(00:00) we start looking at things like well what do they do so all looks good do they have brands do they have control of distribution do they have intellectual property do have an installed base of software or equipment that they service and sell spares and and so on and upgrades to how how do they do this got have an understanding how do they get to those numbers hi folks I'm absolutely delighted to welcome today's guest the legendary British investor Terry Smith who's calling in from his home on the island of maius where he now lives Terry (00:37) is the founder CEO and chief investment officer of an investment firm called fundsmith his fundsmith Equity Fund is the largest stock Fund in the UK I believe with more than 27 billion assets under management Bloomberg which includes Terry on its index of billionaires often describes him as the UK's most popular money manager he's definitely one of the most successful with a cumul ative return of over 600% since the fund's Inception in 2010 which is roughly 200 percentage points or so better than the msci world index Terry (01:10) it's lovely to see you thanks so much for joining us yeah nice to join you enjoying it so far so far we'll see how it goes from here we're off to a good start I wanted to ask you about your early years I've read in different places that you were born in the East End of London in 1953 and that you came from a very modest background as the son of a guy who I've read in different places that he drove a bus or he drove a truck and my sense is either way that it was a relatively poor area that was probably damaged a lot by the blitz when (01:42) you were growing up there in the 1950s and I wondered if you could just give us a sense of what it was like growing up in the East End what your family was like and really how that those early years shaped the person you'd become yeah I mean it wasn't a very nice place as you rightly say I mean it was still very damaged by the uh uh the wall Blitz in particular with lots of bomb sites and some of the housing was prefabricated housing which was built for temporary accommodation it was a very poor area if you look at the (02:11) statistics of the time for what it was worth uh in terms of educational facilities and achievement it was the worst Metropolitan bar in Western Europe at that time uh West hat which is where I technically was first get West hat which where I was pretty poor um the story I always tell people just to illustrate it is I went to Odessa Road primary school and in the very harsh winter of 1963 we have outside toilets and they froze over and so we were sent home from school and when I say s I don't mean for the day I mean this lasted for about six (02:41) weeks or something like that and um that would have been great part from the fact we also had an outside toilet at home which also froze over so it wasn't a big help and the house I lived in with my grandparents and my parents and my uncle and verious other big was a very modest house which has been knocked down in a the sun clearance program since I lived there and he had no hot running water and he had no bathroom and he had no toil inside toilet I mean that's kind of where I was um and the one thing I would (03:09) say more than anything else about all that is it gives you a big incentive to try and do something better and tell me about your parents uh yeah my father was um as you've touched upon already a lurry driver truck driver very talented driver not you don't have to be to drive buses and laes but he drove other things as well work for a a his undoing was he worked for a company uh embarking in Essex which amongst other things made braak Linings which I guess was where that he got involved with them and the problem was that they (03:39) used Asbestos and that was his undoing he got um uh people say asbestosis but that's a kind of loose term he he he got Mis over in lung cancer was wiped out by that uh and cors as was the entire shift of the place um and my mother was uh worked in various very very very modest job she was a cleaner she worked in a factory making Dart B she worked at the factory making brooms uh and so on so they were yeah it was a very poor um sort of background frankly yeah where do you think you got your intelligence from were both of your parents really smart (04:13) or my father I think was one of these people who was trapped by his background he was one of 12 children which pretty amazing um and had to leave school at 14 and go to work so there's no alternative but to that but he was clear very intelligent man he in the time when people did crosswords in newspapers he regularly won crosswork competitions day in day every week a book or something would arrive where he was winning cross and he did eventually before he died aspired became a manager of a cold storage Transportation facility and (04:41) things like that so he uh you know he was clearly a guy who had native intelligence sort of brain power who hadn't had the education to be able to capitalize upon it I would say yeah I often think my grandfather who grew up in London and who left school at 12 because he was like this poor poor Jewish kid and didn't have uh you know from an IM immigrant family and didn't have at a certain point the soul in his shoe had had worn out so much that he actually couldn't even hold it together with newspaper because there was nothing (05:08) to hold the newspaper in and so he became an apprentice tayor but he was a worldclass bridge player which makes you realize oh God how much intelligence that must have been that sort of got wasted because they were just doing these menial jobs or really really underpaid jobs do you feel like you've been very much shaped by that background I mean I know you've said before that money was important to you yeah money and um and just a feeling of of wanting to escape as much as just money um I mean the thing that that more (05:39) than anything affected my thinking which is strange people ask always ask things and there are teachers I could talk about and my mother I could talk about but uh one of the things was in 1968 I went to the ABC cinemar in Upton Park which is uh you know between us and the West Ham Football gr and I watched The Thomas Crown Affair the movie as I always say you know Steve McQueen this pretty good start he wear several suits he drives a Rolls-Royce flies a glider and plays Polo it's like and I I I literally watch this thing and thought (06:07) there's another world out there isn't there there's just another world out there that was the start also of you wanting to collect all of these beautiful cars that had been in movies and the like yeah I've got that rolls Russ as but um yeah I prob that and my father as well he was very interested in cars and motorcycles and and one of the earliest photographs got of me is and me sitting on my father's motorcycle so I could to ride motorcycles and drive cars fly planes and helicopters and things from a you know relatively easily he he (06:39) definitely had a talent for it it wasn't just that he was D buses and trucks he was he had some talent beyond that I think so now the image I have in my mind Terry is that you're sort of the Steve McQueen of the investing World well as it happen Steve McQueen's first name wasn't Steve it was Terry yeah ter as is mine Ah that's sure it's just a coincidence as they say yeah they they named him after you um no no he was born before me so kid I know you've you you're a big fan of um boxing and you've talked a lot about and (07:17) and then became I think a mui Thai um i' I've been to Thailand a couple of times that stayed in my taii camps for weeks and and trained at at my taii and and I do my tai I sponsor a myai fighter here in Marisha she's actually in Cambodia she just fought for a belt in Cambodia but I train with her most days and I've got a gym a kickboxing gym here in marcius which I I i' bought and equipped and gave to the the coach and the kids to to use and I turn up occasionally and train and spar with them I'm a kind of a curio I'm this old (07:50) white guy who turns up and does does this grow out of coming from a relatively tough area as kid like tell me about that well I went to Stratford grammar school the school uniform was a red was an owl in fact I went past there quite recently and the the cgre owl statue is still outside and so the badge was an owl which was on your cap and your Blazer and I had to walk past the secondary modern school on the way home and so I've going into a fight more more liks than I didn't really on the way home you can imagine (08:22) some kid going to the sort of the local Posh school as it as it was regarded a bit um coming home with an owl on his head and his Blazer was was might as well just draw a Target you know and so then my my uncle who lived in the house my uncle John was amongst other things a boxer and uh so after a bit of this he said I think I'm going to teach you how to fight and so he did and um and it was something I liked i' you I've always liked have felt at home going into boxing gyms so you know in boxing gyms whether they're in London or Marius or (08:53) New York um I've always kind of lik the atmosphere of of going into them it's I said here when I was up the the gym for the kids I went to see them in a municipal where they had no facilities where they didn't have a boxing ring and they couldn't keep their stuff there and I went in there and somebody who knows I'm a bit of a softy for these things took me along to see them uh and train with them and so on and they said well what is it you most like about this and I said they just remind me of me when I was their age you know this is their (09:21) Outlet this is something which uh they probably look forward to every week you know what do you think you were like at that age probably um shy intense I would say probably that age a sponge sponge yeah I read an article that you wrote I think back probably in 2011 when smoking Joe Frasier that the great boxer had just died relatively young I think 67 cancer and there was a beautiful quote there where you um you quoted George Foreman saying I kept knocking him down and he kept getting up after six times I was a (10:00) the championship of the world he was still trying to get me when they fight and I was wondering that seemed to me there's something about that resilience and determination that clearly resonates for you personally yeah yeah I match admire people like I mean people obviously RI certainly on that in that era was regarded as fantastic and he was but a bit he probably wasn't the greatest professional heavyweight of all time I think Joe Lewis and Rocky Marciano got better records he probably wasn't the greatest every way of all (10:30) time Cher foro Stevenson the Cuban amateur had a fantastic record as well but he was a huge uh Global personality and in so being he needed and that's why I tried to bring out the article he couldn't be there on his own he needed to find other men and and foreman and and Fraser in particular but also Ken some others if you hadn't had those he couldn't have been great like that but those men that you thought were different to him because if they were different it wouldn't have worked they need to be different styles to engage (10:57) the and one of the things that it I think it brings out is that your enemies and those you engage with shape you the way that you engage with them and so on it shapes you and um one of the the sort of common sort of thoughts that people have on on smok and Joe was that he was a sort of Slugger or he wasn't he wasn't that he was if you look at the uh the analysis of the first fight the fight of the century in Madison Square Garden where he knocked Hari down and broke his jaw Eddie fuks his trainer had trained (11:27) him very specifically um he worked out that could throw an effective uppercut and was vulnerable at that point and so he said whenever you get within range you throw and eventually he called him throwing this uppercut and it was just a piece of Eddie fugs she boxing his you know people think it's SP no there fair amount of analysis goes into successful boxing as well Eddie FS trained four of the five Med be Ali that's probably not a coincidence when I think of of your life and we'll get into this obviously a lot (11:56) more as this conversation unfolds there there is something about your reputation as being this kind of combative guy and there's also something I think just in in terms of the the drive and the grit that it must have taken for you to get out of the East End of London and become a billionaire and be as successful as you've been when you think of yourself like does the image of you as a sort of as a fighter as someone who's kind of defined is that sort of your um and combative and determined like what what's your own image of your myself (12:30) when I don't really see myself that way I think I'm a big sof actually I really do you know and I think I am in many respects I think a lot of people who know me well might tell you that uh as opposed to the sort of the Public Image that people have got I uh if you look on my uh on my WhatsApp where you can put a phrase I've got a phrase up there I like movies by the way um apart from The Thomas Crown Affair I like panan movies a bit as a as a hobby is a hobby it's not very investment and I I have movie night once a month with (13:01) you know friends I've got priv little private cinar r that etc etc the quote is from um the movie The Cult movie is sought on precin 13 which um uh not many people will have heard of now but it's about a a convict who's on the way I think to the death row and he being a bus the bus gets diverted to a police station which is closing down and um and there's some suspect in there who's been involved in a clat with the gang and the Gang come and attack the police station the game and of course it ends up with a (13:27) convict a girl the policeman fighting for their lives against all this and at one point the girl says to him what I can't understand she said is why you didn't take off because they sent somebody out to get help why didn't you take off down that uh drain and just leave it because then you could have escaped and he says um there are two things in life a man should never run from even if it costs him his life one of them is a man who's helpless and can't run with him and I like that you I I like that approach uh basically and I don't think (13:59) it's not it's it's a somewhat more selfless approach I think than the one that people might think that you're you're talking about portraying there course the quote ends people think that the quote which ends there one of them is a man who's helpless in car with him and the quote and they say you only got half the quot so know the quote does end there because the girl says to him what's the other one and he just looks at her H the two yeah big softy really yeah well as the the the great poem said we contain multitudes right I mean you can be a (14:33) softy and also be pretty tough um sometimes sometimes yeah yeah I think yeah I think that's right and yeah I would I would say it's a bit like that it depends upon the circumstances and the situation and who are with and what I'm doing and and lots of other things but look you don't you don't get out of where I was where I am without a lot of determination obviously that way my classmate who is my best friend in school I'm still in touch with but I'm in touch with both him and the guy I sat next to when I was five which (15:03) interesting yeah and he assures me that out of the the the sort of the the boys in our class the only two who are at Liberty and not dead are me and him really yeah yeah he he kind of because he stayed in the in London and and kept in touch a little more than I did he say notop you you and are the only two guys who were left alive and not in prison huh that's amazing that's amazing huh so did you have great role models in those years I mean what was it was there a teacher or an athlete or someone I mean did or all people you knew who invested (15:42) or did well in business was there anyone you looked to and you thought beyond the movies let me be more like them anyone in business I mean I couldn't possibly have started mean business wasn't something I encountered other than doing various medial jobs until I was in my 20s um I had a good primary school teacher Mr W house my last year of primary school he basically yeah I guess if he said what did he do if anything at all he probably gave me help impetus if you like to pass 11 plus and get to the best grammar school in the area I (16:11) remember him fondly fly although he was quite tough sometimes you know I mean this was an era of corporal punishment you know I mean he was quite tough um and uh and then when I was in secondary school Dennis blow my history teacher who bear in mind not in my family had ever been to University right so uh you know getting the grades and going to University was a process planning for University which nobody I couldn't go home and say what do you think I should do it was going to work terribly well and so he kind of helped me with that um (16:40) and he was a history teacher and he's the guy more than anybody else kindled my love of History um and I went did a history degree at the University that he himself had attended uh and that was a big hell when I think about it I could have done other things other universities and people said oh you could have go to Oxford Cambridge done I'm I'm I'm very happy that I did what I did because I had his sort of help and support in in thinking through that process um in doing it um and lots of different going back to the you know DET (17:07) determination my mother my mother was um the kindest person I think I've ever met Roosa um she never harmed anybody she would be multiplied she AR anybody you know sort of person who I mean obviously we're dealing in a different era in terms of going into shops and buying things if you came out and the shop had given a twoo much change she will be back in there giving it to them right she she'll be mortified by that idea yeah and uh her kind of you know what people would Now call moral compass was quite an important thing I think as well (17:35) in terms of how she treated people I think know my uncle John who I mentioned earlier