Transcript: Thomas S. Gayner – The Big Picture
The transcript from this week’s, MiB: Thomas S. Gayner, Markel Corp, is below.
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RITHOLTZ: This week on the podcast I have an extra special guest. His name is Tom Gayner, and he has a fascinating position in the world of investing and finance. He is the Chief Investment Officer and Co-CEO of Markel Corporation, which he describes as a publicly-traded family office. They have an insurance arm, that’s the genesis and history of the company, but he also has been running the investment portfolio for quite a while. It’s their second arm. And they have — for lack of a better word — a venture, a private equity group that purchases companies. Really a fascinating history, a tremendous track record, and really very interesting gentleman, I found this conversation to be fascinating, and I think you will also.
So, with no further ado, my discussion with Markel Corporation’s Tom Gayner.
VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: My extra special guest this week is Tom Gayner. He is the CIO and Co-CEO of Markel, a diversified financial holding company. He has been dubbed the next Warren Buffet by no less an expert than Jason Zweig of the Wall Street Journal. From 2000 to 2015, Gayner’s stocks have averaged a return of 11.3 percent annually, while the S&P 500 returned a mere 4.2 percent, counting dividends.
Tom Gayner. welcome to Bloomberg.
GAYNER: Thanks so much for having me.
RITHOLTZ: So, I’ve been looking forward to having this conversation. You’re kind of an interesting guy working in kind of an interesting company. I don’t think a lot of folks know what Markel is and does. Why don’t we start by just give us the short version, what is Markel?
GAYNER: Sure. And, in fact, not only do a lot of people not know what Markel does, a lot of people don’t know how to pronounce it. So, it’s a easy screening technique when somebody asked for Markel. They probably don’t know who they’re talking to.
So, yes, Markel, to some degree, I think the shorthand way of describing it in — in the usage of today’s words is we’re a family office that happens to be publicly-traded.
GAYNER: Now, the — the way that business started was in the 1930’s as a specialty insurance company. It’s kind of an interesting history, in that Sam Markel was in Norfolk, Virginia, and he was on the city council there. And Norfolk, Virginia was a place where a lot of veterans would be getting off the boat from World War I. Some of them decided to stay. And it was the early days of the automobile and trucking industry.
So, Sam Markel had been an insurance agent. There were veterans getting off the boat. They were — they were providing cab rides, which were unregulated, unlicensed nickel a ride. Jitneys was the — the name of the term. Of course, accidents ensued, as will be the case, anything like that. And Sam Markel got a law passed that said, “If you’re going to operate one of these jitneys, you had to have insurance.” And so, …
RITHOLTZ: So just the people to provide it.
GAYNER: And — well, no insurance company was willing to take that sort of risk. So, Sam Markel said, “Well, I’ll start an insurance company to take that risk.” I don’t know what the chicken and egg was, whether Sam had the chess moves all laid out before he proposed the — proposed the ordinance. I’m — I would not be surprised if he did, but that was really the start and the genesis of the company. And — and they caught a mega wave in the sense that the automobile, trucks, the highway system, the interstate highway system for 30 or 40 years, you really had this tailwind of epic growth in the underlying business that — that they would insure.
We could go on and on with this conversation, but I think the hallmark that still matters today is you look at the problems, you look at something that somebody needs, you try to be creative, you try to figure out a way to — to solve it, and — and that’s what Markel does. Historically, largely through insurance products and insuring things that a lot of other companies choose not to do for a variety of legitimate reasons. But then also we’ve expanded into a lot of different products and services, industrial products and services over the last 15 years with the growth of Markel Ventures. So, we — we can we can do anything and everything, and if we can figure out a way to make the customers, the employees better off by doing so, we’ll do it.
RITHOLTZ: So, the interesting thing about the insurance side is insurers taking cash against the future potential liability, but between — when the policy is sold and when the payout has to be made, hey, we have to do something with all this capital, which brings us to your job. You’re essentially CIO of — of Markel Assets. How do we describe your title? And we’ll get to the Co-CEO thing in a bit. But technically, what is your job description?
GAYNER: Well, the CIO, in terms of Chief Investment Officer as opposed to Chief Information Officer, that is exactly the job I had prior to becoming the Co-CEO and effectively, it is still a job that’s embedded in my role.
Now, again if your business is story and you have the sophisticated listing base, if you think about insurance — first off, set it up. Your — your initial point is correct, in that an insurance company collects premiums today, and they’re going to make a payment to — for a claim sometime in the future. So, embedded in every single insurance company is an investment operation.
GAYNER: And historically, it’s not been unusual for insurance companies to make the vast majority if not the totality of their earnings from what they make on the investments while they’re holding that pool of money. That — that’s the case.
RITHOLTZ: If you can — if you can run the — the insurance side as a breakeven and then just be free to do what you want with that capital over until those potential liabilities come home to roost, that’s not a bad source of capital. It’s very cheap.
GAYNER: Exactly. And a lot of minds have — have figured that out and — and — and known about that. For some interesting sort of financial history episodes. We go back to the 1960’s or 70’s when conglomerates were sort of the hot money things of the day. Many of those had an insurance company as the financial core of the business – Gulf & Western, Teledyne, things like that.
Now, I think there’s an interesting cultural circumstance that’s at play there. In that if you look at insurance companies that are run by investment people, oftentimes that — that movie didn’t end that well because, you know, investment people have a certain mindset, a certain culture, a certain way of doing things, a certain …
RITHOLTZ: Embracing things.
GAYNER: … lifestyle — sort of lifestyle they’d like to — to lead, insurance people probably not wired that way.
GAYNER: And most insurance companies are run by people who came up through the discipline of insurance. So, they were claims people, they were actuaries, they were sales people, whatever, but the realm of insurance is — is what they are wired to do and how they understand life. They may or may not understand capital allocation and investments quite so much.
Similarly — and — and as such, since they don’t understand it, I don’t think they appreciate it and the discipline and what’s required to be really top league in — in that requirement. Similarly, investment people, when — when they run an insurance-based organization and they came up through the realm of — of investments, I think sometimes there’s a tendency not to appreciate the detail work and the daily discipline of what it takes to — to run a — a very good insurance operation. So, if you look at organizations that have successfully been able to balance that tension and have both sides of the house not have one overwhelm the other side, that the list is very, very short.
RITHOLTZ: Yeah. And — and we’re going to talk — let’s talk a little bit about that list. And part of the reason you’re implying is, hey, some groups are a little too safety first and to risk averse if they’re overly weighted on the insurance side, other groups are too aggressive and risk embracing. You need that balance, which leads us to the comparison that I have to ask. When did you start first hearing yourself described as the next Warren Buffett, a mini Warren Buffett. He used GEICO as a giant source of — of inexpensive capital and, obviously, did okay with it, right, did pretty well with it — better than pretty well.
When did you first start hearing this noise because you’ve been with Markel now for 20 something years?
GAYNER: A little over 30 years …
RITHOLTZ: Thirty …
GAYNER: … going to 1990.
RITHOLTZ: … wow. Jeez …
RITHOLTZ: … 31 years. So how long was it before these silly comparisons began?
GAYNER: Well, I guess the first time I really heard it was when I said it to myself looking in the mirror. And — and frankly, that would have happened even before I joined Markel …
GAYNER: … because the — the way that started was …
RITHOLTZ: That’s hilarious.
GAYNER: … the first time I became aware of — of Buffett and Berkshire was in 1984 with the seminal Carol Loomis article in Fortune. And I …
GAYNER: … and I could remember I’ve worked for a firm called Davenport & Company of Virginia, wonderful firm, still there today. Been in Richmond since 1863, so …
RITHOLTZ: Not going anywhere.
GAYNER: … not going anywhere. The head of the department was a gentleman named Joe Antrim. And I read this article and here’s how naive and stupid I was. So, it was 1984, I was 22 years old, and I — I went into Joe’s office and I said, “Hey, Joe, have you ever heard of this guy named Warren Buffett.” And Joe was sort of a crusty fella, and he says, “It’s a Buffett, you idiot, and threw me out.”
Well, I went to the cutting-edge technology of the day, which was the Standard & Poor’s tear sheet.
GAYNER: And I — and I looked at the Berkshire Hathaway page. And my training is as an accountant. I started out as a CPA with PricewaterhouseCoopers. And I looked at those numbers, and I could tell without resorting to four decimal point calculations, they were good.
GAYNER: So, I became a — I became aware of Berkshire at that point.
RITHOLTZ: When did you first become a Berkshire investor?
GAYNER: Not until 1990, which also points out how stupid one can be, because when I first saw it …
RITHOLTZ: So, he was right when he — when he said, “Get out of my office.”
GAYNER: He exactly was right. So as a kid and the stupid things you — you do as a kid, and I’ll — I’ll — I’ll defer to the notion that at age 22 you’re still a kid …
GAYNER: … so I asked for grace in that sense. So, I — I looked at it, I could tell the numbers were good, and I made the searing mistake. I think — I think the stock was $375 or something like that.
RITHOLTZ: Ooh, so expensive.
GAYNER: And I said no stock could possibly be worth that much.
GAYNER: So, I made the greatest mistake of omission and sat there and watched it go from that to — remember the first share we bought was $5,750.
RITHOLTZ: Oh, my God.
GAYNER: And — and by the way, that’s still a pretty good buy.
GAYNER: But there’s immense lessons to be learned from that. So, the per share value as — as opposed to the per share price …
GAYNER: … let’s do your math and do your homework about that. And by the way, getting back to Teledyne, which is one of those companies that was on the list of balancing out the insurance in the industrial sides of the business under the leadership of Henry Singleton, Fayez Sarofim is a famous money manager, who made a lot of his reputation and returns by being right about Teledyne in the early days.
