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Listening notes #3: Guy Spier on Investing

Time to add a new entry to the listening notes collection. This time is not a tech-related talk, but some interesting ideas I've got from an interview with Guy Spiers the manager of the Aquamarine investment found.

Even though the talk is centered around investments, I think many ideas can be applied also in software craftmanship ... and life in general.

Some of my main takeaways from the conversation:

  • ā± 00:40 he manages over $350 million in assets and has around 150 investors. From 1997 to 2018, the Aquamarine Fund returned 463%, versus a return on the SP500 of 167%. So a $1m investment at inception, would have accumulated to $5.63m, versus $2.7m had it been invested in the SP500 source.
  • ā± 12:30 it's critical for investors to structure their environments to counter their mental weaknesses, idiosyncrasies, and rational tendencies
  • ā± 14:50 When it comes to getting better at what you do there is no one thing that's gonna solve the problem. It's a process of constantly working, constantly improving, and researching. Who you have in your life are very powerful leavers in becoming a better version of yourself. And this applies to both investments and software engineering.
  • ā± 21:50 we should welcome changed opinions in ourselves. When we change our opinion that means we are growing and learning. And that's a good thing. Someone who does not change their opinion on anything is not learning. It's ok to change your process and what you do!
  • ā± 23:15 there are people who are very curious about the world and want to learn more, and there are people who just want to demonstrate to you they are right. You want to get into the category of people who want to share what they did, not tell you what to do.
  • ā± 24:50 avoid businesses that need the capital markets to be opened in order to be able to fund their business. There are businesses that need constantly need to raise money to fund their daily operations. Plenty of tech businesses are like this. The main argument for the negative cash flow is the lifetime value of the acquired customer. Spend and take as many customers as possible and we will be profitable in the end. See Netflix. But it not now always working. On the other side, there are also businesses like Basecamp that were profitable from their first year.
  • ā± 36:05 in the past 15 years over 89% of the active stock managers dit not beat the SP500.

Guy Spiers has written The Education of a Value Investor book. Added to reading list āœ…

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