February 5, 2025 • 47 mins
You don’t need to be a personal finance and investing nerd to know that Warren Buffett is the GOAT. When it comes to investing, he’s the greatest of all time. Which is why we’re so pumped to be speaking with David Clark about The New Tao of Warren Buffett that he co-authored with Mary Buffett, which is a collection of some of the wisdom that Warren has dispensed over his lifetime. David is a renowned author and expert on the investment strategies of Warren Buffett and he’s known for making Buffett's complex strategies accessible to investors of all levels. And having been a friend of the Buffett family for decades, David has some unique insights into Warren’s life that we’re excited to share and get into during this conversation!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How to Money. I'm Joel, I'm Matt, and
today we're talking the Tao of Warren Buffett with David Clark.
Speaker 2 (00:25):
Yeah. So you don't need to be a personal finance whiz,
you don't need to be an investing nerd to know
that Warren Buffett is the goat, like truly when it
comes to investing. He is the greatest of all time,
which is why we are so pumped to be speaking
with David Clark. David is the co author of the
New Tao of Warren Buffetts, which is a collection of
some of the wisdom that Warren has dispensed over the
(00:48):
many esteemed years that he's been at it. David's been
a friend of the family for decades now. He has
some amazing insight as to what life has been like
for Warren. He's also an expert on war Warren's investment methods.
I think he's got something like ten books that he's
written in the Buffetology series. And so, David, we're excited
(01:08):
to have you joining us today to talk everything from
value investing to according to Warren, what it means to
live and lead a good life. Thank you for joining
us today on how to money.
Speaker 3 (01:18):
Well, thank you for having me, David.
Speaker 1 (01:20):
We're pumped for this conversation, especially as to you know,
Buffett's enthusiasts over here. I think there's a lot we're
going to enjoy in glean from this conversation. The first
question we ask everybody who comes on the podcast is
what do you like to sporgeh on? Because Matt and
I we like to splurge on good craft beer, but hey,
we're not doing it at the expense of our future selves.
(01:41):
We're still investing in being smart with our money too.
Maybe it's the equivalent of Warren's egg McMuffin. I don't
know that's what our craft heeer is, but so what
is that for you? What do you like to sporgeh
on books?
Speaker 3 (01:50):
Buck splurge on books. I never hesitate to buy a book,
and no matter what the price, well sometimes I stop
at the price, but.
Speaker 2 (01:59):
First edition expensive.
Speaker 3 (02:01):
It's the one thing about Warren Buffett that a lot
of people kind of some people know about and some
people don't know about, is he's addicted to reading. He
reads a lot of books, and he reads them quickly,
and many many years ago there's an an aquarium bookstore
in town and they were the purveyor of his books,
(02:21):
and he would send them a list and they would
get informed. This is before Amazon and you could go
online and find things on eBay and things like that,
and it was amazing. He reads a lot of business biographies,
and I read a lot of business biographies, but he
also reads on science and history and a lot of
business books in general, and so I tended to follow
(02:42):
that route and other things as well. But I like
reading and he loves reading. And Charlie Munger that his
kids used to say that what he was was a
book and two legs sticking out. Well, yeah, books never
hesitates splurge, yes, definitely.
Speaker 2 (03:04):
So speaking of kids, and I guess I kind of
want to go back to maybe some of Warren's early years. Sure,
whether it's like the pinball machine that he purchased and
ended up selling. I think he called that actually the
best business that he was ever in, Whether that or
maybe his paper route as a kid. Can you kind
of describe, for maybe folks who aren't as familiar with
Warren and his upbringing, what life was like for him.
Speaker 3 (03:26):
Warren as a very young age was obsessed with making money,
and he is the kid with who would go around
and shine people's shoes. He's a kid who he would
buy a six pack of coke and take them and
sell them door to door for a nickel apiece and
get them for like, you know, fifteen cents for a
six pack, and one run around selling them. He was
(03:48):
obsessed with making money. It's all he thought about. And
he was obsessed with getting rich very very early age.
And he got into many sort of business and ventures,
you know, childhood business adventures. And one of them was
he had a paper route that he made money on.
But he also, i want to say thirteen or fourteen,
(04:11):
he would write down to the local racetrack and he
printed up a sheet of paper and he called it
the stable Boy's Picks, And he learned how to bet
on on horses, and he learned how to do odds,
and he would be down there selling the Stable boy
Picks newsletter he had and he would do that those
(04:34):
kinds of things. And then one of those business ventures
was he bought a pinball machine and they convinced some
barber to put it in and they came back and
they found like fifteen dollars in it, and they thought
they invented the will and then they ended up owning
a couple of pinball machines, so they get early gaming business.
And he really didn't want to go to college, but
(04:55):
his dad sort of forced him into going. So those
were his early adventures business.
Speaker 1 (05:01):
Is this like the did he just come out of
the womb like this or was this something that was
instilled in his family or did he meet somebody early
on who was incredibly influential. Can you, like, do you
have any idea where the roots come of that come from?
Speaker 3 (05:15):
I think he hit it right on the head when
you said he came out of the womb trying to
make money and he was obsessed with it. I'll tell
you where it comes from. I'm Mary and I are
slowly working on a biography. It's called about him. It's
called Warren Buffett Tight in a Wall Street Volume one Millionaire,
Volume two Billionaire. He was born on the eve of
(05:39):
the Great Depression nineteen twenty nine, and he was born
into a world when there was no money and everybody
was struggling to find money, and that's where he got
his drive. No money was a worry in his family,
and it was a worry in everybody's family during the
early days of the Great Depression, and he was raised
in that, and I'm sure on some sort of deep
(06:00):
psychological level it was driven in him that if he
made money, he would save his family or something like that,
and they lived what you would call back then would
be a middle class lifestyle, but it was not. You know,
there was no mansion. That was a small house. And
his dad had been a stockbroker before the Great Depression
(06:23):
of the nineteen twenties, and then he lost everything and
they had to struggle to get it back. And so
there's that narrative in his early life. It shows up,
and I'm sure it drove a lot of people that way.
You talk to people who grew up in the Depression.
There's not many of them left, but they all talk
about the struggles with money and the struggles of making
(06:45):
ends meet, and families living with other families because they
couldn't find jobs and things like that, and that probably
drove his early childhood.
Speaker 2 (06:54):
Yeah, I got to think, So I got to think
some of those some of those formative years, I mean,
they're just that, and they can kind of shape who
you are and what it is that you pursue. So, David,
can we go from I guess the early years of
Warren to how it is that he learned about investing specifically,
can you talk about value investing, what it entails and
(07:14):
why it has been Warren's strategy for so many years
and decades Now, Well, his.
Speaker 3 (07:20):
Obsession with money took him to the library and he
decided he'd read every quick rich book he could find
on making money, and he read them all. And this
is the old library in downtown Omaha, which is one
of those Carnegie libraries and very big and very you know,
(07:41):
built out of stone and brick, like the.
Speaker 2 (07:43):
Kind of library you think of when you think of
the first Ghostbusters.
Speaker 3 (07:45):
Yes, definitely. And he ran all and get rich quick books.
And then he started looking at stock books. And his
dad was a stockbroker, so then he started reading stock
books and he got heavily into it. Then he where
do you go? He went off to Warden's to business school,
he hated. He went off to Penn and he hated it,
(08:08):
and he came back and went to the University of Nebraska.
And while he was at the University of Nebraska, he
read a book called The Intelligent Investor, which was written
by Benjamin Graham. And Benjamin Graham was like one of
the early hedge fund managers in New York City, and
we're talking in the nineteen twenties, and he was friends
(08:28):
with Bernard Baroke, who was a famous investor, and he
was sort of they called him the Dena wall Street
and he taught at business school at Columbia University in
New York City. Anyway, Warren read this book called The
Intelligent Investor, and basically it's a book of it basically
says this. It says, the market often undervalues great businesses,
(08:53):
just as it often overvalues businesses, and you want to
be looking for the ones that are undervalued. At that period,
which was in the nineteen fifties, there were still companies
that were undervalued from the Great Depression, believe it or not.
And what happened in the Great Depression it drove the
stock prices down to nothing. And as things started to
(09:16):
come back up through the forties and into the fifties,
there were still many, many companies that never came back
up because people didn't want to own stocks. And Benjamin
Graham was highly skilled at looking for them, finding them
and investing in them. And that's what Warren did as well.
There was no internet and you had to do your
(09:39):
own investigations, and Warren was very skilled at that. Anyway,
he read it when he was in college, was really
really taken by it, and then when he went to
go to graduate school he ended up going to Columbia
where Ben Graham was his professor.
Speaker 1 (09:54):
It makes me think too, You're talking about him having
to dig in and do the investigating to see which
companies were undervalued so that he could, you know, make
those smart investments. It makes me think of like writing
a book report when I was a kid versus my
kids having to write a book report, and how easy
it is with the Internet. Do you think the but
that ease the Internet essentially making information accessible to all instantaneously,
(10:17):
does that make it more difficult to be a value
investor these days?
Speaker 3 (10:21):
That's a really interesting question. I like that question. In
some ways yes. In some ways yes, because in the
in the old days, you had to be an analyst
to go look and find these companies and get the
research reports, and you know, you'd have to get the
animal reports. You just couldn't get on the internet and
(10:42):
click away and pull up an SEC ten K or
something like that in ten seconds. Or you know, you
can go shopping for companies and you could read about
ten companies tonight if you wanted to. He had to
find the companies, and then he had to get the reports,
and then he'd have to read them, and then he
(11:03):
had to figure out what it was worth. Now, back
in his day, they had Moody's, which was Moodies developed
the investment manuals, mostly for bonds, because a whole lot
of bund understand, the bond business was enormous and always
has been enormous, and you would look for he would
thumb through the Moody's Investment Manual and he once said,
(11:25):
they said, how did you get so knowledgeable? He said,
you get the Moody's Investment Manual, which is about, you know,
maybe twenty five hundred pages long, or you know, there's
multiple ones of them. And he says, you start at
A and you go all the way to Z and
you just keep reading.
Speaker 1 (11:41):
And most people can't bear to read twenty five hundred
pages of this.
