The transcript from this week’s, MiB: Alex Morris, “Buffett and Munger Unscripted,” is below.
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MASTERS IN BUSINESS Alex Morris, Author, Buffett and Munger Unscripted
BARRY RITHOLTZ (00:00:07): This weekend on the podcast, another extra special guest. Alex Morris is the author of “Buffett and Munger Unscripted.” The amazing story of how he put this book together: by reading and watching 31 years of annual shareholder meetings — thousands and thousands of questions, hundreds and hundreds of hours of video — distilled into a fairly digestible compendium. I thought the book was fascinating and the conversation was fascinating, and I think you will too. With no further ado, my interview of Alex Morris.
BARRY RITHOLTZ (00:00:54): I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Alex Morris. He is the founder of the TSOH Investment Research Service, launched in 2021 after 10 years as a buy-side equities analyst. He is the author of “Buffett and Munger Unscripted: Three Decades of Investment and Business Insights from the Berkshire Hathaway Annual Shareholder Meetings.” Amazon named it one of the best books of 2025. It’s pretty beefy — I’ve been reading it over the past, I don’t know, eight months. It’s about 500 pages, and I have really, really been enjoying it. In fact, I’ve been enjoying it so much that I reached out to Alex and said, let’s talk about your research and the book. He has been a Berkshire Hathaway shareholder since 2011 and attended multiple annual meetings, including the 2026 meeting, the first of the Greg Abel era. Alex Morris, welcome to Bloomberg.
ALEX MORRIS (00:02:03): Thank you for having me. As I was saying to you before, Bloomberg headquarters is quite a building.
BARRY RITHOLTZ (00:02:07): Nice place to be.
ALEX MORRIS (00:02:07): I’m gonna drop my resume on the way out.
BARRY RITHOLTZ (00:02:10): So before we get to your resume, let’s roll back to what led you to where you are today. Both a bachelor’s and an MBA from the University of Florida — was finance always the career plan?
ALEX MORRIS (00:02:24): It was not. When I went to school, I really didn’t have any idea what I was gonna do, and my dad’s a plumber, so at first I did building construction, and took a couple physics classes and some other things that kind of threw me for a loop. And then I got my first internship working down in Miami, outside all day, and fairly quickly realized, let me find something a little easier. So I went to finance.
BARRY RITHOLTZ (00:02:43): What were you doing, working outside all day in Miami over the summers?
ALEX MORRIS (00:02:46): What were we doing? We were working on a high-rise that was being built, and I spent most of the time running from the rain that came every single day at noon or one o’clock.
BARRY RITHOLTZ (00:02:54): I spent a summer in college working with a crew, building decks, swinging a sledge, breaking up the concrete of an old pool to put in a new pool. And nothing makes you wanna buckle down and study more than physical labor. It’s like, oh my God, this is really hard work. I have tremendous respect for people who do that. It really forces you to see the world in a different way, doesn’t it?
ALEX MORRIS (00:03:17): Yes. It’s very different work than sitting and writing a book, as you and I both know.
BARRY RITHOLTZ (00:03:21): So after you get your bachelor’s and MBA in finance, you take the CFA exam — it’s a two-part exam — and you spend a decade as a buy-side equities analyst. What did you learn from those 10 years on the buy side?
ALEX MORRIS (00:03:37): Yeah, a lot. I kept my head down and learned as much as I could every single day. The first job I started at, I was brought in and basically told, hey, you’re running all the research for equities, but also you’re the secretary and you’re doing the trading — you’re doing everything else. So I got a lot of good experience there, but it was a role where my boss really was like, just go do what you think makes sense to do, which works really well with my kind of disposition. And as time went on, I learned a lot from making a lot of mistakes — that’s a really good way to learn — a ton of reading, a ton of writing online and sharing stuff with people, getting good feedback. So yeah, just time and effort.
BARRY RITHOLTZ (00:04:10): That’s one of the big problems with everybody: here’s what a billionaire’s morning routine is like. You seem to learn more — all of us learn more from our errors and mistakes than we do from our victories. Do these guys have anything to say about that?
ALEX MORRIS (00:04:26): Oh, yeah. They say learn all you can, particularly from other people’s mistakes if you can. But that seems to be hard to avoid, at least for me and most of us.
BARRY RITHOLTZ (00:04:34): So after 10 years on the buy side, you launch an independent research service in 2021. What made you take that leap? What were those initial couple of years like?
ALEX MORRIS (00:04:45): Yeah, I’d been writing online going back to college, and I continued to write online under a pseudonym, Science of Hitting, or TSOH. And again, I had built a network over time. I really enjoyed the process of writing. I had started making some supplemental income through writing, and I looked around and I saw people like Ben Thompson of Stratechery and other people who had built a business online sharing their research, I wanna call it that. So when I saw Substack come around, and it went from having to understand anything on the technical side to write-in-Word, copy, paste — which is more my speed for technology — I decided to give it a shot. I said, I’ll give myself a year, and if it doesn’t work out, I’ll go find another traditional job, but I wanna see if I can do this. And thankfully, it’s worked out.
BARRY RITHOLTZ (00:05:27): And “The Science of Hitting” was a book by Ted Williams that Buffett loves to cite for the whole strike zone analogy. If you Google image search this, there’s a strike zone, and Ted Williams literally figured out every position a ball can be thrown — just picture a grid, 12 by, I don’t know, 20, however many it is — and figured out the batting average for when a ball hit that spot, how likely he was to hit it. Buffett loves that analogy. Why did you name your research service after it?
ALEX MORRIS (00:06:04): I’d say partly luck. I don’t know if at the time I knew it was an analogy that I liked so much, and that it would be a good name to keep for the next — you know, coming up on 15 years now. But it really spoke to the way I think about investing, in terms of being patient and then also making big swings when you get the chance to.
BARRY RITHOLTZ (00:06:21): Waiting for your pitch. And when it finally comes, don’t be afraid. So I’m gonna assume you’re not averse to a concentrated portfolio.
ALEX MORRIS (00:06:28): I’m not.
BARRY RITHOLTZ (00:06:29): How many holdings do you typically have at any given time?
ALEX MORRIS (00:06:32): In the range of 10 to 15.
BARRY RITHOLTZ (00:06:34): Oh, really? That’s very concentrated. So big, big swings after waiting for your pitch.
ALEX MORRIS (00:06:39): Yeah. And there’s names — like you said, I’ve owned Berkshire since 2011, I’ve owned Microsoft since 2011. Most of the positions have been in there for a period of years. So, you know, it tends to be things that I’ve come to know quite well and have gotten familiar and comfortable with.
BARRY RITHOLTZ (00:06:53): So this raises the obvious question: when did you first become enamored of Buffett and Munger, if you’ve been a shareholder since 2011? When did they first show up on your radar?
ALEX MORRIS (00:07:04): Yeah, the late 2000s, when I was in school. I stumbled across the letters, and actually a buddy and I both became obsessed with it. We were at the University of Florida, and we actually drove to one of the annual meetings in Omaha.
BARRY RITHOLTZ (00:07:16): It’s like a 10-hour drive?