GAYNER: And people used to ask Sarofim what’s the next Teledyne. And his famous response was the next Teledyne is Teledyne. So, when you got something right and you’re going to have a …
RITHOLTZ: Stay with it.
GAYNER: Dance with the girl you’re bragging with and keep dancing. But — so answering your question about how the Berkshire comparison started to take place, so in 1986, Markel went public. And luck of the draw, I was the analyst at Davenport who was assigned to cover it.
RITHOLTZ: Ah, there we go.
GAYNER: So, I started covering Markel from the day of the IPO. And what I observed was here was an insurance company that made an underwriting profit. And at that time, in an era of meaningfully higher rates, you didn’t really need to be disciplined about your insurance so much if you make so much from interest income that you — you could engage in cash flow underwrite. You just wanted to get cash in the door and worry about the claims …
RITHOLTZ: Well, a nominal basis not necessarily …
RITHOLTZ: … a real basis, but still …
GAYNER: … but this was an unusual discipline to stick to the idea of making an underwriting profit even amidst the — the ability to earn epic investment returns.
So, what I saw — and by this time I’m 25 or so — from the IPO is that here’s — here’s an insurance-based organization, which is going to make an — make it dedicated to making it underwriting profit, and Steve Markel, who is the Vice Chairman at the time, was open-minded and had already started making some equity investments with those pennies of underwriting profit out of each dollar. So, they have a long-term mentality from day one. So, I saw that instantly. It was a — it was a — it was a light bulb kind of realization, and I — and I — and I wanted to own some of that stock and be connected to the company.
So, from ’86 through ’90, four years, Steve Markel became a friend, a client, a business associate. And he might tell the story differently. I might tell it differently depending on the point of view. But I sort of begged him for a job for four years because I just wanted to be part of that.
In 1990, Markel did one of their famous “double the size of the company” deals, but they bought — they bought another company that was as large as what they were. Steve had been managing investments by himself, thought he might like a wingman and …
RITHOLTZ: You got the call.
GAYNER: … offered me the job at that time. I’ve got the call at that (inaudible).
RITHOLTZ: And I assume you jumped right at it.
RITHOLTZ: And — and let — let me just stay with Markel for a moment. They famously — they don’t hold analyst days. They don’t give earnings guidance or things like that. At least that was the reputation back then. Tell us a little bit about that. What was the thinking behind if you’re going to cover us, you figure it out?
GAYNER: Well, there’s a lot of layers to — to that, but I — but I think it makes sense. Think about it this way. If — if you — if you really are, as I said, the first definition of Markel, the — the family office, which is a very popular term these days, that was not a term so much in — in 1990 when I joined.
If you really want shareholders who are going to be there for a long period of time and have a sense of ownership, and have a sense of partnership, and really wish to be multi-generational investors, well, I — I run a business and setting aside the investment side with the Markel Ventures’ sides of things, in the businesses that we run, which are long-term established businesses, I don’t think — and the people who run those businesses do not think about their customers in — in a quarterly time frame. We think about our customers as once you’re a customer of ours in whatever business we have, we want to be doing a good enough job for you and delivering enough value and delighting you in such a way that you want to keep doing business with us.
So, cutting that into quarterly time frames and setting expectations that are tied to that, that just seems like a bad idea and — and contradictory to — to how we would really run a business. So, we didn’t have to think up all these things our self. We got to observe the — the way Buffett did things. And — and we’ve been going to the Berkshire Annual Meeting since — since 1991, which have been the — the first year — first year I joined, because what I said to Steve at that point was in terms of investors that we wanted to get at Markel, the people who are most likely to understand what we’re doing are people who are already in Berkshire.
So rather than try to get them to come to Richmond and engage, so well …
RITHOLTZ: Let’s go there.
GAYNER: … if you own Berkshire, you’re already — you’re already qualified.
GAYNER: So, let’s go there and start meeting people. So that very first year that we were there, just because I’ve been in the investment business for a couple of years, there were — there were six people that were willing to sit down and drink coffee and eat bagels with Steve Markel and I. And we didn’t have a formal presentation. I think we just talked and answered their questions. And that went on for maybe 2.5, three hours or something like that.
GAYNER: In that room, six people, Chuck Akre was one. He’s a legendary investor. I don’t know whether he’s been on your — your — your podcast or not. Wonderful guy and …
RITHOLTZ: Make an introduction.
GAYNER: He would be a …
GAYNER: … well-worthy person to talk to, and he’s a meaningful teacher to me ever (inaudible).
RITHOLTZ: We love people like that.
GAYNER: I do indeed. Michael Lowenstein, whose father was Louis Lowenstein, the professor at Columbia Business …
RITHOLTZ: Columbia, OK, sure.
GAYNER: … School, exactly. And one of his cousins I can’t remember who, but wonderful family and sort of the right — the right kind of people. Having Peter Cayman (ph) for Boston — Jonathan Brandt at Ruane Cunniff is one of the panelists that asks Buffett questions at the meetings, whose father was a — a roommate and buddy of — of Buffett and Bill Ruane.
So, we — we started off with just an absolutely wonderful set of people. And — and all Steve and I said at the end of that meeting was, “You know, we’ll be back again next year. And if you know anyone who would be interested, please let them know and we’ll stick together.”
RITHOLTZ: Let’s have another one, I’m sure.
GAYNER: So, we started doing that, and that became an annual tradition. And we did that year after year after year. What started with six people, by the time you got to the year before last, which was the last in-person meeting that Berkshire had, we had something on the order of 1,200 or 1,300 people at — at that meeting.
And again, same format, we open it up. We say, “Thank you for being here. Great to see you. What questions can we answer for you?” And — and there are more Markel shareholders in that room than typically come to our annual meeting, so it — it really is cultivating of the community that that’s out there.
And this year, unfortunately, because the Berkshire meeting was virtual and — and — and that the crowd wasn’t there, I said, “Well, we have the opportunity to try to create some center of gravity in Richmond, Virginia because that convening — that worldwide convening of people who are searching for certain values and certain ways of running the business, the world is hungry for that. So, let’s give them a forum and a venue to do so.
So, we found the concert arena in Richmond, Virginia that had a roof, but open air to — to try to, you know, meet people halfway that the pandemic (inaudible) …
RITHOLTZ: Makes sense.
GAYNER: … we’re getting better. We — we had a meeting. We had — my goal was to get 100 and — 100 out of town professional investors to attend. We ended up with about 150 professional investors. And then between employees, associates, local people, we had 500 people at that meeting and we try to make it fun.
We had — we had food trucks. We had beer trucks. We had a band. And that may seem minor, but it speaks to the culture of trying to connect with people in ways that you just cannot do in any other way than — than be with them, and — and to cultivate this long-term sense of ownership where your time horizons are — are infinite — eternal rather than — than cut into — to quarterly things. So, it’s just an entirely different way of approaching things and thinking about things, so it — it doesn’t really comport to match up with the — the — the typical way that — that major finance is done. Not right or wrong, just different.
RITHOLTZ: I — I like it, I love the idea of burning man for finance …
RITHOLTZ: … instead of, oh, great another boring hotel conference room. I mean, the one good takeaway from the pandemic is those sorts of financial, you know, just deadly meetings, they seem to be attenuating quite — quite a bit. And …
GAYNER: I think people are maximizing their multitasking skills when they’re with listening to something like that on a — on a Zoom call. I — I don’t — I don’t have the patience or the endurance to do that with a — without fidgeting and looking at something else, too.
RITHOLTZ: I’m — I’m with you on it. Let’s talk a little bit about your background, which has some really interesting things about it. You’ve described yourself as knowing that you’re just good and not great. Explain that. Who — who goes out and says, “I am not great. I’m — I’m good and I am aware of that.”
GAYNER: Well, I was in a discussion last night with an absolutely fascinating person, absolutely high-end quality on every measure you could — you could think about and — and that excellence shown through. And — and the discussion took this twist and turn where the — the distinction between an optimizer and a satisfier came up.
GAYNER: And — and I think there is a tendency among Taipei people, extraordinarily high accomplishment people, high achievers to really latch onto the idea of optimization.
GAYNER: And there’s nothing wrong with that. But sometimes there can be a hidden intangible, unquantifiable cost to focusing entirely on optimizations all the time. Einstein says that, you know, not everything that counts can be counted and not everything that counts — Einstein is smarter than me, he’s a perfect example of how — I couldn’t remember it, not everything …
RITHOLTZ: Not everything that counts can be counted and not everything that can be counted counts.
GAYNER: There you go. My special guest Barry Ritholtz, thanks for the pickup in the (inaudible) there.
RITHOLTZ: Was that Einstein? I thought that was — I thought that was some management consultant who said that.
GAYNER: I’m going to go with Einstein.
GAYNER: But I’ll defer to …
RITHOLTZ: Makes it sound better.
GAYNER: … I’ll defer to the fact-checking experts on that. But — but the point is there — there’s an element of — of intuition, of — of the — the intangible sense of — of — of spirit and culture that I find extraordinarily different — difficult to matter, that sometimes you got — you have to let people have some room to make some mistakes and look at outcomes that are not optimized. And what you get in — in design thinking and — and in systems approach if you’re dealing with the right kind of systems that there’s — there’s a bit of an evolutionary process where mistakes that you make start drifting away and things that you did right start compounding, and — and — and — and magnifying themselves. And — and as such, if you just — if you just leave a little slack in the system and you don’t try to press a to the last red line of — of what’s there, you allow time and space, and muscle, and rest, and energy to create things that you — you couldn’t have thought of beforehand that happened somewhat through serendipity.
