It's the gold rush. >> His book, The Dando Investor, the low-risk value method to high returns. >> There's a part of this business that's black magic. >> $650,000. That is what one hedge fund manager paid for the opportunity to sit down with the Oracle of Omaha. >> Heads I win, tails I win. >> The one and only shameless cloner. I give you Mish Fabry. Why would you want to be slightly in bed with a croak? Investing is really simple because the thing is >> Thank you, man, for taking the time to talk with me. I I really do appreciate it. >> Brandon, first of all, it was a pleasure to meet you in Omaha. I really enjoyed that and I'm very happy to be here with you. >> The first question, I'm very curious on your opinion on this. So, right now, we've got obviously a stock market that's at all-time highs. We've got the S&P 500 that's super concentrated in the MAG 7. We've got the Schiller PE at levels not seen since the tech bubble. Then we've kind of got on the other hand, we've got geopolitics, we've got war, we've got interest rates, we've got inflation, all to worry about. I'm wondering if you're advising a new investor, someone that's just opening a brokerage account today. What are you telling them? Like what what are they supposed to do in this market that we have at the moment? >> You know, the kind of investing that I do is uh we make very few bets. uh they tend to be large bets and they tend to be infrequent bets. My opinion on things that we don't buy whether I'm right or wrong on that is irrelevant. Right? Because what matters is what we do act on. So for example, I'm not an investor in the S&P 500. I generally feel it's overheated. Whether it's overheated, underheated, or fair, or overpriced, whatever else, it doesn't matter from my point of view because we aren't placing a bet there. And we generally think in terms of trying to place bets where the odds are heavily in our favor where they tend to approach kind of no-brainer kind of territory. Anytime things become murky or debatable or anything like that, uh it's an automatic pass, right? And I think when you when you talk about an individual investor, you know, normally I would tell people who are individual investors who have a long runway to dollar cost average into an index for example. But I also feel that currently the S&P where it is, that's probably not the best direction to go in. At the worst case, it's not a no-brainer and more likely it's ridiculously overvalued. An alternative that may work for a lot of people is to think of Burkshire Hathaway as an index. Don't buy the S&P, buy BRKB, the Bshire class B shares. >> I like that. >> Basically, when you buy the Burkshire class B shares, you know, like something like 40% of the market cap is cash. Another 25 30% is very good businesses, publicly traded and then they have a lot of great wholly owned businesses etc. And Berkshire may be either fairly priced or underpriced but probably not overpriced. The big advantage you gain is that if we have a dislocation of any kind, Greg Ael is going to step up to the bat. That's one one thing I wanted to actually talk to you about is this idea of Berkshire Hathaway being the Buffett ETF. Now we've got Buffett stepping down, Abel taking the reigns. I know that does concern some investors. Do you think about that? Is it still going to be the Buffett ETF in the next 10 to 20 years or is it going to start becoming something totally different? Let's say Buffett has a had a life expectancy of 200 years >> and let's say he decided that he was in good shape and he was not going to step down and let's say he was going to run Burkshire for another 70 or 80 years for example. >> Mhm. >> The problem he has is the same problem that Greg Ael has which is size is a big anchor. Warren Buffett with a trillion or more in assets to manage has his hands tied behind his back versus Warren Buffett with 50 billion to manage or 100 billion to manage. It's not a Greg Ael versus Warren Buffett situation. It's really the size is the big 800 pound gorilla in the room. If you gave Greg Ael a billion dollars to manage or even 50 billion to manage, I think he would be a different he would be killing it in a way that he can't do as well at now what they may be able to do is if we do get a big dislocation they are sitting there very pretty and Greg and and Warren definitely Greg even alone on his own definitely has a temperament to get very aggressive. and go go go to go to bat on that. So I think the reason I like the Berkshire ETF or Burkshire index is that if we don't get a dislocation we we are not going to be kind of taking a lot of risk. If we do get a dislocation we may be looking at a double in a few years which is great. So it's kind of like you've got optionality on some great >> pre- optionality >> pre- optionality is a very good thing. I'm interested. What do you think about obviously the media will just talk nonstop about how big this cash pile is getting and oh what's Buffett or Abel going to do with it. Would you do anything differently to what they're doing now in this market if you had control of what is it like a $400 billion cash pile? Would you be more aggressive in returning it to shareholders? Like is it is there does it get big enough where it's like this cash pile is just too big or do you like their plan of just h we'll just hold it for now. We'll just hold it. We'll just wait and see what we can find and we'll just be patient. >> They did recently put about 30 billion to work into Google. >> That's true. >> So they are generating, you know, 50 60 billion or more in cash flow, but they