ALEX MORRIS (00:07:17): No, it’s like 20 or 25.
BARRY RITHOLTZ (00:07:19): Oh, really?
ALEX MORRIS (00:07:20): It’s a long way.
BARRY RITHOLTZ (00:07:20): Wow.
ALEX MORRIS (00:07:21): And we were college kids with no money, right? So we slept in the car, I think, one or two nights.
BARRY RITHOLTZ (00:07:25): Wow.
ALEX MORRIS (00:07:26): So yeah, we were very interested in it.
BARRY RITHOLTZ (00:07:29): Wait, you’re college kids, you have no money — but you didn’t own Berkshire A or B back then?
ALEX MORRIS (00:07:34): I think I bought one share — a B share, to be clear. Just to go, for the sake of getting in.
BARRY RITHOLTZ (00:07:40): Right, it’s open to anybody who’s a shareholder. What was that first trip as college kids to the Woodstock of Capitalism in Omaha like?
ALEX MORRIS (00:07:49): I mean, it’s tough to remember now. I don’t know how productive the trip was, but it was more just being in awe of seeing everything and, you know, really starting to learn about investing. And I didn’t do much. Now when I go, I go to a bunch of events and other things and network with people. At that time, it was walking around the convention center eating Dilly Bars, something like that.
BARRY RITHOLTZ (00:08:07): So you have sort of the opposite version, the inverse version, of how the sell side or typical newsletters operate. You disclose your buy or sell before you make the trade. You tell your subscribers, this is what I’m planning on doing. Why run it that way? It’s the inverse of the typical way.
ALEX MORRIS (00:08:30): Yeah. I think one part of finance that I didn’t love was what I considered a lot of talking about things that weren’t really particularly meaningful. And a lot of discussions about things like, “we like Google stock,” for example — but then not a discussion around position sizing, or when you like Google, what are you gonna sell to fund Google? Those kind of more detailed discussions around portfolio management and decision-making. So when I launched TSOH, I thought one way to differentiate this is to just take everything away and be completely transparent about all my decisions, my returns, et cetera. And I thought there’d be a group of people — maybe not the largest group, but a group of people — who would connect with that, and, you know, I could build a sustainable business as a result.
BARRY RITHOLTZ (00:09:11): I recall way back when, watching some talking heads on TV, and when they’d say “we like Google,” or whatever stock it happened to be, the immediate question was, what does that mean? Does that mean you own it? Does that mean you’re holding it? What? Like, liking a stock is very different than “I have allocated 6% of my portfolio to this position.”
ALEX MORRIS (00:09:31): Correct.
BARRY RITHOLTZ (00:09:33): And post-analyst scandal, they used to put the disclosures on screen. We seem to have moved away from that.
ALEX MORRIS (00:09:40): Yeah. I mean, it’s tricky. It’s tough to get on there and kind of explain these things, and a lot of it’s not black or white — it’s in the gray, a lot of these decisions, and there’s a lot of mental accounting and decision-making. And I think it’s just a reality of being an individual and being an investor, and it’s figuring out what are you comfortable with and what game are you trying to play. And, you know, I think talking about that resonates with some people who are kind of honest with themselves about what this game actually is.
BARRY RITHOLTZ (00:10:05): So I like the hundred percent transparency and the disclosure prior to trading, but it raises one question. When you are this public, does it make it more difficult to change your mind, or say, hey, we got this wrong and we’re now selling this?
ALEX MORRIS (00:10:20): Yeah, and that’s probably fair. It’s never fun to be wrong, of course. It’s less fun to be wrong when you’re telling people that you were wrong and you’re dealing with the pain of that. You know, the way I write my research, I kind of view it as an ongoing discussion for a given name. So there’s a lot of opportunities to link back to prior work and go, hey, this call is looking good for X, Y, Z reasons, or looking bad for X, Y, Z reasons. It allows for a continuity of thought and a level of honesty and transparency that I think kind of makes it easier to deal with that issue.
BARRY RITHOLTZ (00:10:52): The reason I asked this question was due to a quote right from the book, which is Charlie Munger’s: “Show me the incentive and I will show you the outcome.” First of all, I think that could be the most quoted line of his of all time. But how do you contextualize that? Is the whole transparency an attempt to stay honest within the Munger framework?
ALEX MORRIS (00:11:19): Absolutely. And yeah, it’s part of — and it goes back to writing when I was much younger and didn’t know nearly as much as I hopefully do today — it’s part of this just being a continual learning process. And it’s with the subscriber, and it’s also me on my own. And I think we’re collectively moving to a place where we can become better investors, or at least more thoughtful investors.
BARRY RITHOLTZ (00:11:38): I like that concept of becoming a better investor. I don’t remember — the problem with the book is, was that a Buffett quote? Was that a Munger quote? They all kind of blur together. The compounding of knowledge that you’re referring to — I think that’s a Munger observation.
ALEX MORRIS (00:11:58): I forget as well.
BARRY RITHOLTZ (00:12:00): But one thing that he definitely said was, Warren Buffett got better after 65. “We’re both learning machines, and we spend most of the day reading.” Explain — these guys are running hundreds of billions of dollars, or at least they were, and they spend their day reading.
ALEX MORRIS (00:12:19): Yeah. I think it’s all about trying to expand your circle of competence and learning as much as you can. As we said, learning from the mistakes, and the mistakes of others. And it’s a game where — you know, I’m thinking, as I’m getting a little bit older, when I go running some time, my knee hurts more and more, while in investing, I’m still quite young, ’cause in theory I could be doing this for another 40, 50 years. And all I need to do is be able to sit in a chair, which isn’t that difficult. So yeah, as long as you put the time and the effort in and remain open-minded — which is a huge thing that I think especially traditional value investors, Buffett and Munger fans, the last 15 years have been a good lesson in, in terms of being flexible and willing to learn. And the world’s obviously changed very significantly. Just turning your mind off from trying to learn about tech, as an example — you can’t really do that anymore in today’s world. You have to be able to at least try to learn about some of these things.
BARRY RITHOLTZ (00:13:08): So I know at TSOH you cover a number of individual names — things like Netflix, Microsoft. Ten to 15 names is pretty tight. Tell us about some of your other names, and are you sitting tight with all of these?
ALEX MORRIS (00:13:21): Yeah, so as I said before, I’ve owned Microsoft and Berkshire for a long time. I’ve owned Disney for a while, which has not worked out, but thankfully it taught me things about the business that then led to a decent Netflix investment back in ’22.
BARRY RITHOLTZ (00:13:34): Why is that? I was curious why you think it didn’t work out. Was it Netflix as a threat, or was it something else?
ALEX MORRIS (00:13:43): They saw where the world was going too late, and in their ability to truly pivot and make the investments they needed to make, they were behind. I think they’ve done better than a lot of their peers, at least among the legacy media companies, but they were slow to the party. And I think especially with ESPN, they’ve struggled with, what really is our strategy going forward? They have their strategy on the entertainment programming side, but in live programming and sports, it’s still really a challenge of how do we get from A to B over time. And obviously sports are expensive. So it’s been an issue for them.