So, I think — I think humility — and it’s an epic challenge. I’m — I’m 59 years old now. And fortunately, things have worked out well. And I have credibility because my record is pretty good. I have a lot of empathy and — and — and understanding of the challenge that would face a 26-year-old or a 25-year-old one, or — or me at 22, trying to get on the ladder and — and get the career, get the leeway and latitude that I enjoy right now. Because if you think about it, say you’re 22 or 25 and you’re trying to pitch somebody to — to manage money for them or being given discretion, typically, if — if you just say the kinds of things that I do, we’re long-term, we’re going to be patient, we’re going to look at this and step in. So, you don’t really stand out enough to get people to — to write you a check.
RITHOLTZ: Especially at 26.
GAYNER: Exactly. So, you’re — you’re forced, almost — almost bullied by the system to make hyperbolic statements, and — and claim precision, and claim efforts that are — that are super human just to get people to — to give you the job and give you the money to manage. And — and I think markets are — are — are — are quantum systems. They — they — they defy understanding. And — and you can do a lot of work and you can keep trying to get to the next decimal point of understanding, but there’s a certain irreducible quantity to human psyche, and greed, and fear, and all those sort of things that really do matter in markets.
And — and I just think it’s helpful to be humble to — to acknowledge that. Don’t pretend you can know it. And by virtue of not pretending that you — you can know it, I think you’re more open to ideas, people, different ways of thinking that you can start out with a premise that this person I’m talking to is probably smarter than I am. They’re demonstrably smarter than I am, so I think I should listen and learn something.
And if you just go about your `daily life that way, you do learn things and you do get exposed to things and the people that were right. And you — they start to occupy a greater and greater share of your mindshare, and the people who are wrong kind of — kind of — kind of drift away into smaller and smaller thing. So, the math of compounding really accentuates the positive and it makes the — it makes the mistakes drift away into irrelevance over time.
RITHOLTZ: I do like the idea of — of not being a — a maximalist optimizer to give you a little breathing space to allow creativity and collaboration, other things to bubble up. I don’t remember whose quote I am about to steal, but the line is, “Jazz is the space between the notes.” And it’s that same — you need a little breathing room in order to allow some creativity to take place.
RITHOLTZ: So — so let’s talk about a horrible, terrible, ridiculous mistake you’ve made or at least everyone else who does this. It’s a horrible mistake. Co-CEO is usually a disaster. Somehow you guys seem to have made that work.
GAYNER: Yeah, I think you’re correct to point out that that’s — that’s not the odds with a bet, and I think it gets back to some of the history and culture of Markel that makes it work in the sense that you had Sam Markel who was the original founder of the company. He ran it from its inception up until, I think, the mid-50’s like 50 something like that.
Sam had four sons who were two sets of twins. And when he unfortunately died, the business then was taken over by the — by the four sons. And — and they ran it essentially by unanimous consent.
GAYNER: I believe they had lunch every day, if not almost every day. And for any kind of strategic or — or more than just little decision, there had to be unanimity among the four.
GAYNER: And I think you can sort of picture how this unspools.
RITHOLTZ: Everyone has veto power.
GAYNER: Exactly, and the company did not grow that much during their era that they ran it. But then what happened, but — so you went from one CEO to effectively four despite what the titles might have been. So, then the second generation started to go the way of all flesh …
RITHOLTZ: (Inaudible), right.
GAYNER: … and the third generation comes along. At this point there are 12 cousins that — that are in existence, some of whom work for Markel, some of whom did not. And the generational transfer succession issue started to be — become paramount and become important. A lot of sifting and sorting about that.
The public offering — offering in 1986 was one of the tools used to bring about some — some finality there.
GAYNER: But at the end of all that sifting and sorting, three of the 12 cousins said “We’re in.” And in effect, they did a leverage buyout of the second generation where they gave them a note with a coupon to provide income and sale process to the — to the second generation, but gave them the stub equity underneath of it so that as they, you know, built the value of the business they’d attribute it to the equity as opposed to the debt that was there for the second generation.
The — the IPO did two things. It — it paid off that debt. It gave the company a little bit of a capital base. And culturally, it said, “You know, you don’t need to be a member of the Markel family to own equity interest.” And — and I’m a perfect example of that. I’m not a Markel family member. I’m not married to Markel. I have no Markel blood. And we — but I’ve been there 37 years. I’ve been there since I was a kid, so I — I feel like a member of the Markel family. And I — I own some equity in the company from the IPO from …
GAYNER: … from day one …
GAYNER: … and — and had always sort of been accumulating more stock as — as — as time goes by.
So there — there’s that element of how the — the transition is taking place, so the — the four went down to three and — and really a triumvirate of Steve Markel, Tony Markel and Alan Kirschner who was a cousin-in-law, ran the business for decades. And as — as they started to — to — to move on, Alan retired from the board that year and a half to a year just so ago. Steve and Tony are still on the board, but not active in day-to-day management.
You know, that — that went to three to two, so Richie and — and myself. And it — it’s also connected to the evolution of the business itself, in that historically, the insurance business was the largest single piece of the company. Investments are there, but, you know, it’s just the investment operation that’s embedded in the insurance company. So, while we emphasize investments more than most, every insurance company has an investment operation. So that — that wasn’t weird.
As Markel Ventures has grown to become a substantial part of the company, they have two very distinct pieces of the company. So, in — in reality, the way it works between Richie and myself is that — and this is really the way it worked with Alan, Tony and Steve as well. In — in the era of the triumvirate, everything on the income statement reported to Tony Markel. So what branches did we have? How many sales people? What were the locations? All the — all the sort of things that would — that managing the (inaudible) all that would Tony would be the ultimate authority and really the ultimate CEO of that.
And I was in the room sometimes when — when Alan and Steve would disagree with him, but they would always say at the end of that meeting, “If that is your decision, that is your area, so we support you.” And they walk out of the room, the door is closed, and the — there’s the — the team speaks with one voice.
RITHOLTZ: That’s right.
GAYNER: Similarly, Steve is in-charge of the balance sheet of the organization. And anything — the loss reserve setting, the — the M&A activity, strategic stuff like that, Steve was the ultimate authority on that sort of stuff. And Alan joked he was the world’s highest paid referee because he would adjudicate disputes between the two of them to — to make sure that’s how it worked.
So, with Richie and I, it’s a slightly different gearing. He’s in charge of the insurance operations of the business. I’m in charge of the investments and the ventures’ operations. And our — our normal working relationship is if something meaningful or substantive comes up in one of our areas, the first person that I will talk to about an upcoming deal or a capital — a big capital allocation decision, I’ll talk to Richie and make sure he and I get on the same page.
We — we don’t see the world eye-to-eye on everything, but we — we function and — and work it out. And similarly, on the insurance thing, he would come to me first and we work that out. So, on major capital allocation decisions, it’s very important that he and I manage to find agreement, and we have. On day — on day-to-day matters, the tactical execution of the business itself, we — we both operate as sole CEOs in the realm of the businesses we run.
RITHOLTZ: So, you mentioned — so we have insurance, we have asset management. You mentioned the third arm, Markel Ventures. That’s kind of unusual for insurance company. Let’s talk a little bit about what — what brought this division about and what sort of things you look at. What do you focus on?
RITHOLTZ: Sure. Well, again the way it came about was being aware of the Berkshire example where you saw Buffett and — and Buffett would give a lot of credit to Henry Singleton and Teledyne, and — and seeing that model and how that — how that worked. We’d always bought equity securities. And there’s a — there’s a construct and a way we think about what we buy. And — and really, it’s the same thing we hope Markel shareholders think about us when — when they — when they buy Markel stock.
So, we look for profitable businesses with good returns on capital that don’t use too much debt to do it. We look for management teams with equal measures of talent and integrity. We look for businesses that have reinvestment opportunities or great capital discipline. And we look for that at a reasonable price. That’s — that’s the quick and dirty way of describing what we look for when we’re buying a public security.
Well, from my point of view, whether that’s buying 100 shares of something, 1,000 shares of something or the entire company the thought process is exactly the same. So, we’d seen the example from Berkshire and Teledyne of what it meant to go from passive minority shareholders to actually controlling shareholders in — in diverse businesses, and — and that’s really the way it happened.
Really from the first minute that I went to Markel in 1990, I always had it in the back of my mind that this would be a future leg of growth and sustainability for the company. It wasn’t until 2005 that the stars aligned in a particular deal because it happened to be in Richmond, Virginia. Because I happen to personally know the CEO, we — we’re — we’re not in the traditional investment banking channels, (inaudible) flow channels, it just happened to through serendipitous circumstances some of that time and space that we talked about a company called AMF Bakery Equipment, which if you — if you eat a McDonald’s hamburger or hotdog, the very good odds that there’s buns and rolls were backed on AMF Bakery Equipment. It’s a leading company (inaudible) what they do in that — in that world.
So, it happened to be headquartered in Richmond, Virginia; happen to know the CEO, happen to know it was for sale — I knew the seller — and we were able to do a deal. And doing that one deal raises a flag, and then all of a sudden the phone starts to ring. And …
GAYNER: … “Oh, I didn’t know you guys would do that.” And how about this business? How about that business? It really has cascaded from that.
RITHOLTZ: So — so Berkshire is kind of known for — when — when Buffett and Munger find a company like that meets similar qualifications, including very, very strong leadership talent management of the company, they basically put them into the Berkshire family and let them run the business — continue running the business so successfully. I’m assuming you bring a similar approach.
