang out with a yo-yo, that's fine by me. No problem." And so Leelu and I would meet at Dintai that Dintai is a very good dumpling place. Some of you might know. If you don't know, then you can try it. It'll be great. But there was only one branch at that time in in the US, which was in Arcadia and California. So we would go to Dintyang which was great food and that was great conversation but now he's in Seattle and I'm in Texas so we don't do our lunches but and then you know obviously with Guy Spear also I found it very useful. So I think that if you get the investment ideas from value investors club, it's actually gone through one brain, right? So it's already been through one brain filter and then it's coming into your brain, which is a second filter, which is pretty good. But if you can get it through those two filters and then talk to someone you trust, that can be huge. It can be really powerful. All of you have seen this picture too many times. The mistress only looks hotter than the wife. In reality, the wife is hotter. Okay, please remember that. So, what do I mean by that? That the mistress looks hotter than the wife. What you don't own looks hotter than what you do own. But what you do own is actually better. So, don't be distracted by the bright shiny objects around you. Stay focused. Okay? Stay focused on the thing because it's an illusion. the mistress is not hotter than the wife. Then you know there's Pelonius who told his son neither a lender nor a borrower be and I decided to adjust Palonius a little bit with some help from Warren which is neither a short-term borrower nor a long long-term lender be it's okay to be a short-term lender and a long-term borrower but please remember Palonius then the importance of introduction of randomness in your life and this is really important. I mean, I think for Charlie, Charlie was very interested in meeting all kinds of new people. Part of the reason was he wanted the randomness introduction in his life. And one time he was telling me, "Most of my friends are dead." I said, "Yeah, you know, when you're 99, most of your friends are going to be dead, you know." But I said, "You don't need to worry about it. You got new ones like me. It's okay. It's okay. We can live with it." So, I had never really, you know, looked at investing or stocks or anything. And I think in 1994, Heathrow airport, my wife and I were coming back from vacation and I was looking for something to read on the plane and I picked up this book, One Up on Wall Street. And I don't even know why I picked it up, but I read the book and I really enjoyed it and I said, "Oh, this is a interesting area." And I want to go further. So, there was another Peter Lynch book, Beating the Street. I read that book and then I was out of Peter Lynch books. He had only written two books at that time but he was talking about Warren Buffett in one of the books and he was talking about him like he was talking in reverential terms. So I said let's figure out who this Buffett guy is. And then I find that the first couple of biographies on Buffett and then the Burkshire letters and the Buffett partnership letters that opened up a huge world for me which eventually led me to start making investments and then eventually you know change my career. But it started with something random, right? So I never worked in the industry before. And so I think it's always good to bring or have things in your life that allow randomness to come in. And we don't know kind of from where what connects. I remember that in 97 I was on the fence whether to come to Omaha or not. That would have been my first time coming to Omaha for the Burkshire meeting and I was thinking you know I don't know anyone and the transcripts were published in oid at that time I was standing investor digest you know I had young kids and so on I really couldn't really justify it and I was really on the fence but finally I said let's just go what the hell we'll go see what the hoopla is all about and again it opened up such a big world right and so many friends so many great relationships came because of that trip and and such So I think we should always be willing to go outside comfort zone, do things that we're not sure about, just introduce randomness. It's a it's a very good thing to have. The next few models I'm going to talk about, which is be a Swiss Army knife, actually violate one of the earlier models, but we'll ignore that for now. So focus on spin-offs. I said earlier the 20 punch card, right? 20 stocks and also that the 4% rule. So very few investments are going to eventually lead to most of your wealth. But these are some areas to pay attention to. The spin-offs which Joel Greenblat talked about and you can be a stock market genius. I think it's worth focusing on the spin-offs. The Uber cannibals very important to focus on them like NVR, Autozone, Autoation and like I own one right now, Alpha. And then focus on the spawners and these are the companies that are creating new businesses. You know, Amazon's a great spawner. Alphabet's a great spawner. And then we have a couple in our portfolio, Constellation, Rayas. And then arbitrage is wonderful. And you know, this is merger arbitrage. Like I remember that when Rupert Murdoch was chasing Dow Jones. He wanted to acquire Dow