BARRY RITHOLTZ (00:14:13): And yet, go back a few decades, they were very aggressive. They bought Star Wars, they bought Pixar. Those seemed like — wow, those $4 billion deals, that seems crazy. Meanwhile, it’s been a giant moneymaker for them. Was it just a change of leadership at Disney? What led to this failing to recognize the changing world?
ALEX MORRIS (00:14:36): Yeah, I think the media companies got lulled into a place where they thought Netflix or these other channels were incremental, as opposed to replacing what they were doing. And by the time they figured that out, you know, you’d gotten through a period where Netflix had been investing very aggressively and was going global and getting scale in a way that nobody else has basically been able to catch up to. And it changed a lot of their negotiating position amongst each other, and also how they had to price their products, and the reach and engagement of those products. They’re in a really tough place — or have become in a really tough place — relative to Netflix’s rise.
BARRY RITHOLTZ (00:15:09): Give us one more holding that is intriguing.
ALEX MORRIS (00:15:13): Yeah. One that at one point I would’ve probably thought I’d never own — it speaks to what I said before about reading about a company and writing a company up and following it for a couple years — is Peloton. When they brought Barry McCarthy on as CEO, who used to be at Spotify, that’s where my interest came from. The company went through a transition process — it still continues to this day; he has since left. But the stock got to a point where it appeared to be very cheap—
BARRY RITHOLTZ (00:15:40): Post-pandemic.
ALEX MORRIS (00:15:41): Post-pandemic, yeah.
BARRY RITHOLTZ (00:15:42): It had a crazy run-up when everyone was stuck at home and couldn’t get to the gym. Obviously, as did others in that space, but they were the poster child, right?
ALEX MORRIS (00:15:51): Yeah. I mean, I think it was a $150 stock at one point, and recently it traded below $4.
BARRY RITHOLTZ (00:15:56): Wow. That’s a 96, 97% drop.
ALEX MORRIS (00:15:59): Yeah, it’s pretty amazing. I think there’s this question of, what are they dealing with that’s cyclical versus structural? And I think people have a certain view on it that is kind of informed by their anecdotal experience. But you look at other industries — like mattresses, for example — where volumes are still meaningfully below what they were during the pandemic. I think most people would argue that’s probably not structural. People still need mattresses, but the supply-demand got outta whack. And in Peloton’s case, they went from 500,000 paid customers to 3 million in 36 months.
BARRY RITHOLTZ (00:16:29): Paying a monthly subscription fee on top of everything. So it’s a little bit of a razor blade model as well.
ALEX MORRIS (00:16:33): Yeah. Now they’ve bled off half a million, so they’re at two and a half. But, you know, if you step back and in the fullness of time went, hey, you guys are gonna go from 500,000 in ’19 to 2.5 million in ’26, everybody would say that’s great. Their strategy got outta line, their cost structure got outta line — I think they’re rectifying that now. And again, you’ve got a stock that in my mind was incredibly cheap. So it went from something that I probably didn’t think I would’ve ever owned a couple years ago to — it has been my largest position lately.
BARRY RITHOLTZ (00:17:02): Oh, interesting. Give us one more.
ALEX MORRIS (00:17:04): Another one that I bought recently, or relatively recently, is Dollar Tree. I think it’s a really interesting retail concept that is kind of on its own in the retail landscape. I mean, everybody competes with everybody in retail, but their position, and who they serve, and what they sell to them, is unique.
BARRY RITHOLTZ (00:17:20): No threat from the internet at Dollar Tree?
ALEX MORRIS (00:17:22): No. No, there’s not.
BARRY RITHOLTZ (00:17:24): What about from Amazon, or places like that? Or Target, where — you know, I can’t remember the last time I stepped into a Target, but I get Target deliveries every couple of months on a regular basis. It’s so delightful not to have to spend a couple of hours doing that.
ALEX MORRIS (00:17:41): Yeah. Dollar Tree sells product at a price point — obviously, it’s very low. The average ticket’s really small. The immediacy of the purchase is a tight window. The ability to cost-effectively do it with delivery is challenging, to say the least. They owned Family Dollar for a long time, which is a Dollar General competitor. They tried to turn it around, and it didn’t work. So I was watching from the sidelines for a long time. As they got that resolved, they changed the strategy to basically replicate what a company called Dollarama has already done in Canada. And if you look at that, the stock’s been a great performer and the business has done particularly well. I think there’s a lot of sense in the strategic evolution that they’re making, and the stock got pretty cheap — I think I bought in the second half of ’24. So yeah, it’s a business — retail, again, obviously is intensely competitive, but there’s little niches that people play in that I think can be attractive, and Dollar Tree is one of those niches.
BARRY RITHOLTZ (00:18:33): Really interesting. Coming up, we continue our conversation with Alex Morris, author of “Buffett and Munger Unscripted,” discussing how he plowed through hundreds of hours and 31 years’ worth of material to write this book. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
BARRY RITHOLTZ (00:18:44): I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Alex Morris. He is the author of “Buffett and Munger Unscripted: Three Decades of Investment and Business Insights from the Berkshire Hathaway Annual Shareholder Meetings.” So I found the book fascinating, but before we delve into the content, I have to discuss your process. Back in 2018, Berkshire releases the full archive of every Berkshire Hathaway annual meeting from 1994 forward. That’s 31 years’ worth of stuff, and you watch all of it — hundreds of hours, maybe even thousands of hours, 1,700 questions. What the hell? How do you start? Where do you begin with an archive that immense?
ALEX MORRIS (00:19:54): Yeah — slowly, and somewhat unwillingly at first.
BARRY RITHOLTZ (00:19:57): Did you just go back to ’94 and start plowing through? Was there a method to the madness?
ALEX MORRIS (00:20:04): Originally — well, first of all, when I was in college and got interested in investing, one of the books that really resonated with me was “The Essays of Warren Buffett,” which Lawrence Cunningham—
BARRY RITHOLTZ (00:20:14): I went to grad school with him.
ALEX MORRIS (00:20:15): He had the decades of shareholder letters, which you could just sit and plow through if you want, or he compiled it in a way where you could look at, what about capital returns to shareholders? — and look by topic.
BARRY RITHOLTZ (00:20:25): He had a much easier task, ’cause the letters are a couple of pages — 10, 20 pages each — and they’re already in print format. You had to fight your way through hundreds and hundreds of hours of video. How did you organize that material?
