The Gift of Wisdom

I was recently on a business trip to Omaha, Nebraska. I was one of the speakers at a TD Ameritrade Market Drive Event. I had a little time to explore the city and breathe the same air that Warren Buffett does. On several occasions since we commenced publication of In Sickness and Wealth, we have mentioned Buffett’s style of investing and how we should copy his long-term approach.

At any rate, while at the airport heading back to Chicago, I bought myself a couple of birthday gifts since my birthday was right around the corner. Each year I spend some money on myself. This year there were two great books. One on Buffett… a special edition of Andrew Kilpatrick’s Of Permanent Value. The special edition of this book has additional material as well as over 2000 photos on the life of Warren Buffett and the history of Berkshire Hathaway. The other book is entitled The Great Minds of Investing and it includes some phenomenal photographs of all the greatest investors over the last hundred years including Buffett, Ben Graham, Bill Miller, Joel Greenblatt and two dozen other individuals who compound money better than the vast majority of investors. I have to admit – I didn’t recognize some of the names but found their stories fascinating nonetheless.

For example, Thomas Gayner. Ever hear of him?

Thomas Gayner grew up on a 100-acre farm in Salem County, New Jersey. From the age of eight or so, he would sit in front of the TV with his grandmother on Friday nights and watch Wall Street Week with Lou Rukeyser. “It was not against his will,” Gayner says, amused by what a nerd he was. His grandmother inherited dozens of stocks when her husband died and she NEVER sold them. A few great companies did so well that the entire portfolio generated excellent results. For Gayner, this is proof that investors often do best by leaving their stocks alone, so the winners can compound dramatically for many years. Even as a child he sensed that compounding was “this miraculous gift of the gods that just comes down and creates a stream of wealth.”

Gayner adored his father, and accountant who owned a liquor store and often chatted with him about business and investing. “My dad was a great story teller, and that’s really how I learned so many things.” One childhood tale involved a Salem couple who received stock as a wedding gift. They sought out the owner of a furniture store that was reputedly the richest man in town and asked: “how do you go about selling stock?” The rich man replied: “I don’t know, I’ve never sold any,”

Gayner, now 53, says his investing philosophy was shaped by these childhood lessons and later reinforced by observing role models like Warren Buffett. – Adapted from the Great Minds of Investing.

After college, Gayner went to work for Markel, one of the best run insurance operations in the world and long known for a portfolio that’s modeled after Warren Buffett’s style of investing. Gayner is now the Chief Investment Officer of Markel’s giant investment portfolio. By the way Markel’s stock runs at over $1000 a share up from $200 just a few years ago. So, buy this book. It’s a terrific read. We will share more of these stories over the next few weeks/months. Hopefully, they will teach us some lessons.

Be careful out there….

David Lerman / Jodie Warner