Speaker 3 (11:44):
Yeah, and that's what his obsession was. It's amazing what
he knows, and it's amazing the companies he knows. And
you could say to him you know some iron company
in Wisconsin, he know about it. Pain company that was
publicly traded in Chicago, he know about it. And it's
(12:06):
amazing what he knows and remembers. Yeah, he's got a
phenomenal memory too. He's a really, really, really bright guy
on top of it.
Speaker 2 (12:14):
Yeah, you had to be an incredible analyst to kind
of find that edge, and so it takes a whole
lot of work. But do you think that there's a
difference between Warren's pursuits and some of that natural talent
that he had as opposed to what most normal folks
should be doing when it comes to their investments, Like
this makes me think of when he's just like, yeah,
(12:35):
you know, for most folks out there, they should be
investing in the S and P five hundred VU specifically,
And that one's always stuck with me ever since I
read that quote. Then this is years ago. Do you
think a lot of folks should they be taking that path?
Speaker 3 (12:48):
Right?
Speaker 2 (12:48):
Should they be doing as Warren says, not necessarily as
he does, I would.
Speaker 3 (12:52):
Say yes, for most people. Yeah, it's unless you want
to go into the world to be an analyst. And
there's still wonderful there are wonderful events that happen. Warren
Buffett is a man waiting for something bad to happen,
and he's very patient about it. He doesn't have to
predict when it happens. Like a black Swan event, you
(13:15):
don't have to predict it. You just have to know
some day it's going to show up. And he's right
about that. It shows up and when it beats security
prices down. He's in there looking at what is a
bargain buy and not always so much a bargain but
a fair buy, because there are wonderful companies that never
become bargain buys, but they do often become fair buys,
(13:39):
and through like the pandemic, created buys two thousand and
eight created a ton of them. And you know it's
open season when that happens for him because he comes
into it with a lot of cash.
Speaker 1 (13:52):
You could maybe even classify it like some of his
Apple buys in that fair price. It's not like this
bargain basement deal, right, But he kept investing in Apple
even though Apple was the most valuable company in the world,
because he thought it was still a fair price.
Speaker 3 (14:06):
Correct and it was a fair price.
Speaker 1 (14:07):
What about like where market evaluations are right now, David, Like,
there are a lot of banks out there, investment banks
are saying, oh, the market overheated, even some of the
vanguards of this world thing. When you're thinking about, you know,
expectations for returns over the coming decade, don't get your
hopes up, Like, how does he think about investing given
(14:28):
kind of specific market conditions.
Speaker 3 (14:30):
Well, this market is high, and you're looking for a
quality company at a fair price. And in this market
you're not going to find a quality company at a
fair price. But something weird might show up. And this
kind of market in a down market is much easier
to find it. But things do show up because companies
(14:52):
individually have problems and odd things happen, and it creates opportunity.
It's just not as much opportunity as like in a
pandemic or a two thousand and eight kind of situation.
I have to take you back in time for a minute.
In the late sixties, the market was roaring like this
(15:14):
one was, and Warren woke up one day. He had
a hedge fund, and he woke up one day and
he said, I can't find anything to buy. And he
told his investors, I don't want to go to a
different strategy, and I'm just going to quit. And he
folded up his hedge fund and took his money and
(15:37):
he sat on it and as he said, I sat
on it for years, and you know, this is the
late sixties. And he sat on it until I think
it was seventy three seventy four, and there was suddenly
a market crash and he said, you know, I woke
up and there I was. You know, I woke up.
It was like I was an over sex man who
woke up in the middle of a harem. And he said,
(15:58):
everything was selling dirt and I had all this cash.
And Charlie Munger, who had a hedge fund during that period,
lost his investors half their money in the seventy three
seventy four crash. He regained it over the next three
or four years, but as he said, it was like
the most horrible woman in his life. Where Warren walked
(16:19):
into seventy three seventy four loaded with cash, today Berkshire's
loaded with cash, which tells you Warren thinks that somewhere
and then not too distant future, there's going to be
some kind of correction on the downside. Dramatic and it
will be an opportunity for him to buy.
Speaker 2 (16:37):
And that makes sense, right if you are a hedge
fund manager. For most folks listening who are just looking
to dollar cost average into their fore one case, sure,
I mean we say to not time the market, you know,
so like on one hand, you've got Warren who's always
waiting for an opportunity to you know, to snatch up
the next deal. And then on the other hand, it's
just like, hey, just keep investing no matter what, just
(17:00):
keep buying. Is there any overlap there or do you
feel that these two sort of schools of thought when
it comes to the average investor as opposed to like
the greatest investor of all time? Are those mutually exclusive in.
Speaker 3 (17:11):
Some ways yes, in some ways no. And I think
we talked about this. This is in the book. You
would sit on your cash and then buy the S
and P five hundred and in a down market and
not go in and like, you know, buy an index
fund in a down market as opposed to averaging it
in all the time. So there would be periods you'd
(17:31):
be sitting on cash in periods you would be buying.
The problem with that analysis is that when things start
going down, people freak out, and they freak out, and
even though they're sitting on a lot of cash, they
hoard it. And my own personal solution to that is
is that I just make myself allocate. And it goes down,
(17:53):
I allocate twenty percent in. It goes down again, I
allocate twenty percent in. And if it starts going up
and I've only gotten forty percent of the market, it
still turns out well. And so I work it like that.
So you you don't get in the market goes down
and you get in, and let's say you put all
your money in, and then it keeps going down, you know,
(18:15):
then you go throw up your lunch. You know, you
think in those terms and stockpile your cash. And when
things go bad, and things do go bad, not almost
on a regular basis, frankly, then you go looking for
things to buy. You know, I look for companies, But
(18:36):
you could just put your money in this and P
five hundred. I have a friend who's done really, really
well doing that over the years. He hoards up on
cash and things go to hell, he just goes in
and buys he has and P. Five hundred buys an
index fund and he's become fairly rich. I mean rich
and in the context of investment rich, which is, you know,
(18:57):
tens of millions of dollars.
Speaker 1 (18:58):
So, yeah, what do you think, David, from a perspective
of what it takes to become wealthy? Some people would say, Oh,
I wasn't born on third base. I don't have like
tens of thousands much less. You know, maybe I've only
got a few thousand dollars a year that I can
be investing. And Warren Buffett, it seems like he doesn't
think you need tons of money in order to build
(19:20):
wealth in this country. Do you agree with him?
Speaker 3 (19:22):
Yeah? Completely. I started with nothing, and I started with
nothing and got something and then invested in and for
many years the main source of income was investing. And
I live frugally like he did. I mean, he was
(19:43):
a multimillionaire driving around in a Volkswagen bug You know
what that is? Oh? Yeah, okay, they're still cool.
Speaker 2 (19:49):
We grew up playing punch buggy David.
Speaker 3 (19:52):
Okay, And he still lives in the same house he
bought when he came back from New York City. But
you go into the early numbers on Warren Buffett and
you're not talking a millionaire. You're talking about a guy
with you know, like fifteen thousand dollars and twenty thousand
dollars and and things like that. And he started managing
(20:15):
people's money when he What happened is he got out
of business school. He came back to Omahaa Rasca, worked
as a stockbroker. Finally got kept writing Benjamin Graham saying,
you know, I'd like to come work for you, and
Ben kept saying no, no, no, no no, and Warren said, well,
I'll work for free. Da da da da da, And
finally Ben said, okay, you can come work for me.
(20:37):
And two years after Warren went to work for him,
Ben decided to retire. But he started with a small
amount of money and he just kept growing it. And
that's how I did it. And then he started managing
people's money. And that's like the magic formula if we're
getting super rich, is managing other people's money. But you
(20:58):
can make yourself a millionaire over time. And you're not
going to do it overnight, but you can easily do it. Yeah.
Speaker 2 (21:04):
Okay, So, speaking of Warren Buffett living in the same house,
we've got more to get to. We're actually we might
even be able to talk something about crypto, talk about
a little more about McDonald's as well. We've got more
to talk to with David Clark about Warren Buffets.
Speaker 1 (21:17):
We'll get to all that right after this. All right,
we're back from the break. We're still talking with David Clark.
We're talking about Warren Buffett and the newly updated The
Tao of Warren Buffett book.
Speaker 3 (21:35):
I want to talk.
Speaker 1 (21:36):
More, dig in a little bit more on Warren's frugality, David,
And I think that is kind of People think of
it as quirky, but it really is quirky. I guess
when you think of somebody with that amount of money
being as frugal as Warren Buffett, is the fact that
he pinches pennies when those pennies are essentially insignificant, like
(21:57):
he famously eats at McDonald's mornings. He seems frugal to
the extreme right given his net worth, but he also
encourages people to enjoy their money. So how what would
you say like his ethosubfrugality.
Speaker 3 (22:10):
Is having witnessed it over the years. In the early days,
he was a big believer of compounding interest and Mary
has this great story where he's in an elevator and
he sees a penny on the floor and he picks
it up and he goes the beginning of my next million.
The feudality he believed strongly in that. He his wife
(22:34):
went and bought a new carpet once and he came
back and it was home, and he goes, you have
no idea how much money I won't make because you
bought carpet. And I mean, it was that obsessed. And
he saw everything in terms of compounding. And if you
take a penny and you double it like thirty two times,
(22:55):
you know, you keep doubling it over and over and over.
You know, it ends up a fabulous sum of money.
And that's how he saw it. He just saw it
in that context. He didn't see it as today. He
saw it as you know, twenty thirty years down the line.
And for that reason, he was very, very cheap and
very tight with his money. And he lived and he
(23:20):
lived in Omaha, which was fairly inexpensive to live, and
he lived in what was I mean, he was worth
forty million dollars and he's living in basically it would
be considered an upper middle class neighborhood. Our middle class neighborhood.
To this day he lives in a house like that.
Speaker 2 (23:38):
So as I hear you say that, like, on one hand,
you can think, oh, it sounds like he's incredibly content
with where he is. But what I hear you saying
more is that it's less of like contentedness, and perhaps
it's more, like you said, more of like that cheapskate mentality,
where he's looking ahead to the future and knowing what
that could turn into, and therefore he's sacrificing in the
(24:00):
here and now. So if you disagree with that, let
me know. But that's what I'm hearing you say. But
as he has gotten older, has he kind of come
to terms with that where you're forsaking the present for
the future. But I think as you get a little
bit older, I'm curious if that sort of changed his
tune a little bit.