he was uh a boxer and sometime villain he was he was a good guy what sort of villain um a villainous villain that's you know I mean this was the East End of London The Craze R the East End of London during this period you know he was a guy who was involved in in operations of that sort yeah interesting very interesting and so then to get back to to your trajectory of your career you had gone to Stratford grammar school this very (18:16) good school and I think I'm right in saying you won the physics prize you obviously a smart kid you went to the university in Cardiff to study history I think I'm right in saying you got a first class degree graduated in 74 and then you off and and got a job at at barle well you were there for 9 years right starting around 1974 and it it was not glamorous when you started I mean you joined as a graduate trainee and and ended up becoming a bank manager can you talk about those early years at barkle and you know how it sort of shifted you (18:49) into a different world and different way of thinking about the world again we'll talk about mentals a bit probably um but the um I chose baray I'm me ited who what I wanted to do when I left when I was in university so I went to all these so-call milk round interviews where companies comeing I was interviewed by the metal box company by Unilever by Marks and Spencers by bar by n West all these companies and how to make a decision I made it by on the you might consider perverse basis of the one that gave me the toughest (19:17) interview I thought yeah I'm going to go with him um guy called Roger brocklehurst I remember him well gave me the toughest interiew I I think I like these guys so I went and work for them uh it was a training program they put me through coures um uh on everything you can imagine law accounting Etc credit through all that uh which is very good and I always say that people people ask me for career advice I said get a job take all the training courses number one right um I think it was Lucy kellway writing the F said that the the sort of (19:46) the dotom era of the geek economy of the digital age have done great disservice to some young people who just want to start business go and get some experience first right go and get some training first then have I think about all that so I did all of that then um they BL had nearly gone bust in the 7375 secondary banking crisis and their own management accounting um was lamentable I mean they had none basically they had AED accounts which were produced three months after the year end you could look at them and see the balance sheet in the (20:15) income statement cash flow but actually having a budget and monitoring its budget working out what your exposure was to assets and liabilities and interest rates and nothing I always said when when I discovered this I said we would never have lent money to a company with our level of of management information right anyway what they did was they grabbed me out of what I was doing in training for Commercial Banking and sent me off to do an NBA they sent me to Henley to the management college and I did a very peculiar or different (20:44) kind of NBA one with different you three months in classrooms three months in a company three months and I did that um across different businesses and learned a lot different things um as like producction engineering and uh human Human Resources management and all kinds of stuff like that manpow planning uh with different organizations and then told me this but they were going to form a finance department so they had a guy uh called John Spencer who'd been with Pete marwick and they made him head of the department um I made a good guy (21:14) called debie vanw uh as the the first CFO really um this guy John Spencer who I'm still friends with to this day friendly with to this day still work together with to the state after nearly 50 years um and a guy from walker uh which had blown up very recently the the gym sler acquisition me and a couple of other vs and said you're the finance department and but what do we do we wanted to create this management accounting management information budgeting forecasting planning thing from scratch and so I got to sit there (21:46) and do that for the next three or four years and um that was great and I had uh a good boss in so far as uh he was a good Mentor um and uh he really liked to go sailing and uh and I got the one of those deals which I think you do get sometime which is I did his job when he was away which meant he could go off for six weeks and go sailing and uh so I learned an awful lot I got an awful lot of early responsibility doing that uh so I you know I was basically the manager straight underneath the CFO managing the (22:16) banks finances if you like and um think you learned by looking under the hood and act because obviously I mean this has been part of your you the key to your success as a stock picker is that you understand the accounts what did you see by actually being on the inside and looking under the hood loans of things I mean lots and lots of things that you see I mean one of them is cash flows and profits are completely different things I mean they all clearly related um AC cruel profits or cruel accounting is a way spreading cash flows across (22:46) reporting periods um but you know you can have plenty of profits and go bust it's you know the two things to not that you that that you've got to be very careful with businesses that require leverage or borrowing in order to function which banking does right because the margins for error uh uh in terms of success or failure are very slim at that point when you're on 20 to1 leverage or something like that it doesn't take long to go bust you know it really you can do it quite quickly by taking risk you know uh in that regard (23:15) so there are lots of things I but in the con of doing that job in those days the investor relations industry which we've now got where companies have IR offices didn't exist there was no such thing nobody had one not even one so what would happen is these people brokers would ring up and they would um ask for the finance director who did like taking their call so he pulled through to to well my boss all but he wasn't there so me so the phone would ring and it would be a bank analyst working at a stock bring firm in London or New York (23:43) whatever who would start questioning me about the results or the forthcoming year and what was going on and where we were positioned in relation to property lending or less developed country lending or whatever and I dealt with all these people and that was fine uh and learned quite a lot from them about how the market viewed us uh over time and and I and I investors who would come in as well uh you know from Capital group people like that they come into interview and and I would tell them about that and then eventually one of (24:11) them said to me um you're wasting your time you know that don't you I said what do you mean I'm wasting my time he said you're going to do very well he said I said yeah they've told me sort of I'm on the sort Fast Track up towards the Bard possibly or something like that one day and he said he said I'm absolutely certain he said but you really you're just going to have a career and you're going to be quite an important guy in a bank and then that's going to be that he said I think you should come and work in (24:33) our industry where the the rewards are much greater um obviously if you fail then there's not there's not the same sort of parachute that you might get in your job here he said but I don't think you will um and he said you you're far more like you this a partnership you'll end up being your own boss he said I think you get it and I said oh okay so I quit the bank and went off and became a bank analyist much of the shock of everybody evolved uh who like increased the manager of turnover by literally 100% like you don't quit go off I said (25:04) well no I'm going to be I'm going to be a bank analyist and I went I joined a stop broking firm I became a bank analyist so you you went off and you became an analyst I think first to a company called W Greenwell and Company and then you ended up Park's desit wed which was uh where you were until the late 80s and there's famous story told about your your time there um I think about a week after you joined as a banking analyst that sort of cemented your reputation as someone who would speak your mind um even when it annoyed (25:40) the hell out of people in positions of power tell tell us what happened it wasn't actually a week after I joined I mean I joined sometime in the summer of the 1986 just before Big Bang in London and then um I wrote a piece on the bank set piece of research uh in the run up to Christmas and left it for publication either the day when you left it the public department ran it out and mailed it to people and um I went off for a holiday I can't remember where I went and and so I said I'm going away over Christmas New Year and I left my my (26:08) number two in charge of I've got this research to do anyway he went out for a uh a lunch in the days when people did go for a lunch um with the Ft banking correspondent and gave him a copy and of course on the first working day of New Year there was absolutely no news anywhere at the financial word so the front page AR but at time says Bar bzw says sell baries and of course I mean everybody went completely crazy about this uh you that wasn't allowed you people didn't put out sell recommendations to anyway you're doing (26:42) on the company that and I said well yeah they got look through gr te the management of barlay said yes it is absolutely wonderful it proves the independence of our investment baking subsidi and the boss said I think you're going to have to leave because you got no career in now that's it and so I left and that was that was that you know I've kind of not for the first time I I reclaimed the moral High Ground a notch too high for people's comfort zone um I've got to say looking at what happen subsequently bking I was right because (27:10) this was ' 86 and by the turn of the ' 80s into the 90s uh they they ended up cutting the divid end because of the size of their property losses I was talking about their their inability to lend without incurring higher than average bad debts was the basic the thesis I was putting forward yeah then there was an even more dramatic PR of a similar story where you end up at UBS Phillips and Drew um so in 1990 became head of UK company research there and for people who don't remember this firm it it was a a pretty prominent (27:42) Investment Bank and stock broker and asset manager in the UK and I think and Drew had been founded in like the 1880s and then acquired by UBS and so you come in at an interesting time right where there are all these companies like poly peek and British and Commonwealth that were going bankrupt while seeming to be in good health and you weighed into this with your usual delicacy and and gracefulness and tacked and do what tell us tell us what happened I probably did show rather more tag but you're giving me credit for so um I uh together with a (28:16) guy who's transport analyst uh I worked with him on it I said why don't we write a piece of research about why this is happening why we've got companies which are reporting record profits and going bus 6 weeks L big companies right and so we wrote a research paper 30 pages long which looked at 12 methods by which companies cook the books right uh that they managed to report profits that didn't exist or profits without catch flows or got liabilities out about and we wrote that and it was for its worth voting the best piece of research (28:42) published in London that year by the sort of writers so you need to back up a bit why was I hired by UBS they had been involved in a thing called the blue arrow shortly before they hired blue AR was a UK shell company run by a man called Tony Barry who owned Spurs I think for a while the football club and he used that to bid for a company a much much bigger company this was a show company called man P temporary services company based in employment service company based in Milwaukee Wisconsin and um it was a huge acquisition and they (29:10) did a750 million pound convertible which sell quite a lot of money but try to think back to 1989 in terms of the size of that deal it was done by the lead banks with Barclays and and that way so bzw and sorry UBS and that West the issue was a complete flop because the deal was a complete Lem and um instead of admitting that they were stuck with the £750 million they put it on their Market making book which was exempt from disclosure now this was regarded when it became apparent as a bit of a foul by two people one was the institutions (29:42) because a few of them had bought these bonds not very many but they thought the whole issue was solved because they published newspaper sort of adver saying successful issue Tri out and then he fell a bit a grief so they stopped dealing with people like UBS over it and the the regulatories and uh sort of police authorities who went and arrested the CEO the head of research the head of trading and the head of sales and so the head ran me up and said um because I'd been a bank analyst for number of years successfully seven years I think I've (30:10) been a bank analyst I'd like to do something more I'd like to do something looking at the whole Market you know wider scope of things rather than doing banks forever and can know quite a bit about Banks and like to do something new and so he rang me out the blue and said um look UBS have got a vacancy because of these arrests they'd like to hire you and I sort of said well okay fine I'll go that and I S simple what do you want out me and there obviously we want to be profit of War we want you to reclaim the (30:34) moral High ground with the institutions who youve got this it comes back to the beo you've got this reputation for telling things how they are and we'd like you to use that to to rebuild our reputation institution so I said sure So I published this piece of research and that was all very well done um and so on then I got a phone call from somebody a random house to publish it and said um we think that we could sell a book if you could write a book did you write a book based that I said yeah so I went to the UBS management and said I've had (31:02) this approach I think it might be a good idea because you're trying to do this more High Ground stuff and they said yeah good I said I think this will be sort of another sort of you know feather in and our cap to doing that what do you think I said yeah if you want so I said you want the book to be UBS this book A terisi book I said terth book I said fine okay so I wrote the book and um of course the thing is all people have written other books on Creative Accounting in the botom the first one by any isans but if you look back back to (31:28) some of those they used company a by Company B and it did it I actually use real companies right and when we got towards publication the publisher said you quoted and you report in there I said yes you said I think you need to write to all the companies and tell them that you're using that in case they wish to claim copyright I said it's a public document and he said right to the compan I said okay fine so I wrote a letter to all the companies saying and Smith on publish accounting I'm going to quote from your 1988 andn your repul uh hope (31:58) that's okay let me know it's not of course having seen who I was and so a couple of the companies realized what was about to happen and the next thing I know is I get called in by the chairman of UBS who says them we're going to stop this book aren't we I said I know then we can do that there was sort of I don't think you've understood what I just said I'm telling you to stop the book right I said I think you find the book's mine not yours because that's what we agreed okay I'm giving you the instruction to you go and tell them I said what reason (32:31) should I give them well there's going to be a huge route over this you know and and I said so I'm going to tell a publisher note the connection between the word publicity and publisher the same verb right that he's got a book on accounting which he you think it's going to sell about 5,000 copies or something like that but now there's going to be a huge part I said have you come across a book called spy catcher that Mrs Thatcher tried to ban I said it's mainly about a guy who was in MI5 complaining about his pension I said but it sold out (33:00) when you tried to stop I said we're telling you we're going to fire you and sue you I said okay and so I got fired and sued the book got published the publisher regarded this is the funniest thing he'd seen the best thing he'd seen for a long time stopped the Press long enough to put across the corner the PBA tried to ban it's amazing I mean you got you got you got suspended initially for quote unquote gross misconduct then you you're fired they sted you so as I as I understand it you you had to settle out of court after about 18 months but the (33:36) book was number one in the best hell this I mean it knocked stepen Hawking off you are the Steven Hawking of the investing world not just okay but yes it did yeah I mean but it's really it wouldn't have done that they I mean you know I hope something might have read it regarding this qu no the interesting thing is I think it has stood the test of time in a number of regards I think that's a more interesting ref 40 years over 40 years later over 30 years later 30 you know five years later we were it's there are (34:07) examples in there which stand the test of time the one on P father count I think in particular stood the test of time uh so I think it was an okay book I don't think we' have sold hundreds of sells of copies without them trying to stop it and sue me and and things like that though yeah in many ways it made your reputation as somebody who was candid and had integrity and had the courage to tell it like it is but but also it it seems relevant in everything you did was based on a real understanding of the accounts of the (34:36) finances which seems which seems to have been I it sounds so prosaic but that's kind of been one of your competitive advantages in an