Quote of the week:

“Study hard what interests you the most in the most undisciplined, irreverent and original manner possible.” — Richard Feynman

Companies that obsess over customers

In a recent episode of The Knowledge Project, Shane Parrish sits down with Tom Gayner, the longtime value investor and CEO of Markel Group, a public holding company. The conversation explores Tom’s approach to life and investing over a 40-year career: how he looks for quality companies, the lessons he learned from tech bubbles and financial meltdowns, and his nuanced thoughts on risk. In particular, I liked how Tom framed the importance of finding companies that treat all their stakeholders fairly—especially their customers. As Tom says, “You want companies that are doing things for their customers rather than to their customers.”

“And that’s what our business is; it’s cultivating relationships with customers, trying to do things for them to make their [lives] better. And if we made their [lives] better, they tend to pay us fairly. And we get to be creative. We get to feel like we added value, we get to learn stuff, we get to have fun, and we get to build these relationships that just make life fun. And to the extent it works, you keep doing more of it. And when you get just snookered, you stop.”


Multitasking is out; focus is in

One topic I feel compelled to return to fairly often is the idea of focus, largely because I believe its importance is growing in tandem with how noisy the world is becoming. This is true in both life and investing.  As Larry Jamieson writes recently, “the perceived risk with intense focus is that you might become blind to other compelling opportunities or you might miss large pitfalls before you’re in them (personal and professional). There’s no path without risk. Conversely, the danger of not focussing intensely is that you may end up doing many things foolishly and none well.” He continues: 

“The convexed nature of applied focus also explains why many of the great investors have concentrated portfolios. You can only really know enough about a relatively few situations to invest in them. Every additional name you add either to the portfolio or to the watchlist is more or less the giving up of additional leverage and understanding you might gain in a current situation.”

A few more links I enjoyed: 

“The most powerful paragraph in the book: One day I was sitting at home and, I remember having the thought ‘You can dig this hole as deep as you want to dig it.’ I remember thinking ‘My God, I’m going to spend the rest of my life in this fucking hole.’ You can reach these points in life when you say, ‘Fuck, I’ve reached some sort of dead-end here. And you descend into chaos. All those years you thought you were achieving something. And you achieved nothing. I was thirty-eight years old. I’d just been fired. My second wife had just left me. I had somehow fucked up. I developed this maniacal passion for wanting to achieve something.”
“My annual presentation on the state of decarbonization told with climate, capital markets, technology, and sector data. A coherent view of the future begins with the clearest possible view of the present.”
“Initially the rise of legitimate online businesses such as Netflix actually helped curb digital piracy, which had largely been based on file uploads. But now piracy involving illegal streaming services as well as file-sharing costs the US economy about $30 billion in lost revenue a year and some 250,000 jobs, estimates the US Chamber of Commerce’s Global Innovation Policy Center. The global impact is about $71 billion annually.”

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