ALEX MORRIS (00:20:41): Well, originally it was only on CNBC’s website, with a web player where you couldn’t speed up the time. And one of those where, when you try to fast-forward 20 seconds, it goes 15 minutes and you can’t get back to your original spot. So that made it a little bit tough. When it eventually got on YouTube, that helped a ton. I originally went through it for the sake of learning and using it as writing material for TSOH. And as time went on — well, first I thought somebody else would do this, so I wouldn’t have to do it. And then I didn’t see anybody doing it. At one point, Harriman House reached out to me about writing a book, and I actually was working on something. Basically, the concept was for people like my parents or my grandparents, who had asked me questions about working with a financial advisor or managing their own finances. I was trying to write a book about how do you navigate that relationship with a financial advisor, and talking about active and passive and asset allocation. And then I started writing it, and as I got into it, I thought, well, one, I’m not hugely interested in this, and two, I don’t have the depth of knowledge on things like trusts or estates or a lot of financial planning stuff that’s a really important part of that discussion. I just don’t really have the depth of knowledge there — I shouldn’t be the person writing this. So when Harriman House reached out, I first said, you know, I have this book, but I think I’m gonna kind of drop it, and I don’t really have anything else. And then a week or two later, I wrote back to them and said, I think actually I might have something with the Berkshire meetings that I could explore a little more. But I can’t do it unless I reach out to Berkshire and get, if not approval, at least not disapproval from them.
BARRY RITHOLTZ (00:22:09): You don’t want them fighting you every step of the way.
ALEX MORRIS (00:22:10): Yes. So I put together a sample chapter and sent it to Warren’s assistant at the time, Debbie, and asked, can I please do this? I promised that I’m a massive fan of Warren and Charlie, and I’ll do a good job, and I’ll give away half the proceeds to Glide, which is a charity that Warren supported through the lunch auctions. So I got a response a couple days later saying, as long as you’re saying he didn’t approve this, you’re okay to go with it. So at that point I was like, okay, now I actually have to do this. And the process at first was not particularly well thought out. I remember I got through two or three or four meetings, and I realized I wasn’t getting to a place where I wasn’t gonna have to repeat that process again. So I went back to the start, created an Excel file where I timestamped everything, had like primary topic and secondary topic, and then a very simple green, yellow, red: is this gonna be in, or maybe be in? As time went on, I had a lot of overlapping things — I had to figure out which answer was better, which one should I keep. But as I got through 10 or 15 years, I knew what I was doing at that point.
BARRY RITHOLTZ (00:23:17): Did it reveal itself to you as you were working? By the way, full disclosure: Harriman House is my publisher. But one of the things I found fascinating about the writing process is when you happen onto a good framework, it sort of opens itself up to you. It reveals itself, and like, oh, I see what this should look like. I would imagine you might have had a similar experience — year after year, the same themes, the same ideas, although they must evolve over time somewhat.
ALEX MORRIS (00:23:51): Somewhat. And I got to a point where — well, one, yes, the meetings definitely have their place in time, as is kind of revealed — I mean, especially think of like the late nineties, or you get to the financial crisis, the discussions that are had there. The part of it that I found so useful, that I thought would resonate with people, was, you know, the letters are edited, and Warren’s very specific about what he says—
BARRY RITHOLTZ (00:24:12): Unscripted is very different.
ALEX MORRIS (00:24:13): Unscripted, when they’re off the cuff. And Charlie a lot of the time pushes Warren in directions that he may not want to go. The answers would be really revealing. And again, in a period like the late nineties, when people were really pressing them on, why aren’t you investing in tech companies — you know, as they’re pushing them, they get a little bit more honest and say things in a slightly different way than if they had written them. So anyways, as I worked through it, I just got to a point where I could imagine myself, the college kid, reading this book and getting a lot of value out of it. But I also could see myself, the person today who has a lot more experience, reading it and still getting value. So I thought, this is gonna be a worthwhile book for a wide range of people, so it hopefully could be a good project.
BARRY RITHOLTZ (00:24:53): So a recurring theme of all of the meetings, and therefore of the book: investing success is a temperament problem, not an IQ problem. Emotional stability, patience, and independence from crowd opinion do the compounding. Again, I don’t remember which of them I’m taking the quote from, but we’ve heard that over and over again. Give us a little color on temperament versus IQ.
ALEX MORRIS (00:25:24): Yeah. I mean, I think your book title sums it up well — “How Not to Invest.” What mistakes are you looking to avoid is a great place for starting to figure out where you’re trying to go. And I think that’s what they’ve done their entire career. And it’s funny how that mindset of “don’t be stupid” can still be connected to really big swings at points in time, ’cause that seems like an aggressive act and kind of a risky thing. But I think when you actually pair ’em together, they can work well.
BARRY RITHOLTZ (00:25:50): So the flip side of the Munger quote “be less stupid” is a Buffett quote: if you have an IQ of 160, well, you can sell 30 points — they’re not needed in investing. I love that. That goes and flies against everything we’ve ever heard about, you know, the genius hedge fund manager, the quants, the math whizzes. And clearly both Charlie and Warren — not dumb guys, right? They were more than less stupid. But how sincere is that — hey, you don’t need 160, and it’s probably gonna get in your way anyway?
ALEX MORRIS (00:26:28): I definitely think the latter part is true. It’s very easy to get overconfident in your abilities and to make mistakes that can be — particularly when you start doing things with options or leverage — you can make mistakes that are truly devastating. And if you just avoid those things, it’s much easier to, at a minimum, stay in the game. And to get to a decent place is also, I don’t think, overly difficult as a starting point.
BARRY RITHOLTZ (00:26:51): So over the three decades that the book covers, there have been wildly different environments, where there were those examples of people who should have been less stupid. So you had Long-Term Capital Management blow up in — what was that, ’98? — the dot-com implosion, the financial crisis, the zero interest rate policy of the 2010s, then COVID. How do the same principles that are espoused by Buffett and Munger apply to all these wildly different environments?
ALEX MORRIS (00:27:27): Yeah. I think it’s being consistently level-headed and not letting things get away from you, and having a long-term view, and staying within your circle — which I think is one of the biggest lessons I’ve had as an investor: learning what game you are playing and why you’re playing that game. And your answer may be different from mine. I think a funny example is, someone asked in one of the meetings about Peter Lynch, and Warren Buffett was talking about it and said, his approach works well for him and mine works well for me, and I think if he tried to adopt my approach, it would not work as well — and vice versa. There’s more than one way to get to heaven in this game. And as long as you understand that, I think you’re at least at a good starting point.
BARRY RITHOLTZ (00:28:04): Another quote that I can’t remember which of them said: volatility is the friend of the investor who knows values, and the enemy of the one who doesn’t. Explain that.
ALEX MORRIS (00:28:15): Yeah. Well, sometimes in real life it feels a little different than that, when you’re seeing a lot of volatility in your portfolio. But I think the idea is a sensible one, which is you don’t want your decisions to be led by the market. You want to be making decisions that are somewhat independent of what the market’s telling you. There’s a fine line there between just being stubborn and overconfident — I think especially when you’re younger. A quote like that — and this is true of a lot of quotes from Warren and Charlie — a little bit of experience helps you understand what they’re actually saying, versus maybe a more novice interpretation that can get you in trouble. So I think to completely disregard what the market’s saying is something that you should do cautiously, but the idea of acting based on what the facts tell you, as opposed to, you know, the short-term weighing machine, is the right mindset to have in investing.
BARRY RITHOLTZ (00:28:59): There are so many quotes of theirs that have just become so famous and repeated over and over again. What sort of buried gems did you find in there that people don’t really talk about? What stands out as, how is this not a more famous line?