GAYNER: That is correct. And for instance, one of the ways to validate that and look at what people do not what they say, the CEO of AMF Bakery who we bought the business with in — in 2005 is still the CEO of that business today.
RITHOLTZ: Sixteen years later, wow.
GAYNER: Correct. So, of the 20 or so businesses that we have bought over the last 16, 17 years, probably 15 or 16 of them are still run by the CEO who’s there the — the day we showed up. So, we are very much hopeful that the — the management team, the leadership team that is in place will — will stay with us and become part of the Markel family and grow and flourish because we will take the worry of that capital off the table for them. We’ll take — and — and I’ll tell this story about AMF.
For example, so, you know, it was owned by a local set of — of business people in Richmond and it was what I would call a club private equity deal, so it was not levered to the extent that many private equity circumstances will be, but it had some leverage attached to it. And the — the CEO of the business, when I showed up and Markel bought things, I said, “You know, in the — in the old days can — when a — when a machine broke, that was a really bad day for you because you had an unhappy customer and you had an interest bill to pay at the same time, and that creates tension.
I said, “These days and forever going forward, I’m not rooting for machines to break, but I know in the real world — world they do.” And on that day, instead of that being a bad day, I now want that to be a good day. I want you to show up. I want you to fix it. I want you to make it right. I want you to make your customer happy. And if you do that and you do that repeatedly, dependably and never waver from that, what will happen over the course of the next three, five, seven years is your reputation for being that person will grow and grow and grow. And you will get paid fairly for doing that.
So, by removing the financial constraint of an interest bill and adding the dimension of that time horizon where how come we’re not going to worry about this quarter because I know this is the right thing to do, so we’re just going to do it. And then the accountants will tally up with the results of that, but I’m just — I’m willing to bet that will be good. And that is a business that in a no-growth industry they’ve done a couple of tuck-in deals since that time, but they’re six times the size that they were …
RITHOLTZ: Wow, that’s impressive.
GAYNER: … than the day we showed up. And they’re every bit as — as profitable, if — if not more so. And I think the mentality with which the — the business is run has been helped by the Markel Capital umbrella. We really give somebody the — the — the room to do what they want to do anyway.
RITHOLTZ: So — so bakery equipment is — is the first acquisition you do. What are the next couple of acquisitions? And what — because from what I’ve read, there’s not a whole lot of rhyme or reason. It just seems as long as it meets those four metrics that you described in terms of profitability and — and return on capital, talent, integrity, et cetera, you guys seem to be pretty open-minded as to the sort of acquisitions that makes sense for you.
GAYNER: Well, that’s exactly right and there’s four things are indeed the selection criteria. Now, if I wanted to speak in an academic setting and I wanted to convince the consultants and the academics that I did indeed have some sort of rational strategy, I could frame it in such a way where I said what we are looking for is large companies within small industries because if you look at a market leader in a small industry, what you have is a situation where you are the go-to vendor, you are the go-to supplier. You have some advantages of incumbency. And unless you mistreat your customer or do something wrong or don’t keep up, you are highly likely to get the next order.
So, if you — if you look at all our businesses, it is often the case that these companies are actually pretty well-known, and — and very good, and very dominant, act a little niche therein. And because it’s a small industry, that is not as attractive to bigger, bigger companies that are going to …
GAYNER: … come after it. And because it is so well-established and so dependent upon by their customers, it’s harder to start up a competitor in the garage. And — and I don’t think, you know, the — the — the young geniuses at the Stanford Business School are trying to figure out breakthrough disruptive ways to break bread. So, these are — these are not the sort of things that people are — are talking about or — or interested, but we can build a fine business by — by collecting these — these wonderful things and growing.
RITHOLTZ: Give us another one. Tell us another example of a business that the average person might not think of as a long-term profitable business, but you guys have managed to put into your balance sheet and have been very happy (inaudible).
GAYNER: Sure. Well, I mean, the — the most recent company that we — we bought is a company called Buckner Cranes. And — and — and this is an interesting case study as well on why we get these — these things.
Fourth generation family, so if a family business has made it to the fourth generation …
RITHOLTZ: They know what they’re doing.
GAYNER: … they know what they’re doing, and there’s something that’s just fundamentally right about a circumstance like this. This was an inbound call. Somebody called us and said — laid out the — the — the snippet thumbnail case of what this company was, what they do. And they had started out in the steel erection business and they rented cranes. And the crane size kept growing and becoming more and more sophisticated over time.
GAYNER: So, their kind of cranes lift things from 300 to 1,000 tons.
GAYNER: And in addition to the — the crane itself and it’s — it’s a — a German manufacturer that supplies Buckner with its cranes, and Buckner, in turn, leases them out to the companies that are erecting wind turbines or very large structures or new football stadiums, things of that nature. And — and you can’t just show up like at the – at the Hertz (ph) rental lot and rent one of these things.
GAYNER: You have to know what you’re doing. And if you don’t know what you’re doing, oftentimes, Buckner will provide the crew or the technical expertise top right …
RITHOLTZ: For a fee, obviously.
GAYNER: Right, right, so it’s a real value-add kind of business with a good, good, you know, physical base there. But the family and the family values really mattered to the family as they were looking to sell their business and create liquidity for the third generation, but set the fourth generation up for success to run the business going forward.
So, they called. We went down to — to visit them. Immediately, we — we struck up a warm and friendly relationship and did a — did a home and home (ph) and — and came to — came to terms, and it came on board. So that’s how some things like this happen. And at that 300-ton to 1,000-ton crane — I mean, 1,000-ton lifts, you — you can’t do that over the Internet. You can’t do that from a foreign country.
There are certain — there are certain underwriting criteria that if you …
GAYNER: … if you really go through the traps of what you’re looking at, that speaks to the likely durability and — and need for that business. If you need to lift something that is 1,000 tons, there are not many people in the world who know how to do that.
GAYNER: And — and again, I don’t think that’s the kind of thing that kids in business school are trying to figure out how to — how to disrupt it. You can’t, it’s not that, you got to lift it.
RITHOLTZ: It — it’s too small to be worth their time and effort, but it’s large enough that there’s a real business there.
GAYNER: Exactly. We have — we have — these stories could just go on and on and on. We’re — we’re the largest grower of indoor house plants in the world through our Costa Farms business. If you go into …
RITHOLTZ: Indoor house plants.
RITHOLTZ: So, when I go to the local whatever …
GAYNER: Home Depot, Lowe’s …
RITHOLTZ: Lowe’s, yeah.
GAYNER: … Wal-Mart, IKEA, Kroger, all those kinds of folks …
RITHOLTZ: Your — Markel is the company that’s providing those …
GAYNER: Correct. And then …
RITHOLTZ: … (inaudible) that’s why …
GAYNER: … and Costa Farms is — is the name of that company. And even within Costa, there will be sub-brands within that, so you don’t exactly know when you’re looking at the label who the ultimate folks — folks are, but — but that would be us.
RITHOLTZ: Very interesting. So — so there are two data points I’m kind of fascinated about. One is, in your public investments, your 10 largest holdings, they’re almost half your portfolio. They’re about 45 percent. That’s pretty unusual.
When I look at the average, let’s look at a stock mutual fund, the top 10 holdings is usually way below 30 percent. Tell us why you approach this with such a concentrated bet on those top 10 stocks.
GAYNER: Well, I think there are a couple of things that come together, and — and one of my great investment teachers was my grandmother, so let me get to her in just a minute. Now, obviously those 10 have worked, and those have been circumstances where we’re basically right and had a high degree of confidence in order to make some substantial bets to — to put them in the portfolio at that size.
But then time and being right about your fundamental underwriting of the business kind of is your friend. As Charlie Munger says, you know, time is the friend of a wonderful business and the enemy of a mediocre business. So, here’s — here’s my grandmother story.
So, when I was a kid and — and a — a nerd at that, on Friday nights unfortunately, instead of being able to get a date, sometimes I would — I would sit with my grandmother and we will watch Wall Street Week with Louis Rukeyser. And my grandmother, she was widowed at — and my — my grandfather had died, and she was one of the types of widows that basically never made any substantive decisions after that. So, she remained in the same house, his suits hung from the rack in the closet, his shoes were on the floor, and being just a small town local businessman in the 1960’s, they would have been the type that, you know, they — they drink coffee at the diner together and they would talk about their stock portfolio and that sort of thing. That’s what small town business people did. And he had a 12, 15 stock little portfolio. It’s — it’s not massive sums of money. And those 12, 13, 14 stocks that my grandfather had when he died, my grandmother held those until she died.
Now within those — that — that little portfolio, there was Lockheed Martin and Pepsi. Now the fact of the matter is the other 10 holdings could have gone to zero.
GAYNER: And it wouldn’t matter.
GAYNER: The — the total — I mean, I bet my grandmother was at the 95th percentile in investment returns, basically, because she caught two mega winners that she was able to hold for 30 years. And in terms of the growing dividends and — and funding her pleasant, but modest lifestyle, it did that. And — and I observed that basically when — when you’re right about something, don’t — don’t get off the train as if that train is going to — going to keep rolling. We’re — we’re both searching for who we should attribute these quotes to, but I — I think it might have been Peter Lynch who talked about that — that human tendency to want to, you know, sell your winner (inaudible) …
RITHOLTZ: Ring the bell, right.
GAYNER: … (inaudible) he rings (inaudible), well, that’s — that’s a — that’s pulling the flowers and watering the weeds.
RITHOLTZ: That’s right.
GAYNER: So …
RITHOLTZ: That is the Peter Lynch quote.