Speaker 3 (24:19):
I think it did change his tune, and it shows
up in some of the things he says, and he
says them at the annual meeting. He says things like,
being frugal is smart when you're young, but you shouldn't
deny your family, you know, fun things like take them
to Disneyland and education and things like that. Which he
never denied his kids anything that they needed in the
(24:42):
way of that. However, he didn't spoil any of them,
and they all grew up, you know, wanting things that
they didn't get. And however, when it came to education
or something like that, he wouldn't hesitate to spend money.
But no, he was tight and tight for a long
long time and it just went on and on and
(25:02):
on with him.
Speaker 1 (25:03):
You've used the word obsessed or obsession a lot, yeah,
And I think like you're really pointing kind of at
the root of something with Warren, is this kind of
obsession with compounding and that that maybe kind of took
over his brain in a certain way, and then it
became the lenses in which he saw everything through. And
it seems like too, though, that he loves his work
(25:26):
right so that even having a certain amount of money
where he never had to worry about money ever again
for him, for his progeny, he's still like, hasn't really
changed his work ethic or his desire to kind of
be at the office most days. Is so, is that
just because he's in love with the idea of what
(25:48):
he does and with what his pursuits.
Speaker 3 (25:51):
He talks about that he talks about being in love
with what he does, and he shows that he's in
love with what he does. Well, let me in on
something else. People say he doesn't spend his money, But
here's a guy who's I see him mostly as a
collector of great businesses, and he does never hesitates to
write a check for billions of dollars. And in the
(26:13):
early days, he went hesitate to write a check for
millions of dollars if he was buying a business. If
it came to buying carpet for the house, that was
another story I mean, and it's separated in his head
like that. I see him mostly as a collector and
a man who's out collecting things, and if he sees
(26:34):
value in it, he'll spend the money, and if it
becomes overvalued, he'll sell it and go on and buy
something else. He's very he doesn't hesitate to sell either
if he thinks it's overvalued or he thinks that he
could put the money to use somewhere else. He doesn't
fall in love with something, he'll sell it, and that's
an interesting aspect of his life. But he never hesitates
(26:58):
to spend money if he's getting a good deal on
a business. He collects businesses. It's like a guy who
collects art our guy who clucts cars or something like that.
But it's completely different.
Speaker 2 (27:10):
David, what is Warren's take on financial advisors? We're going
to take more of a turn towards personal finance. Do
you think that most folks need outside advice outside of
maybe the bits of wisdom that they're able to read
from Warren Buffett?
Speaker 3 (27:24):
Most financial advisors are highly overrated, most of them. I
don't know how they're paid anymore. They take a percentage
of what you have, and then they do things like suggest, well,
we're going to split your portfolio. It's, you know, a
third in bonds and the rest in stocks. And now
we've got an idea of two years later, they're saying
(27:46):
we're going to put it all in bonds and then
in stocks and things like that, and Warren never liked them.
I don't like them. I think you're better off following
his strategy of investing in it an index fund and
a down market as opposed to using one.
Speaker 1 (28:03):
Yeah.
Speaker 3 (28:03):
I mean, if you have no idea what you're doing,
that would be the best strategy for you. And if
you don't know how to do that, then you maybe
you should have an investment advisor. Like if you came
into a lot of money and you seriously had no
interest in it at all, then you would be better
off with a financial advisor.
Speaker 1 (28:20):
Talk to us about how Warren's take on cryptocurrency has
it evolved at all, because, like especially in the early days,
he didn't mince words. His late partner Charlie Munger also
didn't really have anything good to say about cryptocurrency. I
think he called it rat poison squared, so like immediate death.
I guess is what cryptocurrency is up from their point
(28:41):
of view? Is that still how Warren feels? And I
guess the meme coin space too, has gotten kind of
out of control in terms of how much money has
gone in there and how much money just normal average
investors trading from the comfort of their home have been
able to lose in that space through a lot of
kind of grift and Scamminess what's his take on that
space right now?
Speaker 3 (29:02):
His take on cryptocurrency is that it doesn't make any money.
It's not a business. It's like in many ways, it's
kind of like cash. It's not a business. The problem
with cryptocurrency. You can't even put it in a bank
and ear an interest on it, so it's it doesn't
make any money. However, it is a medium of exchange,
(29:25):
and it's largely a medium medium of exchange and sort
of nefarious world. You know, it's kind of the underworld
medium of exchange, and crypto converts into dollars. There's an
argument for crypto that, you know, it's not like the
(29:47):
Federal Reserve Bank can't print more crypto and inflate it.
But nobody really understands. Nobody really knows how much crypto
there is, and nobody really understands how it's made. People
do understand, but the public doesn't. People speculate on it.
Now I just said the word speculation. So now you're
(30:08):
speculating on something that doesn't have any true inherent value,
and so the price goes up, the price goes down,
and that the gambling aspect of it creates a problem
of it someday going to zero and speculative and the
zero part is what Warren never liked about those kinds
of things.
Speaker 2 (30:25):
Well, I mean, I think that gambling aspect of it,
that's what worries me the most when it comes to
how it is a lot of folks are investing these days,
especially folks maybe got into it four years ago when
all of a sudden they found themselves with more cash
on hand, whether it's because of stimulus checks or whether
it's because of the fact that they weren't going out
and blowing money at restaurants and bars anymore. And I
(30:46):
think for I can see an argument going back to
financial advisors. I think that's some of the value that
some of those advisors are able to provide is the
fact that, hey, there's some folks out there that don't
know one in from the other, and for them to
have somebody to essentially kind of coach them through making
worse decisions. It's less about the I guess maybe the
(31:07):
optimization of their investing dollars as opposed to keeping them
from losing it completely.
Speaker 1 (31:13):
Does that make sense and probably better than getting their
investing advice on TikTok, which is where some people get
it these days.
Speaker 3 (31:18):
Well, that's a really good point, and I like that.
Thank you for sharing that with me. I like that
a lot. Yeah, you're right, And for those people, an
investment advisor would add value to their lives and stop
them from doing from something highly speculative. Like again, in speculation,
you can make an enormous amount of money very quickly,
but you can also lose an enormous amount of money
very quickly, and that's a problem. And Warren wasn't about
(31:43):
getting rich over night. He was about getting crazy rich
over a long period of time.
Speaker 1 (31:48):
Yeah, crazy rich over a long period of time. Yeah,
that would if you were looking for an alternative title
for the biography, that would be a good one too.
Speaker 3 (31:56):
I like that. Yeah, thank you, that's good. See, I'm
getting things out of this.
Speaker 2 (32:00):
This isn't a total waste of time, right, No, No, you're.
Speaker 3 (32:04):
Giving me ideas. I like it.
Speaker 1 (32:05):
It's fun talk to us about how Warren thinks about inflation,
because that's I think the normal average American in these
days would be like, man, inflation sucks. My groceries cost more.
Look at the cost of eggs and housing and insurance,
and it certainly feels like it's this tax on the
average person. But Warren would also say that there are
(32:25):
certain upsides to inflation too, right.
Speaker 3 (32:28):
Well, the upside to inflation is that raises asset prices,
including stocks, and it's sort of like built in we
live in an economy that is basically perpetually in a
state of inflation, and it's built into the federal reserves
projections they want, like I don't know, what is it,
(32:48):
two percent inflation a year. And the reason they want
inflation is because the opposite, deflation destroys everything. You understand
that the banks are highly highly leveraged businesses and they
only have about ten percent equity behind them, and if
you had fifteen percent deflation, you would deflate their asset
(33:09):
values by fifteen percent. Technically, you would wipe out all
the equity value in a bank.
Speaker 1 (33:14):
Like the scene from It's a Wonderful Life, Right, Everybody's
going to get their money, and they don't have all the.
Speaker 3 (33:19):
Money, yes, exactly, and that is because the bank has
loaned out all the money, but now it's not worth
as much. So that kind of thing. So it's built
in inflation wise, and that lists security prices over time,
and it's you know, it doesn't happen overnight, but it
perpetual inflation for security prices, which helps your index fund
(33:42):
constantly rise over a long period of time. Understand there's
going to be gyrations in there, but it's kind of
built into our economy that investment stock prices will rise
over a long period of time as a whole. That's
not individual but as a whole.
Speaker 1 (34:01):
Yes, And it's actually beneficial to people with fixed rate
debt too. Right, Like I'm thinking about my three percent mortgage.
It only looks better and better and better as inflation
continues to continues the.
Speaker 3 (34:11):
Sort definitely, because you're paying for it and inflated dollars
down the road. Yeah, my parents built a house in
the sixties. It costs thirty four thousand dollars to build.
I still own the same house and today it's worth
close to a million dollars. And you know, but it's
(34:32):
just the same house that they paid for thirty four thousand.
I said to the guy I was having some work done,
and I said, let's just reside the whole thing. And
he looked at me and he said, David's cedar. And
I said so, And he goes, it's going to cost
thirty four thousand thirty. Who cost you forty thousand dollars
to reside your house today? And I said, the house
(34:52):
only costs thirty four thousand. He said, well that was
back in the sixties. Well, that's inflation it's the same. Hell,
it's worth more money, but it really it's just the
same house.
Speaker 1 (35:04):
I'll looking back at those Sears Roebucks catalogs of those
like beautiful homes that they shipped your door for like
so like so little money in the nineteen twenties. Sure,
and they were gorgeous. And yeah, you can't get kick
get anything like that today for that price.
Speaker 3 (35:17):
Right, you're right. Do you remember when McDonald's hamburgers were
fifteen cents?
Speaker 1 (35:20):
I remember on like Tuesday nights they have twenty nine
cent Hamburgers when I was a kid.
Speaker 3 (35:24):
Yeah, I remember when they're fifteen and fries were a
dime and a coke was a dime. Right, But you know,
you make more money today, and but you're paying off
your mortgage on a value that was you know, five, ten,
fifteen years ago. Yeah, yeah, your three percent mortgage is great.
Speaker 1 (35:44):
Holding on to that forever. We get just a few
more questions to get to with you, David. We'll get
to those right after this. We're back for the break.
We're still talking with David Clark talking about one of
our heroes, madd and I's mutual heroes in the Finance Base,
Warren Buffett, and David has just updated the book The
(36:06):
Tao of Warren Buffett, which is definitely worth a read,
and we really like I guess I'm David. I'm curious
to know why you think Warren remains so culturally relevant.