did put a decent chunk of it to work. Again, the thing is people shouldn't read too much into it because Google is a 4 trillion market cap company. He has to make those bets because his universe is so small, >> right? M >> and he can't be playing Mickey Mouse games the way I play. You know, he's way past all that. I can still play a lot of Mickey Mouse games, which are a lot of fun, but he has to, you know, step up the big leagues and do that. So, I I don't think they should be distributing cash. I think that we've had a long run of the S&P going up quite a bit for a while. It is not unlikely that in the next 5 or 10 years we see a big dislocation. And if we do see a dislocation, that might wipe out all their cash. >> I want to pick your brain a little bit more. This is something I've been looking into and I made a video on it recently about Bergkshire's Google position because I was arming and aing as to who made the call cuz it kind of seemed like maybe it was Greg Ael taking Berkshire in a slightly newer different direction and then I don't know if you saw the CNBC clip of Warren Buffett recently where he came out and he said actually that was me. I initiate it. I normally wouldn't give you an answer on something like that, but I will. >> I'm very interested to hear your take on that position and the fact that Buffett himself was the guy that did it. >> Well, I think it makes more sense that Warren did it than Greg did it. >> Okay. >> Warren has been studying Google for a long time. Geico has been a customer of Google. I mean, they've they've kicked themselves a lot for not buying Google back in the day when they knew that Geigo was being charged 20 bucks a click and it cost Google not even 1 cent to do that, right? And they they could see the economics of that that how well it was working for Geico and how incredibly profitable it was for Google. And also when Google before Google went public, Sergey and Larry came to see Warren. they came to see Warren and they wanted advice because they were they were going to be a public company and they wanted to you know run it like Burkshire's being run and all of that. So he's he's had a front row seat on Google for a long time >> and they've been an a big customer of Google for a very long time. But I think we also have to temper that with the fact that his universe is very small. >> If he was managing a h 100red billion I don't think there'd be a Google bet. I found that interesting because in that little interview snippet he did with CNBC, he said something like >> I would say that I don't like it as well as at least four or five other businesses that we own. >> He he was almost like downplaying it. >> So Google is now a company with debt. Okay. >> True. Yeah. >> They've never been a company with debt. Uh they've never been a company with high capex. >> Um now they have high capex >> and all these guys have high capex. In fact, Zuckerberg came out and said that whether the bet works or not, we don't know, >> but we have to play. >> I mean, just think of that statement. What he's saying is >> I'm putting a lot of money to work and I don't know whether it's going to pay off or not, but I don't have a choice. So, I think what happens in AI at the end when this whole thing shakes out is >> two or three players make out big time and then there's a lot of carcasses on the roadside. >> Yeah. And we don't know who the carcasses are and we don't know who the winners are. So I think it's a it's a very difficult game right now. >> Well, it sounded from what Buffett was saying in that snippet, it's almost like the big dogs are now forcing everybody to play a game that they necessarily might not want to play. >> But and I think that's where maybe it goes back to the strength. It's almost a battle of the balance sheet in some ways. It's like we're going to use our strength of balance sheet to force you guys to play a game. >> I also want to point out that when Google spends a 100red billion for example in 2027, that's like the equivalent of spending 20 billion five or 6 years ago. That's how much the prices of what they are buying has gone up. >> Isn't that insane? >> So basically it's the gold rush. >> Yeah. And the people selling the pickaxes >> are making it coming and going. >> Yeah. >> So they have to pay the memory guys >> and they're paying the memory guys a lot of money. They have to pay all these people who are essential to creating the data centers >> and what they are paying for what they're getting today is multiples of what they were paying a few years back. So the numbers look big, you know, 100 billion, 200 billion, 400 billion, but you have to calibrate that it would have been a fourth or a fifth of that a few years back. >> That's crazy. So it's the case of buy the pickaxe makers. I think >> is that how you more think about things like as opposed to making >> even better than pickaxe makers is put the whole thing in the two hard pile because even with the pickaxe makers what I'm saying is that let's take the memory guys right we got three memory there's a lot of barriers to entry for a fourth player to come in all the patents and scale and everything and I remember a few years back I was talking to the CFO of Micro >> right And he said that we have all the patents, we have all the engineers, we have all the process people, we have everybody. He said that if one of our fabs burnt down and we tried to replicate that fab and we have everything. We have all the factors, the production, everyone who actually built it the first time and all that. We're not sure we can get the same