industry where most people don't seem to bother no they don't no I'm I can give you as many examples as you you prepare to listen and recall to of of where we know that people in the industry don't read the accounts I mean we have the accounts for a reason you know uh and they kind they look at management slideshows and all kinds of about reading the actual accounts I mean there (35:04) lots of examples of this I mean we had one on IBM we looked at IBM in 2010 and rejected it wisely so as it turns out as as a stock but when we're doing it we found I I need to go look we found a $2 billion error in the cash flow State for the last year and so we sort of rang out the IR Department said look um we're these guys we're doing this we're looking at that we just go after some C there's this number idiot we can't make this work um and they that they the usual will call you back and they said we've been in touch with the finest (35:35) absolutely right the the cash flows out by two billion dollars we said anybody else run up they said no and I know it's because other people have discovered it but couldn't be bothered they hav read it you know it's like oh okay then it's very interesting I mean so it seems it seems to me I mean just in terms of keeping scool for our listeners and giving them and and viewers and giving them a sense of some of the morals here I mean part of it obviously as you said before is an emphasis on cash flow and due diligence and and part (36:10) of it it seems to me one of the great lessons of your career is just focusing on economic reality over reported earnings yes I think economic reality is it if you read what we do at F I'm would be C you probably have been preparing for this yeah we talk about coming with high Returns on Capital and high gross margins and great cash conversion and and growth and so on but when we found those and I mean anyone can find those going through looking you know on Bloomberg or other data sorts to find them you then have to pause and ask (36:42) yourself a very important question how do they do that what's the economic reality as you said what what product or service are they selling to people that enables them to generate good margins that enables them to get good Returns on Capital enables them to convert profits into cash but keep competition somewhat B what they actually do you know and I mean you do get investments in campus particularly in the botom era where people buy kinds of stuff without understanding it just on the basis of them mentioning AI oh right okay what did (37:13) they actually do and it's amazing enough I mean with the years of maintain this people have L come to believe it a bit but if they actually speak in go be go it's not a good sign you know we these people to tell us you in straightforward which we try to doing what we do in investment we try to tell people in straightforward terms what it is we do you know and what we don't do yeah there's a big chunk of your career that I'm sort of leaving out here that maybe we'll come back to later where you were running public companies but since since (37:43) you bring up fundsmith and it's so relevant to our discussion here let's dig in more to what it is you do here at this fund you you founded back in 2010 and that's become a really great emblem for what I would call The Art of quality invest in which is a phrase you use in the introduction to your book investing for growth where you describe your approach as quality investing a lovely phrase in that introduction where you talk about seeing an ice cream van that has an advertising slogan on the side which is its quality that counts so this (38:15) is the at the heart of what you do tell us tell us about the attributes you're looking for when you're trying to identify these high quality companies well I mean financial terms we're looking for a high on Capital employed let's start with that and you know Warren Buffett said it's the single most important measure of performance in his 1979 anur book right uh for what it's worth I have and he seem to have done quite well since there so probably we should listen a bit you know um and um it is because if you invest with me you (38:46) want to know what return you're going to get if you're going to put your money in the bank you want to know what return you buy a bond you want to know what interest rate yield you're going to get what people invest in company ignore that well no you're buying a your of their Capital what return do they get on that Capital that's question number one because there's a great Charlie Munga quote which is over the long term the performance of your shares if you hold them for long term will start to gravitate towards the return that the (39:10) company generates and it he's not putting forward a theory here it's a fact and so we look at we Ching Capital employed and and people look at all kinds of other earnings growth and so if you're prepared to give me access to Capital either by you sending me more or me retaining your earnings and you ignore return on Capital employed I'll generate earnings growth for you at lower and lower returns which plenty of companies have done over time see Tesco for details right it's like oh it's a disaster right so we look at return on (39:38) capit put we look at gross margins we look at the difference between sales revenues and cost of good so what they Mark things up by because companies take stuff in they take in components ingredients Services labor they put a mark up on it right and again in normal life you go into a shop you can imagine them having a markup or all companies have that markup what is it and and the size of that tells you a lot of things it tells you about their pricing power their brand strength uh it tells you about the defenses against inflation if (40:08) if the cost of goods goes up and we obviously look at profit margins but most people do we look at Cash conversion and what percentage of the profits arri in cash you know um is it 100% 80% 120% for our companies that make more than 100% of profits in cash usually by the method of paying people more slowly than they get paid yeah um and that's beneficial fairly obviously because cash is the only thing in the end you can pay the the divid end with and various things so we look at a rout of financial metrics for these companies (40:39) and and every year we give that to people in terms of our portfolio and how it looks and how it looks against the indices and so on and so forth and then as I say we start looking at things like well what do they do so only looks good to they have Brands they have control of distribution do they have intellectual property do they have an installed base of software or equipment that they service and sell spares and and so on and upgrades to how how do they do this we got have an understanding how do they get to those numbers what's what what (41:07) drives them to get to those what drive and then we look at things like the management they not in the sense of you know are they good manager or bad manag traditionally what most people mean by that is they have a meeting with them and how did they come across I've met people who can present brilliantly but bad managers and people who can't present to save their lives with very good managers right so and and no no no let's get to the nichy gishy of of of talking to these people and ask some all the usual question what's happening here (41:35) what's was that that product and in this region what we really want to know is every year you have this company that produces this with ch these profits and cash flows arrive right how do you decide whether to give it back in a dividend buy back shares invest in the business or buy things right those are your four basic choices um two of them are obviously subsets of one which is is giving money back how do you decide between those and we're looking for people who've got a grasp of how that works and what they do which is honest (42:07) and that matches something like the way that we think right so they go well actually I mean I've met managers have done projects for managers in public companies over years where they say my Stock's undervalue ah now you're you're busy acquiring things yes yes buying lots of things why don't you buy your own stock what What will what would to do that a train but surely the company you know best is not the company you're acquiring it's the one you've already got you must know that pretty well you know and you're telling me you think it's under (42:35) value by the way I checked I think you're right why don't you buy those no and it's so you're looking for people who' got an honest and intelligible approach to that as well so great financials how do they do it people are honest and straightforward and and intelligent in their application of this that's it when you're interviewing management and you're trying to figure out whether they're rational in the way that they allocate Capital what do you find helps in terms of your your meeting style like is it better to be Charming is it better to be (43:09) competive what actually works for you when you're trying to figure out whether these guys are rational in the way they think about allocation of capital usually it's to try and start with going down the route um but tried to get them to talk about how they view it without giving them too many Clues as it were right so you know something like you well how do you decide your priorities you know I don't say anything beyond don't say you could do this you could do that you could bu no no don't give them a road back just leave it as (43:42) obviously you want to point them down the route of talking about this but you want to point them down the route of talking about it with as few sign posts as possible to see whether they've actually got a framework you know um and sometimes L framework I mean comptitive yeah it makes Sur problem we're not usually all that competive I mean we are with people who we think in the end are trying to dup us or just not listening to what we trying to tell them we own quite a lot of their shares uh you know we will become like we did with you l in (44:11) the end it's kind of like guys we will become competive because we've owned these shares for a long time You' completely ignored us you're ignoring us now and we don't think you should and you're treating other people who arrived the last five minutes better than us so we'd really like you to F and we both become competent that you they'd say oh we got an ed of investor and we MO him on the board and it's like great you know but I don't want to go on the board I would turn it down if they asked me notely likely but why are you doing that (44:35) right why trying to get them to the point we look we can get you managements um who will give you uh I don't you want it probably but we can get people managements who will give us a reference who say fundsmith turned up they did all this in ter about our business they bought a big stake then we had an activist who said we've got to cut cost and we've got to split the business we got to do this and not only did they vote against that but they talked to the proxy boting agency and said I think these people are wrong what they're (45:01) going to do is injure this business right I mean we will actually stand alongside them and fight for the business that we think that someone's doing something wrong in that regard so far from being cooperative sometimes we're their best friend you know one of the things that's very striking about your portfolio is that obviously you have a lot of these very wellestablished self-- financing business with businesses with these high Returns on equity and durable competitor Advantage it's very much buffets style companies (45:28) but a lot of them really old I mean I remember you once saying that the average company in your portfolio was founded in 1883 I don't know if that's still true it's 1920 something I think yeah that's extraordinary can you can you explain that because we're in an era where so many people are just obsessed with the new technology right and AI this and um you you know biotech and drones or whatever it is and here are you focusing very heavily on 100y old companies what's going on here because it's not that you're ignorant about (46:02) technology no no but mostly winners keep on winning it's kind of the way the world is the the stern business school in New York uh produces a table I think they produce it annually and it's good on bad companies and what they have is companies by and they analyze thousands of companies with so they have the sectors they so there consumer Stables consumer discretionary and pharmaceuticals and Healthcare Mining and minerals Bank all these sectors and the hundreds of companies each one and they do a very simple calculation whether a company (46:31) creates or destroy value for the year that they're looking at but they've got the data over many years and what they look at is the reen cap employed you know the buffet thing that he focused on in 79 that we focus on less a a guess at the waged average cost of capital people get their nickers in a terrible twist it's a guess right the exact number doesn't matter right and so they take off a w average cost of capital and come is it taking in money a we average cost Capital making a positive sprit in which case it's creating value or is it making (46:58) a negative spread in which case it's a machine for destroying value and then they show you the sectors let me tell you almost every year they do it you go all right so the good companies the ones creating value are oh they're Consumer Staples uh consumer discretionary Health Care uh Information Technology right and then what's all the bad stuff oh it's Banks real estate Insurance um heavy engineering and Manufacturing Mining and minerals oil gas and transport in particular airlines are all bad right now every dog has its (47:32) day right there will be a year somewhere in the cycle where mining is good or U airlines are okay you know a cookus you know but good things don't become bad and bad things don't become good right so that's that's the first point is you on the whole we're not suddenly going to find all the good companies will become bad companies all back it persists and the reason it persists is because of competitive advantages in those sectors there are certain competitive advantes that those sectors and the leading companies within it enjoy it's what (48:02) Buffett calls the moat their defensive mechanism I think keep those sharp elbows and keep you out right because we can all look at Coca-Cola and see it's got good returns but how are we going to get in there um and we've got to get past PepsiCo and Dr Peppa first before we even get a crack of them they've got this Ms of Defending themselves not there's no doubt that we are in the era where there's been change um you know and we can sort of look around us and go well in the time that um I've been in business we've seen change in terms of (48:31) uh Computing and the Internet and mobile telephony and social networks and maybe we're seeing something now in AI maybe maybe not I I don't know and it is a period of change and there's no doubt that you've got to be alive to it and I think we are alive to it not everything that we've got was founded in 1920 you know we've got meta and we've got Microsoft we got some something that's more recent but before we aign upon the idea that there's never be more changing this bear in mind I did the history degree um and you need to think back to (49:02) earli periods in history yeah sure that this is the most change we've ever seen because if you were involved in the Communications business across the last sort of two centuries you would have started in the telegraph business where they put out wires to be alongside railway lines and you send M code that's how you communicated rightt dash dot dash and then somebody came out with a means of of having a microphone so you could have the voice so we attached a microphone to the wise now we could talk to each other and then somebody invented (49:30) radio and after we'd had radio in place for a while two things evolved from that one was we could talk to each other without being connected by a wire Ah that's different isn't it so you know ships at see and people who are tring you know could communicate and not only that you can communicate to the many you could broadcast that's a bit different isn't it then I long came somebody who said never mind that I've got this thing you can look at each other while you're communicating you can have television yeah you can have either video or you (49:59) can have broadcast television then Along Came the internet so if you're involved in this it's been a hell of a lot of change already hasn't there along the way so you know recency bias is something I think that a lot of people suffer from it's tempting to think that we've got more change now than we've ever had before I'm not actually convinced there's so much to unpack here and I I wanted to highlight a few things for our listeners before we move on right so one thing that's very distinctive about what you do which is (50:27) very much in in tune with Charlie manga right I wrote a chapter in my book about manga and just not being a fool avoiding standard stupidities a lot of what you do is just avoiding certain things right so certain sex you're avoiding Munga is great I think because he does have this idea that if you invest in good stuff you'll be all right roughly speaking you could take our investment philosophy and boil it down what if you got good stuff you'll be all right that's it that's it it you might not be the best fun or you might not help everybody (51:01) in the world but you'll be all right good stuff sorry I interrupted you in the middle of talking about M no that's such a it's such an important Insight I mean it it um and the ability to sort of make it very simple right just buy good stuff I mean I remember you saying at one point um you don't need to own the absolute best stocks you you need to own a lot of pretty good you know really good companies that are resilient and durable and then avoid the crap and and so tell us how you how you figure out what bad companies look like like like (51:36) when you're looking at the financial statements