We got some backyard chickens recently and my kids got
to name one, my wife got to name one, and
I got to name one. I named mine Warren. That's
how much I like Warren Buffett. So why do you
(36:27):
think he has become and then remained such an important
cultural figure as someone who's like just kind of a
good investor. What defines or what's the appeal?
Speaker 3 (36:38):
Well, let's point something out. He never ever made anything, Like,
He's not Elon Musk. He didn't invent anything. He didn't
invent an Amazon. All he did was allocate money, buy
and sell things, and so that's a very unique position.
The other thing about him is he's really really funny,
(36:58):
really entertaining and very charming to listen to. And he
has been in his annual meetings have gotten bigger and
bigger and bigger. And I mean there were at times
in the early days there was like twenty people showed
up and then there were fifty, that it was one hundred,
that it was two hundred, there is five hundred. Then
it got, you know, a thousand. They kept going to
(37:20):
bigger and bigger venues, and people showed up to listen
to his wisdom. And he was entertaining when he was talking,
and he made a lot of sense to people. And
then he entered into a sort of the international world.
And this book that we just wrote, the newtw of
(37:42):
Warren Buffett, It's been translated into fourteen languages already. It's
in Chinese, it's in Japanese, it's Entai, it's all over
the world. And he is a cultural he's a worldwide
cultural phenomenon. Why. I think it's his folksy way of
talking with people, and he's funny and people like it,
(38:06):
and he talks about things. They're one thing they're interested
in more than anything else in which is money, and
and he makes sense and he got super super super
rich doing it.
Speaker 1 (38:18):
I think authenticity is part of the appeal to.
Speaker 3 (38:20):
Yeah, I like that authenticity. Yeah, it's very authentic, like
what you see is what you get. Yeah, what you
see is what you get. And Charlie, remember, was the
same way Charlie was caustic, and I mean that's to
put him mobly, and that had its own humor to it. Yeah.
Speaker 2 (38:38):
I do wonder how Warren's folks see aphorisms translate stumanderin
and like if there's something lost in translation there. But
speaking of the book, there is one of the one
of the notes of wisdom was about writing your own
obituary and then trying to live up to it right
where you're setting those sort of end of life goals.
(38:58):
Do you feel that war Jarn has done a good
job in that regard.
Speaker 3 (39:04):
Yeah, I think he's done a really brilliant job at it.
As he's gotten older, he's gotten more reflective. But he's
always embraced the world with a kind heart, and he
has always been generous in giving away his money. And
he didn't give his way as much as in the
early days, but he gave money away locally, and he
(39:26):
gave money away. It's remarkable how much money he's given
away and how much money he's given away and not
had his name put on the building, and anonymously so
to speak. I mean, the university has got things in it,
and I know he paid for them, but his name's
not on the building, And there's a scholarship fund in
(39:49):
town in Omaha for any indigent person who wants to
go to college that he pays for. But nobody ever
writes about it. It's just the university dolls out the
and he pays for it. Yeah, he's extremely generous, and
as he's gotten older, even more so.
Speaker 1 (40:06):
When when you think about people in our country who
have been highly successful, sure made billions and billions of dollars,
the typical route for most of them has been to
give away the vast majority of that money as they
get older and especially when they pass away. It's like, man,
ninety nine percent of my money is going to such
and such organization, whether it's like you know, Bill Gates's arm,
(40:30):
philanthropic arm that oversees, you know, the disbursements of money
to really need the organizations across the world. How does
Warren think about this vast sum of wealth that he's
built up and what kind of good it can do
for not even for his legacy, because it sounds like
he doesn't care about that as much, but for the
good it can do when he's gone.
Speaker 3 (40:51):
He's always said that he didn't like thinking about it,
and so he's always left it others to others to
think about how to allocate it, and he's allocated it
to his three children at the end of his life,
and it's no longer going to Bill Gates. For a
while it was going to Bill Gates. But his three
kids he's been giving money to allocate over the years
(41:12):
and they've done a brilliant job with it. All three
of them are really great kids. You know, they're older
people now, but they're you know, they're all three of
them are hard working. All three of them are real smart,
and all three of them have a really kind heart.
So you know, they and they they have a spect
(41:33):
they cross the spectrum to one of them is extremely
liberal and one of them is very conservative. So they
they'll do a good job with giving his money away
and it will benefit society as a whole. But it's this,
it's his children and the kindness in their heart that
will dictate where the money will go.
Speaker 2 (41:54):
That's cool, very cool. Well, David Clark, we really appreciate
you taking the time to speak with us today. We'll
definitely make sure to link to the book that you
and Mary Buffett have co authored together. But thanks again
for taking the time.
Speaker 3 (42:07):
Oh, thank you for having me. It was a real pleasure.
I enjoyed some. I enjoyed the conversation and your ideas
are great. Thank you.
Speaker 2 (42:13):
Thanks David, take care all right? It almost kind of
felt like we were talking speaking to the man himself,
Warren Buffett. Did it Did it feel feel that.
Speaker 3 (42:20):
Way to you?
Speaker 1 (42:21):
Mean, you've been rubbing shoulders that long with him as
as David has with him and his family.
Speaker 2 (42:26):
He's there in Nebraska, he's he's at the epicenter.
Speaker 1 (42:28):
We were joking before we started recording that like, have
you have you ever did you ever think you would
know more about another individual human being than you know
about Warren? And he was like, yeah, it's pretty insane.
By the way, I cannot wait to read the two
part biography on Warren and then the three part biography
on you, my friend.
Speaker 2 (42:44):
Oh sure, sure. What's your big takeaway from our conversation
with David about Warren Buffett? So?
Speaker 1 (42:49):
I loved when he was talking about Warren's depression roots
and and when he talked about kind of.
Speaker 2 (42:54):
The macromitive years. Yeah, the macro.
Speaker 1 (42:57):
Events that were influencing who he became. I think the
true is for all of us, there are either macro
or micro events that influence significantly who we become. And
I talk about this in my own personal journey with
money about how my parents' money struggles when I was
a kid. I was just at this particular age where
the impression was strong, right when my parents were having issues.
(43:18):
And I do think why I do what I do
has a lot to do with kind of that history
and my experience there. And so it's a good idea
for all of us to kind of maybe take a
look back and say, well, what are those things that
might have influenced who I am and why I think
about money the way I do, Because some of it
might be good, some of it might have actually led
(43:38):
to good money habits, but it might actually be bad
in some ways. And over time, hopefully we can tease
some of those those things out so that we can
have a healthy relationship to our money. I don't know,
And just that struck me too. As he was talking
about that, I was like, oh, man, I feel like
I have struck a chord.
Speaker 3 (43:55):
Yeah.
Speaker 1 (43:55):
I didn't go through the depression, but I went through
like a micro familial version of.
Speaker 2 (43:59):
It, YR own version of it. For sure. My big
takeaway is going to be the fact that David kept
coming back to the fact that Warren is just this
brilliant investor. And it's true, but if you want to
outperform the market, you have to be an analyst essentially,
like you have to be willing to dig in. And
we do know some folks who do that and have
found success. But otherwise, most people who are listening to this,
(44:21):
they've got another job, they've got a life, they've got kids,
they've got other things that they are interested in. Even
if you do have the time to and the skill
and knowledge to be able to dive into it. And
so if that is you and you still want to
invest your money, will index it an S and P
five hundred fund the ability to overtime a mass large
amounts of wealth. He mentioned a friend of his and
(44:41):
all he does is invest in the S and P
five hundred and he's got tens of millions of dollars.
That's more than me, Joel. So I'm going to keep
at it by come on, please, But yeah, I want
that to be the biggest take away at least that
you hear from me, because I think a lot of
times you kind of get carried away with this notion
of it's an overly romanticized sort of idea, right of
(45:02):
like pouring over books, you're diving into the financials. You're
going to find the next up and coming business to
invest in, and you're going to ten x, one hundred
x your money just in a few short years. As
folks are trying to get rich quick, but most folks
aren't going to be able to.
Speaker 3 (45:14):
Pull that out.
Speaker 1 (45:14):
I do think this conversation revealed that Warren has like
this secret combination that's really hard to come by. It's
like the depression roots, the superior intellect, the hard work ethic,
the boring twenty five hundred page analysis of bonds. Yeah,
nobody in their right mind wants to read, but he
finds it fascinating. No wonder he's such an incredible investor,
and most of us just don't have that inclination or
(45:36):
the intelligence level myself included, to invest in the way
Warren has. So maybe we should be like, Wow, amazing
that he can do it, but I'm probably not going
to replicate it.
Speaker 2 (45:45):
That's right. The beer that you and I enjoyed it
during today's episode is called Space Broccoli, which is by
Other Half. Another half has to make more of my
favorite beers than any other brewery out there. Like every
time I drink an IPA by them, it just tastes
like the most perfect.
Speaker 1 (46:01):
I would love to try them side by side too,
because I just always think of them in the same vein.
They all taste similar to me, but they're all fantastic,
so good.
Speaker 2 (46:08):
This one so space broccoli. They've got a regular broccoli,
but I'm pretty sure this is the double dry hot version. Yeah,
of that IPA. But which also makes me think of
a local brewery, space Lettuce wait by Monday Night, which
I wonder which one came first, Space Lettuce or Space Bccoli.
It's a good a question makes me think that maybe
Monday Night did some ripping off one of the most
(46:28):
delicious beers in the country. But yeah, did you dig it?
Speaker 1 (46:31):
I loved it, and I only wish this coul account
as my vegetable serving for the day. Sadly, no, I'm
gonna have so so good veggies for dinner tonight. But yeah,
I mean, this is basically IPA perfection. Other half continues
to just I mean rocket every time they make beers so.
Speaker 2 (46:48):
Super dry hopped a war that you use to describe it.
Before we started recording, was like chalky, and it does
have like not chalky as in not bad powdery, but
like almost like this dryness that you get when it's
dry hop like this, there's a sharpness.
Speaker 1 (47:02):
Like the hops are sticking to the sides of your mouth.
Speaker 2 (47:04):
It is so freaking good. It's so hard to describe.
But of course I'm glad that you and I got
to share one of these during our episode today while
we talked with David Clark, and we'll make sure to
link to his book as well, The New Tale of
Warren Buffett, that was co authored of course by him,
but then also Mary Buffett, daughter in law of Warren Buffett.