throughput out of it. And he said because there's a part of this business that's black magic. >> This is the CFO of Micron talking. He said that >> yeah, >> so when you are not in this business and you're trying to enter this business and you don't have the patents and you don't have the engineers and you don't have the black magic, uh, good luck with that. So what I'm saying is the memory guys look like they're insulated. You know, the three guys are there and they cannot keep up and they're they're on allocations. You know, they're they're telling people take a number and they're jacking up their >> um their prices like unbelievable. So that's why that's why there's a four or five to1 delta between what Google was paying and what they are paying in the future versus the past. But even with that I think the question that comes up is where is this 5 years from now >> or three years from now do one of the three players you know jump in front of the others or something we don't know. So what I'm saying is that these areas that people talk about on YouTube, that people talk about on podcasts and all that, the simple monish rule is that's not where we want to invest. We want to invest where nobody's interested, >> nobody's talking about it, and >> the boring stuff >> and it's a no-brainer. >> Yes. >> And that's where we want to go. >> As you say, being hit over the head by a 2x4, right? >> Yeah. Now you know that doesn't translate directly into Australian because it's not following the metric system. You get the idea. >> I I get the idea. That's very interesting. Okay. So this is uh an interesting path to go down because for example we've seen AI, everybody talks about it. It's on the news every day. The Mag 7 gets pumped up. Then on the other end of the spectrum, what you're saying about some sex like unsexy, unloved businesses, we can think about things like the software as a service companies that were all the rage like a few years ago and now they're being completely spat out. >> We want things that are orgasmic. Okay. We don't want even the like the software as a service. >> That's not even it for you. >> We're not quite there. So I'll give you an example. >> Okay. So, we're getting more boring than that. We got to get more boring. >> There's a company based in Kazakhstan. Okay. Caspie. Ki. Okay. >> Okay. >> Now, Caspie is listed on the NASDAQ. It's a USlisted company. >> Gotcha. >> It cash flows $2 billion a year. >> Right. >> Okay. And Caspie is the WeChat of Kazakhstan. >> Okay. All right. >> Okay. So what WeChat did in China, which is it's a super app, you know, it does everything. Caspie was broken failing bank >> about 10 years ago. This rockstar manager comes in CEO. He has now he's got about 40% or 43% of the company. He converts it into WeChat and you need your driver's license or you want to do some shopping or anything under the sun you want to do. I mean Kazakhstan is a country with 10 million people. >> It's a small country. >> There is no other company in Kazakhstan that produces two billion of cash flow. That's a very large number. Okay. >> That's an outlier. >> What he was doing, Michael, the rockstar CEO, he was pumping out a billion a year in dividends because they're so profitable, right? >> Yeah. Then he decided that I'm going to replicate what I did in Kazakhstan in Turkey. Right? >> So he bought a small bank in Turkey >> and he bought a kind of failing fintech in Turkey. And what he did is when he needed to buy these things, he told his shareholders, "Oh, by the way, I'm shutting off the dividend for a year or two because we need the cash for what we're going to do." when he shut off the dividend, they took the stock out back and shot it. Okay. Like he said, "What the dividend?" So when they took the stock out back and shot it, he made his bets. The stock has collapsed and then he said, "Now we've made our investments in Turkey. We're turning the dividend back on." Okay. So he just took like a 18month pause, 12 or 18 month pause to make this bet and come back. He's awesome manager. The dividend yield on it is approaching 10%. Like we don't need to put money in a bank. It's trading at like five to seven times cash flow. When it got taken out back and shot in China came in, bought a big piece. >> Okay. >> Michael himself bumped up his stake as well. >> Right. >> Okay. The way I look at this business is they've got the core business in Kazakhstan which is actually still growing. They're still adding bell and whistles to it which is doing fine, monopoly and all of that. And then they have this moonshot in Turkey. >> If the moonshot doesn't work at all, you make two or three times your money. And if the moonshot does work, then we don't know. >> Heads I win, tails I win. It's not even tails I don't lose much. It's heads I win, tails I win. >> I was waiting for the heads I win, tails I don't lose much. I got the new version. >> I need I need to keep you on your toes, Brandon. >> Yeah. Yeah. So So you're I'm interested in how you find these things and how you chase them. Is it just through just turning over stones? Cuz I'm also like I'm not as definitely not as a seasoned investor as you. I stay quite tight in a circle of competence and I'm fairly rigid about it cuz I don't want to stray. But are you more just a curious investor that you just want to turn over stones and chase these things and find these things? >> So we need to go back about 2500 years to the opishads in India. These were set of awesome texts written by some very smart guys. One particular verse in that text was written for our benefit