GAYNER: Exactly. So …
RITHOLTZ: So …
GAYNER: … so I’m not the smartest guy (inaudible) trying to have to be the dumbest. If I got a flower that’s blooming, let it grow.
RITHOLTZ: And — and another data point that’s kind of mind blowing, so your — your capital portfolio is about $27 billion. Your costs are just incredibly low, less than 0.01, about 170th the cost of the typical U.S. stock mutual fund. How do you manage to keep your cost structure that low?
GAYNER: Well, we don’t have a lot of people, so it’s — it’s myself. I have a gentleman named Dan Gardner who works on the — on the — on the equity side that’s been there 10 or 12 years.
For the — for the first 17 years that I was at Markel after Steve hired me, we managed the portfolio in-house and I did that solo. After 17 years of doing that, I decided to add one person, and — and that was Dan. And then a couple years ago I added one more person, so we have that group of people thinking about the equity investment portfolio. We have three people working on the — on the fixed income side, which is also a treasury function of managing just the cash balances …
GAYNER: … of the company. So, we have an extraordinarily small number of people doing it.
By Wall Street standards, our compensation is very modest so that keeps the — keeps the — keep the costs down. And here’s — here’s the implicit cost savings that cannot even be measured or quantified, but make the numbers that you cited even better is our turnover is extraordinarily low. We tend to be able to buy things on hold on for a long period of time, which means we’re not incurring the tax cost of realizing gains and — and paying the tax at that point.
So, the growth in the deferred tax liability, which is just compounding overtime, that isn’t an easily quantifiable cost that’s not captured in that — in that basis point of management you’re talking about. But in terms of dollars, that’s bigger than all the others by multiples.
RITHOLTZ: Quite, quite interesting. So — so we talked a little bit about Markel Ventures earlier. You’re not doing what I think of as venture capital as early seed stage, you’re buying mature companies and you mentioned you’ve done 15 of these deals since 2000. We talked about the crane company, we talked about the bakery machinery company, give us another example of the sort of transaction that attracts your attention.
GAYNER: Well, a couple other examples. If — we have a company called Cottrell. And if you’re driving up and down the highway and you see a trailer hauling seven, eight or nine cars, we’re the dominant company that makes those trailers.
RITHOLTZ: Oh, really?
GAYNER: And we’ve owned that. I — again, I lose track of times, five, eight years, something like that. Spectacular business. And the gentleman who runs it, Danny Zink, just a — a first rate individual, they …
RITHOLTZ: Open carriers is like when …
RITHOLTZ: … like when they pull up to a car dealership and 20 new cars roll off …
RITHOLTZ: … it’s one of those.
GAYNER: That’s exactly right. So, they’ve just done a spectacular job over many, many years of taking care of their customers and incrementally sort of getting more and more of the flow. And — and the wonderful thing about that particular business and — and a variety of reasons that we were able to — to — to buy it, it’s cyclical. So, for instance, when car sales are going up and there is incremental demand for the trailers to move the cars around, it’s — it’s a — it’s a nicely profitable business, and then they’re going to earn good returns if they — if they run their internal operations reasonably well.
If car sales are flat or going down, they’re going to struggle to breakeven, and there’s nothing they can do about that.
GAYNER: You can’t — you can’t reduce your prices by 10 percent to induce demand. People either need it right now or they don’t need it at all. Now that makes that business a little hard to finance …
GAYNER: … if you’re using a lot of debt to buy it. So, by virtue of the fact that we’re not using debt to do that, our underwriting decisions gets to be a lot easier and you don’t need to have an MBA to sort of figure this out. My math was if I buy that today, I’m pretty sure that within the course of the next five years I’m going to get out all my money and — and then still own the business, which is probably better and bigger in five years especially with the culture they have and the people that are running it.
And I really have some in difference about whether I make zero in year one and 40 percent of it in year two, and 10 percent of it in year three, and zero again in year four and whatever the residual is in year five. That — that pattern doesn’t matter to me because I’m not trying to hit quarterly — quarterly goals. And as such, we’re able to be competitive to — to buy businesses like that because we’re not competing with people who are using leverage finance …
GAYNER: … to do so. So that is just another small example, and it’s — it have been cars. I was about to make the mistake of saying cars can’t drive themselves, but, you know, we’ll — we’ll get to that.
RITHOLTZ: Well, arguably they still can but …
GAYNER: And believe me …
RITHOLTZ: … we’ll — we’ll get there eventually.
GAYNER: … that was one of the things we thought about. And even if you have a car that can drive itself …
RITHOLTZ: You don’t want us in, right …
RITHOLTZ: … you want a brand new car to come off and carry you.
GAYNER: Correct. You wanted to have 12 miles on it, not 700.
RITHOLTZ: So — so let me ask you a little bit of a twist question, how do you know if one of your acquisitions is not working out? I mean, there’s some pretty clear metrics for, hey, we’re seeing revenues increase, we’re seeing profitabilities increase, how do you measure when, hey, maybe we made a mistake. This one isn’t working now.
GAYNER: Sure. Well, Mike Heaton, who is my — my partner in Markel Ventures and he’s the President of Markel Ventures so day-to-day execution of the Markel Ventures business, he has a great saying. He says, you know, what it feels like when you’re making a mistake? It feels great because if you didn’t feel good, you wouldn’t do it.
RITHOLTZ: You wouldn’t do it, right.
GAYNER: Exactly right.
RITHOLTZ: That’s very funny.
GAYNER: Yeah. So, we — we make mistakes. We — we do that, but we do have financial reporting. And — and again, I started out life as an accountant and the accounting profession where we could do hours and hours on the pass of the accounting profession. But a good accountant, a true account, an accountant who is honoring his craft is giving you a feedback loop that this worked or didn’t work.
So, when we make mistakes in the fullness of time, they — they show up. So, what we do is we stop doing that. And we — we do more of the things that work and we do less of the things that didn’t work, and over time, the weighted average of that really works in your favor. And — and again, I — I use that language very precisely — the weighted average, because the things that worked mathematically become larger and larger as a percentage of the total whereas the things that didn’t work become less and less a percentage of the — the total. So, the — the mistakes get deluded into the — the overall solution, which — which, in aggregate, worked out just fine.
So, my grandmother’s lesson, I really don’t know the names of those other 10 stocks she owned.
RITHOLTZ: But it doesn’t matter.
GAYNER: It didn’t matter.
RITHOLTZ: Right. So — so you pride yourself on investing with management groups that not only have been successful, but have integrity and have built a corporate culture of — of both quality and success raises an interesting question. During COVID, you have 20,000 employees. How did you maintain that corporate culture? How did you keep everybody involved, integrated, and all moving in the same direction?
GAYNER: Well, it’s a — I mean, I heard in last year’s annual port, there’s been an unprecedented use of the word “unprecedented.”
GAYNER: And that’s an accurate statement to make. None of us had a playbook for how to do this and how to proceed. And of those 20,000 people, 15,000 of them are — are within Ventures, and a lot of them are in the category of frontline workers as — as our — one of our business called Havco. And it makes the flooring for trailers of tractor trailers. And it’s wood.
And as the president of that business, a guy named Bruce Bader said, “You can’t make wood floors from home.” So …
GAYNER: … we had to keep the factory running and we had to figure out how to operate its cleaning procedure, sanitation procedures, not wildly unlike the procedures have …
GAYNER: … existed to get into this building this morning. You got to figure all of that out on the fly and — and we did so. And I am so amazed and so grateful for the ways in which the leaders of those companies. And by that, I mean, not just the CEOs, but the people who work for them and the frontline supervisors, and — and all the associates who they went to work among other — other reasons because they needed to work.
GAYNER: And so, it’s our job to figure out. Look, if you want to work and you can work — and by the way, our society needs you, we must find a way to figure out how to do that as safely and as effectively and efficiently as possible. That’s our job. So that’s really what we have been about.
And the very act of doing that, it’s — it’s almost like exercising. So, if you want to lift a lot of weight, I would suggest — and — and that weight is just too much for you right now, but it’s within the realm of theoretical possibility. I would suggest to you, well, let’s –let’s — let’s lift a little bit. Let’s lift 25 percent of that. Now, let’s do it a couple of times. And then when we can do that and do it a couple of times, let’s lift 35 percent of that.
You build muscle by doing. This is not theoretical exercise, these are some theories that guide you. But the very act of doing itself is — is what creates the learning of — of how to do it.
So, there’s been a lot of that going on and we’ve been learning how to move differently and lift different weights of what we had. And in and of itself, that act has reinforced culture where you could choose. And I believe there is a great choosing going on not just in Markel, but really sort of society writ large, whether if you really want to do that or not.
And there are some professions in some circumstances we don’t have to quite do that so much. In our business, you do, both in the 15,000 frontline workers. And I would argue in a second derivative sense, even the white-collar workforce that can work remotely. There’s something about being together in person. The — the water cooler (ph) conversations, the coffee cup conversations, the — the — the quips, the — the use of humor, and laughing, and joking, and going back and forth that’s really hard to do in a – in a virtual world.
That I think there is a place for everything in this world. It’s not right or wrong, it is just different. So, we — we — we run the gamut of where, you know, just the physical reality whether we’re making wood floors or lifting 1,000 tons, you got to be present to win, so you got to do that in person. And that creates some aspects of the culture by itself doing so.