Speaker 1 (47:23):
Yep, all right, Matt, we'll link to that book. We'll
put up in the show notes on our website at
howtomoney dot com. That's gonna do it for this episode.
Until next time. Best Friends Out, Best Friends Out,
Welcome to How to Money. I'm Joel, I'm Matt, and
today we're talking the Tao of Warren Buffett with David Clark.
Speaker 2 (00:25):
Yeah. So you don't need to be a personal finance whiz,
you don't need to be an investing nerd to know
that Warren Buffett is the goat, like truly when it
comes to investing. He is the greatest of all time,
which is why we are so pumped to be speaking
with David Clark. David is the co author of the
New Tao of Warren Buffetts, which is a collection of
some of the wisdom that Warren has dispensed over the
(00:48):
many esteemed years that he's been at it. David's been
a friend of the family for decades now. He has
some amazing insight as to what life has been like
for Warren. He's also an expert on war Warren's investment methods.
I think he's got something like ten books that he's
written in the Buffetology series. And so, David, we're excited
(01:08):
to have you joining us today to talk everything from
value investing to according to Warren, what it means to
live and lead a good life. Thank you for joining
us today on how to money.
Speaker 3 (01:18):
Well, thank you for having me, David.
Speaker 1 (01:20):
We're pumped for this conversation, especially as to you know,
Buffett's enthusiasts over here. I think there's a lot we're
going to enjoy in glean from this conversation. The first
question we ask everybody who comes on the podcast is
what do you like to sporgeh on? Because Matt and
I we like to splurge on good craft beer, but hey,
we're not doing it at the expense of our future selves.
(01:41):
We're still investing in being smart with our money too.
Maybe it's the equivalent of Warren's egg McMuffin. I don't
know that's what our craft heeer is, but so what
is that for you? What do you like to sporgeh
on books?
Speaker 3 (01:50):
Buck splurge on books. I never hesitate to buy a book,
and no matter what the price, well sometimes I stop
at the price, but.
Speaker 2 (01:59):
First edition expensive.
Speaker 3 (02:01):
It's the one thing about Warren Buffett that a lot
of people kind of some people know about and some
people don't know about, is he's addicted to reading. He
reads a lot of books, and he reads them quickly,
and many many years ago there's an an aquarium bookstore
in town and they were the purveyor of his books,
(02:21):
and he would send them a list and they would
get informed. This is before Amazon and you could go
online and find things on eBay and things like that,
and it was amazing. He reads a lot of business biographies,
and I read a lot of business biographies, but he
also reads on science and history and a lot of
business books in general, and so I tended to follow
(02:42):
that route and other things as well. But I like
reading and he loves reading. And Charlie Munger that his
kids used to say that what he was was a
book and two legs sticking out. Well, yeah, books never
hesitates splurge, yes, definitely.
Speaker 2 (03:04):
So speaking of kids, and I guess I kind of
want to go back to maybe some of Warren's early years. Sure,
whether it's like the pinball machine that he purchased and
ended up selling. I think he called that actually the
best business that he was ever in, Whether that or
maybe his paper route as a kid. Can you kind
of describe, for maybe folks who aren't as familiar with
Warren and his upbringing, what life was like for him.
Speaker 3 (03:26):
Warren as a very young age was obsessed with making money,
and he is the kid with who would go around
and shine people's shoes. He's a kid who he would
buy a six pack of coke and take them and
sell them door to door for a nickel apiece and
get them for like, you know, fifteen cents for a
six pack, and one run around selling them. He was
(03:48):
obsessed with making money. It's all he thought about. And
he was obsessed with getting rich very very early age.
And he got into many sort of business and ventures,
you know, childhood business adventures. And one of them was
he had a paper route that he made money on.
But he also, i want to say thirteen or fourteen,
(04:11):
he would write down to the local racetrack and he
printed up a sheet of paper and he called it
the stable Boy's Picks, And he learned how to bet
on on horses, and he learned how to do odds,
and he would be down there selling the Stable boy
Picks newsletter he had and he would do that those
(04:34):
kinds of things. And then one of those business ventures
was he bought a pinball machine and they convinced some
barber to put it in and they came back and
they found like fifteen dollars in it, and they thought
they invented the will and then they ended up owning
a couple of pinball machines, so they get early gaming business.
And he really didn't want to go to college, but
(04:55):
his dad sort of forced him into going. So those
were his early adventures business.
Speaker 1 (05:01):
Is this like the did he just come out of
the womb like this or was this something that was
instilled in his family or did he meet somebody early
on who was incredibly influential. Can you, like, do you
have any idea where the roots come of that come from?
Speaker 3 (05:15):
I think he hit it right on the head when
you said he came out of the womb trying to
make money and he was obsessed with it. I'll tell
you where it comes from. I'm Mary and I are
slowly working on a biography. It's called about him. It's
called Warren Buffett Tight in a Wall Street Volume one Millionaire,
Volume two Billionaire. He was born on the eve of
(05:39):
the Great Depression nineteen twenty nine, and he was born
into a world when there was no money and everybody
was struggling to find money, and that's where he got
his drive. No money was a worry in his family,
and it was a worry in everybody's family during the
early days of the Great Depression, and he was raised
in that, and I'm sure on some sort of deep
(06:00):
psychological level it was driven in him that if he
made money, he would save his family or something like that,
and they lived what you would call back then would
be a middle class lifestyle, but it was not. You know,
there was no mansion. That was a small house. And
his dad had been a stockbroker before the Great Depression
(06:23):
of the nineteen twenties, and then he lost everything and
they had to struggle to get it back. And so
there's that narrative in his early life. It shows up,
and I'm sure it drove a lot of people that way.
You talk to people who grew up in the Depression.
There's not many of them left, but they all talk
about the struggles with money and the struggles of making
(06:45):
ends meet, and families living with other families because they
couldn't find jobs and things like that, and that probably
drove his early childhood.
Speaker 2 (06:54):
Yeah, I got to think, So I got to think
some of those some of those formative years, I mean,
they're just that, and they can kind of shape who
you are and what it is that you pursue. So, David,
can we go from I guess the early years of
Warren to how it is that he learned about investing specifically,
can you talk about value investing, what it entails and
(07:14):
why it has been Warren's strategy for so many years
and decades Now, Well, his.
Speaker 3 (07:20):
Obsession with money took him to the library and he
decided he'd read every quick rich book he could find
on making money, and he read them all. And this
is the old library in downtown Omaha, which is one
of those Carnegie libraries and very big and very you know,
(07:41):
built out of stone and brick, like the.
Speaker 2 (07:43):
Kind of library you think of when you think of
the first Ghostbusters.
Speaker 3 (07:45):
Yes, definitely. And he ran all and get rich quick books.
And then he started looking at stock books. And his
dad was a stockbroker, so then he started reading stock
books and he got heavily into it. Then he where
do you go? He went off to Warden's to business school,
he hated. He went off to Penn and he hated it,
(08:08):
and he came back and went to the University of Nebraska.
And while he was at the University of Nebraska, he
read a book called The Intelligent Investor, which was written
by Benjamin Graham. And Benjamin Graham was like one of
the early hedge fund managers in New York City, and
we're talking in the nineteen twenties, and he was friends
(08:28):
with Bernard Baroke, who was a famous investor, and he
was sort of they called him the Dena wall Street
and he taught at business school at Columbia University in
New York City. Anyway, Warren read this book called The
Intelligent Investor, and basically it's a book of it basically
says this. It says, the market often undervalues great businesses,
(08:53):
just as it often overvalues businesses, and you want to
be looking for the ones that are undervalued. At that period,
which was in the nineteen fifties, there were still companies
that were undervalued from the Great Depression, believe it or not.
And what happened in the Great Depression it drove the
stock prices down to nothing. And as things started to
(09:16):
come back up through the forties and into the fifties,
there were still many, many companies that never came back
up because people didn't want to own stocks. And Benjamin
Graham was highly skilled at looking for them, finding them
and investing in them. And that's what Warren did as well.
There was no internet and you had to do your
(09:39):
own investigations, and Warren was very skilled at that. Anyway,
he read it when he was in college, was really
really taken by it, and then when he went to
go to graduate school he ended up going to Columbia
where Ben Graham was his professor.
Speaker 1 (09:54):
It makes me think too, You're talking about him having
to dig in and do the investigating to see which
companies were undervalued so that he could, you know, make
those smart investments. It makes me think of like writing
a book report when I was a kid versus my
kids having to write a book report, and how easy
it is with the Internet. Do you think the but
that ease the Internet essentially making information accessible to all instantaneously,
(10:17):
does that make it more difficult to be a value
investor these days?
Speaker 3 (10:21):
That's a really interesting question. I like that question. In
some ways yes. In some ways yes, because in the
in the old days, you had to be an analyst
to go look and find these companies and get the
research reports, and you know, you'd have to get the
animal reports. You just couldn't get on the internet and
(10:42):
click away and pull up an SEC ten K or
something like that in ten seconds. Or you know, you
can go shopping for companies and you could read about
ten companies tonight if you wanted to. He had to
find the companies, and then he had to get the reports,
and then he'd have to read them, and then he
(11:03):
had to figure out what it was worth. Now, back
in his day, they had Moody's, which was Moodies developed
the investment manuals, mostly for bonds, because a whole lot
of bund understand, the bond business was enormous and always
has been enormous, and you would look for he would
thumb through the Moody's Investment Manual and he once said,
(11:25):
they said, how did you get so knowledgeable? He said,
you get the Moody's Investment Manual, which is about, you know,
maybe twenty five hundred pages long, or you know, there's
multiple ones of them. And he says, you start at
A and you go all the way to Z and
you just keep reading.
Speaker 1 (11:41):
And most people can't bear to read twenty five hundred
pages of this.
Speaker 3 (11:44):
Yeah, and that's what his obsession was. It's amazing what
he knows, and it's amazing the companies he knows. And
you could say to him you know some iron company
in Wisconsin, he know about it. Pain company that was
publicly traded in Chicago, he know about it. And it's
(12:06):
amazing what he knows and remembers. Yeah, he's got a
phenomenal memory too. He's a really, really, really bright guy
on top of it.