brand. >> Okay? >> Because they knew we were going to have this conversation after 2500 years. >> Great. >> And because your Sanskrit isn't that great, I'm going to say it in English. >> Help me, please. >> Okay. So, as is your wish, so is your will. As is your will, so is your deed. As is your deed, so is your destiny. And then the punchline is your deepest desire is your destiny. What you have to do when you read this is you have to hook, line, and sinker buy into it. Don't be a skeptic. Well, deepest desire is my destiny. I'm not sure about that, whatever. No. >> Assume it's the gospel truth that your deepest desire is your destiny. Now, you cannot have three deepest desires. You have to have one deepest desire. And if you're burning passionate about one thing, what the openership said is it's going to happen. Okay. So let's say you said I want to focus on buying stocks at a PE of one. That's my deepest desire. I only want to pay one times earnings for stocks. Well, there are 50,000 stocks in the world. If you start going through them, you're going to find P of one. you're going to find P of 0.1. Now, if you said I want to only buy stocks at a P of three, you'll find those too. And if you say I only want to buy stocks at a P of 50, you'll buy find those as well. So, it depends what your desires are. It's very important to have the right desires. Don't blow it with some stupid desires. >> Fair enough. Yeah. >> Now, the deepest desire has to be something that resonates with your soul. Yeah, >> it's who you are. If you look at someone like Jeff Bezos and when he's driving to Seattle trying to get the money to for Amazon and get going, he just wanted to build the world's largest bookstore. >> Okay, he had no other desire. That was his desire, the world's largest bookstore. And he went all in on that. Whatever he had to do to get there. Elon wants to die on Mars just not on impact. Okay, he wants to die on Mars but not on impact. Okay, it's going to happen >> because that's the power of the deepest desires. But you have to be you have to have a singular focus and you have to go allin. So when you say you know what are you looking for and how do you find these things? My focus is that I want to make investments >> where I can explain them to a 10-year-old in about four sentences. We talked about Caspie. I apologize it took more than four sentences, but that's because you're not as smart as a 10-year-old, Brandon, with due respect, you know. >> Yeah. What can I say? >> If you're as smart as the 10year-olds I interact with, I could have done it in four sentences. But basically the CASPY thesis is a simple thesis. We have a business that we are not paying much for and it's not some you know old economy business. It's a tech business. >> It's a real new new age tech business. And then he's got the moonshot which I don't know whether that moonshot happens or not. What I do know today is that when I go to Turkey it's all analog. It's all paper. There's no apps. There's nothing there. So, the market is definitely there. The question is, can he crack it or not? And I don't know the answer. I don't need to know the answer because I'll make that bet and give him five years. See what happens. If he doesn't make it, 10% a year is coming back as dividends. So, what I'm saying is that we are looking for equations like that. So, how do you find them? Finding them is really easy. There's a website called valueinvestors club. It's free. Valueinvesclub.com. If you give them your email address, you can see all ideas. I think with a 60-day delay. It doesn't even matter if there are six month delay. It's irrelevant. >> Yeah. >> But it's very difficult to be a member and post ideas. I mean, if someone were just wanting to find these things and they just said, "I'm going to read every write up on Value Investors Club till something hits me in the head with a 2x4, till a dense person like me has an aha moment. Until that aha moment doesn't come, I keep reading and trust me, the aha moment's going to come." >> It is an element of turning over stones, but yeah, just doing the work. But it also sounds as though in in your personal investing experience, it sounds from the stories that you're saying is that you like to also find the people. For example, this fellow or a Jeff Bezos. >> When I'm reading a value investors club write up on Caspie, for example, it's telling me about the company and the person. It's all there on a platter. I don't have to figure out. It's all there. >> Yeah. >> You just have to read it. >> Okay. >> Just turn over the stones. Yeah. Like someone asked Warren, you know, there's 5,000 stocks in the US and Warren said start with the A's. >> Yeah. Yeah. >> So basically the bottom line is that if it's your deepest desire, it's not going to be work. It's going to be exciting. It's going to be like watching the like the you know highlights of the World Cup final. >> That's what it's going to be like. I went to Turkey personally with an investor called Matt Peterson. I don't know if you know Matt. >> Yeah, I know Matt. Matt's right here in Austin. >> Yes. Yes. But I also came away with the the impression that this this is me starting to push my own circle of competency because I am I'm not Turkish. I'm not super familiar with the Turkish economy. Where do you draw the line of the investor kind of branching out into different markets into into really pushing things? Because I I'm not sure if personally I would feel comfortable investing in Turkey, but that's just me, you know. >> Oh, Brandon, the thing is Buffett says that in investing there are no called