Jones. General consensus on the street was that the family did not want to sell. They were not interested in selling to Murdoch at all. And people did not expect that deal to close. And so I think the deal was going to be at $60 a share that he had offered and the stock price had gone up a little bit but it was in the high 40s. So there was a pretty large spread between where the stock was trading and where the deal would close. Warren has studied Murdoch for decades and of course he used to own a newspaper and and such so he really understood really well. He knew that Dao is going to end up with Murdoch one way or another. it's not going to end in any other way. And so he made us a merger bet on that and it paid off. And I think now there's a Netflix documentary some of you might have seen on the Murdoch. Have you guys seen that? Yeah. There you go. So once you see that you'll know he was going to win that battle. It wasn't going to go anywhere else. And then model 28 is heads I win, tails I don't lose much, you know, which is we want to focus on situations where there is upside without downside. And because equity markets are auctiondriven, we constantly run into these things where where these things have asymmetric payoff. I had made an investment in a Canadian steel company called Ipsco. I think this was in like 2004, long time back. And Ipskco was a situation. It was very simple. I could have explained it in three sentences to 10year-old. Basically, they had $15 share in cash on their balance sheet. They made tubularous steel that went into pipelines and oil wells and so on. And they had contracts going out several years to deliver these pipelines uh these steel pipes to pipelines and so on. So they had said that the next two years we're going to make $15 a share for each of the next two years. So the stock was at 40 and the company's telling you that between the cash today and the cash coming in next two years you would have $45. There was no debt and all the plant equipment and inventory was free. Now the third year it could go zero. It could even go negative because it's a cyclical business. But my view was that why don't we just own it for two years and see what happens. I actually want to see what how Mr. Market would price this when there's $45 of cash on the balance sheet. So we put 10% of the fund into IPSCO and a year later they announced that they have one more year of $15 and by now the stock has been creeping up and it's at 90. So it's gone from like 40 to 90 and still a sec business still can you know go anywhere. I was just about getting to long-term gain. So I was thinking okay it's we can end the bet you know we've won we can end the bet. And then as I'm thinking through that, one day I wake up in the stocks at 155. Some Swedish company came to buy them at 160 and one phentoc after that I sold everything, right? And so I had very fond memories of IPSCO. So someone on X posted that, oh this bet David Einhorn made on console energy looks just like Monish's Ipsco bet. This is why I mention these things at these talks because then I said, "Oh, Console Energy, which I've never heard of in my life before. Let's go look at that." And I look at that and I see it's just like IPSCO. Long live the internet, you know. And I said, "It's so nice to go back to IPSCO again." And so then I bought console and it was a similar situation, not exactly the same, but they are forward selling their coal. And they have a band where they say that it'll be sold at the index price at the time but no less than X and no more than Y. So within a collar of that and so it was very similar where you could actually look at the cash flows in the future. It wasn't even like speculative. It was just there. So we want to look for opportunities where there is upside but downside is muted. We want to pay attention to that. And then model 29, you know, the formula is that if we have low risk in combination with high uncertainty, Wall Street hates high uncertainty and Wall Street loves low uncertainty. So if you look at a business like for example ADP which processes payroll, they have no variance in their earnings. Next quarter they've got their clients who are processing payroll. there'll be some small change here or there if unemployment goes up and down but nothing meaningful. So they just like clockwork keep producing cash flows. The market loves that and it awards a high multiple for that. On the other hand, if you have let's say an oil company which is completely unhedged where oil can go anywhere, how do you price that? And so markets have very difficult time pricing businesses like that. So what we want to look for is businesses where the risk is low, the uncertainty is high because then it's likely that the rewards are high and IPSCO is a good example of that right we couldn't see much risk the risk was very low but there was uncertainty because after year three year four year five what happens so model 29 is an important one with low risk high uncertainty and then we amazingly got to the last model pretty good and the last model is do not skim off the top. Most managers like to skim off the top. But if your fee structures allow it, like I have an ETF, I don't have a choice. We have to charge a fee. But if the fees allow it, then make it like the Buffett