There are some that — that’s creative, so you may not think of us as a creative business and an insurance operation or white-collar work, but it — it — it’s something — it’s — it’s almost like an advertising agency. So, there are some parts of our business, which are actuarial and — and formula and mathematically-driven, but there’s a lot of our insurance business, which is — is more like an advertising agency than it is a — a — a big insurance company because you got to be creative and you got to figure out how to solve this problem of some risk that’s not going to be priced …
RITHOLTZ: You took — you took the words out of my mouth, old problem-solving unless you’re doing basic arithmetic involves creativity. Hey, maybe this will work. Sometimes not every solution is ideal for this problem, let’s see what else we can come with — come up with. And that doesn’t really work great over Zoom.
Let’s talk a little bit about some of your favorite companies. You have some holdings. And when I look at some of your top five or top 10, there are almost nothing like each other. There — there’s just a mix of companies, CarMax, Disney, Berkshire, Amazon, Regeneron, and then a whole bunch of investing firms, BlackRock, Federated, Oak Tree, T. Rowe. Am — have I named anything that you’ve jettisoned since or …
GAYNER: Oh, actually, you know, Oak Tree is — is no longer with us. That’s part of Brookfield Asset Management, which is our second largest holding that we have. And we are no longer owners of CarMax.
RITHOLTZ: Oh, you sold CarMax, which had a huge run-up …
RITHOLTZ: … given the craziness with supply chain. And I think, at a certain point, that just became fully valued. I’m going to guess …
GAYNER: Well, no, and I would — I would admit an error on my part in this. And, in fact, the — the gentleman who runs CarMax — the CEO — I mean, we’ve owned it for a long time, but it had been absolutely a great holding. When we sold it, I called him and I said, “Bill, that — that was our circumstance, not yours.” CarMax is a great company. It’s very well-run. I have epic respect for what they do. We enjoyed being a shareholder for — for a long, long time.
When we go back to the initial days of the pandemic and the shock losses from event cancellation insurance …
GAYNER: … business interruption, which was uncertain, in the first quarter of 2020 — I lose track of years …
RITHOLTZ: Yeah, same.
GAYNER: … and time these days, you know, we reported a combined ratio of 118. So as compared to our historical record of underwriting profitability where that combined ratio number would always be below 100, 118, that is the worst period Markel Corporation has endured in 90 years of existence.
RITHOLTZ: Wasn’t a great quarter.
GAYNER: It was not a great quarter. And the model where we are using the profits from the insurance company to create the flow — to create the (inaudible) …
RITHOLTZ: Now you’re reversing that.
GAYNER: … exactly. So, jet engines don’t fly in reverse.
GAYNER: That jet engine was flying in reverse during the first quarter of 2020. As such — and I think even independent of that, there — there were kind of a combined set of forces at work where, look, we got — we got to make sure that the insurance business is on firm capital footing. It’s a regulated business.
GAYNER: And we always want margin of safety and margin of error, that humility. Look, let’s — let’s not pretend we’re the smartest. So, if we were the dumbest, what do we need to do to protect ourselves from us …
GAYNER: … to make sure we keep going? So, we would’ve re-underwritten and as usual, we did. We’ve re-underwrote every single security we’ve worked. And, by the way, in that environment, we also re-underwrote our thinking on every insurance policy. We wrote because it was clear that this was a fundamental change that — that had overtaken all of us. So, let’s make sure that we’re adaptable and thinking that we’re able to answer the bell for the next round of the fact.
So, in looking at each and every security that we owned and recognize — and look, I want to take a little money on the — off the table, and I wish to make sure that the capital footings are impeccably sound and — and unquestionable. Looking at each and every one, among the decisions that we decided to sell was — was CarMax. And I thought, you know, at that point in time 50 percent locations were closed, who needs a new car? Who needs a used car? Well, it turns out everybody did.
GAYNER: But I did not foresee that coming. And just given the time and facts of the — the — the circumstances, there were — there were several things we sold at that point. In retrospect, they all went up and they all went up a lot …
GAYNER: … since — since that sale. But at the same time, our capital basis has never been questioned. The integrity of the business is there. And we — we kept 80 percent of what we owned at — at that point across the board in aggregate, and that’s done great. So, you know, we’re — we’re in good shape.
RITHOLTZ: You — you would have had to anticipate not only a surge of moment to the suburbs that would require more cars, but you would have had to anticipate all of the supply chain on the semiconductor, all that whole interruption and supply issues that have led to just a surge in used car prices and unavailability of new cars, kind of hard to foresee coming in the first quarter of — of 2020.
GAYNER: As — as I wrote in last year’s annual report on the whole discussion of the pandemic stuff, we did not see that coming. So that’s a long list of stuff we did not see coming, so add those to the list as well.
RITHOLTZ: So — so let’s talk about some of the companies you kept because not — not a bunch of steps or some pretty good companies. I want to get a sense of the thought process as to what leads you to find the company like, I guess, in some ways, Disney and Amazon are somewhat similar, but in so many ways they are so different. What led you to each of them and what led you to stay with them over the long haul?
GAYNER: Well, let me take each of those two because I think they — they …
GAYNER: … yes, they are instructive. So, think of Amazon as — as a — as an example. I talked earlier about the importance of the shareholders of Markel and the desire that we have in Markel to have great shareholders who are thoughtful and intelligent and — and really contribute ideas and thoughts to — to me and to Markel that make us better.
And specifically, with Amazon, I have a friend named Josh Tarasoff who runs his own investment management firm, and he’s — he’s done extraordinarily well. He’s a Markel’s shareholder, a friend, and — and so we had a relationship. We talked back and forth. And — and Josh noticed that if you went back — and I can’t — again, I lose track of time — a decade even or more, whatever, our holdings in the world of technology were pretty slim. Call it — let’s round it to zero, not much. And — and if Josh and — is — is kind and — and helpful and gentle way was helping me realize, I — I might be making a mistake about this.
RITHOLTZ: And when you say kind and gentle, was he like, “Tom, what the hell are you doing here? You’re missing the boat?” or was he — you know, how kind and how gentle.
GAYNER: He really was kind of gentle.
GAYNER: So, despite — I mean, I — I love New Yorkers because they are — they are …
RITHOLTZ: By the way, that was kind and gentle just so you know.
GAYNER: Exactly. No, I understand that completely. And — and there’s no mystery or subterfuge about that. You said …
GAYNER: … what — what — you know, what is wrong with you? I — I get that. Oh, so I — I can absorb that and not take it personally. But, by the way, Josh is a kind and gentle person, but he really walked me through thinking about Amazon and helping me to come to understanding in a — in a much more productive way than I — than I had in the past. So that’s point number one.
RITHOLTZ: So that trade worked out I’m — I’m guessing.
GAYNER: Yeah, it’s more — more green than red on that one. And here’s the other thing that really matters. So, one of my hiccups or concerns about Amazon would have been the idea of the valuation at that instant, you know, what — what — what is it if I — if I pencil out numbers. And because Markel has been a profitable insurance underwriting organization for so long, what that creates is regular periodic cash flow and the ability to do dollar cost averaging.
So, I’ve been in Markel a little over 30 years, well, times four for a quarter. That’s 120 quarters. And I would say, of those 120 quarters that I’ve been there, the insurance operations — and now the Ventures operations as well — have deposited cash into the investment account, maybe 116 out of those 120 quarters.
RITHOLTZ: So, you have money to put to work every quarter?
GAYNER: Exactly, exactly. And if I make a mistake, among the mistakes you can make are you can make a mistake about valuation where, look, this is a great company, but it’s just really high priced. And so, you — you paid too much for it or you can make a mistake about the business itself. It’s not as good a business as you thought it was.
Well, if I’m right about the second thing that this is really a good business, I get to solve for the valuation problem a little bit by dollar cost averaging …
RITHOLTZ: Right, little time.
GAYNER: … just nibble, nibble, nibble, nibble, nibble, nibble, nibble overtime. And — and again, the ultimate return that you earn if you really have a long-term horizon is the intrinsic return that the business itself earns, not the trading returns from the more volatile stock prices. It’s the underlying returns on capital that the businesses offered.
So, dollar cost averaging, and flow and time, it enables you to get to the point where you can — you can — you can power your way through evaluation error.
RITHOLTZ: Especially if the growth is that strong.
GAYNER: Exactly, exactly. I mean, if — that needs to be true for you to be able to power through the valuation problem. If growth doesn’t happen, then you got a problem on your hands.
RITHOLTZ: What about a company like Regeneron, which seems to be so industry-specific?
GAYNER: Yeah. And I’m going to give credit to my colleague Dan Gardner for that particular stock. That is — that is his pick and the way our system works. He has a — a sleeve of money that he manages. He gets a portion of that — of that flow as well. And part of his job, for me, is to signal through his purchases what he has conviction about. And Regeneron is his idea and something that he has conviction about.
And again, if you look at Regeneron’s performance over the last five, 10 years, I mean, it’s — it’s …
RITHOLTZ: Actually, the past two years have been pretty good.
GAYNER: But even more than that, and — and again while Dan is the expert on that, not me, you have founder — leaders …
GAYNER: … that were in place. You have a culture of scientific discovery that seems to be embedded in that organization and talked about sort of the comfort level that you get from investing people that are making the world a better place rather than a worst place. Regeneron is solving some thorny problems and — and — and I, as a human being, am grateful for what — for what they do and what they’ve come — come up with some — I sort of rooting for them, so it — it wins on a lot of different counts.
RITHOLTZ: So, I saw you give a speech some years ago where you said, “Hey, when you walk into the bar, you want to be the bartender not the people at — paying for drinks,” and hence, the parallel or things like BlackRock and — and T. Rowe Price. Tell us about your thoughts about investing in the world of financial services.