ALEX MORRIS (00:29:15): I mean, I think some of the discussions on, again, things like stock option accounting in the late nineties, where — I think they say in the book, there were 500 companies, and two of them had adopted, quote-unquote, the right stock option accounting rules. Everybody else was playing this kind of game. And they talk about things like that so clearly, in a way that anybody can understand, that it’s just so useful to hear those things. I’m trying to think of other examples throughout the book that stand out. One example they give, in terms of their business, is National Indemnity Insurance Company. They talk about this idea of, there was a period of time where the volumes in that insurance business went up, I believe, five-x, then over a period of 15 years contracted 85%.
BARRY RITHOLTZ (00:30:00): Wow. That’s back below the original starting line.
ALEX MORRIS (00:30:03): Yeah. And you could imagine running a business and how painful that is. And they use it to teach a lesson — it applies differently in different businesses, but how in the insurance business, the only thing that matters is writing good business. And you have to get to a place where all the stakeholders, particularly employees, realize that writing bad business is not the decision to make. And you have to help them appreciate that they can keep their job, too, as you go through this. So it’s just an example of them laying out something that, when they explain it, is so sensible and logical. But you have to have that long-term mindset. And again, when you compare something like that to how a lot of public companies act, you start to notice things that you may want to avoid.
BARRY RITHOLTZ (00:30:41): That’s very much a Science of Hitting philosophy. You’re better off not writing bad business — not writing any business — than writing bad business. I think the modern Berkshire is underappreciated for the importance of the various insurers. So there’s GEICO, there’s Berkshire Re, there’s a few insurance companies, which essentially gave Warren a giant pool of capital — and patient capital — to work with. Talk about the significance of insurance to the success of Berkshire Hathaway.
ALEX MORRIS (00:31:17): Yeah, it’s been hugely important. That float has — I don’t know what the number is now, but it’s grown very significantly over a long period of time, and it has allowed them to make the investments that have, you know, gotten Berkshire to where it is today. One example that I come back to a lot, from one of those investments, is Coca-Cola. Everybody knows that Berkshire owns Coca-Cola. I think the part that people sometimes don’t know is that Warren started buying in, I believe it was ’88 or ’89, and he bought his last share in ’94. And he hasn’t bought or sold a single share since then. At a point in time, it was more than 30% of Berkshire’s equity portfolio — it’s not like it was 2% of their portfolio that they’re not touching. It was a hugely important position, and he hasn’t touched it for more than 30 years. Which is — you know, when someone’s really good at investing, like they are, and they do something like that, and you look around and see, well, nobody else is really acting in this way — it’s just something that stands out and I think is noteworthy.
BARRY RITHOLTZ (00:32:10): So I love the concept of, imagine you only get 20 investment decisions for a lifetime. When you look at Berkshire’s returns, it’s a handful of decisions and decades of sitting still that have been driving it. What is that thesis — hey, you’re only gonna make 20 meaningful investment decisions — what does that do to selectivity?
ALEX MORRIS (00:32:34): Yeah, it raises your bar a lot. The things that you’re willing to compromise on will — you know, if you need to find a hundred things to own, you gotta make a lot of compromises. If you can own 10 things, you can make less compromises. And if you can own one thing, you can get even more selective. So I think that idea of knowing what you’re looking for, being patient — and then these two are connected: if you’re gonna act in that way, you have to swing big, to some extent.
BARRY RITHOLTZ (00:32:57): So they repeat a lot of the same principles over and over over the years. I’m curious not only how things evolved, but what are some examples of them reaching a conclusion — hey, maybe we haven’t really thought this through, and we wanna pivot or tack away from a previous belief? Where did they really change their minds?
ALEX MORRIS (00:33:19): Yeah. Two really prominent examples. One, in an owned business, in GEICO: they basically missed the move in telematics, which is like the data measurement in the car, and Progressive was really early there. And Warren publicly, at the meetings, kind of said, we don’t think this is gonna be important to the rate-making decision. And they were wrong, and they were years behind.
BARRY RITHOLTZ (00:33:39): Explain what telematics does for an insurer.
ALEX MORRIS (00:33:41): Yeah. Basically, it gives you actual data from how someone drives, which, it turns out, is very important for determining how they drive and setting their rate and the riskiness, et cetera. So GEICO — or the way Warren talked about it, they were convinced—
BARRY RITHOLTZ (00:33:54): Is that built into the car, or is it something that you have to give permission for?
ALEX MORRIS (00:34:01): You have to get it — you had to get a device at one point. I believe you can do it with your phone now.
BARRY RITHOLTZ (00:34:07): And you get a discount if you use it?
ALEX MORRIS (00:34:08): You can get a discount for using it. And they’ve changed over time what they’re willing to do with your rates, but early on, you could just get a discount from it — you wouldn’t get a rate increase. So yeah, Berkshire, or GEICO, kind of missed that early, and they’ve kind of been playing catch-up since then. And Progressive went from millions of policyholders less than GEICO to now being quite a bit larger than GEICO.
BARRY RITHOLTZ (00:34:29): This is a huge growth story and change for them over the years. Is the telematics strategy what drove them?
ALEX MORRIS (00:34:40): Yeah, it’s a huge part of it.
BARRY RITHOLTZ (00:34:41): And then the other issue that comes up is that Buffett has been notoriously tech-averse, and then becomes one of the biggest shareholders of Apple. How did he explain that? How did he wrap his head around that major pivot?
ALEX MORRIS (00:34:58): That’s the other example I was gonna say. You go through a period of, I believe it’s 2011, 2012, 2013 — some select quotes are, when they owned IBM, they basically said — the person asking the question specifically asked about Apple and Google, which in hindsight is kind of funny, ’cause those are the two companies that they’ve now invested in — they basically said, we’ll never have the confidence in those two companies that we have in IBM. Which was not a good investment. And then, I think at the next meeting, Charlie even more forcefully said, basically, Apple’s too hard for us — we’ll never own it. Fast-forward a few years, and I think at one point it was almost a $200 billion position, and it’s one of the greatest investments of all time. And I think it just speaks to a willingness to continue learning. And, you know, Warren specifically talked about, on CNBC when they bought it, how at the Nebraska Furniture Mart — which is a retailer that they own — people come in and buy a TV, and they’re looking at the number of pixels or the quality of the screen, they’re comparing the prices, et cetera. And then when it comes to an iPhone versus an Android, it doesn’t matter if an Android phone is 60% cheaper — some people were just absolutely gonna buy the iPhone no matter what. So he noticed that, in terms of that differentiation between a technology question versus a consumer brand kind of question. I think he also recognized clearly the value of the screen and the services strategy that Apple, in the mid-2010s, really got underway. And also, the valuation was attractive, and they had a capital returns policy. That’s one of the things that really jumps out in terms of his investment approach: how much he valued, particularly in publicly traded companies, the combination of the valuation and a very clear capital return strategy. You see that at Apple. You see that at PetroChina in the early 2000s. It’s a very prominent part of what he seemed to be looking for.