and you're looking for warning signs because a lot of what you're doing is a getting rid of lousy sectors and be getting rid of lousy companies I mean over all of it comes down to just knowing it's like you there aren't good Airlines I mean people say what about Ry so every rule has an exception somewhere out there but on the whole there aren't any and if you look at the last 20 years of data it's lost something like 5% versus its cost of capital on average every year it's a (52:09) machine for destroying value right that's just what the statistics tell you so that's what analyzing the statements will tell you either in aggregate or individually then you got I wonder why they are a bad industry it's that a th promote every single major factor involved in those companies is outside their control this is another thing to look for you're looking for companies which have certain things they can control and and work on the things they control they don't worry about the things they can't control they work on (52:35) the things that can control Airlines can't control the frequency with which you fly uh the load factors vary right they can't control atmospheric conditions things happen to stop them flying from time volcanic dust clouds and things like that um they can't control the main input costs which are fuel o price sta the Union on so on and the cost of airplanes basically they are buying airplanes from two suppliers and right then and then you get on to this you know hopefully this is a rhetorical question is an industry (53:10) a good industry or a better industry if there are few from an investment standpoint if there are few participants or many participants well the answer surely is few participants right I mean ideally one would be great but you know if we've got to have it duopoly is is okay you these are a MasterCard Pepsi so on last time I checked and I'm sure I'm out of B before anybody sort of rings up or writ under of your podcast is an idiot but the last time I checked and I haven't bought a checking for a long time there were 3,000 airlines in the (53:38) world they'd bear in mind this are those 3,000 Airlines why a large number of the owners and operators aren't even trying to make money they're national flag carriers right they're they're owned and operated by governments using your money they don't care they really don't care or they're own by entrepreneurs who really like their name on the side of planes it's so when you look at sectors you say well I've got the financial statistics and and it's the opposite what we do okay so theis look good how do they make that how do they make that (54:08) this is they're really terrible why well we can look at all the reasons why we can look at those terrible sectors and look why um so yeah know if you look at Mining and minerals or oil and gas or uh transport including Airlines um and Banking and Investment Banking and insurance and real estate it's dire uh there just di sentence you said you need to begin you almost need to begin the discussion about the individual company somebody's telling you about you almost need to begin to to think about it uh go think back to the stern business school (54:37) and it's good versus I here is when you get into a sector which is commonly populated by quite good companies but you get businesses in there which are not good and that does happen just like you occasionally get sectors where they're bad sectors but there's a good one let me let me give you a couple of examples you know uh out of there you know if we looked at um uh in in consumer staples a sector that is generally good and we looked at Kimberly Clark a company that makes toilet tissue and kitchen towel and and tissues and so (55:07) on it's not a great business I'm afraid the uh you know the the business of making paper towels isn't something where there's a great deal of brand loyalty you know I don't know how how many people go down the the super I feel they got to buy scotx so they've got to buy cleaning they just want a paper towel they're really not concerned about it as much as they would be if they put this into their body right if it were to have food and drink and medicine so on it's not got the same kind of p and you know it's in the consumer it's not great (55:35) is it and then you must get hooked up on uh sector descriptions sometimes people will say well you don't do you invest in chemical companies no terrible yeah but you owned a company called Sigma alrich it was taken over we did own it and oh it wasn't really a chemical company what it was was a how yeah it literally made chemicals but it made little pots of chemicals um which it supplied to biochemists doing experiments and tests and so they were trained as biochemist to use its catalog it online catalog so when they got a experimental test to do (56:06) tomorrow they go on the catalog and Order their ingredients and the little PS turn up with all the stuff that's what they Supply and what they really is in the Fulfillment business they're supplying stuff to help you do they're supplying the stuff that you know really working out what the bulk cost of the container of chemicals is you you just want to know that it's going to be there waiting in your laboratory in the morning when you come in and then of course the final frontier is they have a certain amount of they Supply which is (56:31) corrosive or poisonous or Radioactive in other words difficult and and that gives them an edge as well in terms of the ability to safely Supply ingredients like that and so it literally had chemical on the tin but it wasn't really a chemical it was actually a company which had trained scientists to use its ingredients in experiments and its average Supply it wasn't you know it's not like a b Chemical Company supplying thousands of tons of phosphate or something their average pop cost 400 bucks last time I looked um and that so (57:03) it says it's chemical but it's not really so you got to be careful about those the ones that cross over are in a sector that's good but are bad or in a sector that's bad but there's your good one you have to be careful so when I look at your list of top 10 Holdings in your Flagship fund and I see things like meta and Microsoft and Nova Nordisk and Striker and which I think you've owned since the Inception of the fund 14 years ago or L'Oreal or automatic data processing Visa Philip Morris Waters and alphabet can can you take a couple of (57:31) those that kind of illustrate what you're looking for in in a business that sort of embody what you love yeah yeah I know um let like a couple of words on Microsoft um you know it's the world's leading supplier of computer operating systems um your computer probably works on it my computer definitely works on it the vast majority of business Computing is done using his operating systems um it can go back to when we bought that was its leading business windows and it had the servers and tools professional business um it had a change of (58:02) management which we were hoping for shortly after we bought it and and its new management took it into other things which were linked into it so you know it's now VES with h and web services to being one the leader in the provision of Cloud Computing Services so you know using uh distributed computing rather than having the Computing sitting gear on our desktop using the cloud to back up our information and process it and do it on a common platform is something which is uh they've basically been one of the two leaders in (58:30) since I think they're also a leader in gaming um although they they screwed up the the mobile telep thing and handed that to Apple basically um that was before we bought it and they have actually made a comeback in business Computing in terms of mobile devices with the Microsoft Surface um and so on and so forth and um you know we'll see where they go in AI but all of this is built into a company which has regularly produced high growth revenues and and high high Returns on Capital I'll tell you what they are while we're talking (59:00) give me a second I just L on log on to my system and tell you what but also what's relevant Terry is you bought it during a period where it was out of favor so so I mean you often talk about um this issue of valuation with Quality Companies there's a very interesting thing a a chart that you have in the introduction to your your book investing for growth where you talk about how you would actually have been Justified paying a 281 PE for L'Oreal back in 1973 or 126 for Colgate or 63 for Coca-Cola so so you're willing to pay a reasonably high (59:36) price for high quality but then there are things like Microsoft where actually you bought it when it was really undervalued can you also talk about how you think about this issue of valuation when it comes to high quality growth companies because it's very it's it's very thorny particularly at the moment with a lot of the magnific since s yeah I mean for a really good company um we are very bad what we're very one of the things we're very bad at is uh estimating the impact of of compound returns as human beings you the when you (1:00:11) look at the difference between a 10% and 12 half% compound return the difference over 20 or 30 years isn't 25% right people don't realize that actually quadruples the capital value at differential wow and we're very bad at that you know unless you sit down and compute it yourself and so people don't figure that out I think very well which means that commonly things which are able to make persistent I returns and and growth do not get full valuation Lal is a great passing point with that particular calculation it's astonishing (1:00:41) but if you look at that t you could have paid 100 for Pepsi 100 times P for Pepsi in that but look like said as much as we acknowledge that and we do acknowledge that markets whil they're not completely perfect are completely imperfect either they gener on average they price companies better than bad companies right so we're going to have to pay a higher price for our good companies than the average people keep coming yeah well it's going to be because it's better company but once in a while some form of Madness overtakes them and and they (1:01:09) offer you something which they really shouldn't right it's going how does it happen so we started buying Microsoft when it was 25 bucks a share uh it's 420 something today right um and it's been in our top performance 8 years running this shouldn't happen with a company this size it was trading on P of about eight when we bought it uh because you know Steve bmer I don't know Mr bman I don't really want to be critical of him he hadn't been a happy period when he was there and they' missed out on the whole mobile teleph thing then they (1:01:38) bought Nokia and that been pretty disastrous and they bought Skype which had been pretty disastrous tour which is ironic the teams is now such a success um and so there we were and we when we have things looking at things like so we look at something like this it's a company with returns on Capital around 30% right and revenue growth now you know has been coasting about 20% for period of time and this shouldn't happen we we if we think we found one of these we have found them time we found it AR D bet equipment with found it Microsoft we (1:02:05) found it Domino's Pizza back in the day we sit down and think are we missing something here and what we tend to do as a as a sort of check on sanity as much as anything else is go and look at what the detractors are saying what are the detractors say what are they saying is the reason and I I remember an awful lot of the Microsoft stuff roughly speaking just it with not apple is it well no it's not is it we we figured that out all on our own very famously the in my view the the financial times Lex colum and I do know which journalist Ro you at (1:02:38) the time but obviously they haven't got a by line unfortunately said when it was $26 a share nobody should own it at this price and they were right but not in the way that they meant it um and it's like sometimes where people are just absolutely mad about things about you should own this you do get this opportunity where a large very good business gets offered to you at a price where you just should get meta was another one after the Cambridge analytica thing um you know meta was a g me in I mean it's gone up 5 100% or (1:03:11) something like that since that point where we owned it and um you know we received a cacophony of invied from people about how we shouldn't own it I mean I mentioned in that I quote my previous annual letter or this year's annual letter saying I I'm almost thinking having a fund that just buys the one everybody tells me not to own cuz they they're working on emotion anecdote right you know people are saying nobody's using Facebook anymore I mean I remember nobody's using Facebook I said oh right okay where do you live (1:03:39) well tumbridge Wells I said oh um how about in jaara are kids using it in Jakarta at all well how would I know I said well I think that's kind of more important don't you that TBD Wass so your kids are not using it anymore what are they using Instagram I said you do know they own that too people the plural of anecdote isn't data yeah it's no just deal with the facts there's a there's an old TV series from the 50s called Dragnet um and um the detective or his name I can't remember uh would always be interviewing a suspect a witness to (1:04:19) somebody that just occurred a murder or robbery or something like that and they'd be dappling and they'd say the fact man just the thans it was a very nice um thing in I I think it was in investing for growth your your book which collected your letters from the first 10 years of the fund where you quoted the Simon of guncle song the boxer where you here's what he wants to he is disregards the RIS yeah I mean look you can get an all I'm quite serious now you can get an awful lot of stuff from uh the uh from (1:04:51) the movies and from s lyrics because people spend quite a lot of time sometimes on on movies and on fil lyrics and so sometimes they've got a bit more meaning than just somebody Simon a golf unle playing a nice tune I mean one that we quote all the time um is um is the the the movie All the President's me about the war Affair and um you know the bit where deep throw is the uh the FBI deputy director know it is but he's giving information to Woodward paid by um PID by B Redford and he meets him in the car park and and one of his critical (1:05:24) piece of advices is follow the money yeah money you know's going on just follow the money right and there's lots of examples of things like that you know the we we play to ourselves clicks when we're explaining things day and out there's the bit in Casablanca where the the je goes to close down Rick's Cafe he blows his whistle and he says um this place is closed down I'm shocked shocked to hear there's been gambling here one of the waiting stuff comes by and goes you're winning sir whenever we read one of these things about yes apparently (1:05:54) somebody has been bribing people people to do business in Nigeria we always play the castleblanca GI right I remember Howard marks quoting to me um uh Clint Eastward in Magnum Force saying a man's got to know his limitations it's I that one too all the time a a good man knows his limitations when that he's told by the chief of police is's being asked to deliver the ransom to the bad guy and he said we don't want any gun blade from you Kahan he said I was a cop for 20 years and I never run hes in my web and he says that's good A wise man knows his (1:06:24) limitations it's great oh yeah yeah the m is littered with great quotes that you can that you can learn something from in my view so this idea of how people hear what they want and disregard the rest is really important and you've operated in a in a team for a long time right you've had um Julian Robbins I think you've worked with for 38 years and he's your head of research and he helped you co-found the firm you sometimes talk to him as your designated successor if you retire at the age of 145 and um young Mr Robbins (1:06:57) as known yeah tell me tell me how it helps to have a partner like that because I I see this a lot right with I mean look Howard marks talked to me about Bruce K Joel greenblack talked to me about Rob Goldstein um I've interviewed Charlie a lot right who you know obviously was the Abominable no man for Warren um yeah about how it helps in terms of just dealing with your own blind spots and potential biases and the like to have Partners hey everybody it's Kay Fink here host of we study billionaires here in a few months Warren Buffett will be (1:07:34) hosting the Woodstock for capitalists in Omaha with the Burkshire Hathaway annual shareholders meeting the meeting welcomes over 40,000 investors that head to Omaha to tune in the marathon Q&A session with billionaire Warren Buffett and Burkshire managers since we don't know how much longer Buffett will be around to attract tens of thousands of people I would highly encourage you to make the trip to Omaha during the first weekend of May while I personally love sitting in on the meeting what makes the trip extra special for me is the (1:08:04) relationships that are built around the meeting which is why I'd like to briefly tell you about the events that tip will be hosting my colleague Shan Ali will be hosting two free socials for the tip audience on Friday and Saturday evening and more details on that can be found in the link in the description below and I'll be hosting a couple of dinners and socials for our tip Mastermind community which is our paid Community for private investors portfolio managers and high net worth individuals attending the (1:08:32) birkshire meeting on your own can be quite a lonely experience and I wanted to personally invite you to join the events that Shawn and I will be hosting again details on the free events can be found in the description below and to apply to join our tip Mastermind Community simply go to the investors podcast. (1:08:53) com slm Mastermind that's the investors podcast.com slm Mastermind we'll also be sure to get that Linked In the description as well additionally flights and hotels can get booked quickly so I'd encourage you to book yours as