Soler

In 2014 a manager from a small Milwaukee firm stood up to Coca Cola. Its new pay plan could hand executives stock worth tens of billions of dollars over the years ahead, paid for by shrinking every existing shareholder's slice. 83 percent of shareholders voted yes anyway. Four years earlier he had stood in front of a class and explained exactly how he thinks about who a company really works for. For free. No bank and no fund has ever made you watch this recording. His name is David Winters. He learned the business under Michael Price at Mutual Series and later ran his own fund, Wintergreen. His fight with Coca-Cola went public, and even Warren Buffett, whose Berkshire owned about 9 percent of the company, refused to vote for the plan and said Berkshire disapproved of it. The lecture is not a stock tip. It is about owning a business like an owner: reading what management pays itself, and asking whether the company is run for its shareholders or for the people running it. The uncomfortable part is who pays. Stock handed to executives looks free on the income statement. It is not. It is paid by every shareholder, including the pension and index funds holding your money, which mostly vote yes without a fight. The people managing your money vote your shares every spring. Ask them how they voted.

$10,000 compounding at 14 percent a year for 30 years becomes about $550,000. At 5 percent it becomes about $47,000. One fund manager in Hong Kong delivered the first number for three decades, while the market he invested in delivered something close to the second. In 2015 he stood in front of a class and explained exactly how. For free. No bank and no fund has ever made you watch this recording. His name is Richard Lawrence. He started Overlook in Hong Kong in 1991 and compounded around 14 percent a year for 30 years, beating his benchmark by roughly 9 points a year. Then he did something almost nobody in the industry does. He capped how much new money he would take, holding growth to about 8 or 9 percent a year, and turned the rest away. The uncomfortable part is why that matters. Most funds are paid a percentage of what they manage, so the business goal is to get bigger. Bigger funds are harder to run well. He chose a smaller paycheck to protect the returns of the people already in. The lecture is not a stock tip. It is a model: buy great businesses at fair prices, hold them, and never let size or fees push you into worse decisions. The industry grows its assets because that grows its fees. He grew his slowly on purpose, and his clients kept the difference. The people managing your money celebrate when their fund gets bigger. Ask them who that actually helps.

One Morningstar study found that in about half of the funds it tracked, the managers had not put a single dollar of their own money in. You pay their fees. They keep their savings somewhere else. One firm in Memphis turned the opposite into a rule. In 2005 its founder stood in front of a class and explained why. For free. No bank and no fund has ever made you watch this recording. His name is Mason Hawkins. He started Southeastern Asset Management in 1975, and in 1987 he launched the Longleaf Partners funds so his own people could invest right next to their clients. Then he made it a rule. Employees can own public stocks only through the firm's own funds. If the clients lose, the staff loses with them. The lecture is not a stock tip. It is one discipline. Work out what a business is really worth, and only buy when the price is far below that number, so the gap protects you when you are wrong. The uncomfortable part is the incentive. A manager with nothing in the fund gets paid whether you win or lose. A manager whose savings sit right next to yours thinks very differently about risk. The question costs nothing to ask, and almost nobody asks it. The people managing your money can quote you their fees to the decimal. Ask them how much of their own money is in the fund.

One man built a firm managing well over $100 billion by buying what everyone else was desperate to sell. Warren Buffett says that when this man's memos arrive, they are "the first thing I open and read." In 2013 he stood in front of a class and explained how he thinks. For free. No bank and no fund has ever made you watch this recording. His name is Howard Marks. In 1995 he walked out of a big firm that was not paying his team for the money they made and started Oaktree. Its distressed debt funds have earned up to about 19 percent a year after fees, buying the bonds of struggling companies when nobody else would touch them. The lecture is not a stock tip. It is about risk, and his definition is the opposite of the one you were taught. Risk is not a stock moving around. Risk is paying too much. When everyone feels safe, risk is at its highest. When everyone is afraid, it is at its lowest. The uncomfortable part is what that means for you. The moments that feel safest are the ones that hurt you, and the moments that feel terrifying are where the money is made. The industry sells you the feeling of safety. He has been giving his thinking away in free memos since 1990. The recording has sat online almost unwatched. The people managing your money read his memos. They just never made you watch the lecture.

In December 1973 a Canadian money manager boarded a flight from Toronto to Vancouver and read one chapter about Benjamin Graham. By the time he landed he had decided to change everything. The fund he took over two years later compounded 15.2 percent a year for 33 years. In 2005 he sat with a room of students and taught the whole method. For free. His name was Peter Cundill. He hunted companies trading for less than the assets they held, in countries most managers would not fly to. The line that became the title of the book about his life was simple: there is always something to do. No bank and no fund has ever made you watch this recording. The people managing your money have all heard of Graham. They just never made you watch the man who read one chapter on a plane and built a career on it.