BARRY RITHOLTZ (00:36:45): So I see how their ideas have changed over time. I’m curious — the process of going through the whole book, and all of the various meetings and videos you ended up watching: anything change the way you invest personally? Any ideas you’re still wrestling with, trying to put into practice?
ALEX MORRIS (00:37:07): Yeah. I think this idea of — again, I think I mentioned this before — kind of traditional value investors, this idea of change being a bad thing and trying to avoid it. It’s borderline impossible in today’s world. I mean, if you could give me a list of five companies that haven’t meaningfully changed in the last 10 or 15 years, it’d kind of be tough to do. Every industry is changing, and you have to be — you just can’t avoid it. It doesn’t mean you have to run into it, but you have to be really thoughtful about how every business is changing. And you think of the prominent examples that they gave over time of, you know, the greatest businesses — newspapers and other things that are either greatly changed or gone. And retailers, as an example.
BARRY RITHOLTZ (00:37:48): Adapt or die.
ALEX MORRIS (00:37:48): Yes, adapt or die. And I think that’s a reality of being a business manager. It’s a reality of being an investor. And you have to be willing to, you know, lean into that.
BARRY RITHOLTZ (00:37:57): Huh. Really, really interesting. Coming up, we continue our conversation with Alex Morris, author of “Buffett and Munger Unscripted,” discussing Berkshire Hathaway after Warren Buffett. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
BARRY RITHOLTZ (00:38:16): I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. Alex Morris is my extra special guest this week. He is the author of “Buffett and Munger Unscripted: Three Decades of Investment and Business Insights from the Berkshire Hathaway Annual Shareholder Meetings.” He is also the founder of TSOH Research. So let’s talk a little bit about their relationship before we get to the post-Buffett — and we’re already in the post-Munger — era. What did Munger contribute to Buffett’s thinking that Buffett probably wouldn’t have developed on his own? They really had kind of a unique partnership.
ALEX MORRIS (00:38:59): Yeah, they did. And Charlie will say he didn’t have as much of an impact as Warren says he did — so I guess you gotta pick which one you want to agree with or believe. You know, I think Warren’s strategy that he ran up until the point in time when they became friends with each other, and the decades after, was a cigar-butt strategy, a traditional value investing strategy. The main constraint it was gonna run into over time was size — and that’s the problem they have now, even as they’ve adjusted the strategy. And I think Charlie changed his mindset a little bit towards buying businesses that they’re gonna own, as opposed to things that are gonna be liquidated or sold, whatever it may be.
BARRY RITHOLTZ (00:39:34): When you say buying businesses — completely, like a full takeover? Not just, we don’t want 10% of GEICO, we want all of GEICO?
ALEX MORRIS (00:39:42): Yeah. I think one of the prominent early ones was See’s Candies, where they were getting a little touchy on the price, and I think they had someone who worked with them who said, if you guys don’t buy this ’cause the price is 10% higher than what you wanted, you’re idiots, basically.
BARRY RITHOLTZ (00:39:56): Really? Who says that to Warren Buffett? I’m curious.
ALEX MORRIS (00:39:58): I think it was Charlie Munger’s partner — I wanna say Ira Marshall, for some reason, but I could be incorrect. But anyways, they told him, if you don’t buy this business ’cause it’s 10% higher than what you want to pay, you’re not being very intelligent, because this is a really good brand and it’s gonna be a really good business over time. And thankfully, they listened.
BARRY RITHOLTZ (00:40:16): You know, I have a buddy, Jonathan Miller, who’s not only a data junkie with the back end of real estate, an appraiser, but he was saying, if you’re buying a house that you’re gonna live in for 25 years — this is the house — if you pay 10 or 15% over, who cares? Just look at houses sold 25 years ago: what would’ve happened if you paid 10% more for that? It’s meaningless. And Marc Andreessen said the same thing about Facebook. All right, it was a 40x or a 50x — imagine if we paid 25% over. It wouldn’t have made any difference. And yet this is coming from people with a value background. How do you reconcile that?
ALEX MORRIS (00:41:01): Yeah. Personally, my personal experience taught me, in some ways, to just get past that way of thinking. And again, as I said before, I bought Microsoft in 2011. It was a very traditional value investment — ex-cash, it was trading at a high-single-digit P/E. Again, a very traditional value investment. You get forward to 2015 or 2016, in that period, and now the P/E, as opposed to being in the high single digits, is, call it, mid-teens. And I can remember at that point in time, a lot of the, again, more traditional value investors, they were at a point where they’d go, okay, we’ve had our run here — it’s time to sell. It’s a situation where I looked and saw, with Satya Nadella, who was recently named the CEO at that time, the strategy they had in the cloud business — and not that I have any great technical knowledge on this, but the way they explained where they were going and what the opportunity was, it just seemed clear to me that to sell it simply because the P/E was a couple turns higher than, you know, what the quote-unquote fair price was — it just didn’t make a ton of sense. If you’ve found a business that has a really long runway, with a person running it that you think is the right person for that job, to let that go easily is a mistake. And it’s funny to look back now — I didn’t know this, ’cause I was updating on Microsoft the other day: over the last decade, the stock’s compounded at a mid-twenties annualized return.
BARRY RITHOLTZ (00:42:20): Amazing.
ALEX MORRIS (00:42:20): This happens all the time with companies like this, where people, if they become too focused on the valuation, they go, this isn’t gonna generate more than 12% a year over the next decade, or whatever.
BARRY RITHOLTZ (00:42:25): What’s the line? Price is what you pay, value is what you get.
ALEX MORRIS (00:42:30): Exactly.
BARRY RITHOLTZ (00:42:31): So clearly, even at an elevated price, Microsoft turned out to be a good value.
ALEX MORRIS (00:42:34): You have to consider both at all times. If you become overly focused on price as the driver of your decision-making, I think that’s kind of a flawed way to do things. And the same goes for — you know, theoretically, you have a portfolio, and theoretically you could re-rank it every single day on expected five-year returns, whatever it may be, and the answer’s gonna change based on what those positions did the day before. Obviously, I think that mindset, while it makes sense theoretically, guarantees you’re never gonna own anything particularly in size. You’re gonna be trimming it as it goes up 20, 30, 50%, because—
BARRY RITHOLTZ (00:43:07): Suddenly it’s fully valued.
ALEX MORRIS (00:43:08): The IRR is three points lower than it was six months ago. And I just think, if you look back — again, like the last 15, 20 years, and your example of Facebook — selling it because the IRR was down slightly was a mistake, if you understood what the business was, in some sense, and what the opportunity was. Again, you can deal with this through position sizing, but be really thoughtful about selling businesses that you actually think are worth owning.
BARRY RITHOLTZ (00:43:30): Yeah, that makes a lot of sense. Both Buffett and Munger have emphasized staying within one’s circle of competence. How can an investor expand that circle, and how do you avoid fooling yourself into thinking you have some competence when you don’t? This is classic Dunning-Kruger.