soon as possible if you plan on attending and please feel free to email me or shoot me a message on LinkedIn if you have any questions I would be more than happy to help hope to see you there for decades real estate has been a Cornerstone of the world's largest portfolios but it's also historically been complex timec consuming and (1:09:24) expensive but imagine real estate investing was suddenly easy all the benefits of owning real tangible assets without all the complexity and expenses that's the power of the fundrise flagship real estate fund now you can invest in a $1.1 billion portfolio of real estate starting with as little as $10 4700 single family rental homes spread across the booming sunb belt 3. (1:09:50) 3 million square ft of Highly sought-after industrial facilities thanks to the e-commerce wave the Flagship fund is one of the largest of its kind well Diversified and managed by a team of professionals and now it's available to you visit fundrise.com swsb to explore the fund's full portfolio check out historical returns and start investing in just minutes that's fundrise. (1:10:17) com WSB carefully consider the investment objectives risks charges and expenses of the fundrise flagship fund before investing this and other information can be found in the funds perspectus at fundrise.com Flagship this is a paid advertisement hey guys do you ever feel like you're juggling 1,000 things all at once and that your life is constantly unorganized as a host of this show I often times felt that way and that was until I picked up the remarkable paper Pro nowadays thinking smarter and thinking better can give you a leg up (1:10:53) like we've never seen before and remarkable vision is to help you do just that the remarkable paper Pro is a beautiful minimalist paper tablet that looks and feels just like paper but it's packed with many amazing digital features helping me sort out my work Life by putting a lot of it on this one-of-a-kind tool for example when I'm analyzing a stock for my portfolio I can jot down notes on the company as I read their reports or mark up the company's report itself with what sticks out to me then I can share my notes with others (1:11:26) and organize them however I'd like on the tablet in a world with constant distractions and cluttered workspaces the remarkable paper Pro is an absolute must to work smarter and more effectively it also has a high quality in premium design and feel making it a lot of fun to use day-to-day so give it a try today and thank me later you can get your paper tablet at remarkable. (1:11:51) com that's remarkable.com I think that Julian is very intelligent he's also got a first in history by the way um and very honest and uh he's different to me uh and amongst the differences are that he sometimes sees things in terms of um the subtleties of what's going on that that I miss and he's got a very very good way of pointing them out to me without pissing me off uh basically he could he can get me to understand something with without getting into a a fight over it and that's quite po that he he just says no (1:12:29) I wouldn't by that because of this um and uh and have you s about this in terms of and he's he's always got a way of saying like you're buying L'Oreal he will go well you know I think if you take the P ra show roughly um look at it in a mirror and Ed your car Isis plate it's okay and and really he's just d right I mean and then somehow he manages to get I that he might have a point about looking at it that way and I go and buy it real no he just T me into that didn't he he realized that that I if I hadn't been (1:13:00) talked into it I would always have been sitting there going no it's a bit too expensive and then we never own him so he just found a clever way of bloody spoofing me into it didn't he and he did and he's got a great um inquiring mind he he actually really likes the stock market and uh and he likes he's lived in America for I don't know 30 years now and um and he's got a wealth of knowledge about America and and the the stock market that he brings to bear in a way that I simply can't as much as I deal with Wall Street and worked on Wall (1:13:31) Street and I I'll never have that lengths and depths of knowledge that he's got you know you have a very interesting sort of emphasis on the US in in what purports to be a global fund right I mean when I checked the other day I me I think it was 74% in the US and um and obviously you know there are these issues over where a company is Dom child and all the like um you know France R sales in the US we had a company that was us and in that number that had zero and sales in the US but it's clear that the US is a massive (1:14:08) hunting ground for you I mean with all these companies like Microsoft and meta when you think about this issue of what makes the US Special and whether whether this is just a sort of a permanent if anything is permanent advantage or whether it's just another kind of pend swing and sooner or later you know the pendulum will swing back to Emerging Markets or whatever else what do you think I mean how you know you used to have an Emerging Markets fund and then you closed it at a certain point because the is the US just a persistent winner (1:14:41) we're right by the way we've G in we're right look the US is the biggest economy in the world let's just start with that showing um secondly it has the most active Capital Market in the world so when maor companies are listed um you know increase is you'll see much of the shagr of of people in London companies are listing in America which are not in America so I mean you know given that it's the biggest economy and given that it's got the most active Capital Market I'd almost say if you're doing what we're doing why haven't you got more (1:15:10) companies in America than it was how does this work then right um because you know if you are a company thinging of listing thinging of listing why would I think about doing it in London I the the greatest debth of Market the biggest liquidity the most investor attract ction is in New York isn't it you know um and then you think about how companies become big and very profitable companies one of the things that helps American companies is that they get the opportunity to build their strength in the biggest Market in the world before (1:15:40) they move out and Take On The World so you know whether it's in technology or health care or consumer and so on they sit there and they become the dominant player then then when they reach out to The Wider world it's very difficult for people to compete with them you know when Coca-Cola and PepsiCo arrive in the UK do you really think that Brit can get going to give them a run for their money um and and once so that's in their own Market how about once we get it to an adjacent market so so in Europe is how Brit going to do there against Coca-Cola (1:16:09) yeah when they' you it's it's the like a boxer who's pumped up at the gym who's been fighting he's been in the crank gym in Chicago fighting the best heavyweights in the world in sparring and then he CHS out and he's finding a HomeTown fighter somewhere uh in another country like I wonder how this is going to go so you just got to be mind it's the biggest economy with the biggest Capital Market and the companies the coca-colas and the microsof and the strikers and so on have had the ability to build a fantastic base there before they move (1:16:39) out into the wider world and take on the the the local competition then you get on to other factors as well when you look at the World At Large um you know Europe um you know the the great saying is America innovates Europe uh China China rep repli Ates China or Japan replicates and Europe regulates I mean some of the stuff that's going on in Europe about the digital markets act they may as well put up a sign here saying high and Tech not welcome I would say and and it's kind of sad if you see what's Driven the market in recent times (1:17:08) because you know look at the heights of technology in the in terms of the companies and I know I am with other people go that's a bit worrying in terms of the the size of their their domination of rich but what's the biggest UK technology company God knows there's nothing really famous is there well I'm talking about listing UK sage and account which by the way is a good business I've got nothing against say please don't take it as that being it's BR in fact but that's it an accounting software company based in (1:17:40) Newcastle is UK's biggest indigenous soft technology company and I'm embarrassed to say I've never even heard of it so that's I mean I'm based in New York and I've never heard it's funny you should say that we happen to know that when they were looking for a chief executive by the way this is not meant to be in any way criis courage you I think he's a good guy um but he's an internal appointment the reason he's the internal appointment Max else is they went out to head handers to try and get a a CEO and when will you start if you (1:18:07) looking for a headand for for a software firm you'd start in Silicon Valley pretty much would you so they got ah head under there and said go around see if you can find any Coos or number twos or whatever we' like to step up and and the response you just had is the response they got from everybody they never heard of it never heard of it I don't think that Europe is about to overtake the United States in any of the areas that we've that we've identified as being good businesses no I can't see any any I can't China is difficult (1:18:32) because you don't truly own the business right I mean you are actually in partnership with the Chinese government for good or ill particularly in the high-tech business system and Japan at least until very recently um businesses weren't Run for the benefit of shareholders they were Run for the benefit of the employees and and the why Japan as it were you know um Returns on Capital and things like we're discussing we're like okay so that's why we EMB up very much it's not that we don't like that we actually have a bit of a s spot (1:18:59) for European companies uh in the industries that we like which are run by PES and have a very long-term perspective so if you have look at at portfolio things like L'Oreal lvmh Atlas Copco you know we do like them um but they're rare they're Rarities sorry I interrupt you there go ahead no I was I was just wondering because I I mean it's interesting that there's a discussion between two Englishmen who are not living in England so that tells us something about not coincidence that is it right I mean and both of us I think (1:19:30) love England and love being there but there is a dynamism when you move out certainly when you move to New York but when you think about the future of the British economy when I go back I sometimes feel like I mean I only really go to London but and I'm no doubt going to annoy lots of people here but I I feel like it's almost become a kind of playground at least in in the areas I I go to um which are not that representative it's become a playground for the foreign Rich right it's not it's not really dynamic as an economy it's (1:20:04) more a really wonderful place for other people to come and spend it's so London I think and I'm a Londoner so I I I feel strong strongly about I think it's I think it's the greatest city in the world probably but I'm I'm obviously not exactly objective in that opinion and it's sad I think that what you describe is at least pit well that's really explains the the British economy where it stands I think also what the British economy has been good at in terms of innovation and it's got a great record of innovation in uh in health care it's (1:20:33) got great drugs and and other areas it's got technology in a number of regards arm in terms of the low power uh chips for for mobile telephony they they've dominated that uh over time it's got it in um in in a number of Brands as well that it's it's over time that it's developed which should be uh very good but it's um I think that the the problem that it exhibits are in the end I think there is in my view an anti- entrepreneurial anti kind of capitalist whatever you want to call it um uh spirit abroad in the UK and it's been (1:21:08) problematic I think for a very long time I don't think I think one of the biggest differences with American like you I love New York you know apartment in New York for some time and spent a lot of time there is I think on the whole and I realize this is a generalization Americans wish to emulate success Britain's wish to destroy or criticize it and that's my take on it and um I I'm afraid you know I don't think that's helpful really you know we've got to got to learn to to appreciate people are successful and applaud it and and wish (1:21:39) to emulate them and multiply it not to not not bring them down in some way so the other thing about the UK is I think you're probably right about London but once you go outside London the thing that becomes evident to me is a number of things one of them is is being somewhat hollowed out I mean the industries which we used to reliable for for manufacturing have by and large gone um but going back to what I was saying earlier about progress that's not new you know if you take the textile industry originated in the north of (1:22:05) England the Industrial Revolution then it migrated to America in the Northeast after the Civil War and then it migrated to places like Hong Kong and then it's migrated from places like Hong Kong to places like maius and then it's G it's become a midle gbat it's gone to places like Ethiopia and Cambodia and madas and it keeps moving and you have to move on yourself there's nobody saying well I think we but I'm not I'm not lamenting the absence of the of the textile industry from the dark satanic bills of all England you have to move to New (1:22:32) Industries but you do need to move to New Industries you don't need to have half the population employed by the public sector which it is that's not going to be helpful right because they aren actually going to create anything whatsoever here's a statistic for you the poorest state in America is Mississippi okay and the median income in Mississippi and I give you an exact figure but not you on this call but is about $44,000 us yeah that's the same as the median income of the UK what went wrong because something's definitely (1:23:06) gone wrong I mean think about because I think one of the things that strikes a lot of people when they travel around America outside of the the main cations is how poor America is once you get out into the out of the boonies well yeah but the UK is pretty po all over you know outside of those enclaves of London and a few other major UK is as bad as not just America but the poorest state in America I'm not I'm not being party political in terms of my views on this I'm you know my view is if they I don't vote elections in you come on the (1:23:38) Electoral register but if they had an election had a draw they could bring me in I though which why I would have voted um but um because that's my view on them essentially uh but both both uh siid of the of the divide in the UK seem to me to have a rather large responsibility for this lamentable state Affairs there there's certainly tremendous dynamism in the US that I I think I I definitely remember when during the financial crisis when you know obviously the US kind of Trigg triggered a lot of the world's problems and everyone everyone (1:24:08) was Bley saying you know well the US is finished and you know now things and if you lived here you just had this sense it's so Dynamic and the flow of capital to good ideas is so quick but the willingness to deal with things when they go wrong I I quoted in my said you know we had unil where we had a you know a battle that lasted many years I mean you could say through two CEOs to try and get the place straight D um in comparison with Knight you know the chief executive screwed up the bricks and M he's gone sh um and I I as people (1:24:42) are all terrible I don't think it is terrible one of my mantras about running a business is I don't think you should ever be allowed to fight people unless you've been fir yourself right because you need to know what this feels like right and if you're going to sit in a room and you're going to actually far people you need to be able to talk to them from a position of empathy I me in my view so I'm not in favor of just you know going like a chain sort of people but I am in favor of dynamism and dynamism only comes that you're (1:25:07) describing in part from grasping not just money going through the ideas but also how to deal with problems you the dynamism of changing where people are living what jobs they're doing who they work for is is uh you know the the the US is is in another League I think I think you're unusual also in that you've not only been a very successful stock picker but you were actually a very successful CEO I mean you've been a CEO of two public brokerage companies one of which I think you built into having about 3,000 employees and the (1:25:38) other you you floated and there were lots of merges and Dem merges and the like and this is back in the 1990s and 2000s and it reminded me when I was reading about your past as a CEO of the quote from Buffett where he famously said I'm a better investor because I'm a businessman and a better businessman because I'm an investor and so I was wondering if you could talk a little bit about what you learned as a CEO that's helped you as an investor yeah I mean look one of them is that um change requires time quite often um not (1:26:12) withstanding me saying you know acting quickly is good because even if you act quickly you've still got change to implement you might change the person you got change um and and quite of money and effort and lots of other things that I've got a a very good friend of mine who's uh got a steel business in the UK um and he said when he was a quoted company which he's not anymore he went private and that was he said the analysts reading up asking him about to change things reminded him of the fies but it's funny BR said they think that (1:26:37) I've got these two buttons on my office wall a red one and a green one I'm going to come in the morning I pressed the green