A young man landed in Canada in 1972 with about $8 in his pocket and sold furnaces in winter and air conditioners in summer to pay for school. In 2008 his company made billions while some of the biggest banks in the world had to be rescued. In 2011 he stood in front of a class and explained how he thinks. For free. No bank and no fund has ever made you watch this recording. His name is Prem Watsa. He came from India, built Fairfax Financial from 1985, and grew its book value around 18 to 19 percent a year for decades. People call him the Warren Buffett of Canada, and he runs Fairfax much the way Buffett runs Berkshire. The part nobody talks about is his most famous bet. Years before 2008 he quietly bought protection against the exact companies he thought were overextended, mortgage lenders and bond insurers. For years it cost him money and made him look paranoid. When 2008 came, those swaps and hedges paid more than $2 billion, on top of a company already compounding its book value around 19 percent a year. The uncomfortable part is what that takes. He was willing to lose money for years on a bet that looked foolish, because the downside was small and the upside was enormous. Most managers cannot survive looking wrong for that long. He arrived with $8, spent decades compounding, and made one patient bet the market laughed at. Then he taught a room how he thinks. The recording has sat online for years, and most people have never watched it. The people managing your money call 2008 a surprise nobody could have seen. They just never made you watch the man who saw it.

Between 1997 and 1999 the S&P 500 more than doubled, while one manager's fund rose just 29 percent because he refused to buy the tech names everyone was chasing. 7 out of every 10 of his shareholders walked out, and his assets fell from about $6 billion to $2 billion. Years later he stood in front of a class and explained why he never gave in. For free. No bank and no fund has ever made you watch this recording. His name is Jean-Marie Eveillard. He ran the SoGen and later First Eagle global funds. In 1999, with him lagging a roaring market, his own parent company sold the business. When the dot com mania ended, his funds held up and the money came flooding back. Morningstar later gave him a lifetime achievement award. The lecture is not a stock tip. It is about the hardest thing in investing: looking stupid for three years in a row because you will not pay a crazy price. The uncomfortable part is what he says about his own industry. A manager who holds out usually gets fired long before he is proven right. So almost nobody holds out. The business rewards following the crowd, not being right. He lost 7 out of 10 clients for refusing to chase, and was proven right anyway. The recording has been public for years and almost nobody sits through it. The people managing your money watched him get punished for being right. They just never made you watch the lecture.

In 1939, as war broke out in Europe, a 26 year old borrowed $10,000 and bought 100 shares of every stock trading at $1 or less. There were 104 of them, and 34 were already insolvent. About four years later only 4 were worthless, and he had turned the $10,000 into about $40,000, four times the money. His grand niece stood in front of a class and walked through exactly how he did it. For free. No bank and no fund has ever made you watch this recording. His name was John Templeton. He grew up in small town Tennessee, went to Yale and then Oxford, and became one of the first Americans to buy stocks all over the world. In the 1960s he gave up his US citizenship, moved to the Bahamas, and ran money far from Wall Street on purpose, so the crowd could not get into his head. The lecture is given by Lauren Templeton, who runs money by his rules. It is not a stock tip. It is one rule taken seriously: buy at the point of maximum pessimism, when the news is worst and nobody wants what you are buying. The uncomfortable part is how it feels. His best trades all looked insane on the day he made them. Borrowing money to buy near worthless stocks at the start of a world war. The industry sells comfort. He bought what felt terrible. The man who bought 104 stocks nobody wanted is one of the most quoted investors who ever lived, and almost nobody has sat through the class explaining how. The people managing your money put his line about maximum pessimism in their brochures. They just never made you watch the lecture.

A book written in 1991 now sells for up to $2,000 a copy, because the author refused to ever reprint it. In 2009 he joined a value investing class by video and walked through how he actually thinks. For free. No bank and no fund has ever made you watch this recording. His name is Seth Klarman. He took over Baupost's $27 million in 1982 and compounded around 20 percent a year for the first two decades plus, one of the best records of his generation. He almost never speaks in public. He almost never does television. His letters to investors are guarded like state secrets. The book is called Margin of Safety. Its whole idea fits in one sentence: never pay a price that only works if everything goes right. Buy with a cushion so large that being wrong does not hurt you. The uncomfortable part is what he says about cash. He is willing to sit on huge piles of it for years, doing nothing, while everyone around him calls him a coward. The industry is paid to be fully invested at all times. He is paid to wait. People pay a small fortune online for his worn out book. The same ideas, in his own voice, are sitting in a free classroom recording most people have never watched. The people managing your money own a copy of that book. They just never made you watch the lecture.

Put $300 a month into a plain index fund from age 25 to 65 at 7 percent a year and you end with about $787,000. Start at 35 instead and you end with about $366,000. Ten years of waiting, only $36,000 less saved, and more than $420,000 gone. Same person, same paycheck, same fund. The only difference is how long the money was left alone to work. Most people never find out, because they spend their whole life on the weakest way to make money: selling hours. Money working for you is the second way, and the price of entry is not knowledge. It is stomach. Watching your account drop and doing nothing. One investor built his whole career on that stomach. Tom Russo bought Nestle in 1986 and Berkshire Hathaway in the 1980s and simply never sold. He oversees more than $8 billion today, and from 1990 to 2016 his firm compounded around 12 percent a year against 9 for the market. His idea has a name: the capacity to suffer. He only owns companies willing to take a hit to profits for years to build something bigger, and he is willing to sit through that pain right next to them. He stood in front of a class and explained exactly how he thinks. The lecture is free. The people managing your money earn more when you keep moving it. The fortune was always in leaving it alone.