strikes. And I realize I'm talking to an Australian and I'm not talking to an American baseball player. But you know in baseball if if a a pitch is coming in the strike zone and you let it go after three of those you are out. >> Yeah. >> Right. >> Maybe we could say we're playing a test match. You've got unlimited dot balls. >> Yeah. Yeah. Or or u unlimited wide balls. >> Unlim Yes. >> And it's not going to hurt you. You decide which one you want to hit. Okay. >> Yes. What I'm trying to say is that you don't need to and you should not invest in Turkey or any other place till you are 5,000% allin. >> Yeah. >> If you are harboring doubts, the answer is very simple. >> Yeah. >> We move on. So because there are no call strikes, what Buffett said is the baseball player has to swing because if he doesn't swing after three strikes, he's gone. He says I can let 10,000 balls go by. And he says, "When there's a big fat pitch coming down the center, when the ball looks like a watermelon and it's coming right at the center of the bat and uh I'm going to like just send it, you know, deep into the bleachers, >> you know, that's when we're going to swing. And until that happens, we won't swing." So, what I'm saying is you could look at Caspie and you may not see a watermelon. M >> you may see a tiny marble not very centered in some corner of your strike zone and say >> I'm going to let that go and that's why so this is a very forgiving business. >> You don't need to invest in the same things I'm investing in. >> I don't need to be investing in the same things Warren Buffett's investing in. The important thing is that when we invest the 10year-old and four sentences >> Yeah. and the 10-year-old be completely convinced, yes, this makes sense. >> And the 2x4 is somewhere around the corner. >> Yeah, that's what we want is we want these complete no-brainers. >> Yeah. >> Because we have auction-driven markets and because we have humans vacasillating between fear and greed, there is always one portion of the market where everyone's exuberant, everyone's greedy, everyone's hyperactive. Let them have their fun. Leave it alone. >> That is not where we going to hang out. We're going to hang out in other unpopular nooks and crevices. >> Yeah. >> Because we have much less capital, small capital, we don't need to make Nvidia type bets. >> Yeah. >> We can make a lot of Mickey Mouse bets. As you have lower amounts of money to invest, your opportunity set gets larger. Your returns possibilities get larger. But you have to have the discipline. You have to have the discipline to know when you're within your circle of competence. Know when things are a total no-brainer. Have the patience >> to let them play out and uh that's it. >> I wanted to talk to you about the idea of uncertainty. So for examp we can use an example that's relevant to my world. One of the companies that we use as a business personally our business is is Adobe. You know, we're very familiar with their programs, with the editing and the work that we do. We see the stock is down 36% in the past year, 63% since its highs in 2024. But then there's always this emotional side. There's this emotional part of investing that gets to you because then you start thinking, oh, but they are down. You start looking at these image generation models and you're like, oh, there is a risk there, hence why the stock has been crushed. There's always something there's there's a reason why investors want to push it down 63% you know since its highs. I'm wondering when you're looking at a market event where investors do see uncertainty what are the steps you go through to make sure that your riskreward equation is good you're protecting your downside. How do you make sure >> Adobe is a very simple case basically where if you have strong conviction that you know what the minimal cash flows Adobe would produce over the next five or 10 years or 15 years are and you can discount those cash flows back then the decision whether to invest or not becomes obvious. If those cash flows are going to be very robust and when you discount them back they come they point to a cheap stock and you have a lot of confidence in those cash flows you can proceed. If on the other hand you are not able to have high conviction on what those future cash flows are the answer is we move on. >> Yeah. Yeah. >> Adobe may be a no-brainer for one person and may be a two hard pile for another person. to me to me if you look at it from Monish's point of view it just goes in two hard pile >> right >> okay because because it's not what I'm saying is so let's me let's just say we compare Adobe to Caspie >> Mhm. Now Caspie also has risk in the sense that I don't know if something comes and hits their ka cash flows from left field but I can't see anything there that is giving me in fact there's a case to be made that those cash flows could be higher because they're still innovating and doing things there and uh it's a rich country and so on. So what I'm saying is that in that case my conviction is that these cash flows are pretty certain. Uh they may stay at this level or they may go higher. Turkey may or may not work but if it does work it's got eight times the population of Kazakhstan. >> It's got the upside >> and they might do three more countries after that. >> Who knows right? We don't know. So from my point of view that if you put a gun to my head and said you can make only one of two investments, Adobe or Caspby, I would just say okay I'll choose Caspie. In your case, you could just say neither. >> Yeah. >> If you if you're not comfortable, just say