GAYNER: Yes, I think it’s fundamentally historically have bene a — a very good business for a long time. I think that’ll continue to be the case, so I think …
RITHOLTZ: Now a lot of people look at this space — I’m sorry to interrupt, but a lot of people look at this space and say, “Hey, there’s fee pressure and there’s competition from crypto, and from private equity, and from all this other stuff,” how do you respond to that?
GAYNER: I think there’s always been competition. Competition is just the nature of things. That’s all to — to bring in a different topic the — the idea of theology that said Martin Luther’s great gift to the world was not the theology of Lutheranism, it was — it was competition. So, the Catholic Church had some competition.
It’s been going on for a long time. It is the nature of — of creativity and freedom that — and this is a wonderful thing that you hope somebody somewhere are saying, “You know, I could do that better than that.” Our — our world progresses on account of that, but — and here’s the other advantage in financial services.
There’s not a lot of sunk cost when — when you have a financial operation. So, if something is not profitable, you don’t have a plan …
RITHOLTZ: Jettison it …
GAYNER: … that you needed to (inaudible), right, exactly. So …
RITHOLTZ: Fire that group and move on.
RITHOLTZ: Right, it’s all human capital, it’s not …
GAYNER: Keep going.
RITHOLTZ: … it’s not big factories or cranes or any of that stuff.
GAYNER: Right, right.
RITHOLTZ: It’s your people or assets and …
RITHOLTZ: … you know, you’re constantly — they’re all competing with one another to show their ability to produce.
GAYNER: Right. So, if you look at a — at sort of anything in the financial services businesses, by and large, it’s like our, you know, body temperatures that we have to check before we got into — come into the building today …
GAYNER: … 98.6. And look, if you’re 101.6, I’m betting they wouldn’t let me in here today.
RITHOLTZ: For sure.
GAYNER: Pretty quick feedback loops.
GAYNER: So financial services groups. And — and this is a really important notion, the idea of feedback loops and — and awareness, and tying that to humility and just always been willing to listen to other people. Where people get themselves in trouble is where they — where they don’t pay attention to feedback loops. And there are some things that I — I — I put in the category, these are mistakes that only experts can make because people are so sure of themselves.
And I — I read a wonderful book recently called “The Long Gray Line,” and it’s by a gentleman named Rick Atkinson. It is about the West Point Class of 1966. This is a really good book.
And if you think about that, just picture it in your mind for a second. So those kids — and they were kids when they started — would have been, you know, entering West Point in 1962, the height of idealism, and JFK, and moon race, and all that sort of stuff. And the author does this great job of connecting you to this kid from Wisconsin, this kid from Tennessee, and this kid from upstate New York, their girlfriends, and their family, and their situations. And you really felt like you got to know them. And then you got to follow them through their four years at West Point, and who was the rule follower and who was to rule breaker, and — and — and thje branches of the Army that they decided to go to, so on and so forth. And then they finished in 1966. And they got dumped into Vietnam.
GAYNER: And you hear their stories and — and the tragic circumstance of what was involved. And if the people who were in-charge had listened to the people who were on the ground, we would’ve done things differently. And when you see that so vividly explained there, it puts me in a situation where we have 27,000 people working for Markel. I feel responsible for them and I feel responsible for the decisions that I make that affect them with no control or ability to influence their fate by themselves some time.
So, I will always want to personally guard against being that expert who thinks he knows. I want to listen. I want to hear. I want to — I want to get that sense of what the people with boots on the ground, were they doing it, have — and that — that feedback loop of just staying connected to that is a fundamentally important philosophy and way of doing things.
RITHOLTZ: I like that a whole lot. Last company I want to ask you before we get to our favorite questions, you have been a Marriott shareholder for a long time. Are you still a shareholder?
GAYNER: Unfortunately, no, and again that was also a decision that was made …
RITHOLTZ: In the first quarter of pandemic.
GAYNER: … exactly.
RITHOLTZ: I mean, they still haven’t recovered.
GAYNER: Yeah. And — and my goodness, if you’ve — I mean, Arne Sorenson who did a spectacular job as the leader there, if you saw the video that he put out in the early days of the pandemic and the emotions that were there, and …
RITHOLTZ: I’m sure.
GAYNER: … and I don’t know whether the cancer had been disclosed at that point …
GAYNER: … or not, that was a first-class individual doing first-class things. I still have every epic regard for the business. But given their circumstances and our circumstances, I — I needed to make the painful but difficult decision to — to eliminate that — that (inaudible) portfolio. And tactically, you could say, and I’ll admit made a mistake that that stock price is higher today than it was when we sold it, but we sold it for different reasons than …
GAYNER: … just what the stock price was at that point.
RITHOLTZ: Quite fascinating. Tom, I know I only have you for a couple of minutes and I have to thank you for being so generous with your time. But let’s jump to all of our favorite questions we ask all of our guests, see if we can get a little insight into — little more insight into who you are and what makes you tick. Starting with tell us what has kept you entertained during the past 18 months. What are you watching on either Netflix or Amazon Prime during this period when we’ve all been stuck at home?
GAYNER: Well, sure. I am completely grateful for the return of live sports and live music …
GAYNER: … because those are both things that I just love immensely. And it’s football season and I am more of a college football guy, but to be able to go back to UVa and be in person for those games in over the last 40 years, but I’ve missed no more than five home football games at UVa.
GAYNER: It’s what my family does. So — so I went to UVa. My wife went to UVa. I have three children who went to UVa.
RITHOLTZ: You dressed everybody up in the guard and you …
GAYNER: Well …
RITHOLTZ: … hit the stadium.
GAYNER: Fortunately, my children are old enough that I don’t have to dress them anymore. And when they were young enough to have to be dressed, pretty much my wife did that. So, I’m not much (inaudible).
RITHOLTZ: But I mean, you’re wearing all UVa sweats when you show up.
GAYNER: Oh, yeah, yeah, yeah.
GAYNER: We’re — we’re there. We’re — we’re good for that. So, it’s — it’s fun to be back at — at live sporting events and live music.
In terms of podcast and — and streaming, I’ll tell you one that has really captured me is Broken Record with Rick Rubin. I don’t know if you know Rick Rubin …
RITHOLTZ: Sure, sure.
GAYNER: … music producer …
RITHOLTZ: Yeah, absolutely.
GAYNER: … with complete diversified portfolio, everybody from Jay-Z to Johnny Cash.
RITHOLTZ: Did — did he record a Springsteen album if memory serves me right?
GAYNER: I — I don’t know, but I certainly wouldn’t rule it out. Who didn’t he recorded? Who didn’t …
GAYNER: … he do over the — the last 30 years. So, it’s a fabulous way of learning history when you have somebody as knowledgeable as — as what Rick Rubin is and has been connected to so much music.
I mean, music reflects the zeitgeist of the times. Whether it’s reflecting it or causing it, it’s — it’s — it’s right there. So, for these artists to talk about their craft and talk about their art with — with Rick, I find those conversations to be things that I really learned from and have been just sort of — as I go out and walk, listening to that podcasts quite a bit. It’s my favorite one.
RITHOLTZ: I’m going to check that out. I’m a big music fan. Since you mentioned doing the live shows, what live acts have you seen since the world has begun to reopen?
GAYNER: Well, there’s a — there’s a particular artist in — in — in Virginia. I’ll give him a plug here. His name is Scott Miller. He’s from Swoope, Virginia, which is outside Staunton. And neither one of them sounds the way it’s spelled, and I’ll let your viewers Google that — that — that map and figure out what I’m saying there.
But Scott I would describe as someone who has sort of a definitive Virginia voice. So, listen to his music. It’s a singer, songwriter of folk stuff. And I think I’ve heard him about four or five times since the — since the pandemic has hit. First, when first live show started, he — he had one in Staunton, Virginia and then one up in Natural Chimneys, which is near Harrisonburg, Virginia. So, he done two shows in two weeks, and I have been to both shows. So, I was telling people I have been to 100 percent of the Scott Miller concerts that had been — since the pandemic. And I’m not still at a 100 percent, but anytime I get the chance to — to hear him, I — I — I look to do so.
One of the artists that through — during the pandemic said he’s not touring anymore is Aaron Neville. He’s probably a little more well-known than …
GAYNER: … than — than Scott Miller. Up until the pandemic, that’s the artist who I had seen the most times, and absolutely love his — his music. And just — just being in a room where Aaron Neville is singing, that’s a good thing.
RITHOLTZ: Yeah, to say the least. Neville Brothers also.
RITHOLTZ: The whole — the whole family is super talented.
RITHOLTZ: Let’s talk about your early mentors. Who helped shape or guide your career?
GAYNER: Well, clearly, my father probably occupies a singular spot in that. He was a — a CPA in Salem County, New Jersey. And then Salem County, compared to most parts of New Jersey, is very rural. He would’ve started his CPA practice in Salem County probably in the early 1950’s after serving in World War II and finishing up his education at Temple on the — on the G.I. bill, just to give some insight into — to my father in the way he — he did things.
So, he became a reasonably successful businessman over — over time. And when people would ask him where he went to school, he would say Temple O. And I observed my father doing that all the time, and I kind of one time asked him, “Dad, when — when people ask you where you go to school, you say Temple O. Why — why do you do that?” He said, “Well, when I say Temple, people say oh. So, I think that — I’d save them the time.”
RITHOLTZ: That’s very funny.
GAYNER: But that’s a view — but that’s an insight into the way he did things. And I don’t know if you remember the show Green Acres.