Speaker 2 (12:14):
Yeah, you had to be an incredible analyst to kind
of find that edge, and so it takes a whole
lot of work. But do you think that there's a
difference between Warren's pursuits and some of that natural talent
that he had as opposed to what most normal folks
should be doing when it comes to their investments, Like
this makes me think of when he's just like, yeah,
(12:35):
you know, for most folks out there, they should be
investing in the S and P five hundred VU specifically,
And that one's always stuck with me ever since I
read that quote. Then this is years ago. Do you
think a lot of folks should they be taking that path?
Speaker 3 (12:48):
Right?
Speaker 2 (12:48):
Should they be doing as Warren says, not necessarily as
he does, I would.
Speaker 3 (12:52):
Say yes, for most people. Yeah, it's unless you want
to go into the world to be an analyst. And
there's still wonderful there are wonderful events that happen. Warren
Buffett is a man waiting for something bad to happen,
and he's very patient about it. He doesn't have to
predict when it happens. Like a black Swan event, you
(13:15):
don't have to predict it. You just have to know
some day it's going to show up. And he's right
about that. It shows up and when it beats security
prices down. He's in there looking at what is a
bargain buy and not always so much a bargain but
a fair buy, because there are wonderful companies that never
become bargain buys, but they do often become fair buys,
(13:39):
and through like the pandemic, created buys two thousand and
eight created a ton of them. And you know it's
open season when that happens for him because he comes
into it with a lot of cash.
Speaker 1 (13:52):
You could maybe even classify it like some of his
Apple buys in that fair price. It's not like this
bargain basement deal, right, But he kept investing in Apple
even though Apple was the most valuable company in the world,
because he thought it was still a fair price.
Speaker 3 (14:06):
Correct and it was a fair price.
Speaker 1 (14:07):
What about like where market evaluations are right now, David, Like,
there are a lot of banks out there, investment banks
are saying, oh, the market overheated, even some of the
vanguards of this world thing. When you're thinking about, you know,
expectations for returns over the coming decade, don't get your
hopes up, Like, how does he think about investing given
(14:28):
kind of specific market conditions.
Speaker 3 (14:30):
Well, this market is high, and you're looking for a
quality company at a fair price. And in this market
you're not going to find a quality company at a
fair price. But something weird might show up. And this
kind of market in a down market is much easier
to find it. But things do show up because companies
(14:52):
individually have problems and odd things happen, and it creates opportunity.
It's just not as much opportunity as like in a
pandemic or a two thousand and eight kind of situation.
I have to take you back in time for a minute.
In the late sixties, the market was roaring like this
(15:14):
one was, and Warren woke up one day. He had
a hedge fund, and he woke up one day and
he said, I can't find anything to buy. And he
told his investors, I don't want to go to a
different strategy, and I'm just going to quit. And he
folded up his hedge fund and took his money and
(15:37):
he sat on it and as he said, I sat
on it for years, and you know, this is the
late sixties. And he sat on it until I think
it was seventy three seventy four, and there was suddenly
a market crash and he said, you know, I woke
up and there I was. You know, I woke up.
It was like I was an over sex man who
woke up in the middle of a harem. And he said,
(15:58):
everything was selling dirt and I had all this cash.
And Charlie Munger, who had a hedge fund during that period,
lost his investors half their money in the seventy three
seventy four crash. He regained it over the next three
or four years, but as he said, it was like
the most horrible woman in his life. Where Warren walked
(16:19):
into seventy three seventy four loaded with cash, today Berkshire's
loaded with cash, which tells you Warren thinks that somewhere
and then not too distant future, there's going to be
some kind of correction on the downside. Dramatic and it
will be an opportunity for him to buy.
Speaker 2 (16:37):
And that makes sense, right if you are a hedge
fund manager. For most folks listening who are just looking
to dollar cost average into their fore one case, sure,
I mean we say to not time the market, you know,
so like on one hand, you've got Warren who's always
waiting for an opportunity to you know, to snatch up
the next deal. And then on the other hand, it's
just like, hey, just keep investing no matter what, just
(17:00):
keep buying. Is there any overlap there or do you
feel that these two sort of schools of thought when
it comes to the average investor as opposed to like
the greatest investor of all time? Are those mutually exclusive in.
Speaker 3 (17:11):
Some ways yes, in some ways no. And I think
we talked about this. This is in the book. You
would sit on your cash and then buy the S
and P five hundred and in a down market and
not go in and like, you know, buy an index
fund in a down market as opposed to averaging it
in all the time. So there would be periods you'd
(17:31):
be sitting on cash in periods you would be buying.
The problem with that analysis is that when things start
going down, people freak out, and they freak out, and
even though they're sitting on a lot of cash, they
hoard it. And my own personal solution to that is
is that I just make myself allocate. And it goes down,
(17:53):
I allocate twenty percent in. It goes down again, I
allocate twenty percent in. And if it starts going up
and I've only gotten forty percent of the market, it
still turns out well. And so I work it like that.
So you you don't get in the market goes down
and you get in, and let's say you put all
your money in, and then it keeps going down, you know,
(18:15):
then you go throw up your lunch. You know, you
think in those terms and stockpile your cash. And when
things go bad, and things do go bad, not almost
on a regular basis, frankly, then you go looking for
things to buy. You know, I look for companies, But
(18:36):
you could just put your money in this and P
five hundred. I have a friend who's done really, really
well doing that over the years. He hoards up on
cash and things go to hell, he just goes in
and buys he has and P. Five hundred buys an
index fund and he's become fairly rich. I mean rich
and in the context of investment rich, which is, you know,
(18:57):
tens of millions of dollars.
Speaker 1 (18:58):
So, yeah, what do you think, David, from a perspective
of what it takes to become wealthy? Some people would say, Oh,
I wasn't born on third base. I don't have like
tens of thousands much less. You know, maybe I've only
got a few thousand dollars a year that I can
be investing. And Warren Buffett, it seems like he doesn't
think you need tons of money in order to build
(19:20):
wealth in this country. Do you agree with him?
Speaker 3 (19:22):
Yeah? Completely. I started with nothing, and I started with
nothing and got something and then invested in and for
many years the main source of income was investing. And
I live frugally like he did. I mean, he was
(19:43):
a multimillionaire driving around in a Volkswagen bug You know
what that is? Oh? Yeah, okay, they're still cool.
Speaker 2 (19:49):
We grew up playing punch buggy David.
Speaker 3 (19:52):
Okay, And he still lives in the same house he
bought when he came back from New York City. But
you go into the early numbers on Warren Buffett and
you're not talking a millionaire. You're talking about a guy
with you know, like fifteen thousand dollars and twenty thousand
dollars and and things like that. And he started managing
(20:15):
people's money when he What happened is he got out
of business school. He came back to Omahaa Rasca, worked
as a stockbroker. Finally got kept writing Benjamin Graham saying,
you know, I'd like to come work for you, and
Ben kept saying no, no, no, no no, and Warren said, well,
I'll work for free. Da da da da da, And
finally Ben said, okay, you can come work for me.
(20:37):
And two years after Warren went to work for him,
Ben decided to retire. But he started with a small
amount of money and he just kept growing it. And
that's how I did it. And then he started managing
people's money. And that's like the magic formula if we're
getting super rich, is managing other people's money. But you
(20:58):
can make yourself a millionaire over time. And you're not
going to do it overnight, but you can easily do it. Yeah.
Speaker 2 (21:04):
Okay, So, speaking of Warren Buffett living in the same house,
we've got more to get to. We're actually we might
even be able to talk something about crypto, talk about
a little more about McDonald's as well. We've got more
to talk to with David Clark about Warren Buffets.
Speaker 1 (21:17):
We'll get to all that right after this. All right,
we're back from the break. We're still talking with David Clark.
We're talking about Warren Buffett and the newly updated The
Tao of Warren Buffett book.
Speaker 3 (21:35):
I want to talk.
Speaker 1 (21:36):
More, dig in a little bit more on Warren's frugality, David,
And I think that is kind of People think of
it as quirky, but it really is quirky. I guess
when you think of somebody with that amount of money
being as frugal as Warren Buffett, is the fact that
he pinches pennies when those pennies are essentially insignificant, like
(21:57):
he famously eats at McDonald's mornings. He seems frugal to
the extreme right given his net worth, but he also
encourages people to enjoy their money. So how what would
you say like his ethosubfrugality.
Speaker 3 (22:10):
Is having witnessed it over the years. In the early days,
he was a big believer of compounding interest and Mary
has this great story where he's in an elevator and
he sees a penny on the floor and he picks
it up and he goes the beginning of my next million.
The feudality he believed strongly in that. He his wife
(22:34):
went and bought a new carpet once and he came
back and it was home, and he goes, you have
no idea how much money I won't make because you
bought carpet. And I mean, it was that obsessed. And
he saw everything in terms of compounding. And if you
take a penny and you double it like thirty two times,
(22:55):
you know, you keep doubling it over and over and over.
You know, it ends up a fabulous sum of money.
And that's how he saw it. He just saw it
in that context. He didn't see it as today. He
saw it as you know, twenty thirty years down the line.
And for that reason, he was very, very cheap and
very tight with his money. And he lived and he
(23:20):
lived in Omaha, which was fairly inexpensive to live, and
he lived in what was I mean, he was worth
forty million dollars and he's living in basically it would
be considered an upper middle class neighborhood. Our middle class neighborhood.
To this day he lives in a house like that.
Speaker 2 (23:38):
So as I hear you say that, like, on one hand,
you can think, oh, it sounds like he's incredibly content
with where he is. But what I hear you saying
more is that it's less of like contentedness, and perhaps
it's more, like you said, more of like that cheapskate mentality,
where he's looking ahead to the future and knowing what
that could turn into, and therefore he's sacrificing in the
(24:00):
here and now. So if you disagree with that, let
me know. But that's what I'm hearing you say. But
as he has gotten older, has he kind of come
to terms with that where you're forsaking the present for
the future. But I think as you get a little
bit older, I'm curious if that sort of changed his
tune a little bit.
Speaker 3 (24:19):
I think it did change his tune, and it shows
up in some of the things he says, and he
says them at the annual meeting. He says things like,
being frugal is smart when you're young, but you shouldn't
deny your family, you know, fun things like take them
to Disneyland and education and things like that. Which he
never denied his kids anything that they needed in the
(24:42):
way of that. However, he didn't spoil any of them,
and they all grew up, you know, wanting things that
they didn't get. And however, when it came to education
or something like that, he wouldn't hesitate to spend money.