partnerships, you know, like 0625 and win with your investors. So when you combine all these models and you use them at the same time, that's when you get the Lulua effects. You know, 1 plus 1 becomes 11 and so on. So really important to kind of go all in on these and apply them together. And then if you go through these books, you know, poor Charlie Almanac and Influence by Robert Seldini and then a one I ran into recently which is by Kevin Kelly which is excellent advice for living. These are phenomenal books for mental models. And of course we encounter models all the time. So when you look at something that challenges your view of reality, you should pay attention to that and that could be a model that you can add to your repertoire because that'll give you an edge versus other humans. I had given this talk earlier which was on starting or growing a business and so here is kind of a different set of models that we went through and then these are in some future talks which I have not yet given >> you know which these are more about models for leading a great life so at some point we'll get to these but we I haven't gotten to these yet maybe we'll do it next year and then this is what we just went through today the 30 models we went through. Amazingly, we got got it through all. So, thank you so much. >> Thank you so much for being so generous sharing those 30 models with us. So, among all the models, which one do you think most people understand but still fail to follow? >> I think the probably the first one which is you take a simple idea and take it seriously. I think people will think that it's too simple. So why do you think knowing something is not enough most of the time by just knowing like following a simple idea and follow it? >> I think you have to take deliberate action. You just knowing it is not going to work. But I think in many ways you have to be fanatical. Humans tend not to want to go to one extreme or the other >> but using the models will push you to one extreme or the other and so that's can be dis uncomfortable for some people. So you show that only 4% of the companies outperform the market returns over 90 years and for Warren's money like 4% can move the needle. So so the the whole game came down to finding the the few actually really good business. So how do you feel like at the moment you know you found the one? How does it feel like you just know it like at the moment? I think for most of my career I was like I said overdose on Ben Graham. So I was you know buying 50 cents 40 cents selling at 90 cents. And when I look back I see that there were so many great businesses that were let go because of using I think a wrong framework. The thing to remember is that even when we think we own a great business that may or may not be true. The reality with capitalism is that almost all modes disappear because people are I mean capitalism are all about people wanting to take away your business from you, right? And so it's almost an anomaly that a business will do well for 50 years or 100 years or 150 years. That's very rare. But on the other side, if you focus on the great businesses, you actually only need to be right once. You don't need to be right 4% of the time. You only need to be right once. So it tolerates a very high error rate. If you look at Nick Sleek's example, you know, two of those three could go away. It still works. What we have to get comfortable with is that what we think is a great business may or may not be great forever, but you don't have one. You might have five or 10 and then over time there'll be two or three that >> become the ones that you're left with. So just as you said you only need to find one good business and also like more than a third of the analysts out there are wrong and you have a like 213 question checklist. So after all that discipline what is the mistake you have made more than once a pattern in your own thinking that your checklist still didn't catch. >> We are still going to make mistakes because the thing is that you're looking at the future of a business. Anytime you're looking at the future of the business, the future is uncertain. What I find is the mistakes that have hurt the most are not the ones that you lose money or even if it goes to zero. What hurts the most are the ones that you sell that you should not have sold. Those are the ones. So it's actually inverted from what normally you think about. So your deepest desire is your destiny and you have built a remarkable investment fund and a foundation that has changed the thousands of people's lives. So after all of it, what is your actual deepest desire right now? Uh not as an investor but as a person and is there music you are still trying to get out? >> I think that particular model your deepest desire is your destiny is very powerful. very powerful model especially if you go all in on it. It's the one model that goes across the different things that we're looking at. So it applies to life >> very much applies to life. It applies to investing. It might apply to when you have a business. >> And what I find in myself is that I'm naturally a person who can really only be very focused on one or two things at a time. Usually only one thing. And what I find is that when I get enough time to focus on the one thing usually that