The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment

by Guy Spier

We like to think that we change our environment, but the truth is that it changes us. So we have to be extraordinarily careful to choose the right environment—to work with, and even socialize with, the right people. Ideally, we should stick close to people who are better than us so that we can become more like them.

that I didn’t understand nearly enough about Farmer Mac to justify owning it.

he spoke about the way that “extra-vivid evidence” distorts our thinking.

academic who had written a book entitled Influence: The Psychology of Persuasion. Munger said Cialdini’s book had “filled in a lot of holes” in his own “crude system” of psychology.

There was something magical about this process of getting outside myself and focusing on other people.

Lowenstein biography and by studying Berkshire’s annual “Letters to Shareholders.”

In a sense, this is a value investing approach to life: pick up something cheap that may one day prove to be precious.

Power vs. Force: The Hidden Determinants of Human Behavior. The author, David Hawkins, explores the theory that we have a greater capacity to influence others when we’re an authentic version of ourselves since this truthfulness evokes a deep psychological response in others.

Mohnish, who referred to this as “cloning,” sometimes jokes that he’s never had an original idea in his life, but this doesn’t bother him in the least.

Many of the best ideas are already out there for us to see; we just have to clone them.

some businesses succeed because they get one thing right, but most succeed because they get a lot of small things right.

But when you begin to change yourself internally, the world around you responds.

experience, when your consciousness or mental attitude shifts, remarkable things begin to happen. That shift is the ultimate business tool and life tool.

Warren, who had brought gifts for the two girls, beamed with pleasure and goodwill—more like an amiable grandfather than one of the world’s richest men and the greatest investor of all time.

“People will always stop you doing the right thing if it’s unconventional.”

“It’s very important always to live your life by an inner scorecard, not an outer scorecard,”

“Would you prefer to be considered the best lover in the world and know privately that you’re the worst—or would you prefer to know privately that you’re the best lover in the world, but be considered the worst?”

He sees no reason to compromise his standards or violate his beliefs.

His strength comes in part from this rock-solid sense of who he really is and how he wants to live.

he makes no compromises in terms of his own happiness—even in something as small and insignificant as his gleeful enjoyment of the restaurant’s desserts.

“Charlie and I always knew we would become very wealthy,” he told us, “but we weren’t in a hurry.”

Buffett doesn’t hesitate to disengage himself from the world in order to avoid distractions that might impair his judgment. He

biographer Alice Schroeder has

This is an important benefit of remaining in the right intellectual environment:

temperament is more important than IQ when it comes to investing.

studying heroes of mine who had successfully handled adversity, then imagining that they were by my side so that I could model their attitudes and behavior.

Marcus Aurelius. At night, I read excerpts from his Meditations. He wrote of the need to welcome adversity with gratitude as an opportunity to prove one’s courage, fortitude, and resilience.

investment success isn’t just a matter of identifying great stock ideas. As I had learned through painful experience, I also had to create the best possible environment for myself—physically, intellectually, and emotionally—so that I could operate more effectively and make myself less vulnerable to the sort of negative influences I’d encountered during the financial crisis.

Kahneman, Dan Ariely, Jason Zweig, Joseph LeDoux, and Antonio Damasio. Reading works by these and other experts on behavioral

complexities of our decision-making processes. For example, the

neurologist Benjamin Li...

Santa Fe Institute, a transdisciplinary research community. I knew that Bill Miller, a remarkably smart fund manager at Legg Mason, was

I read Journey to the Ants by Bert Hölldobler and Edward O. Wilson.

These studies deepened my sense that it’s helpful to think of the economy as an evolving and infinitely complex biological ecosystem.

Companies, like ant species, must adopt strategies that enable them to thrive or they will be at risk of extinction.

Danish theoretical physicist Per Bak coauthored a classic study of sandpiles that

our brains are hopelessly limited in the face of this overwhelming complexity.

knowledge, including seminal works by Ben Graham and David Dodd, Marty Whitman, John Mihaljevic, Seth Klarman, and Joel Greenblatt.

could design an array of practical work-arounds based on my awareness of the minefield within my mind.

With this in mind, I began to realize just how critical it is for investors

to structure their environment to counter their mental weaknesses, idiosyncrasies, and irrational tendencies.

psychologist Roy Baumeister

his lab discovered that even the simple act of resisting chocolate chip cookies left people with less willpower to perform subsequent tasks.

Richard Zeckhauser is a professor of political economy and a champion bridge player who chairs the Investment Decisions and Behavioral Finance Executive Program at Harvard.

chess champion, Edward Lasker,

who remarked, “When you see a good move, look for a better one.”

Chess highlights the need to keep searching for a better move even after the brain has latched onto that first idea. Playing chess also strengthens this particular mental muscle.

But these games also taught me a simpler truth: after so many years of taking life too seriously, I needed to adopt a more playful attitude. So instead of seeing everything—including my work—as a form of mortal combat, I began to approach it in a different spirit, as if it were a game.