But no, he was tight and tight for a long
long time and it just went on and on and
(25:02):
on with him.
Speaker 1 (25:03):
You've used the word obsessed or obsession a lot, yeah,
And I think like you're really pointing kind of at
the root of something with Warren, is this kind of
obsession with compounding and that that maybe kind of took
over his brain in a certain way, and then it
became the lenses in which he saw everything through. And
it seems like too, though, that he loves his work
(25:26):
right so that even having a certain amount of money
where he never had to worry about money ever again
for him, for his progeny, he's still like, hasn't really
changed his work ethic or his desire to kind of
be at the office most days. Is so, is that
just because he's in love with the idea of what
(25:48):
he does and with what his pursuits.
Speaker 3 (25:51):
He talks about that he talks about being in love
with what he does, and he shows that he's in
love with what he does. Well, let me in on
something else. People say he doesn't spend his money, But
here's a guy who's I see him mostly as a
collector of great businesses, and he does never hesitates to
write a check for billions of dollars. And in the
(26:13):
early days, he went hesitate to write a check for
millions of dollars if he was buying a business. If
it came to buying carpet for the house, that was
another story I mean, and it's separated in his head
like that. I see him mostly as a collector and
a man who's out collecting things, and if he sees
(26:34):
value in it, he'll spend the money, and if it
becomes overvalued, he'll sell it and go on and buy
something else. He's very he doesn't hesitate to sell either
if he thinks it's overvalued or he thinks that he
could put the money to use somewhere else. He doesn't
fall in love with something, he'll sell it, and that's
an interesting aspect of his life. But he never hesitates
(26:58):
to spend money if he's getting a good deal on
a business. He collects businesses. It's like a guy who
collects art our guy who clucts cars or something like that.
But it's completely different.
Speaker 2 (27:10):
David, what is Warren's take on financial advisors? We're going
to take more of a turn towards personal finance. Do
you think that most folks need outside advice outside of
maybe the bits of wisdom that they're able to read
from Warren Buffett?
Speaker 3 (27:24):
Most financial advisors are highly overrated, most of them. I
don't know how they're paid anymore. They take a percentage
of what you have, and then they do things like suggest, well,
we're going to split your portfolio. It's, you know, a
third in bonds and the rest in stocks. And now
we've got an idea of two years later, they're saying
(27:46):
we're going to put it all in bonds and then
in stocks and things like that, and Warren never liked them.
I don't like them. I think you're better off following
his strategy of investing in it an index fund and
a down market as opposed to using one.
Speaker 1 (28:03):
Yeah.
Speaker 3 (28:03):
I mean, if you have no idea what you're doing,
that would be the best strategy for you. And if
you don't know how to do that, then you maybe
you should have an investment advisor. Like if you came
into a lot of money and you seriously had no
interest in it at all, then you would be better
off with a financial advisor.
Speaker 1 (28:20):
Talk to us about how Warren's take on cryptocurrency has
it evolved at all, because, like especially in the early days,
he didn't mince words. His late partner Charlie Munger also
didn't really have anything good to say about cryptocurrency. I
think he called it rat poison squared, so like immediate death.
I guess is what cryptocurrency is up from their point
(28:41):
of view? Is that still how Warren feels? And I
guess the meme coin space too, has gotten kind of
out of control in terms of how much money has
gone in there and how much money just normal average
investors trading from the comfort of their home have been
able to lose in that space through a lot of
kind of grift and Scamminess what's his take on that
space right now?
Speaker 3 (29:02):
His take on cryptocurrency is that it doesn't make any money.
It's not a business. It's like in many ways, it's
kind of like cash. It's not a business. The problem
with cryptocurrency. You can't even put it in a bank
and ear an interest on it, so it's it doesn't
make any money. However, it is a medium of exchange,
(29:25):
and it's largely a medium medium of exchange and sort
of nefarious world. You know, it's kind of the underworld
medium of exchange, and crypto converts into dollars. There's an
argument for crypto that, you know, it's not like the
(29:47):
Federal Reserve Bank can't print more crypto and inflate it.
But nobody really understands. Nobody really knows how much crypto
there is, and nobody really understands how it's made. People
do understand, but the public doesn't. People speculate on it.
Now I just said the word speculation. So now you're
(30:08):
speculating on something that doesn't have any true inherent value,
and so the price goes up, the price goes down,
and that the gambling aspect of it creates a problem
of it someday going to zero and speculative and the
zero part is what Warren never liked about those kinds
of things.
Speaker 2 (30:25):
Well, I mean, I think that gambling aspect of it,
that's what worries me the most when it comes to
how it is a lot of folks are investing these days,
especially folks maybe got into it four years ago when
all of a sudden they found themselves with more cash
on hand, whether it's because of stimulus checks or whether
it's because of the fact that they weren't going out
and blowing money at restaurants and bars anymore. And I
(30:46):
think for I can see an argument going back to
financial advisors. I think that's some of the value that
some of those advisors are able to provide is the
fact that, hey, there's some folks out there that don't
know one in from the other, and for them to
have somebody to essentially kind of coach them through making
worse decisions. It's less about the I guess maybe the
(31:07):
optimization of their investing dollars as opposed to keeping them
from losing it completely.
Speaker 1 (31:13):
Does that make sense and probably better than getting their
investing advice on TikTok, which is where some people get
it these days.
Speaker 3 (31:18):
Well, that's a really good point, and I like that.
Thank you for sharing that with me. I like that
a lot. Yeah, you're right, And for those people, an
investment advisor would add value to their lives and stop
them from doing from something highly speculative. Like again, in speculation,
you can make an enormous amount of money very quickly,
but you can also lose an enormous amount of money
very quickly, and that's a problem. And Warren wasn't about
(31:43):
getting rich over night. He was about getting crazy rich
over a long period of time.
Speaker 1 (31:48):
Yeah, crazy rich over a long period of time. Yeah,
that would if you were looking for an alternative title
for the biography, that would be a good one too.
Speaker 3 (31:56):
I like that. Yeah, thank you, that's good. See, I'm
getting things out of this.
Speaker 2 (32:00):
This isn't a total waste of time, right, No, No, you're.
Speaker 3 (32:04):
Giving me ideas. I like it.
Speaker 1 (32:05):
It's fun talk to us about how Warren thinks about inflation,
because that's I think the normal average American in these
days would be like, man, inflation sucks. My groceries cost more.
Look at the cost of eggs and housing and insurance,
and it certainly feels like it's this tax on the
average person. But Warren would also say that there are
(32:25):
certain upsides to inflation too, right.
Speaker 3 (32:28):
Well, the upside to inflation is that raises asset prices,
including stocks, and it's sort of like built in we
live in an economy that is basically perpetually in a
state of inflation, and it's built into the federal reserves
projections they want, like I don't know, what is it,
(32:48):
two percent inflation a year. And the reason they want
inflation is because the opposite, deflation destroys everything. You understand
that the banks are highly highly leveraged businesses and they
only have about ten percent equity behind them, and if
you had fifteen percent deflation, you would deflate their asset
(33:09):
values by fifteen percent. Technically, you would wipe out all
the equity value in a bank.
Speaker 1 (33:14):
Like the scene from It's a Wonderful Life, Right, Everybody's
going to get their money, and they don't have all the.
Speaker 3 (33:19):
Money, yes, exactly, and that is because the bank has
loaned out all the money, but now it's not worth
as much. So that kind of thing. So it's built
in inflation wise, and that lists security prices over time,
and it's you know, it doesn't happen overnight, but it
perpetual inflation for security prices, which helps your index fund
(33:42):
constantly rise over a long period of time. Understand there's
going to be gyrations in there, but it's kind of
built into our economy that investment stock prices will rise
over a long period of time as a whole. That's
not individual but as a whole.
Speaker 1 (34:01):
Yes, And it's actually beneficial to people with fixed rate
debt too. Right, Like I'm thinking about my three percent mortgage.
It only looks better and better and better as inflation
continues to continues the.
Speaker 3 (34:11):
Sort definitely, because you're paying for it and inflated dollars
down the road. Yeah, my parents built a house in
the sixties. It costs thirty four thousand dollars to build.
I still own the same house and today it's worth
close to a million dollars. And you know, but it's
(34:32):
just the same house that they paid for thirty four thousand.
I said to the guy I was having some work done,
and I said, let's just reside the whole thing. And
he looked at me and he said, David's cedar. And
I said so, And he goes, it's going to cost
thirty four thousand thirty. Who cost you forty thousand dollars
to reside your house today? And I said, the house
(34:52):
only costs thirty four thousand. He said, well that was
back in the sixties. Well, that's inflation it's the same. Hell,
it's worth more money, but it really it's just the
same house.
Speaker 1 (35:04):
I'll looking back at those Sears Roebucks catalogs of those
like beautiful homes that they shipped your door for like
so like so little money in the nineteen twenties. Sure,
and they were gorgeous. And yeah, you can't get kick
get anything like that today for that price.
Speaker 3 (35:17):
Right, you're right. Do you remember when McDonald's hamburgers were
fifteen cents?
Speaker 1 (35:20):
I remember on like Tuesday nights they have twenty nine
cent Hamburgers when I was a kid.
Speaker 3 (35:24):
Yeah, I remember when they're fifteen and fries were a
dime and a coke was a dime. Right, But you know,
you make more money today, and but you're paying off
your mortgage on a value that was you know, five, ten,
fifteen years ago. Yeah, yeah, your three percent mortgage is great.
Speaker 1 (35:44):
Holding on to that forever. We get just a few
more questions to get to with you, David. We'll get
to those right after this. We're back for the break.
We're still talking with David Clark talking about one of
our heroes, madd and I's mutual heroes in the Finance Base,
Warren Buffett, and David has just updated the book The
(36:06):
Tao of Warren Buffett, which is definitely worth a read,
and we really like I guess I'm David. I'm curious
to know why you think Warren remains so culturally relevant.
We got some backyard chickens recently and my kids got
to name one, my wife got to name one, and
I got to name one. I named mine Warren. That's
how much I like Warren Buffett. So why do you
(36:27):
think he has become and then remained such an important
cultural figure as someone who's like just kind of a
good investor. What defines or what's the appeal?