neither and just keep looking because there's 50,000 companies. You keep turning the pages. Something at some point may make sense. >> I wanted to um talking about certainty of cash flows. one of the things that I promised my subscribers that I would get your opinion on. I I think we all know what your opinion might be on it, but my subscribers are very interested to hear your thoughts on the SpaceX IPO that happened recently. How you react to what has happened with it being the biggest IPO in the world comfortably and what's happened since in the stock. >> Well, I would I would say this. Elon is not human. >> >> He's an alien. >> You think he's human? He's not human. Okay. And the second thing is that I don't know if there is any manager on the planet as good as him. The capabilities of Elon are superhuman. I mean, what I'm saying is the guy doesn't know anything about rockets and he kills all the rocket companies. He's landing two rockets simultaneously backwards. Okay. Okay. And they all laughed at him when he first said, "I'm going to land these rockets backwards." Okay. >> And then you have Starlink and I mean just on and on all the innovations the >> what I would say is that like what Mer said never underestimate someone who overestimates themselves. >> Okay. So Elon is the kind of person from my point of view that one should never short because he's superhuman. do not short a superhum. Now in terms of going long Elon or Monish too hard pile. So what I'm saying is that investing is really simple because the thing is uh you can look at SpaceX and you can look at their offering documents and all the things they're saying they're going to be mining asteroids and whatever else they're going to be doing and intergalactic adventures and so on and uh and that's it may come about. Okay, because we're talking about a superhuman guy, but I don't need to make that bet. >> Yeah. >> Again, if I go to Caspie versus SpaceX, I'll just go to Caspie. Easier to understand. If I lose the money, I know how I lost it in all of that. >> Irrespective of price, take price totally out of it. Do are you a fan of the SpaceX business? Cuz I actually think they have quite a few. >> I think SpaceX business is phenomenal. >> I think it's interesting, isn't it? I mean, what I'm saying is that he's brought together people who are executing and doing things they themselves never thought they were capable of. The first 3,000 hires at SpaceX, he interviewed all of them personally. >> Because he's not human. >> Yeah. >> And you know, the thing is, he's running five companies at the same time. Plus, he went to go fix the US government on the side. Okay. So what I'm trying to say is that I am I am so proud to be an American and that this country attracted a finished product like Elon to come and do his stuff here. Okay, >> it's very powerful that these people like Elon do their stuff. He couldn't have done what he's doing in South Africa. Okay, just not possible. But the US makes it possible. So, it's a symbiotic relationship. It happens for him in the US and if he's not in the US, it doesn't happen for him, you know. So, it's kind of all the factors of production come together. I live in um a town called Westlake Hills here in Texas. Elon lives in my town. Okay. He lives 8 miles from my home, >> right? >> He's alive when I'm alive. What a beautiful thing. I might bump into him one of these days. >> Have you ever met him? No, >> I haven't met him. No, he's got other things to do than meet yo-yos like me. But but but you know what I'm saying? I I mean the Texas economy, he's single-handedly driving the Texas economy. >> Okay. I mean, just the amount of stuff going on in Austin, the kind of stuff coming up here, the gigafactories here, all this stuff going on, it's just so exciting. I am so happy and grateful that there is an Elon that he's my neighbor and that he's cranking and I wish him a very long life and hope we have 100 Elons. So I I think that the odds that SpaceX as a business does well to me almost is a no-brainer. But SpaceX as a investment is a very different question. That becomes a harder that goes in too hard pile. >> Lot of use of Warren's too hard pile today. I like it. >> Yeah. Yeah. Yeah. We we need to put a lot of stuff in there. >> Yeah, that's actually an interesting thing to talk about cuz I feel like just through my education as an investor, through people like yourself, I've become more comfortable in using the too hard pile. But I actually feel like when I was earlier in my investing career, I would try not to use that too hard pile. And I think it kind of runs people into trouble. >> Humans have a high ego. They're not willing to admit, oh, this is something I can't figure out. And you know, our natural tendencies will SpaceX, yeah, of course, I can figure it out. >> Adobe, yeah, of course I can figure it out. So, it's a exercise in humility. >> Yes. >> Be dumping a lot of stuff in the two hard pile. I mean, the two hard pile should be very aggressively used. >> Very aggressive because that's when you're being true to yourself. >> Yeah. No, I I think that's that's a really good point. One of the things that my audience has kind of messaged in, and I guess not just them, but other notable investors as well over the past few years, they've been talking about this concept of a passive investing bubble because so much money flows into the market passively. We're kind of removing this price discovery, particularly at the top end of the market. I'm very interested if you have an opinion on whether passive investing is starting to cause these