is a favorable outcome. So I have found this to be true in my life. I think one has to have the faith and if one has the faith then you just go all in. >> Thank you so much Mon. >> Hey Monish, thanks very much for your talk. So I've been a Birksher shareholder for 30 years and the guy doesn't pay any dividend. Now my son wants to be a filmmaker. So, should I sell to fund his movie career or I should wait for the dividend? >> What Warren did even though he didn't want to do it is he split the stock and he gave us B shares. And I know you are a A share kind of guy. You're not a Bshare kind of guy. Actually, it's more efficient because capital gains rates are lower than ordinary income dividend tax rates. So when you need the money for your son's film, which is a very good idea to put some money in, then you just split the A share into some B shares and then sell some B shares. You pay some long-term gains. Life is good. You keep going. >> Monish, welcome to Omaha again. It's just amazing to see you in our beautiful town. I'm from Omaha, by the way. The only thing that's common between you and me is Tinkai Fung. I understand nothing about the 4% rule. I could probably go like three pages in the Bengram book. I simply buy index funds. Should I be sleeping well at night? >> I think it's a good way to go. >> Hi, I'm Bridget. I'm gonna go straight to your model 12, the rope power of positivity. You revalued your portfolio when you saw the 0809 crisis values. So my question for you in revaluing those, in setting your own values in that Excel spreadsheet, you had to come up with that value. You must have a system for valuing a company. I look at intrinsic values. They're all over the board. If you were going to recommend a resource when we are getting into the thick of a company and trying to come out on the other side with some simple explanation, what resource do you recommend for figuring out the closest truth to intrinsic value on a company? >> All right, that's great. Yeah. So, intrinsic value question requires us to stay within circle of competence. So when we are within our circle of competence, one of the core things that should be obvious is what the asset is worth. If we do not have clarity on what the asset is worth, we are not within our circle of competence. Charlie says to ask the questions to answer it. So if you have to ask yourself is something within my circle of competence, the answer is it is not within your circle of competence. So bottom line is that if we are within operating within our circle of competence, the value of the business should be obvious. Now any business can have a couple of values. It can have a conservative intrinsic value. It can have an aggressive intrinsic value. So probably go towards conservative, right? But we should be able to figure that out for the businesses that we think we understand and it shouldn't be that hard to do. >> Monish, great talk. Mike, I'm from the uh the San Francisco Bay area, California. my first my first first Bergkshire meeting. I watched your talk on YouTube uh that you gave at South by Southwest. I thought it was fant if you haven't seen it, you guys got to watch it. It's really good. In that talk, you mentioned the founders podcast. >> Yeah. >> And um you mentioned going back to the beginning and and going through all of them and you're using it to kind of give you a leg up to kind of speedread through a lot of these biographies that David Sun spent all this time reading. And so I just thought that was a great way to kind of really pair down. My question is, where are you in the founders podcast first of all and uh number 400's a banger. Uh James Dyson so good. Are you still using founders to speedread or are you going through Moody's manuals more one by one? Japanese business manuals one by one and using that framework in your analysis. >> Yeah, well that's a great question. So the founders podcast is excellent. Many of you might be familiar with it and it actually goes into one of the models which is to introduce randomness. When I read books, one of the problems is that I pick the books I'm going to read. No one else is picking them which is inherently biased because it's going to I'm just going to try to pick books that I'm interested in whatever else. the founders podcast. I'm going through every episode that he has done. And so I don't get to pick which books he's read or why he picked certain books. And he's got books on, you know, Picasso and on Churchill and on Sam Walton. Just it's all over the place. It's he's got Jay-Z. He's got all kinds of people. And I'm going through it backwards, right? So I started the most recent going backwards. I'm in uh at number 115 out of about 415. I'm six years back now and yeah it's been wonderful because of the randomness and he decided to do at that time in the pandemic years a deep dive on the early years of the US auto industry and it's amazing you know all these people olds and Chrysler and the same guy founded Lincoln and Cadillac and so on. So, it's been just been great. On the stock side, the equivalent of the Moody's manual. I mean, I have my assistant print out the first two pages of all the new ideas in value investors club usually every couple of months and I just go through the first two or three pages of those ideas just