Speaker 3 (36:38):
Well, let's point something out. He never ever made anything, Like,
He's not Elon Musk. He didn't invent anything. He didn't
invent an Amazon. All he did was allocate money, buy
and sell things, and so that's a very unique position.
The other thing about him is he's really really funny,
(36:58):
really entertaining and very charming to listen to. And he
has been in his annual meetings have gotten bigger and
bigger and bigger. And I mean there were at times
in the early days there was like twenty people showed
up and then there were fifty, that it was one hundred,
that it was two hundred, there is five hundred. Then
it got, you know, a thousand. They kept going to
(37:20):
bigger and bigger venues, and people showed up to listen
to his wisdom. And he was entertaining when he was talking,
and he made a lot of sense to people. And
then he entered into a sort of the international world.
And this book that we just wrote, the newtw of
(37:42):
Warren Buffett, It's been translated into fourteen languages already. It's
in Chinese, it's in Japanese, it's Entai, it's all over
the world. And he is a cultural he's a worldwide
cultural phenomenon. Why. I think it's his folksy way of
talking with people, and he's funny and people like it,
(38:06):
and he talks about things. They're one thing they're interested
in more than anything else in which is money, and
and he makes sense and he got super super super
rich doing it.
Speaker 1 (38:18):
I think authenticity is part of the appeal to.
Speaker 3 (38:20):
Yeah, I like that authenticity. Yeah, it's very authentic, like
what you see is what you get. Yeah, what you
see is what you get. And Charlie, remember, was the
same way Charlie was caustic, and I mean that's to
put him mobly, and that had its own humor to it. Yeah.
Speaker 2 (38:38):
I do wonder how Warren's folks see aphorisms translate stumanderin
and like if there's something lost in translation there. But
speaking of the book, there is one of the one
of the notes of wisdom was about writing your own
obituary and then trying to live up to it right
where you're setting those sort of end of life goals.
(38:58):
Do you feel that war Jarn has done a good
job in that regard.
Speaker 3 (39:04):
Yeah, I think he's done a really brilliant job at it.
As he's gotten older, he's gotten more reflective. But he's
always embraced the world with a kind heart, and he
has always been generous in giving away his money. And
he didn't give his way as much as in the
early days, but he gave money away locally, and he
(39:26):
gave money away. It's remarkable how much money he's given
away and how much money he's given away and not
had his name put on the building, and anonymously so
to speak. I mean, the university has got things in it,
and I know he paid for them, but his name's
not on the building, And there's a scholarship fund in
(39:49):
town in Omaha for any indigent person who wants to
go to college that he pays for. But nobody ever
writes about it. It's just the university dolls out the
and he pays for it. Yeah, he's extremely generous, and
as he's gotten older, even more so.
Speaker 1 (40:06):
When when you think about people in our country who
have been highly successful, sure made billions and billions of dollars,
the typical route for most of them has been to
give away the vast majority of that money as they
get older and especially when they pass away. It's like, man,
ninety nine percent of my money is going to such
and such organization, whether it's like you know, Bill Gates's arm,
(40:30):
philanthropic arm that oversees, you know, the disbursements of money
to really need the organizations across the world. How does
Warren think about this vast sum of wealth that he's
built up and what kind of good it can do
for not even for his legacy, because it sounds like
he doesn't care about that as much, but for the
good it can do when he's gone.
Speaker 3 (40:51):
He's always said that he didn't like thinking about it,
and so he's always left it others to others to
think about how to allocate it, and he's allocated it
to his three children at the end of his life,
and it's no longer going to Bill Gates. For a
while it was going to Bill Gates. But his three
kids he's been giving money to allocate over the years
(41:12):
and they've done a brilliant job with it. All three
of them are really great kids. You know, they're older
people now, but they're you know, they're all three of
them are hard working. All three of them are real smart,
and all three of them have a really kind heart.
So you know, they and they they have a spect
(41:33):
they cross the spectrum to one of them is extremely
liberal and one of them is very conservative. So they
they'll do a good job with giving his money away
and it will benefit society as a whole. But it's this,
it's his children and the kindness in their heart that
will dictate where the money will go.
Speaker 2 (41:54):
That's cool, very cool. Well, David Clark, we really appreciate
you taking the time to speak with us today. We'll
definitely make sure to link to the book that you
and Mary Buffett have co authored together. But thanks again
for taking the time.
Speaker 3 (42:07):
Oh, thank you for having me. It was a real pleasure.
I enjoyed some. I enjoyed the conversation and your ideas
are great. Thank you.
Speaker 2 (42:13):
Thanks David, take care all right? It almost kind of
felt like we were talking speaking to the man himself,
Warren Buffett. Did it Did it feel feel that.
Speaker 3 (42:20):
Way to you?
Speaker 1 (42:21):
Mean, you've been rubbing shoulders that long with him as
as David has with him and his family.
Speaker 2 (42:26):
He's there in Nebraska, he's he's at the epicenter.
Speaker 1 (42:28):
We were joking before we started recording that like, have
you have you ever did you ever think you would
know more about another individual human being than you know
about Warren? And he was like, yeah, it's pretty insane.
By the way, I cannot wait to read the two
part biography on Warren and then the three part biography
on you, my friend.
Speaker 2 (42:44):
Oh sure, sure. What's your big takeaway from our conversation
with David about Warren Buffett? So?
Speaker 1 (42:49):
I loved when he was talking about Warren's depression roots
and and when he talked about kind of.
Speaker 2 (42:54):
The macromitive years. Yeah, the macro.
Speaker 1 (42:57):
Events that were influencing who he became. I think the
true is for all of us, there are either macro
or micro events that influence significantly who we become. And
I talk about this in my own personal journey with
money about how my parents' money struggles when I was
a kid. I was just at this particular age where
the impression was strong, right when my parents were having issues.
(43:18):
And I do think why I do what I do
has a lot to do with kind of that history
and my experience there. And so it's a good idea
for all of us to kind of maybe take a
look back and say, well, what are those things that
might have influenced who I am and why I think
about money the way I do, Because some of it
might be good, some of it might have actually led
(43:38):
to good money habits, but it might actually be bad
in some ways. And over time, hopefully we can tease
some of those those things out so that we can
have a healthy relationship to our money. I don't know,
And just that struck me too. As he was talking
about that, I was like, oh, man, I feel like
I have struck a chord.
Speaker 3 (43:55):
Yeah.
Speaker 1 (43:55):
I didn't go through the depression, but I went through
like a micro familial version of.
Speaker 2 (43:59):
It, YR own version of it. For sure. My big
takeaway is going to be the fact that David kept
coming back to the fact that Warren is just this
brilliant investor. And it's true, but if you want to
outperform the market, you have to be an analyst essentially,
like you have to be willing to dig in. And
we do know some folks who do that and have
found success. But otherwise, most people who are listening to this,
(44:21):
they've got another job, they've got a life, they've got kids,
they've got other things that they are interested in. Even
if you do have the time to and the skill
and knowledge to be able to dive into it. And
so if that is you and you still want to
invest your money, will index it an S and P
five hundred fund the ability to overtime a mass large
amounts of wealth. He mentioned a friend of his and
(44:41):
all he does is invest in the S and P
five hundred and he's got tens of millions of dollars.
That's more than me, Joel. So I'm going to keep
at it by come on, please, But yeah, I want
that to be the biggest take away at least that
you hear from me, because I think a lot of
times you kind of get carried away with this notion
of it's an overly romanticized sort of idea, right of
(45:02):
like pouring over books, you're diving into the financials. You're
going to find the next up and coming business to
invest in, and you're going to ten x, one hundred
x your money just in a few short years. As
folks are trying to get rich quick, but most folks
aren't going to be able to.
Speaker 3 (45:14):
Pull that out.
Speaker 1 (45:14):
I do think this conversation revealed that Warren has like
this secret combination that's really hard to come by. It's
like the depression roots, the superior intellect, the hard work ethic,
the boring twenty five hundred page analysis of bonds. Yeah,
nobody in their right mind wants to read, but he
finds it fascinating. No wonder he's such an incredible investor,
and most of us just don't have that inclination or
(45:36):
the intelligence level myself included, to invest in the way
Warren has. So maybe we should be like, Wow, amazing
that he can do it, but I'm probably not going
to replicate it.
Speaker 2 (45:45):
That's right. The beer that you and I enjoyed it
during today's episode is called Space Broccoli, which is by
Other Half. Another half has to make more of my
favorite beers than any other brewery out there. Like every
time I drink an IPA by them, it just tastes
like the most perfect.
Speaker 1 (46:01):
I would love to try them side by side too,
because I just always think of them in the same vein.
They all taste similar to me, but they're all fantastic,
so good.
Speaker 2 (46:08):
This one so space broccoli. They've got a regular broccoli,
but I'm pretty sure this is the double dry hot version. Yeah,
of that IPA. But which also makes me think of
a local brewery, space Lettuce wait by Monday Night, which
I wonder which one came first, Space Lettuce or Space Bccoli.
It's a good a question makes me think that maybe
Monday Night did some ripping off one of the most
(46:28):
delicious beers in the country. But yeah, did you dig it?
Speaker 1 (46:31):
I loved it, and I only wish this coul account
as my vegetable serving for the day. Sadly, no, I'm
gonna have so so good veggies for dinner tonight. But yeah,
I mean, this is basically IPA perfection. Other half continues
to just I mean rocket every time they make beers so.
Speaker 2 (46:48):
Super dry hopped a war that you use to describe it.
Before we started recording, was like chalky, and it does
have like not chalky as in not bad powdery, but
like almost like this dryness that you get when it's
dry hop like this, there's a sharpness.
Speaker 1 (47:02):
Like the hops are sticking to the sides of your mouth.
Speaker 2 (47:04):
It is so freaking good. It's so hard to describe.
But of course I'm glad that you and I got
to share one of these during our episode today while
we talked with David Clark, and we'll make sure to
link to his book as well, The New Tale of
Warren Buffett, that was co authored of course by him,
but then also Mary Buffett, daughter in law of Warren Buffett.
Speaker 1 (47:23):
Yep, all right, Matt, we'll link to that book. We'll
put up in the show notes on our website at
howtomoney dot com. That's gonna do it for this episode.
Until next time. Best Friends Out, Best Friends Out,
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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