market distortions and whether that kind of leads us into trouble over time. >> My first um feeling on that is to put that question in the two hard pile. >> We're going to end this interview really quickly. I'll just ask you the next one. >> No, no. as well. What I'm trying to say is that you know so we have a saying in Hindi and I'll say it in Hindi first. Why ask the address of a home we're never going to visit. >> Okay. >> So what I'm trying to say is that am I making an investment in the S&P? No. Right. So now that I'm not making an investment in the S&P, do I really need to convince myself that I understand how to answer that question that you posed? The question that you posed, more than likely the answer is we're very far away from that point. Okay? Whether we're very very far away or whether we're very close is not really relevant because it's not the game we're playing. much more important is what the hell's going to happen to Caspie, right? That's a much more important relevant question to think about and like I said the deepest desire we cannot have 10 desire. So >> it's one of the fallacies that humans fall into is they want to have especially smart people they want to have an opinion on everything. >> Yeah. And it's a big exercise in humility to say that I don't know much and I don't have much of an opinion in more for most things. We don't need to Monday morning quarterback everything. No, I like it. I like it. Hey Monish, I've got a list of questions that have been sent in from my subscribers and I was wondering if you'd be open to answering a few of them. >> Yeah, sure. Go ahead. >> All right, let's do it. What to you are the most critical points someone should have on their checklist? What are the things that will really run you into trouble if you're not careful with an investment? >> There are some non-negotiables. One thing that is absolutely non-negotiable is understanding the nature and competence of management and owners. These have to be very high integrity people who have very high capability. So you have to have had enough information which informs you that their capabilities are very high and their integrity is very high. >> And if you cannot answer those questions or if you're questioning whether that's actually the case, I'll give you an example recently which happened to me. There's a US home builder called NVR and uh NVR is very famous because they've brought back like 80 90% of their stock over the last two decades. They no dividends. They've been buying back shares and it's delivered terrific returns. But what's happened with NVR is that the original founder is gone and now there's a bunch of managers who are running the business. The business is being run very well. But something like 40 or 50% of the shares that they buy back end up in the pockets of the managers. Okay. So the amount of compensation that's going to the knights who are managing the castle, the feast that the knights who are managing the castle are having is excessive. When I see that, it immediately says to me, "We're done. A friend of mine who will go nameless, fund manager who likes the business a lot said, "Because of this issue, it's a very small position and if this issue wasn't there, it'd be a very large position." And I looked at her and said, "That makes no sense to me because why would you want to be slightly in bed with a crook, not fully in bed with the crook?" Just a little bit. >> You know what I'm saying? >> Yeah. Yeah. >> I don't even want to be in the same room or the same apartment with the crook. Forget the bed. I'm at the edge of the bed. It's okay. I'm not in the middle of the bed. >> I'm only going to get slightly burnt. >> So, what I'm trying to say is that to me, he said that that made no sense to me because I said there's 50,000 stocks. >> Yeah. >> This is a very basic issue. >> Yeah. >> There's greedy managers. So, one of my things is I don't want to be in bed with greedy managers. One might say that you look at someone like Elon and you might say he's a greedy manager, but he also sets such crazy targets, you know, to hit those targets is so hard. So, I don't have so much of an issue with Elon on his comp side. I just have issues with a lot of other things that just difficult to figure out, right? I would just say that integrity of management, honesty of management, capability of management, >> non-negotiable. >> And for people that are watching along at home, when you say capability of management, what are you referring to? What should people be lasered for when we're talking capability or effectiveness? >> Warren and Charlie answer this question really well. >> They said that when they look at a manager, they just look at the track record. They don't care what the manager is saying he's going to do in the next five years or 10 years. They look at what's happened in the last 20 years or the last 10 years or the last five years and then they calibrate and figure out the nature of the manager. Like with Caspie, I've never had any interaction with the manager. But I spent a lot of time studying the track record and the track record gave me tremendous confidence that I was dealing with someone who was very high integrity. and very high capability, >> right? >> Many times when we look at investments that may not be obvious and when it's not obvious, it goes in the two hard pile. Everything goes in the two hard pile. It's only the anomalies that don't go in the two heart pile. >> Very good. All right. Next question. This is an interesting one. Which of your mental models is most influential in your own life? The