to see if there's anything there that I want to go deeper into. So, I find that that's a very concentrated way to get ideas flowing in. I also look at data Roma you know the 13F filings then sum zero and then you know I have friends and different things I'm reading whatever else is happening and so kind of a combination of that on the other side we don't need that many ideas we need like one or two ideas a year we can find one two or three then we're good if I were limited to only making investments through value investors club that would be sufficient there's enough there you know so we don't need a lot it's more important to go an inch wide and a mile deep than to be a mile wide and an inch deep. >> Thank you so much for the session, Monish. Uh my name is Drei. I'm a student from Pennsylvania and I was wondering, I know you kind of talked about how all boats disappear. As a student, like in the next 5 to 10 years, what kind of pockets of dislocation should I be focusing on? I know you mentioned like some companies in Turkey, international economy, spin-offs. Are there any other opportunities that you think will continue to expand in the next 5 to 10 years that we should be looking at? >> One of the things about investing is that the more assets we manage, the smaller the opportunity set. Like Warren talks about that like you know he's got to deploy tens of billions of dollars at one time. And so there's just a limited number of places that can go. And as that number goes down, the opportunity set gets wider. And so what happens is that when there are really good investors and they get started with very small amounts of capital, they are forced to abandon the pond in which they were fishing to go into larger ponds just because their assets are growing. So the smallest size opportunities become available to the next generation if you will because people have to keep moving up. And so the good news is that the kind of this is a kind of a evergreen system where a person starting out with small amount of capital has a very wide arena where there aren't a lot of people playing who are very very good because they've already moved up and so I think from then on it just depends on what you are most interested in like we talked about Johnga with real estate around Stanford. So I think the important thing is that what are you most interested in, most passionate about because that will drive the interest to spend the time and focus and turn the pages and all of that. I think it's the wrong way to look at it things to say what is going to do well in the future. I don't think that should be the question you should ask. I think the question you should be asking is what am I most excited about? Whatever you're most excited about can become the opportunity. But trying to pursue what looks like may become art in the future can actually be a negative. >> Oh, thank you. U Mr. Par, my name is Jordan Co. I'm from Vancouver, Canada. And uh from what I know is that your background is in engineering and I think to butcher your quote, but I mentioned in I think William Green's rich richer, wiser, happier book, you mentioned that engineering courses are really effing hard. Um, so as a fourth year computer engineering student myself and also really passionate about investing, how can I fix my process and become someone like you like you did in the '90s with your company and how do I win in the future? In other words, how do I start cloning the shameless cloner? Thank you. >> Well, you made a start by coming here. I mean, not to this place, but to come to Omaha and Burkshire, which is wonderful. I would say that you know for me the starting point was reading making of a great American capitalist you know by loven. I think the Buffett biographies are really good because that they explain a lot of things about how he went through it and I think as much as you can learn about their journeys Buffett and Charlie Mer it's kind of a exercise in self-discovery is you have to understand whether yourself you have the interest and the passion to go down that rabbit hole and if you have then you keep going on that path and you'll figure it out then >> I'm Jamie from Houston Tech Texas. My question is, I've been reading a lot of Peter Kaufman and he says, "Public companies, perverse incentives, dirty shirt. Why aren't we looking at private companies, 100red-year evergreen, familyrun, and doing a Berkshire Hathaway of that?" >> Familyun businesses, there's a lot of research that familyrun businesses do very well. The issue is that for most of us, they're not that easily accessible because now you're talking about private equity and that sort of thing. And in fact, I think the best course of action for most companies is to never go public, right? >> Just keep it private. And also some of the biggest companies, they don't really need capital to grow because they're good businesses. So yeah, to the extent that I mean one choice you have is to focus on familyont controlled public companies. There are plenty of companies like Walmart for example. >> The family still has more than 40%. It's been more than 50 years, 54 years since the IPO, family hasn't sold. And so we have a lot of public companies where family ownership is significant. And so if you were to actually limit yourself to