one which is labeled to make money and then when I put my C on the go night I think oh must remember to press the old red button he said it's a bit more accomplish we've got to design products we've got to get orders we've got to build moldes right and I think unless you've actually done that it's difficult to understand I mean it's like people who sometimes come out of running a fund and then try and (1:27:04) build a fund management business and I said well it's like when I was head of research UBS people used to come to me because one of our analysts was a very heavy guy been a hamus thrower at college and put on a lot of weight and when he sat on the toilet seats he used to break them because you know they stand on these little blocks they're up there this guy if he wasn't K and and and and people would go and say I just cut my ass on the toilet he just you know he's and I'd have to say laus could you just sit down a little bit more (1:27:29) carefully because I've got people keep com in it's like you know the way I put is the day job isn't glamorous when it comes to managing businesses quite a lot of the day job isn't isn't sort of striking a pose like rad as The Thinker and having great strategic thoughts right it's actually about execution implementation and a lot of execution and implementation does involve dealing with toilet seats and the like it just does and that different with your investing right with your investing you've talked about how so much of it (1:28:01) yeah you have these Grand theories and principles and stuff that are kind of Timeless but then there's the blocking and tackling day-to-day where you're listening to conference calls and you're doing modeling of you know I say to every new recruit that we've had with some success but not Universal I say before they begin I say I use examply the phrase the day job is not glamorous what we do is not sitting here having great thoughts on investment I said we don't sometimes have one for a couple of years or more of a time you (1:28:31) know the number of microsofts and idex and and things that we pull out there is relatively rare um and if you've got one we'd love to hear about it but we don't you know when you got three in the first week we're going to get a bit suspicious the reality is it's about modeling and collecting data and listening to calls and writing out notes and looking so we've got a record that we can read back through and read what's going historically um and that's really the vast majority the vast majority of what we do and you told me right before we (1:29:01) started before we started recording about a sign that you had in the office can can you tell us about that because in in a way it embodies this mindset of kind of dogged incremental progress and not screwing up I put up um the five PS so five uppercase P's in a frame and the five P stands for Preparation prevents piss poor performance don't turn up for something without having prepared don't go to a company meeting and you haven't read the last results and the note that you wrote before you know um and it originated from a time when I was in (1:29:31) broking and I went on a trip to Scotland when I was at UBS set research with the CEO and a Salesman the salesman I'd come from another broking firm and I'd looked at our Scottish fire figures and they were terrible and the salesman said we were number one or top three or something SC we K weren't and so we decided we' resolve this by to Scotland why not and we were there having a meeting with the general accelent as there was in Pur they were lovely guys I knew them uh but you know they were lovely guys but with that nice steel you (1:29:58) know sort of bit in the middle that you get with the Scots which is good and um and they we having the conversation about what they thought about the service and they said well what do we think about the service how much did we pay you last year in commission as a progam kind of looked at the salesman and he said I don't know I said you don't know they said we paid you4 million or something like that all right L is how much we pay you the year before I I five million so they said what they were telling us was (1:30:25) they were giving us never mind sitting in meetings like this or filling in surveys they were voting with their wallet right any I came out the meeting and I said to the CEO um I would fire that guy I said going to a meeting with you in the room no mind me in the room and you don't have the basic information on the client to add is just a no no I mean that tells you right off the bat what we're dealing with here and it's like you know there is no excuse for that there's no excuse for turning up to interview a company (1:30:54) be interviewed by an invest you know if I'm being interviewed by an investor if you were you coming on say Terry I want to interview you about my holding in and you go well how much do you know how much I got invested f with no I haven't actually got a clue William how much have you got it would be a bad start wouldn't it when did I invest I don't know actually I we've got data on this but if I hadn't take the trouble have you made money or have you lost money with me how much money have you made you know have you been putting money in or (1:31:21) taking money out and the idea of turning up without doing all this work is just Preposterous in my view I sort of wonder if when I look back at your youth right where you you know you came from this poor background and then you know you you're like this workingclass kid going to University College in Cardiff and then you you know you get your NBA but it's not it's not from Harvard or Wharton right it's from Henley School of Management you know I'm wondering if like there's something about having been an outsider and having (1:31:50) to fight for everything that you've done that's really key to your success but I wonder if there's something very Central to your success that you've had to kind of scrap and be tenacious and work harder and you were always sort of this super competitive Outsider does does that resonate with you yeah I think that's pretty accurate actually I think that's that's a large part of this I've never been part of a whatever the establishment is I I suspect we've got a new establishment now that's replaced some of the old establishment in time um (1:32:23) I've never been part I've never wanted to be part of it either actually actually never struck me that I particularly wanted to join any club or or anything like that um literal or metaphorical um in that regard and um yeah I have always felt that that I was a bit of an outsider and and I had to work for things and I think it's probably a good thing um on the whole uh to be in that situation um I I had a conversation with somebody we were having a dinner and at the dinner with someone Su who was eating and uh when we (1:32:53) Paris with for leaving and uh he said five son I'd said him to e and I said would you I will he said why he said it's you know where everybody runs the world goes I said I just don't see this as a great positive I think you know I would uh rather that he went to a very ordinary School uh and found out how the world really works you know my friend the the Steelman who I tell you about is it's a family business he's a s of family that's owned it for several generations and he refused to go to public school and and put himself into (1:33:23) gramar school uh and I think it's to his credit but also to his benefit because I think you know when you're walking through a Founder talking to people you might be able to understand a little more what their issues are and what they're doing if you actually have been alongside them from time to time you know it's such an interesting issue you know I I went to Eaton and I went to Oxford but I'm a Jewish kid you know from a family that fled from Russia and Ukraine and Poland and so I remember going to a friend's (1:33:52) house yeah exactly CH greenal once said to me oh yeah the Jew from Eaton I mean there were 10 of us yeah yeah I'm surprised there were that many I think there were a few who were pretending not to be I think there were some who concealed that they would use and so I I think I think being an outsider I mean for me being an outsider and an Insider somewhere between the two so I'm comfortable I'm comfortable interviewing anyone or talking to anyone because I I you know I was at school with people like Boris Johnson and David (1:34:27) Cameron so I know they were nothing really that special right you're not that intimidated because you here's my my castle BL I'm shocked shocked to hear that they were very I mean Boris Boris I remember when I was a little boy I mean I was 13 and he was the head boy and he was he was clearly incredibly charismatic and a big personality but the idea that the sort of entitled very bright etonians who knew how to write Greek verse should be making big impactful decisions about the future of the company the country just because they'd (1:35:04) gone to eaten Ox I mean it was kind of laughable if you knew them because I knew what a fool I was and I you know I mean I came top in English in my class I mean I I was a smart I was as smart as a lot of those kids and I know that I'm a I think the ideal place if you can get to it and I don't think many do is to be able to get along with and communicate people with people whatever pretty much whatever their background and if you're G to that I think then you've got to about the right place you know if you can be at Bing palace with (1:35:35) Boris sitting alongside you having lunch and I have been at Bing Palace having lunch um and at the same time you can go to the boxing gym with the with the young black kids then I think you've reached a good place is my view and I I feel sometimes I'm fortunate in that regard that I can do both those things and not feel particularly out of place in either one you know it's interesting to me that one of your clients early on was Sir John templon and you've talked in the past about going off to the Bahamas to life at Key (1:36:03) to to see him and Mark Hesco his chief investment officer and I I write in my book about um s John because I went off and interviewed him in the Bahamas and spent a day with him 25 26 years ago and in some ways you seem to have kind of recreated his life where you've gone off to macious and you're sort of away from the mading crowd thinking for yourself can can you talk about in some way the whether a I'm right in thinking that Templeton somehow influence you maybe in the same way that that movie early on influenced you and you thought oh (1:36:35) there's another way to do this and also how it's kind of been an advantage to you to set yourself up in this very independent non-tribal way far far away from Wall Street and the city of London I I actually emulate T in more ways you might think because he as you probably know used to walk in the sea every day yeah I I go for a swim out to the rein back whenever I can which is you know two or three times a week at least and uh and my colleagues say that's interesting you're doing what and I do weirdly U if there's nothing else going (1:37:07) on what I'm doing I do think about him it's strange isn't it just doing an activity similar to what he did in in the Bahamas yeah it definitely did influence me to see somebody like that at work and I always remember very early on when he talked about how to react or not to events he said you know I mean obviously talking way pre internet he said you know the papers Al arrive a day lat here I get the Wall Street Journal the day after it's published so by the time there's there's a problem it's too late to padic and he was making an important (1:37:39) point in in a trivial way uh about that you know the events we often write up in our daily news rups we write to each other you know and we look back over periods of time sometimes only a few weeks sometimes few months and so and say if somebody had gone to sleep on that day and woken up on on today and we've had all these events in the in the middle that happened where you know terrible great things have happen in terms of Elections or Wars or pandemics and so on since the market is at the same level if they didn't look at any of (1:38:06) the intervening events I wonder what they would conclude now these happen so wasn't anything happen terribly important then because mostly the answer is no no it's not and I think he and Buffett although I've never met Buffett and so from the way that he's explained it it is very and there've been other people I think they're not the only people who've done the you know I don't want to be in the in the swim I talked to people who I know in the industry who operate uh from London or New York I mean I always say a lot of these guys (1:38:35) need GPS to get outside at west1 or sw1 I mean they don't know how you do it right and and I say to them why are you there and they go well I like stay in tou with the company's I say you're an investor in Pro and G I said yes some I say they're in Cincinnati right W one and the other reality is he's scratching and they like to be able to go and talk to other people doing what they're doing whether they're Brokers or other managers and they like to be out and beat them for lunch and beat them for drinks and pick up and (1:39:06) they like to compare notes on what they're all doing and the reality is they don't really want to stand out from the pack too much and which is fine I mean that's there's the old John M arcanes quote there the worst thing you can happen from your career is to is to differ from the normal even if you're successful it's still it's still anasma to people uh and that they mainly don't want to get that far out from from the norm um and if you're trying to invest for the real long to being in that is unhelpful really (1:39:34) unhelpful how do you actually structure your lifestyle and your ecosystem there so that you're able to operate in this very long-term patient independent spirited way and sort of resist you know even even the pressure to think about short-term results and stuff in an increasingly short-term world we don't speak to any Brokers not one we don't take any research from Brokers we don't speak to them we do it ourselves so we've got why well you know boxers are paid to fight so they like to have fights lawyers are paid to have (1:40:09) disputes so they like to have disputes and prong Brokers PID on transactions guess what they like to do we were Brokers I broker right Jillian was a broker we've done this job we know what's involved right we don't speak to any of them we don't take any research from them I get a a small tsunami of stuff that comes through asking whether people been be Serv the is no no no no no no no so we don't take any of that we're completely cut off from that the fact that I'm in a different time zone I as well I mean for (1:40:37) the first four hours of the day I don't have anyone outside parish's my I've got some got a dozen colleagues here uh who are awake so I've got quite a large part of the day where I can M over what I've read and what I've taken in the previous day and think if anything that I need to do about it or say about it or ask about it without any incoming whatsoever uh from people you know um and so that that really does sort of and also with regard to Wall Street you know I'm going to switch off looking at things after I've (1:41:08) been speak to you I'll go on and have a look but I'll switch off unless there something really really big something you know Microsoft goes bu give me a call but you know outside of that D know um and so you know the remoteness does help the other thing about macious in particular is I people talk about the world and um living in another part of it can be quite important I think you know I'm living in an island that's about 800 kmers off the coast of Africa uh which has got a majority Indian population and you can tell almost (1:41:37) everything you need to know about Marisha from the national holiday system there are two days a year for Christians two days a year for Hindus two days years for Urus two days a year for tamils two days a year for Muslims two days a year for the Chinese plus national day and the abolition of sleep um in in other words it's a people talk about diverse societies it's a diverse Society you know and people in the street if they don't know who you are will speak to you in French first of all if you're white and if you're black in (1:42:05) cot right um those are the common languages here and there there are pretty good connecting flights into China and India um and we're at the same time zone as as Dubai and um gradually B various means a different perspective on the world begins to enter your Consciousness I think if you live somewhere you know do you've set yourself up in a very um in a very free and independent way I mean it's been a long journey from I mean literally a long journey or like 10,000 kilometers away from London but I mean you've in a (1:42:38) way the fact that you weren't part of the part of the In Crowd that you weren't sort of growing up you know going to par schools and then going to work in Mayfair at a hedge fund and stuff has enabled you to kind of chart your own course in a very unusual way yeah yeah I think he has yeah you're absolutely right and look let's not rule out other things luck as well you need luck um but yeah I also I had some mentors along the way you know I mentioned a couple of them and uh probably two or three four mentors I (1:43:11) think when people ask me about careers and and and what to do and they're all you know they want to set up the latest fintech I always say get a job with an organization that will provide you with training right take everything that they offer and if you can find a mentor somebody who will teach you how this works and in doing so give you experience that you otherwise won't get you know and sometimes it's quite painful I mean being mentored is is not always a positive experience you have you have difficult ones as well I always (1:43:40) remember when I was working King Branch Banking and we used to have to balance the accounts the the the branch itself has a balance she for its operations you know terms of loans and deposits and everything like that and capital is you