Guy Spier

Don't jeopardize compounding for the sake of beating the index

After 7-8 years underperforming the S&P over a 25-year record, Spier says the key is to keep making moves that let him compound. Beating an index would be nice, but he won't risk compounding to do it.

“The key is to compound and to take, make moves that I know will enable me to compound. And if I can end up beating an index, then that would be great. But I cannot jeopardize compounding for the sake of beating the index. I have to focus on compounding and that leads— and if you step back, I mean, I think that, you know, this idea of playing the infinite game, so many people think they're playing a finite game, but they're playing an infinite game.”

Investing is an infinite game: don't blow up to beat the index

Guy Spier distinguishes finite games (chess, football, with set rules and a declared winner) from infinite games like the Cold War, where you don't win or lose, players just drop out. Investing is infinite: of the funds around when he started, under 2% remain, many because they imploded.

“In the infinite game, you don't really win or lose. Usually one or more of the players just decides to drop out. In the case of Russia, Russia kind of in a way imploded and dropped out of it. What's the most important point? The key mistake that we make so often in life is we think we're playing a finite game when we're playing an infinite game. Life is an infinite game. Investing is an infinite game.”

Steal thisOptimize to stay in the game and keep compounding; never take a swing that risks blowing up just to beat a benchmark.

The two gas stations: you're the guy who won't copy the winner

Spier retells the Good to Great parable of two gas stations across the road, where one owner reinvests, paints, adds flowers and lowers prices while the other watches and does nothing. The punchline lands when Spier realizes he is the idiot across the road, not copying Mohnish Pabrai.

“And I don't know exactly what happens when I realize actually you're the guy on the other side of the road. 'Cause here's Mr. Mohnish Pabrai doing all these things and you're not doing any of those things. Why the hell not? Don't be such a freaking idiot.”

Steal thisCopy the visible moves of the winner across the road instead of wondering why you're losing.

Run a weekly investing posse where one member pitches a written idea

Guy Spier describes the 'Posse' — a small group of value investors (including Bill Ackman) Whitney Tilson convened, where each meeting one member showed up with a written stock idea handed out to the group and discussed in depth.

“So what I remember is that you needed to show up with a written stock idea.”

Steal thisForm a 5-6 person peer group where each session one member circulates a written idea and the group pressure-tests it.

Farmer Mac: how Ackman's deep dive saved Spier from a fraudulent stock

Spier pitched Farmer Mac as 'the next Freddie Mac' to his group, but Bill Ackman had downloaded the actual securities and found each 'mortgage-backed security' held only a handful of huge farm loans, not thousands of diversified mortgages. Ackman called it borderline fraudulent business lending; Spier sold by end of day.

“Well, I think Bill Ackman's either short it or he is about to take a massive short position and he wants to talk to you. So I'm like, okay. So I take the call from Bill and Bill says, look, I just feel like I need to tell you, I kind of got the idea indirectly from you, but I've just taken a massive short position in PharmaMac and I feel like I need to tell you, I think that the company is borderline fraudulent.”

Steal thisBefore buying, download the actual underlying documents yourself — don't take the issuer's summary at their word.

Write 1,000 'thank you' notes a year (3 a day) to manufacture goodwill

From Cialdini's story of the top car salesman who mailed 1,000 'I like you' cards a year, Spier made a rule to not leave the office until he'd written 3 notes a day — and found the act of writing them actually made him care more about the recipients.

“well, you know, 1,000 notes a year, that's more or less 3 notes a day. I'm not going to leave the office. Until I've written 3 notes that basically say, I like you.”

Steal thisDon't leave the office until you've written 3 genuine thank-you notes; do it daily and the caring follows the action.

Investing is bumper bowling: avoid the gutters, don't chase the kingpin

Spier reframes investing not as a fighter-pilot lock-on but as bowling with bumpers: spend less energy aiming for the perfect winner and more on keeping the ball out of the gutters — i.e. running your portfolio so that even your worst misses don't wipe you out.

“spend less time aiming for the skittle at the very front instead of spend more time thinking just to keep it on the runway rather than in the sides and set myself up such that when I miss really, really badly, I'm still going to be okay. That is more important than actually hitting on the targets.”

Steal thisOptimize your portfolio to survive your worst misses, not to nail the single best pick.

Investing is bumper bowling: avoid the gutters, don't chase the kingpin

Spier reframes investing not as a fighter-pilot lock-on but as bowling with bumpers: spend less energy aiming for the perfect winner and more on keeping the ball out of the gutters — i.e. running your portfolio so that even your worst misses don't wipe you out.

“spend less time aiming for the skittle at the very front instead of spend more time thinking just to keep it on the runway rather than in the sides and set myself up such that when I miss really, really badly, I'm still going to be okay. That is more important than actually hitting on the targets.”