ALEX MORRIS (00:43:51): Yeah. I think it’s time; it’s a willingness to learn; it’s a willingness to feel around and not always, you know, have the answers right away. I mean, for example, at TSOH, a lot of my initiations on companies — they very rarely end with, you know, this is my price target, or this is a buy today. That’s very uncommon for me. The conclusion is almost always: here’s what I think is interesting about this company; these are the questions we kind of need to explore and get a better feel for over time. And it’s just that continual learning process, where sometimes you get, you know, three, four, five years down the road from there and you still don’t have the answers. Other times, you get a couple years down the road and things happen in a certain way, and you go, wait a second — I think I’m seeing this now in a way that I didn’t originally. And you find enough examples like that, and you can have a portfolio.
BARRY RITHOLTZ (00:44:34): Really, really interesting. What do you think, of all the principles that Buffett and Munger enumerated over the years, are often quoted but really infrequently practiced by professionals, or just difficult to put into effect by mom-and-pop investors?
ALEX MORRIS (00:44:54): Yeah. They’ve had things like, you know, permanent capital — which, you look at an example like Terry Smith at Fundsmith right now: when things go against you for a relatively short period of time, but your assets start going away, that’s a huge problem. So things like that are just a prominent example of how thoughtfully they’ve constructed everything, and what that then allows them in terms of their flexibility — of, you know, being really patient, or taking big swings, et cetera.
BARRY RITHOLTZ (00:45:19): What about “avoid difficult decisions”? Is that realistic today?
ALEX MORRIS (00:45:24): Again, I think it’s more difficult over time. But I think if you’re patient, you can — again, as you learn more and more, decisions that may appear difficult might be less so for you.
BARRY RITHOLTZ (00:45:34): I really like Buffett’s comment about market forecasts: they tell you nothing about the market, but a great deal about the forecaster. They claim to have never made a Berkshire decision based on a macro prediction. How true is that?
ALEX MORRIS (00:45:51): Well, I think you look at their cash position currently and wonder how much of that is, you know — maybe it’s not a macro forecast, but there has to be some belief about markets or prices generally. I guess you could look at it at a micro level and say, we can’t find anything — and collectively, all the micro is the macro, right? You know, I think the bigger point — and it’s something that we’ve all seen over the past 15 years — I mean, I’m sure you can remember well, 2011, 2012, people were like, okay, we’re back to another bubble; we got past the GFC, and now here we are again, and stocks aren’t gonna go anywhere for the next decade. And good call — people who overdosed on that have paid a very significant price.
BARRY RITHOLTZ (00:46:29): You know, it’s funny you bring that up. I remember — I don’t remember if it was late ’08 or early ’09, but Buffett wrote an op-ed, I think it was in the Times, “Buy American.” And that felt very much like a combination of, everything has gotten cheaper — so there’s a valuation issue — and, we weren’t quite down 56%, but we were on the way; maybe we were down a third by that time. But it felt like a macro call: hey, this is a temporary crisis and we’ll get past it. Or was it strictly a valuation decision?
ALEX MORRIS (00:47:04): Yeah, I think it was a little bit of both. I mean, as he said later on — you know, I wrote that in, I think he said, October of ’08, and to your point, people were like, wow, what a great call. It was like, well, it was down another 30% six months later, or whatever it was — so my timing wasn’t particularly great. You know, I think the bigger takeaway, particularly for individual investors, in my mind, is understanding something like a structural asset allocation and having clarity on what you’re trying to achieve. And again, coming back to this idea, over and over, of the mistakes you’re trying to avoid. We saw over the past 15 years people making big swings in and outta cash, in and out of the markets. I think you’re just making the game more difficult than it needs to be. And when you’re wrong, it really hurts.
BARRY RITHOLTZ (00:47:47): So, having studied every answer Buffett ever gave about succession over 31 years, what does the record tell us about how he set up his succession? And what did his Thanksgiving letter last year add?
ALEX MORRIS (00:48:04): It’s kind of funny — starting with the ’94 meeting, they were asked every single year about succession.
BARRY RITHOLTZ (00:48:11): He’s, what — he’s my age back then? He’s in his early sixties back then.
ALEX MORRIS (00:48:15): Yeah. It turns out he had another three decades to go. You know, I think they’ve said over time that there’s nobody who cares about the answer to this question more than we do. And you know, a lot of the businesses — at BNSF, the railroad, Warren’s not really involved in the decision-making there. Same at GEICO, same at a lot of other businesses. A lot of the equity positions, like I said — Coca-Cola or Amex, all these other ones — they’re just in there, and they’re almost certainly not going to be sold by Warren or anybody else. So I think a lot of the pieces are in place. The biggest challenges Berkshire has: as I mentioned, there were some operational issues at businesses like GEICO that had to be fixed, and the massive cash pile is another challenge. Those challenges existed two years ago with Warren, and, you know, they still exist today, and solutions are difficult. But it seems like Greg Abel is starting to move in the direction of trying to resolve those issues.
BARRY RITHOLTZ (00:49:09): So let’s talk a little bit about Greg Abel. He took over as CEO of Berkshire on January 1st of this year, 2026. You were at the meeting in Omaha, his first annual meeting — Buffett just sitting in the audience like any other Berkshire shareholder. Well, maybe not like any other Berkshire shareholder, but not on stage. What was that like? How was Abel? Are you confident that this was the right choice and Berkshire is in the right hands?
ALEX MORRIS (00:49:38): Yeah, I think that — and this is also informed by writing the book, the questions over time. In the early days, the questions were really focused on Berkshire and investing, and I think as time went on, they became a lot more about life advice and other things that, while still interesting, are not really Berkshire-specific. And when you got to things like, as I was saying, GEICO and telematics, or at BNSF, where their results were lagging some of the other Class I rails, I think Warren had a tendency to not wanna point fingers at the managers, and he wouldn’t really talk specifically about the issues there — which, you know, for the people who are kind of the diehard Berkshire shareholders, we want to hear those things. Greg took those questions head-on, which was really refreshing to hear. And I think everything we’ve seen so far would suggest that, you know, as Warren and Charlie said, we’ve thought about this more than anyone else — and I think that’s probably reflected in their decision.
BARRY RITHOLTZ (00:50:30): So you mentioned the huge cash pile — a couple hundred billion dollars just lying around. I know, that’s walking-around money. What does capital allocation look like under Greg Abel? Is he gonna emphasize buybacks, or going out elephant hunting and finding some big acquisition, or something else entirely?
ALEX MORRIS (00:50:50): I think repurchases will surely be a big part of the strategy.
BARRY RITHOLTZ (00:50:55): And by the way, Munger and Buffett have both been very explicit about buybacks: hey, when you’re below your true value, when you’re below fair value, it’s a deal — absolutely do buybacks. But if you’re fully or richly priced, it’s a disaster waiting to happen. They made no bones about it, and they acted on that. Where do you think Greg falls on that?
ALEX MORRIS (00:51:19): Yeah. I think Berkshire started buying shares more significantly — I think they started in 2019. The pace has slowed down lately.
BARRY RITHOLTZ (00:51:28): Implying they’re close to fully valued.