that universe, it's generally going to be a better return than looking at the whole thing. So absolutely. Yeah. >> My name is Dan. I'm from Steamboat Springs. Thanks for your time today. I really want to, as a citizen of the world, thank you for your work with the foundation. I think that as the leaves turn with Warren's life, I think that there might be opportunity for additional capacity for you to be endowed with additional resources. And I wonder what capacity you mentally have for that around your foundation. Of course, >> the thing with giving money away is more difficult than making it. When you're trying to make investments, we have a very wide open field. And when you're trying to know improve the world, there's been a lot of smart humans and smart governments that have already taken a crack at. And so the problems that are left are problems that are not been solved by a lot of well-meaning people with a lot of well-meaning resources. I always find that giving away money is more difficult. At Dakshana, we currently spend about $3 million a year and I think we have a very good model with that engine. That engine will max out at 6 or 7 million a year. So until we get to that point, we just stay focused on that. And I'm pretty sure that if and when we have resources that go beyond that, that the outcomes won't be as good. So we'll have to just do the next best thing which is the same thing in investing where you just go with the the best of the options you have. So in giving money away it is actually even more of a headwind when the numbers become large. It just becomes more and more complicated. So I think like when you look at Buffett's situation and especially with their mandate to finish it all off in a few years that's a tough problem. On top of that, I think he's also set up that all three of them have to agree. So the three kids have to be in agreement before any money can be given away. I think he did that so no one could be approached to give something. But the negative is you now get to committee based. Committees are not very good at anything. I have some skepticism on that and I think that uh whole giving away money stuff is a difficult problem. I think one way or another I believe a place like UNO UNICE Nebraska Omaha is going to end up with a good bit of the money which is good. They might go tuition free. >> I have a a DAX a business card of you with a handwriting that says I'm going to try to remember exactly east or west Micron is the best buy Micron. So I obediently went and bought Micron at 30 bucks per share. And then I think you also mentioned to me a couple of times like it's all about the doubles. So when it got to 60 I sold today it's close to 600 I think. What what's wrong with me? >> Yeah that's a great question. I also sold around there. I also sold at at a double what year did I give you the card? >> I think it was 17 or 18 >> 2017. Yeah. Yeah. So I didn't put Micron on the list of companies I regret because I couldn't have foreseen what was going to happen. So a lot of things that happened with Micron were kind of a pretty outlier because they in 2017 2018 you know AI and things were just not even on the radar and so that that happened. How do we think about these large numbers like companies Nvidia 5 trillion people say it will be 10 trillion. Now the GDP of like biggest companies like India, Germany is like 5 trillion. So um I think in one of the talk last year you said Amazon like it's just starting. So like they have close to like 1 trillion revenue now 3 trillion market cap like where is it going in like next 10 20 years how to think about it? >> There's a box on Buffett's desk and he's talked about it several times and it says too hard. The box says too hard on it. This is the actual physical box on his desk. When I went to his office when we were when I was going through the Japan company handbook I noticed the box was empty. So I told Warren how come the two hard box is empty? He said, "Let me fill it up right now for you, Monish." He took a bunch of papers and dumped it in there. Right? We have to remember that 99 plus% of investment ideas should go in the too hard pile. They are s outside our circle of competence or we don't understand them. So when you ask the questions or you've retained said the things about Nvidia, you actually answered your own question which is you are questioning it's not obvious to you that Nvidia is a great great investment. It's not obvious to you that Amazon is a great investment. All of it needs to go in the two heart pile till one day something shows up and you say this is unbelievable. I can understand it. It's very cheap. It's going to grow a lot. So when that happens, which will not happen very often, like Charlie said that we will get to go to make trips to the pie counter very few times in our life. And when we go to the pie counter, we have to load up on a lot of pie. Pie counter trips are rare. When you get to the pie counter, buy a take a lot of pie. And what he forgot to tell me is don't drop the pie on your way back. So much of the pie like Ferrari and Progressive and Goldman Sachs got dropped on the way back. I never got to eat it. So not only do you have to go to the pie counter, not only you have to load up, keep it. Don't lose it. So, thank you so much