one mental model that's extremely important for all humans is uh focus. We are not really going to be able to do anything. You know like the deepest desire it's another way of talking about focus but basically we have to be allin. We have to be allin on one little thing and it has to be everything to us. And if we do that, life is going to be amazing. >> I like that. If you were to start your own investing journey again with the benefit of the brain you have today, what would you do differently? >> Well, I was very overdosed on Graham >> and I was very underdosed on Fisher and Munger. M >> that realization that I need to reverse the two in terms of overdosing and underdosing came to me relatively late. It only came to me seven or eight years ago. So I've been an investor for like 32 years or something. I've been doing this and for almost a quarter century I was wandering in the wilderness aimlessly >> misdirected. And so if I were to go back I would be wanting to focus a lot more on the Fisher Munger model and maybe 20% Ben Graham, 80% Fisher Munger, something like that. >> This is one thing that you changed my opinion on in investing. I was very rigid in thinking that the science of value investing is you find a wonderful business, you buy it when it's undervalued, you write it up until it's fairly valued, and then you sell it and you find the next thing. Then I heard from you that, you know, Warren Buffett talks about that most of Berkshire's success comes down to these 12 investments that he bought but then he held. And so you were talking about how you're more inclined if you've got a highquality business to let it run. So I'm interested in in how you think about that now, especially with some of these businesses. They can go on very big runs and they can even you might say they become quite egregiously overvalued. What are your thoughts about how you decide to either keep something or this has gone too far, I'm going to take the profits? >> Capitalism is very brutal. Anytime you have some successful enterprise, there are lots of people waiting to take you down, >> take your profits, take everything. >> So, it is really an exception to the rule that a business survives for a long time and does well. What happens is in a very small sliver of businesses accidentally a moat gets built. So if you look at a business like Visa or Mastercard or FICO, FICO scores and this and that these were businesses that started with no modes. The founders themselves did not expect these business businesses to last as long as they did or become as moty as they become. Moody's for example or American Express and so on. So what I'm saying is there there are businesses where a moat gets built and it becomes obvious a moat has been built. Ferrari for example. >> Yeah. And if we are in the fortunate situation of having partial ownership of one of these businesses, we don't want to be selling a Costco or a Coke or a Visa or a Mastercard or AMX or any of those businesses unless they're egregiously overpriced. Not overpriced, but egregiously overpriced. The valuation has to be so extreme that you cannot justify it. And in all these names that I've mentioned, currently that is not the case. >> Yes. In fact, I would argue at for Costco, it has never been the case. Costco trades like 50 times trailing earnings. It has never been egregiously overpriced. >> Okay? >> 250 times trailing normalized earnings is egregiously overpriced. >> Okay? I'm going to note that one down. >> Okay? But what I'm saying is that they have not gotten to crazy numbers. >> They may be overpriced, but they've not gotten to crazy numbers. And if they do get to crazy numbers, then yes, we can look at it. So, it seems like your main rule is that as long as the moat is sound and it is strong, then you're more inclined to let the long-term compounders do their thing. >> It is so rare. It is so rare to have a great long-term business that survives 50 years or 100 years, 150 years, and does it on terms that are agreeable to their owners. that if you are in the fortunate place of being a partial owner one of those businesses don't step away quickly. >> One of these questions here could you ask Monish is if he is concerned about the recent problems or redemptions within private credit and if so how exposed are the banks to the downside? Do you have any thoughts on that? >> Monish has no intelligent thoughts on that. It's in the too hard pile for >> too hard pile. >> We're done. Move on. we get. >> I've never spent any time thinking about it, so I have no idea. >> I see it pop up um occasionally in the in the media. I think there there are problems, but I don't know if I'm the right guy to to talk about them. >> Like I said, stay focused. >> Stay focused. >> People's desire. >> I like that. Well, Monish, I think uh I think I've taken up more than enough of your time. I really do appreciate the time that you've given me and the time that you've given us as the followers of the channel. I know that the uh my followers have have admired your work for many many years. They've watched many of your YouTube videos. From the bottom of my heart, I want to say thank you very much for giving us the time and agreeing to come on and and have a chat about all things investing. Now I got to go find that thing that I'm very focused on >> when Yeah. You'll know when it hits you with a 2x4 and you have a big bump on your head. >> Yeah. I said, "Ah, Monish, I'll let you." >> No, Brandon, it's been a pleasure. Thank you so much. Our hour went by so fast. It was a lot of fun. Thank you. >> Thank you very much. >>