GAYNER: Well, there was Mr. Douglas and Mr. Haney as the polar opposites. And my father was somewhere between the two. So, he practiced with the predecessor firm of Deloitte in Philadelphia, but left the big city to — to return to where he was born in Salem County and became an accountant there. And he had a very interesting practice. So, he would do people’s tax work. He did business consulting. He owned a liquor store among other things. He would put together deals and as opposed to taking a fee would take a percentage interest in the — in the business, so a little bit of (inaudible). And his office was in our home.
And in the house where I grew up, among other things in addition to just — during my father and liking him and hanging out with him, in — at the farmhouse we grew — we grew up in, there were only two rooms that were air-conditioned. One was my parents’ bedroom and the other was his office. So, for all kinds of reasons, I hung out at his office, and he read the Wall Street Journal, so I read the Wall Street Journal.
And — and as a kid doing my homework and just sitting in his office, coloring books or reading, whatever, I would hear him as he was talking to people on the phone or people would be in and out. And — and he was kind enough. I came along a little bit later in his life where I was just allowed to be an observer and, through osmosis, pick up the idea of business without formal instruction, but that was — that was the case from a — from an early age, so — so many things I learned about life. And the business was just hanging around with my dad through the — the early years of my life.
RITHOLTZ: Interesting. You mentioned “The Long Gray Line,” what are some of your other favorite books. What have you been reading lately? And what are some of your favorites?
GAYNER: Well, it’s funny you should ask that, and — and I read all the time. That’s what I do in spare moments, and I — I love traveling for so many reasons, not the least of which is always have a book in my hand and — and a bag of stuff to read. And it’s like asking me what — what did I eat last Tuesday. I don’t know, but I’m sure I ate something. So, I — I always draw a blank when people ask me that questions. I know what I’m reading right now.
RITHOLTZ: Tell us what you’re reading now.
GAYNER: It’s “The Lincoln Highway” by Amor Towles. And I thought his book, “A Gentleman in Moscow” was a spectacular book, so I eagerly awaited his — his next book that has come out recently. I think it might be even better written than “A Gentleman in Moscow.” So, it’s — it’s a — it’s a wonderful book.
And — and I will say one thing about reading, I mean, obviously, it connects to role models, and Charlie Munger is about as good as they get …
GAYNER: … at the top of the list. Munger talks about not reading fiction, and he thinks it’s a waste of time. That’s something that I would disagree with. And I think one of the reasons I enjoy fiction is fiction, by definition, creates muscles of empathy.
To read a — a good work of fiction, what’s going to happen is you’re going to find yourself sort of inhabiting the character. And you’re going to find yourself in that setting and in that circumstance. And what you’re doing without even realizing is you’re figuring out and learning how to put yourself in someone else’s shoes. And I think that is a very underappreciated skill in today’s world where we — it’s — it’s so easy to just get inside your own head and live in your own world to — to live and work remotely, to have your groceries delivered.
GAYNER: You kind of forget what it means to be part of a — of a broader society. And to be able to see things from somebody else’s point of view, I can’t think of anything that’s really more powerful than that. So, I think the tool of reading fiction just to — just to teach yourself how to do that is — is a really good way of — of doing things.
RITHOLTZ: I’m going to share something amusing with you. We were having a conversation about Isaac Asimov’s foundation is now a show on Apple Plus, and Dune — Frank Herbert’s Dune — the — not only is in the theaters, but it’s on HBO Max.
And the conversation we had amongst a group of investors are the kids like me who are big sci-fi nerds not coincidently tend to be more inclined to invest in technology and some out-there concepts than the people who always thought sci-fi was wacky. And I’m — I’m — I would be fascinated to find out if anybody has ever done a study on that because if it makes sense, hey, half the stuff we read about in sci-fi — self-driving cars, robots, magic shots of your own DNA that make diseases go away, that’s 40, 60, 80 years old. And here it is, portable computers that allow you to do video talking in your pocket …
RITHOLTZ: … all this stuff is straight out of sci-fi. So, who better to be investors in that than the people who — it was formative for them as — as a child.
GAYNER: I can remember as a kid, I spend a lot of Saturday’s in my youth at the Franklin Institute in Philadelphia, which is their science museum. And — and I can remember the first telephone video that had video attached to it.
GAYNER: And you would stand in one room and your friend would stand in the other room, and you would talk to yourself over this amazing thing. Of course, it died because network effect at that time, it was so expensive …
GAYNER: … that, all right, you got one, who are you going to call?
GAYNER: There’s — there’s nobody else who has one.
RITHOLTZ: That’s right.
GAYNER: But it has become pervasive and — and your point …
RITHOLTZ: Yeah, absolutely.
GAYNER: … your point is well-taken.
RITHOLTZ: What sort of advice would you give to a recent college grad who is interested in a career in either venture private equity investing or traditional finance investing?
GAYNER: Well, there’s a guy named — here’s a book I read, Robert Hagstrom, who has written a lot of books about Buffett. I think he wrote a book if I’m remembering the title exactly right called “Investing: The Last Liberal Art.” And it really is the concept and the notion of using both the right and left side of your brain — both of them — to analyze, and be disciplined, and — and do your work, but at the same time never lose your sense of imagination, creativity, curiosity, wonder about what else might be true, what’s the other side of the — the argument.
I have one friend, Chad Roe (ph) from — from Texas who has Texas ways of saying things. And one of his statements that I always remember is that, “You must remember that any pancake, no matter how thin, has two sides.” So, I think the — the number one thing as you’re — as you’re coming up is just always be developing your mind, be developing your creativity, and be developing those feedback loops, and — and don’t ever think you’ve arrived at the answer. This is not a problem to be solved, it’s a problem to be worked at.
And it’s fun to work at. It’s — it’s — it’s exercising your mind. It’s — it’s free and it’s — it’s — it’s like that scene from Chariots of Fire where the — you know, the sister is telling the runner, “You know, you — you shouldn’t run on Sundays” and he was a person of deep faith. And he responded to his sister that, “Well, yes, the Lord gave me faith, but he also made me fast.” So, the run is how he feels is grace. That was what he was made to do.
So, I think if you — if you really …
RITHOLTZ: I like that.
GAYNER: … are fascinated by finance and investments, and I know as a kid, I — I always have been doing it every day, reading something, talking to somebody, arguing a case back and forth both sides. In fact, one of the things that I joked with Steve Markel about, he had this sort of rabbinical style about him where, at any given point in time, his office was next to mine for many years. If I had an idea, I would go into his office and I would tell Steve this idea. And he would say, “You know, that’s just the dumbest thing I ever heard,” and we would argue it.
And I would go away, and then I would come back a couple of days later or something, then I said, “You know, Steve, I think actually you were right about that.” And he — and he would say, “No, I think you were right about that.” And then we would argue it the other way. And that was just the — the technique to get more robust understanding of — of what might, in fact, be the case. And usually, it’s not the polar extreme in either case. The answer just to be found somewhere in the middle.
And as a — one of my — one of my digitally cool friends says people have forgotten the fact that there are some numbers that exist between zero and 100.
RITHOLTZ: Right. You know, the genius of law school is that moot court forces you to not pick a side and argue it. You have to be prepared not only to argue both sides, but at — at — at a moment’s notice switch positions and suddenly, you’re no longer the plan if you’re now the defendant, and you have to make that case.
And there’s something to be said for you shouldn’t be long anything unless you understand. You know, you shouldn’t be bullish on anything unless you understand the bear case …
RITHOLTZ: … and vice versa …
RITHOLTZ: … because listen, someone’s — for every buyer there’s a seller. There’s two sides to, you know, that pancake. You have to be able to be on to see at least both sides of that argument.
RITHOLTZ: So, our final question, what do you know about the world of investing today you wish you knew 37 years ago or so when you were first getting started?
GAYNER: If I look at the mistakes that I’ve made, the ones that have been most costly have been those of emission. So, to look at Berkshire when I was 22 years old and have it so obvious to me as an accountant, this is good and yet not buy it, that’s stupid. And I think I make that mistake less than I used to.
When you find something that’s really good, I mean, here’s another thing that Buffett said that has — has profoundly changed for me overtime is, you know, being an investor made him a better businessman, and being a businessman made him a better investor. I can tell you through the responsibility of what’s involved in Markel Ventures and operating real businesses, I know from firsthand experience that operating a real business and doing well at it is hard. It’s hard. And people who are good at it, don’t be so quick to abandon them when they go through a rough spot.
Again, going back to Chad Roe (ph), he has a saying that says, in the investment business you are — you are never — smart people, generally speaking, don’t become stupid, and stupid people almost never become smart. So, if you find smart, hardworking, intelligent, creative, dedicated people, stick with them because they’re going to accomplish things over time that will amaze you. And — and give him the leeway, give them the grace to — to make mistakes when they are mistakes of — of learning and nonfatal that you can — you can recover and — and learn from.
And just having grace for that is something that’s easier when you’re older than it is when you’re younger. So those are things I wish I knew as a 29-year-old instead of having to be 59 to know them.
RITHOLTZ: That’s a lovely point to end on. Thank you so much, Tom, for being so generous with your time.
We have been speaking with Tom Gayner. He is the CIO and Co-CEO of Markel Corporation. If you enjoy this conversation, well, be sure and check out any of the previous 400 such discussions we’ve had. You can find those on Apple iTunes, iHeart Radio app, Spotify, wherever you get your podcast from.
We love your comments, feedback, and suggestions. Write to us at [email protected] You can sign up for my daily reads at ritholtz.com. Follow me on Twitter @ritholtz.
I would be remiss if I did not thank the crack team that helps put these conversations together each week. Paris Wald is my Producer. Mohammed (ph) is my Audio Engineer. Michael Batnick is my Head of Research. Atika Valbrun is our Project Manager.
I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.