Hedge Fund Manager Guy Spier Discloses The Disadvantages Of Attending An Elite University

Note ot editor: Maybe find a way to ahve this hit ticker pages.

Based out of Zurich, Switzerland, Guy Spier runs the Aquamarine fund, which follows a philosophy similar to Warren Buffett’s early investing. Spier became the focus of financial media in 2007 when he bid over $650,000 for lunch with Buffett in a charity event.

Spier recently published “The Education of a Value Investor”, which details lessons he learned on Wall Street. In an exclusive interview with Benzinga, value investor Tim Melvin spoke with Speir to gain deeper insight into his background and investing philosophy.

This is the first of a three part series.

You did a previous interview titled, “Build Your Life in a Way That Suits You.” That seems to be what you set out to talk about in “The Education of a Value Investor.”

Yes, I would say so. It’s not what I thought I’d end up writing about and I also didn’t think that my career would be about that when I got going. It’s something I learned along the way. It was an unexpected lesson that I learned by diving into the value investing world. I thought I was just going to learn how to get rich and how to be a good investor and instead I got this unexpected bonus that I learned about how to live a better life.

Phil DeMuth in his Forbes review of the book said that the book was about people “becoming masters of themselves instead of masters of the universe” and I think the book achieved it. 

I thought he wrote a wonderful review, it’s entertaining as well and I enjoyed reading it. There’s an ancient Jewish wisdom that says ‘who is strong is he who masters his own impulses.’ But actually, the way you just put it is just lovely which is that, in a certain way, if we can master ourselves we are masters of the universe. At least we’re masters of our own universe, which is about probably what we should expect in life and I think it’s just this beautiful thing. I went off on this search for avaricious external wealth and I what I found was internal joy and I found it through my greed. It’s a lovely idea that you can start off with greed and end up in a good place. I credit this amazing cast of characters, Warren Buffett, Charlie Munger, Ben Franklin, and Ben Graham, who sort of led me to that path.

You had some interesting things to say about your education in the book; Oxford and Harvard are about as top notch as it gets Can you expand on that just a little bit?

Given the hard times that I had been through to get it through University, the fears that I had of getting thrown out, the intense competition, and the very hard work, I really felt like I was done. College gave me the feeling that I was done with having to fight my battles, so to speak. Little did I know that my battles were not over, they hadn’t actually really begun. In fact, I needed to start undoing many of the things that I learned... I think I write in the book that I came out of that with my mind like a finely tuned Ferrari. Not that it’s not fun to drive a finely tuned Ferrari, but what I needed was a 4X4. But most people at university, they don’t respect people who’ve got minds like 4X4’s. Those people are considered too practical and they’re considered to not have sort of high-flying forts like the guys with the fine tunes Ferraris have

As I start getting four or five years out of my education, I was little shocked to see contemporaries of mine who ought to have done extremely well not doing extremely well and I started asking why. I could see that a lot of it had to do with attitudes that they learned at university. Just give one of many examples, selling was beneath me. I didn’t think that I had to sell. I just thought the world would come and fall in love with my general awesomeness because I was a graduate of these top universities... And so, the very nice thing about it is that having an education from an elite school is an advantage in so many ways, but isn’t it so wonderful that it also pulls in to the students’ mind’s so many disadvantages, which kind of levels the playing field for everyone just a little bit?

I never set foot in a college classroom until I was there as an invited guest lecturer in my 30’s. I think in some ways I benefited from it because I didn’t have to unlearn a lot of the economic and finance principles which are taught as truth in colleges.

This is my perception, it’s very interesting. We’re coming it from two different angles. I feel like the time I spent from ages 18 to 24, I was at colleges that told me that the environment was telling me implicit that I’m brilliant. I have a feeling that someone like you who wasn’t in that kind of an environment, was humbly getting on with learning what you needed to do to succeed in life… I suspect the lessons you were learning between ages 18 to 24, I started learning them at age 28.

After getting your degrees, you started at D.H Blair, which was more or less the bottom of Wall Street. What lessons did you take away from that experience?

Do you know that feeling in a sports team when you get on the pitch with somebody and you realize that they’re just playing down and dirty? They’re playing in a way that you’d never like, the coaches have never prepared you for this kind of play and the ref is not blowing the whistle on the opposing team. Getting onto the playing field at D.H Blair and as I got up to speed with how the game of business and life and financing in Wall Street was being played, I think I landed to shock for the first three months. I don’t think I realized quite how brutal the environment can be, quite how backstabbing the environment can be, the degree to which people would tell me one thing one day and then, very shortly afterwards the reality was completely different. So, I think that I spent a lot of the time in shock because I really did somewhere implicitly believed that all environments were like the university environment that I’ve been in where there were things that were beyond the pail that you wouldn’t do. Until I came into that firm, I didn’t realize the degree with which Wall Street is capable of shafting its clients.

...

I remember sitting in sales meetings and the leadership of the firm would get together and be paraded and it wasn’t like the brokers would duteous go outside and sell, they’d be listening carefully to hear what the sort hooks were they were going to use with their clients.

At the end of your time at D.H Blair, you stumbled across Benjamin Graham's Intelligent Investor. How did that affect you?

It’s serendipity. First of all, it was not the first time I’d come into contact with Warren Buffett because I’ve been jilted by this woman at Harvard Business School and I was upset with her and she dragged me along to a lecture by Warren Buffett and I was stupid enough not to pay any attention to Warren Buffett. Fast forward to about three and a half years later and... I don’t even think I read the introduction by Warren Buffett, but I went into Mr. Market being manic-depressive and owning stocks and shares being part ownership in a business and it’s just funny. It was just this feeling of ‘It’s so obviously true.’ It gripped me… and in a certain sense that’s when my life really started.

Some people get it and some people done. You either have your Intelligent Investor moment, or you thought it away and go back to reading Fibonacci charts.

Exactly!

You have said that Tony Robbins has had a big impact on your life. At first you were a little bit skeptical, but it ended up having a large impact. Tell me about that.

It was an ‘Unleash the Power Within’ seminar and it was in San Francisco. I remember standing at the back and by halfway through the first night I said to myself, ‘I’ll do the fire walk.’ The fire walk did have a really, really big impact on me… In a way my life began when I had my Intelligent Investor moment and in a certain way the first seminal ignited something within me… and I was permanently changed by that. Its just perennial optimism that is part of the zeitgeist. that just flows through the United States. I think that people like Anthony Robbins are sort of they are lightning points for it, but they’re picking up something that is just inherent in what the United States is and I just feel so blessed and lucky that that got into me because although I love living in Europe right now and I love bringing up my children here, I would be awfully depressed living here if I didn’t have that American spark and American optimism.

You may be thinking, ‘why is Guy Spier droning on about this?’ but it’s just not inherent to the rest of the world, this idea that we can always improve. There’s land of incredible opportunity available to us if we just seize it and he just gave that to me in vast quantities. It was so important to me that I went back four or five times because I really wanted to just get as much of it as I possibly can.

Charlie Munger and his “24 Standard Causes of Human Misjudgement” talks about the dangers of shouting stuff out because pound it in. But, if it’s Anthony Robbins, I definitely want to shout that out and pound that in. I think the thing that I find the most difficult, something that saddens me, is when I see a friend of mine that I just know needs a solid dose of Anthony Robbins and I try to share with them. It’s part of the motivation for writing the book.

Stay tuned for the second of this three part series where Spier discusses investors he has learned from and most looks up to.