know we're operating on the supp and um and you used to have to balance those um and all the individual accounts the ledgers that went into it and I remember the uh not being a balance one of the ledgers and uh when I was a graduate training and the the manager's assistant took it off me I said yeah (1:44:07) okay went into his office came back an hour later and went I balanced it I didn't go to university right yeah you do need people from time to time to tell you you can do you should be doing better than this it's not all people think you know the whole world of positive reinforcement no once in while someone need to tell you got it wrong yeah it's an interesting balance right because in some ways when I look at your life I think you know yeah you're you're this this tough sort of indomitable guy and in some ways there (1:44:44) is a you know I mean you're obviously a very likable and Charming guy in gregis and you've had people who worked for you for or with you for a very long time for decades but at the same time time you're clearly an intense and tough and slightly combative Scrappy guy and I'm wondering how that works in the rest of life out of business and investing because I look at so many of the the great investors I mean this is one of the things I often quote on this show Charlie Monga said to me that what struck him when he read my book was just (1:45:13) how many of them ended up divorced or separated and I wonder that like when you when you look back on your life and obviously you you know you got divorced you've had ous relationships in your life H how do you turn off the intensity that makes you very successful in work so that then you can come back into dealing with a wife or a girlfriend or kids or whatever and actually not have that same mentality kind of overrun everything I I don't think if I've got a problem in that regard I don't think my problem is is is approaching the (1:45:49) remainder of my life with the same approach I approach business I think I am able to see to do things quite separately and approach differently I think what is typical however is when you get into situations which are very intense no matter how much you think well though this is home life and I'm going to cook dinner or you bath the baby or whatever you're going to do you may not still be able to get that out of your head so you whether or not you can engage properly sleep properly uh is is not something that you can just do by (1:46:20) thinking about it you know it does stay with you so sometimes and I think that can be problematic you know it's not not whether you are you're treating everybody like they're in work and you want to see their their numbers and you want you know get to engage in PP P all that's not I don't it's as simple as it's just as simple as if you've had an intense time it can be difficult to switch it off uh in in you and therefore whatever it is you're doing you may not perform very well in relation to it to the simplest level of sleeping for (1:46:53) example or something like that you've got something running through your mind it may keep running through your mind and you you may not be very comfortable to be with at that time and and that's the other thing is I think if you do do things like run your own business and you do do you know run businesses including your own business and you do it intensely and successfully and all that kind of thing one of the things that people who are with you have to buy into or not is you will do whatever it takes and some people can't buy that (1:47:20) they they want to be the the Center of Your World and you say well you can't always be there I've got this thing over here that I do and maybe you've got things that you do or maybe you haven't I don't know um but there are times no I'm going to go and do that now and they go well that's not very good because I really like to go do this you go and do it I'll pay you go do it but I'm going over here to do this right now I've just you know I feel I've got to do it because it's required and some people find that quite difficult to accept you (1:47:47) know where where do you think that ferocity and intensity of drive and focus come comes from for you is it just competitive is it kind of a bit like being a being a fighter being a boxer or where where does it come from for you I think it com from the balance of things I mean one is growing up in very bad circumstances you know I think um but you could say well there's lots of people gr very bad circumstances and not like yeah but how many of them Escape as it were and I think I think it mainly comes from that you if you uh you know you're (1:48:18) in very poor circumstances in you know bad weather conditions and the begin to terrible place and it's quite violent one thing another it probably does breed within you a determination that's otherwise difficult to encapsulate with people and I think that's it you know it's um you know when I went to see the uh the kids in Marisha we set up the boxing gym for and uh it was you the girl that they got me uh involved in they people know I'm a bit of a sucker for these things she was she won some fights and got a few trophies and so on (1:48:50) but mother was a prostitute right I mean she was living in a shack and and so and they know that I'm like that but I went to see her and I went to see the club and I saw the circumstances and said know it's terrible isn't it I said yeah I'm going to help yeah I'm help I said let me tell you something I said If you're looking for world champions they come out gyms like that they don't come out of air conditioned gyms right with drinking fountains right they come out of gyms where you know basically you know there's buckets that people spit (1:49:16) into and that's where they come from right real you know real grit down there that's that that form some kind of iron in the soul I think and it does yeah how do you think about this whole issue of giving back and sharing and lifting up other people because I I was talking to my mother yesterday and I said to her I'm she's in London and I said to her I'm going to interview um this guy and I told her about you and she said I disapprove of him and I said why and she said um you know he makes too much money doesn't pay enough tax (1:49:48) doesn't you know owns too many flashy cars couple hundred cars and and she's like why isn't he doing more to solv society's problems and I I said to her I'll ask him like how do you think about that first of all I'd like to say that your mother um obviously criticizing a man's mother is is dangerous ter she doesn't know how doesn't know how much tax I pay with the greatest of respect well I'll introduce you to my mother you you'll find she she's about as formidable as you are great yeah I I we recruited somebody a while back who told (1:50:19) me a story about his mother and I said I I want to hire your mother yeah I think CH sounds like a perfect employee for us let's get's get it and and so um I it's funny you should ask that because it will at least maybe in part answer your mother's question uh which is to say that I believe that um banr or giving back or whatever you do there are a number of things I I'm very strongly guided on by it should be private and it should be with your own money I am anti to the point of disparagement with the people who go in (1:50:51) for glitzy events you know absolute return for kids kind of thing and we'll have a big event and we'll invite the Prime Minister and we'll all bid you know a million pound for a pair of socks or whatever the hell it is and we'll give all the money to get no the reality of that is first of all you're doing it because it makes you look good and you feel good doing it and the second thing about it is you're quite often in those c a number of people come me go well I've got this charity and I want this and you could take part and do that for (1:51:15) me and go so what's going to happen here is I'm going to give you the money and then you're going to go up front it up and do all this and not there's a certain degree to which I have to have people like that because I'm running these things because I'd be extremely bad at it get C but it's kind guys what you're really saying is can I pay for you to go and get credit that's so is some cases a lot of people who raise money for charity I think first of all they don't keep to my private rle and secondly they don't keep to the it (1:51:40) should be your own money rule I Try by and large to keep to both rules and so again going back you about you doesn't know what tax up and she doesn't know what I do with my money but but I do give um what I would personally regard as very significant sums of money to a wide range of things not just boxing gims for kids but a lot of other things as well I try to do how do you think of the parameters like because I'm assuming that there's something about helping to give people opportunity that resonates for you as (1:52:11) someone who managed to get out of like how do you think about a good way to help people well that was another point was coming private with your own money and in practical way wherever possible that that affects them in the way that you've just touched upon which is opportunity and ability to grasp it so I have a new wife OB believe to say and she has a stepson I have a stepson as a result uh and we've got him into school in the UK um and we I said what do you want to do here I can stay government square and basically be trained in the (1:52:43) underclass here to be a guest pump attendant or a gardener or Security man or we send in the UK U if Hees a mission obviously and and so on and we sent to the UK that's good and he seems to be prospering which is good so what I've now moved on to is a scheme to take two qualle children per anom from varius into the school so that once we've got it full we will have at least two children in every year at that school now you know you I'm sure you're aware of the SCH haven't been eaten the price of schooling in the UK by the time we (1:53:13) take this the fees the new vat the uniform the equipment and the flights into account we're getting into some reasonable do there uh basically but the thing I really like about it is it will be of practical help to lift those some of those group of of of children out of their background to give them an opportunity and and this is the really important part thing some of them I hope will think of coming back to maius to change the community in general right by the by the fact that they have the ability to hold down important roles in (1:53:44) government or private sector and and so on and that's that's the sort of thing that really I I like doing you know jooy enjoy that a lot because I can see the Practical consequences of it now I don't want him to name the Terry Smith Wing after me yeah yeah I don't out story at all in fact in fact in terms of getting these things to work quite often does require some sort of in book from the government to get schools to respond here and do that so the I said I said to them M you can put your name on it you can say this great initiative by me I (1:54:14) you're a politician you love this right put your name on it right I don't want my name on it right so your mother's never going to be read almost never going to be reading about me doing this you might read you might read that the uh the president of the labor party of Marius has uh has come up with this wonderful scheme to ucute Corel children into UK public school so yeah but it's it's good to have a mother who holds us all to account she she'll listen to my episode and she'll say yeah I didn't like that one as much to some you know (1:54:40) or that guy was great or you know so having exacting parents is helpful mother apart from her lack of knowledge of my personal fears which is understandable but she should perhaps try and T up before the it it is I think she's veering a little close to that UK dislike of success I was talking about that's a it's an interesting question that yeah I mean tell tell me about um you know obviously having grown up without um money and then over the years you become very wealthy and you know you bought a couple of hundred beautiful (1:55:13) cars and the like and a yacht and the and stuff and a lot of the very I mean I wrote about this in the epilogue of my book Richard wiser happier where I talked to a lot of people who won the you know hit the jackpot financially and my sense is that you know as I would put it the toys and bobles are kind of nice but they only go so far and that in some ways the real gift of the money is that say say again worse than that in what sense all the toys and the BS actually get in the way of pleasure quite often you know owning things of that sort (1:55:46) mainly is a headache you know so if you've got a boat you end up having a crew and then the crew you know somebody quits somebody has sex with somebody else somebody's found out doing something here they run it into the key side of the and so you know really I've got to say the amount of real pleasure that one gets from doing those kind of things is not high in my view right so what I mean if you take the car collection for example I think buying expensive and fast cars and I've got some expensive and fast cars I no doubt about that but (1:56:13) I've got a very wide range of cars my earliest car is from 1903 um and um and I've got I've got a section of cars which are failures I deliberately collect failures and so you know um and the reason for that is I think that they tell us things if if you why do we have I always say why do we have post-mortems on human beings well isn't just because doctors like messing around with kadalas it's because if we die in in suspicious circumstances or difficult DET they might want to know why just in case there's a new illness or fou play and (1:56:43) something needs to be done about it and and I like the idea of looking at cars you look at other things if you want to BU like cars that are failures are see what if anything we can learn we learn out these things um because it might be useful to learn something from time to time about how other people have screwed up in history you know is it ined your skepticism about Tesla because you're I mean it's interesting when you think of The Magnificent Seven right I mean you you you own a bunch of them but you've (1:57:09) said that Tesla and Nvidia wouldn't get through your quality parameters and and that Tesla probably never will and I I hadn't really made the connection that here you are a car expert and like is there some connection between your car collection the the failures and your skepticism about Tesla remember my Stern business school you know good company Bad Company see automobile companies are all bad without without without any kind of uh exception you know every every single one Toyota Ford BMW Mercedes the whole lot right (1:57:43) they destroy value if you if you really like them you can go and buy them all on a P4 if you want and there t on 99 times right um it's a bad business why is it a bad is very Capital intensive you have to build factories right fairly obvious and models development costs a lot of time and money and then here's a problem if if I'm invested in consumer staples and you buy some toothpaste or cat litter or whatever you buy when you run out you have to go buy some more right and so that keeps even in a even in a in (1:58:11) a downturn you might eek it out might squeeze a tube a bit better might go buy some cheaper cat litter and a number two brand or or un I don't know so that's a little bit problematic but it's not big problematic whereas if you got a car and you feel a bit hard up and down turn just keep the car don't have to change your car uh I always quote Mr Mah who is my taxi driver here in marcius who is an Exemplar of this he drove me around in his Toyota axio for 360,000 km the poor chap died and now his son's driving it (1:58:41) so El haven't made a bean off that car in 20 years right um and it's still going strong I could tell you I see it on the roads floating around with the sun driving it it's a really bad business because what that means is that it's hugely cyclical unlike topace and Catal when the demand stops it just stops right and so it's huge Capital involved big uh development costs and and and demand which goes up and down enormously and then you can get on to the other subjects involved which is uh so that's car companies and is a car (1:59:12) company which is you know our batteries the the future of of electric vehicle transport I mean I don't know the answer but there's certainly some reasons to be skeptical about it in terms of range in terms of um use of depletion of resources in terms of disposal etc etc the hydrogen fuel cells an alternative if there was any instructure so not put it all together and I just think I'm a big sort of admirer of many of Mr musk's achievements in in a lot of respects that man's that man's got energy of balls there's no doubt about that but (1:59:42) I'm not sure cars is the way forward I mean if cars The Way Forward why don't you just go and round up all the other ones and buy them um it's interesting I mean the fact that you've been collecting cars that deep back to 1903 and the fact that you got a first in history all those years ago in Cardiff like really informs you your sense of wanting to own companies that endure owning sectors that tend to you know persevere and and be valuable through good times and bad I mean there's there's some interesting through line (2:00:15) there in your life think got the 1903 is an oldmobile curved Dash just to let you know it's not got a steering wheel it's got a tiller um that you steer it with and it was the first mass production car the M TF was not the first mass production car it's the old curve Dash was the first mass production car um and uh yeah and there's there's history involved in that there's history involved in the model G4 the model G4 is is a fantastic story uh of an industrialist and what he achieved I think I've got one and and I think (2:00:43) it's a the sto the stories behind the cars in my view are more important than mostly the cars themselves I'm interested in the stories you know I'm interested in the full GT40 from 1966 from Full V Ferrari and I've got one uh and I like