Steal thisOptimize your portfolio to survive your worst misses, not to nail the single best pick.

Cloning: ask 'what would my hero do in my shoes?' — you don't need the real mentor

Spier (via Mohnish Pabrai's 'cloning' and Robbins' 'matching and mirroring') argues you rarely need the actual person as a mentor; learn enough about them to simulate what they'd do in your exact situation. He calls this a teachable 'technology of success.'

“We need to know enough about them to know what they would say If they were present. And so this idea of me also saying, what would— if Warren Buffett was here right now, if he was in my shoes, what would he do?”

Steal thisPick someone you admire, learn them deeply, then in any decision ask 'what would they do in my exact shoes?'

Two gas stations: you're usually the one NOT copying the winner across the street

From 'Good to Great' via Mohnish: two gas stations face each other; one paints, adds flowers, lowers prices, and the other — who can see exactly what works — simply doesn't copy it. Spier's gut-punch realization was that he was the guy across the street not copying the obviously winning behaviors.

“And I don't know exactly what happens when I realize actually you're the guy on the other side of the road. 'Cause here's Mr. Mohnish Pabrai doing all these things and you're not doing any of those things. Why the hell not? Don't be such a freaking idiot.”

Steal thisFind the person visibly winning near you and just copy their obvious moves — most people watch and never do.

Stop selling to prospects — only meet people already invested with you

Spier was stunned that Mohnish Pabrai wasted zero time talking to prospects; if you weren't ready to invest, he wouldn't meet you. The first time Spier declined a meeting with a non-investor was 'huge' — he replaced prospecting with an engine for people to find him.

“And it just blew me away when I discovered that Mohnish didn't waste any time talking to prospects. Basically, if you weren't ready to invest with Mohnish, he didn't want to spend time with you. And he had an engine of how people were going to find out about him.”

Steal thisQuit spending time on prospects who aren't ready; build an inbound engine and only meet committed buyers.

Finite vs. infinite games: the deadly mistake of confusing the two

Spier lays out the finite (chess, football: fixed rules, clear winner) vs. infinite game (the Cold War, life, investing: no fixed rules or end; players don't win, they just drop out). The key error is playing life and investing like a finite game — and the goal becomes not imploding.

“The key mistake that we make so often in life is we think we're playing a finite game when we're playing an infinite game. Life is an infinite game. Investing is an infinite game.”

Steal thisTreat investing and career as infinite games: don't try to 'win' a round, just avoid being the player who implodes and drops out.

Finite vs. infinite games: the deadly mistake of confusing the two

Spier lays out the finite (chess, football: fixed rules, clear winner) vs. infinite game (the Cold War, life, investing: no fixed rules or end; players don't win, they just drop out). The key error is playing life and investing like a finite game — and the goal becomes not imploding.

“The key mistake that we make so often in life is we think we're playing a finite game when we're playing an infinite game. Life is an infinite game. Investing is an infinite game.”

Steal thisTreat investing and career as infinite games: don't try to 'win' a round, just avoid being the player who implodes and drops out.

Never fall for 'just this once' — judge the action repeated for life

Spier's Buffett-derived rule for fast no's: instead of deciding case-by-case, ask 'if I took this same action every time these circumstances arose, how would my life turn out?' and 'if everyone did this, what would the world look like?' It collapses thousands of future decisions into one.

“if I, in every time I'm faced with these circumstances, I say yes to this, how will my life look? And if every time I'm faced with these circumstances, I say no, how will my life look? And it makes it far easier to come to a quick no”

Steal thisWhen tempted to make a one-off exception, evaluate the rule, not the instance: what if you did this every single time?

Go to the source: Buffett letters, annual-meeting transcripts, Poor Charlie's Almanack

Asked for the best things to read on the Buffett-Munger school, Spier names the primary sources: Buffett's shareholder letters, the transcripts/recordings of the Berkshire annual meetings, and Poor Charlie's Almanack as an incredible, manageable collection.

“You gotta go to the Buffett letters. You gotta go to the transcripts and all the recordings of the annual meetings, which are phenomenal. And obviously, as you brought up, I think that that Poor Charlie's Almanac really is just an incredible collection of stuff”

Go to the source: Buffett letters, annual-meeting transcripts, Poor Charlie's Almanack

Asked for the best things to read on the Buffett-Munger school, Spier names the primary sources: Buffett's shareholder letters, the transcripts/recordings of the Berkshire annual meetings, and Poor Charlie's Almanack as an incredible, manageable collection.

“You gotta go to the Buffett letters. You gotta go to the transcripts and all the recordings of the annual meetings, which are phenomenal. And obviously, as you brought up, I think that that Poor Charlie's Almanac really is just an incredible collection of stuff”