it h it's I can remember that those episodes when I was a child of how you know F worked out went on Sunday sell on Monday and tried to buy Ferrari and not only did they not get Ferrari but he sold out to Fe and dished Henry F and um you know upsetting Henry F was a bad thing to have done really because he (2:01:17) built a car and beat them and in fact Enzo Ferrari managed to cause the development of at least two cars by upsetting at least two by upsetting the full GT40 being one and the Lamborghini being another Mr Lamborghini made tractors he still does make tractors he make tractors and he bought a Ferrari which didn't work like they quite of didn't work there and took it back to to Ferrari Marinello and said you know this is wrong with a clutch and that's wrong with a gear box and S apparently Amo Ferrari said what do you do for I make (2:01:47) tractors and he was like that game was so upset he went and hired a team with six Young Automotive engineers and designers the oldest of whom I think was 26 and built the Lamborghini mura and demolished Ferrari's road cars Ferrari calls nearly as many good cars to be built by annoying people as he did by actually making cars I love those stories yeah you also had things like of 1968 Ford Mustang right which was the car that Steve McQueen drove in bullet and you have I think the Aston Martin bb5 the James Bond drove in Goldfinger so you living (2:02:22) out the movies yeah well l u yeah I like I like movie Cars I think if you said what are you trying to do with the car collection I mean it's about well there's a guy um who's got a museum in Naples in Florida called the revs Institute and he's got a book called the archaological automobile and his thesis is that the car is the single most important object with which human beings interupted in the 20th century it's not a bad thesis um and I think he's he's certainly going to point and I think there's an awful lot of human (2:02:54) development history in cars through the mul for and industrialization and all those sort of things the rise of Japan um the movies TV shows Mor's Jaguar the Saints Volvo uh they they're part in in in our Consciousness is is is enormous I think and they evoke quite a lot uh with people you know um quite a lot of it particularly of a certain age group I think you find people talking motor museums I've talked to a lot of people in motor museums cars is they'll say they'll find is walking around and and somebody will be in tears and they say (2:03:24) is there a problem I go my father had one of those you know I remember as a child it invokes emotion him uh so I'm I'm a Believer in the stories you know I mean the one I like on the model GF is Henry F and with the model G4 put it on the production line and in so doing he cut the production time of a car from 12 hours to 93 minutes right and in doing so he obviously cut the cost of production very significantly then he did really clever bit he cut the price what most people would have done face with that is just (2:03:57) made more profit he cut the price in so doing he took the car from being a placing of the of the of the of the the money classes into something where he invented the middle class in cars the middle class marketing cars cars then were sold to doctors and bank managers and lawyers and dentists he invented the Middle Market by doing that it's just a fantastic story of it for a man who going back to how people have viwed a man who many would review as a sort of Rob Baron industrialis yeah Nick sleep and case sakaria who who you may have come across (2:04:28) or from Nomad who I wrote about a lot of my book talk a lot about just seeing that scale economies shared model that they saw in Ford and then they saw it in Costco and then they saw it in Amazon so it comes again and again this ability to resist you know pocketing as much money as you can yeah I agree I agree is there anything you take from your history is a collector that you can actually apply to investing like are there I mean I assume it's sort of somewhat somewhat different OD but there's something in terms of the (2:05:01) pursuit of quality that runs through both there's also the fact that most things will come around you know every time I've ever thought of buying something and I've thought you know what I'll give in I'll buy a Lamborghini Diablo in Black because the red one is never going to come up guess what happens one minute after you bought the black one oops there you go there's that also don't trust auctions so you know I uh I I know from cars I've I've been involved in auction that uh people are auction put other people logged on to bid uh and (2:05:34) let them bid against their car to get the price up you know uh and so you don't don't trust what it's the same we dealing with Market do not trust what you see on the screen in sheer price action as is equaling reality you know there could be a lot of reasons why that price is moving or somebody's dealing you know uh yeah I've seen more than one example I think there one coming up uh this weekend at kiss in Florida where there's a very important car for sale where if I were bidding on it and I'm not I would look at that and say I (2:06:04) wonder if there's anybody else there who is in fact the vendor because once the bidding starts and it's clear that somebody's committ to buying it the vindor might use somebody to put in competing bits yeah I just mighta he gets stuck with his own car well yes or no because if he gets stuck with his own car they'll just ring you up later if you with eyes bid and say that guy didn't come through with the money do you want to be good for your bid Before I Let You Go Terry because you've been incredibly generous with (2:06:33) your time I just wanted to ask you one final thing which is actually about Sir Keith Park who's this hero of yours who is air Chief Marshall and one of the really tangible marks that you've left in the world is that there's now a statue of him in travago square in the heart of London that was unveiled in 2010 because you you led this campaign to get him honored tell tell us just a little bit about him and why um his story resonated so deeply for you uh he's a New Zealander um and he came from New Zealand in World War one (2:07:08) with the Anzac Corp who fought with galipoli which of course was utterly disastrous um and most people would have gone home then I guess um he didn't he volunteered for the British Army and fought with the song uh he was invalided out from the song after being blown off horse artillery Horse by a shell and uh was it was just unfit for for the Army so he volunteer for the newly for Royal flying Corp where he flew Bristol Fighters and um and was credited with 18 kills quite good guy um he then transferred from the RFC to the newly (2:07:40) formed RAF and uh won the trust of Hugh daing who was the head of fighter command who um had a theory on how to combat German air power the Germans had about 2,800 ples in the w Al the RF had about 650 fighter planes so they were heavily outnumbered um and ding realized that what they needed to do was not trying win the battle there were lots of people as you can imagine at that time particularly Lee mallerie the guy ran the uh the group in C who were let's give Jerry a blood he knows we don't need to win the battle we just need to (2:08:12) not lose this is a bit like companies we don't need to own the best company we just don't want to own any bad one so he would feed the finds in in Penny packets if you like um and it became a standing J with the lofw for Pilots as it were sort of Gallow hum the bom pilots who as a Battle Ground on would say oh here they come again those last 10 spit FS got they been told them wife there and they hadn't so they would always have some figh planes in the sky because operation Seine The Invasion order for the invasion of Britain their first (2:08:42) requirement was Air Supremacy because they were terrified of the road crossing the English Channel with the Royal Navy at large so they had to be able to neutralize the Royal Navy from the air they couldn't do that with air Supremacy and he was going to deny the mayor Supremacy now he needed a trusted associate who would Implement that strategy and that was Park and park did it to the letter of people have wargame Park's decisions over that summer from June through to October roughly uh he made daily decisions about deployment (2:09:09) and they've never managed to significantly improve on his decisions in terms of trying to do it he he under intense pressure every day did that and of course he was himself a fighter pilot um he'd been in World War I as a fighter pilot and flew his hul arog ok1 registration around the airfields from day to day at the end of the day finding out what had happened what was happening in tactics what morale was like what the damage was Etc so he had that anyway um he won the battle um in one of those wonderful pieces that only the Brits (2:09:39) could do Lee mallerie then interceded with Churchill to say that deling and park weren't aggressive enough and so after they'd won the freaking bat and got ding fired and park sent off the trading Kebab right anyway he was seeing training command when they realized they had a bit of a problem with molter molter was the Key island for trying to stop the African call being reinforced from from Mainland Italy and um was in the way and it was being bombed to hel back and so they put um uh they put Park in there to Mane defense smiling Albert (2:10:08) kry who ran the LOF off must have thought he was a very unlucky chat because he managed to lose to bark twice with P then beat him in bloody mure as well and and he was a fighter on his way there he was being thrown in by brist bow fighter and they spotted a German warship uh on their way into M and Par insisted that they press an attack they were nearly shot down um he was a fighter he would fight but and he understood the men there were lots of good photographs of him having Christmas lunch with the men and all that sort of (2:10:36) thing he would fly around the Airfield and so anyway again in typical British style and it's something I much admire in his regards he left at the end of the war went off through Asia for the end of the war and comeand went back to New Zealand was mayor of Oakland briefly and then just disappeared Into Obscurity and was gone and um there was a book by Steven bungay the historian um who actually fun up was a historian who worked in lawyers and insurance turned to history which I thought was the best book on the battle the most dangerous (2:11:02) enemy and in it he he has this wonderful phrase he says something that's really caught me at the he said AR was like a wizard in an Arthurian tale he traveled literally Halfway Around the World to defend the country which wasn't even his own country and then having successfully done so he just disappeared and he said there is no Memorial to him anywhere in the world neither in England nor in M Zealand he said there's a Keith Park present at bigy De wear a drug that's it and um I my father was and I was a key flyer when I was young I used to (2:11:37) play gliders planes and helicopters qualified flow and um I guess being a historian reading bungo with that background I thought I'm going to do something about it and so I got the Planning Commission and I got the statue fabricated and I po the m uh to him and got the park Family involved fortunately the park Family supplied some very good members uh his great great nephew was a movie guy uh and his great great niece turned up and pulled the cord to unveil it the the surviving battle Britain Pilots all took part in the The Campaign (2:12:08) and and turned up for the Trump because getting a statue put up in central London of a white uh Street war hero is not exactly what you call Easy at this day and age yeah that's so interesting so in some ways part of I mean obviously there's this extraordinary heroism and his historic role is really important I mean that there was a there was a wonderful quote from one of the vice Marshals saying he was the only man who could have lost the war in a day or even in an afternoon so I mean his his role in in actually (2:12:43) defending Britain was hugely important but there's also the aspect of him just being an unsung hero and him being an outsider and I can see why that would resonate for you as well yeah it was I think so yeah I think absolutely so it's interesting because when I was doing the ukar memorial I went to New Zealand I met the family were very nice extended family I said this what I'm planning to do do you approve and so on so they br very supportive they you know Lobby parliament in New Zealand we've got every party in New Zealand to sign a (2:13:11) letter going to the mayor of London saying that they wanted this to happen that was all very good and we've got to the the unveiling and invited as many of the family to come as could and we got his great great Niche to pull the call B with one her one about but I said in the build up to it I it was in I said um what do you think about ening the Germans to the ceremony um because I said in some respects in a spirit of reconciliation maybe we should uh but I think you should tell me what you want to do and they said Uncle Keith never (2:13:41) forgave he every day he had to make these decisions to send young men to their death and it never left him right the the and that comes back to you saying about being unsung and Outsider her s things and he made good tactical decisions every day which worked and under extreme pressure over long periods of time and every time he knew that he took those decisions he knew he was sending guys that were 20 years of age many of them had have trained out to die and he knew that and he did it because that was what his job was it (2:14:14) didn't mean that he did it feel very cheerful about it sometimes I imagine yeah such a such a rich an interesting story thanks so much for sharing that with us and thank thanks for being so generous with your time and your insights I I just really enjoyed spending the last few days deeply immersing myself in uh in the mind of Terry Smith so thank you it's been a great pleasure getting to getting to speak with you story to go with is about a car and I think it's a car that exemplifies if you were trying to get a (2:14:43) link between cars and and investment um and there's a a video on YouTube which you can look up called how one man made the perfect car okay I commend it to you and are you familiar with the McLaren F1 the I mean somewhat I know that you have one okay um what happened was Gordon Murray who was the man behind the wild success of McLaren under and center and so on um literally decided one day actually at Geneva airport I think with wrong Dennis and so on they they'd never made a road car before they made a road car and he (2:15:15) decided that the basis for making it was they were going to make the best rad car that ever had been built and I would suggest ever will be built given the way that things have moved on since then and I think he achieved it he made a car which is extraordinary I mean it's an I've got a 1995 example it does 243 mil hour this is this a 30y old car right okay it's extraordinary um and um if you watch that one of the things you'll find striking is he made a very fast car it's also a very safe car it's Caron fiber (2:15:46) monoco and so on but and it's actually a practical car it's got three seats and it's got get you need get it comes with a golf bag you can get your golf clubs I don't play golf he never took any interest in how fast it was going to go and if you remember my owners Manu one of the things I'm mentioning there is obliquity um not aiming for the the the sort of objective I say I've been fortunate to meet an awful lot of very rich people I can't think of one of them who've got very rich trying to make money they try to make things and (2:16:19) services they try to do things better than other people who had an idea or an imput to do things better than other people and I think Henry for didn't want to make money he wanted to make cars and he want to make better than other people make cars and that's what got him to wear and I think that that McLaren F1 is a perfect example of oblit it's a fantastically fast car U and when you think that that was 30 years ago uh making that thing and and by all accounts G Murray never once asked them to do any kind of calculation how fast (2:16:52) the C go it went fast as a result of how he designed and built it not as an name so in a way I guess to R this off it all goes back to the slogan on the ice cream truck it's quality that counts I think it's I think it does I think it is and look my view of that car is there will never be another car like it in there true cars I mean you know the idea that you have this thing that does 243 mph it has no power brakes it has no power steering it has no anti-ock brakes has no fourwh drive the only thing that that guy has is you and the (2:17:27) car that's it which is how Rowan Atkinson's car Ralph Ren's car ELO mus car and Bernard Brasher's car all got crashed the car is more capable than the person sitting in the seat most of the time ah really interesting it's been such a delight chatting with you was back to the Magnum Force quote Yeah yeah you can sit in that car and drive it but you should be aware of something yeah man got to know his limitations well that is what you wanted or something like what you wanted oh it's been a great pleasure and one of (2:18:05) these days I'll make it out to macious and hopefully I'll actually see what it's like there come without to letting us know we make you very welcome and uh and tell your mother that my check is going off in uh uh 16 days time and she would be shocked shocked like inspector Rena and guess blr the number on it I I certainly am you'll be very happy to hear it Terry lovely meeting you a real pleasure all right thank you smart people diversify so that's the truth you want to diversify not only is the future unknown (2:18:42) the future is unknowable so if you're dealing with something that's unknowable diversify and you need to start saving when you're really really young you need to start saving when you're in your 20s it could be a small amount of money but you just have to start saving