ALEX MORRIS (00:51:30): Yeah. I believe that they have views about the market, or the opportunity set more broadly — I think that would be fair to say, based on how they’ve been acting for some time now. You know, it would’ve been helpful if they’d started repurchasing shares earlier. I don’t think Warren was particularly interested in doing that for a good amount of time, and it got to a point where they basically had no choice: they either had to, or have to pay a large special dividend, whatever it may be. I think Greg will be a lot more open to leaning into these things. And as I said, many times — I mean, obviously we haven’t had huge shakeouts, outside of maybe a brief period during the pandemic, but if we get a period where equities really trade off meaningfully and they can put a decent amount of dollars to work, they’re willing to spend tens and tens of billions of dollars, or potentially even over a hundred billion dollars, if the right opportunity is there.
BARRY RITHOLTZ (00:52:16): What’s the cash holdings right now?
ALEX MORRIS (00:52:17): I think it’s north of 300.
BARRY RITHOLTZ (00:52:20): Yeah. It’s a crazy number. That sounds to me like a war chest waiting for a disaster to happen.
ALEX MORRIS (00:52:26): Yeah. I think the thing is, you gotta find a willing seller — which, if you’re gonna buy a whole business—
BARRY RITHOLTZ (00:52:30): Do you have to find a willing seller, or can you wait for an era of distress, where everybody’s a seller and you are the — well, you know. That’s what I meant by war chest waiting for disaster to strike.
ALEX MORRIS (00:52:44): Well, that’d be a nice way to deal with this issue. And we haven’t seen it yet, but I’m sure the day will come where things look really ugly, and I’m sure they’ll be ready to act — and will act.
BARRY RITHOLTZ (00:52:53): So the whole idea of the annual meeting taking place in Omaha was really built around these two men, Warren Buffett and Charlie Munger — one of whom is no longer with us, and the other one is now sitting in the audience. So the question that comes to mind is, does Omaha still matter today? What’s it gonna look like, you know, a decade from now?
ALEX MORRIS (00:53:17): Yeah. It’s funny — I think, and I’d say from my experience here, and from people I know who are also Berkshire shareholders, it sounds like their experience has been similar — it’s become an event where, you know, people go there, and there’s so many events around the meeting now that aren’t the meeting. It’s people coming together who are hosting their own meetings of one variety or another, or having investor conferences. And yeah, I think that’s become a really important part of this trip for a lot of people. So I sense — I mean, the size of the audience will get smaller, as it has already, I believe.
BARRY RITHOLTZ (00:53:47): Oh, is that true?
ALEX MORRIS (00:53:47): Yeah, I think it was smaller this year than it’s been in the past. But for the core group of, you know, the diehard value investors, I think they’ll continue to show up for a while, as long as those events keep going on.
BARRY RITHOLTZ (00:53:57): Do you have any insight into who the average Berkshire shareholder is? Is this primarily Main Street, or is this more professional investors, or some obvious combination?
ALEX MORRIS (00:54:09): Yeah, I think it’s a combo of the two. It feels like a combo of the two. They definitely attract a more Main Street audience than, I think, just investors do generally — or investment managers, especially.
BARRY RITHOLTZ (00:54:20): And I’ve never made it out to Omaha. I’m curious — who goes to these events?
ALEX MORRIS (00:54:25): Value weirdos.
BARRY RITHOLTZ (00:54:26): Really?
ALEX MORRIS (00:54:27): Yeah. People always like to joke that, you know, “I’m a contrarian” — and I’m sitting in here with 40,000 people who think the same way I do.
BARRY RITHOLTZ (00:54:35): It’s the scene from Monty Python’s Life of Brian.
ALEX MORRIS (00:54:38): Yes, exactly.
BARRY RITHOLTZ (00:54:39): You’re all individuals — you don’t have to follow the crowd. And they just repeat in unison, “We’re all individuals.”
ALEX MORRIS (00:54:46): No, I think it’s people who wanna learn. And for myself, it’s — you know, I’ve learned a ton from Warren and Charlie about business, but I’ve learned a lot more as well about life and other things that I think are, you know, as important as part of your development as an individual and as an investor. And it’s funny — I wrote Warren in 2010, and I said, hey, I’m not asking you for a job, and I have fantastic parents who are my role models, but outside of that, you’ve been really important to my life, and I just wanna say thank you for that. And he wrote a response, and it’s framed in my office. It’s probably the one material possession that I care about. But, you know, I think it’s people with that mindset, who have come to really appreciate all they’ve taught people. And obviously, Warren, through charity and other things, has done a lot for the world at large as well.
BARRY RITHOLTZ (00:55:33): Huh. Really, really interesting. So I only have you for so much time, and we don’t have the studio for so much time, so let’s jump to our favorite questions that I ask all of my guests — starting with, and I kind of have a suspicion as to the answer of this: who were your mentors who helped shape your career? I know you have the letter from Buffett, so I want you to address Buffett and Munger, as well as anybody else who might have shaped the curve of your career.
ALEX MORRIS (00:56:07): My start was with Peter Lynch, actually.
BARRY RITHOLTZ (00:56:09): Oh, really?
ALEX MORRIS (00:56:10): I think “One Up on Wall Street” was one of the first books I read, which, even to this day, when younger people ask me what should I read, I think that’s a perfect book for getting a feel for what investing is, and it’s very approachable. So I’ve always liked Peter Lynch. Other investors like Chuck Akre and some of these other fund managers — Ackman’s another example — fund managers, at least in the early 2010s, were names in the world that I tracked, and they were well known and people that I learned a lot from. Obviously, Warren and Charlie are at the top of that mountain for me.
BARRY RITHOLTZ (00:56:43): Let’s talk about books. What are some of your favorites, and what are you reading currently?
ALEX MORRIS (00:56:47): Currently reading the Jeremy Grantham book, which I thought is an interesting book. I’m reading a book about Fairfax. What else am I reading right now?
BARRY RITHOLTZ (00:56:55): About Fairfax?
ALEX MORRIS (00:56:56): Yeah, Fairfax — Canadian insurer. It’s called “The Fairfax Way.” It’s a good book. I have two young kids, so my reading time has been changed in for 4:00 AM walks with my daughter and podcasts. So I listen to a lot of podcasts now, as opposed to reading as many books as I’d like to.
BARRY RITHOLTZ (00:57:13): Well, that’s my next question. What are you streaming these days — either Netflix, Amazon, Disney, or podcasts? What’s keeping you busy?
ALEX MORRIS (00:57:20): I’ve been listening to your podcast. The Hagerty episode that you had here recently is really good — so interesting. I mean, your knowledge of cars was also — well, that helps the podcast.
BARRY RITHOLTZ (00:57:31): You know, I go outta my way to learn as much about each guest and their business as I can before the podcast, but that was easy. I didn’t have all that much research to do for that one.
ALEX MORRIS (00:57:43): You could tell you love that topic.
BARRY RITHOLTZ (00:57:45): It was fun. I’ve had a few really interesting automobile people over the years, but still — you have to do the deep dive, ’cause you’ll find stuff that you wouldn’t have without doing the research. I just think it makes a better conversation. What else? Give us some other podcasts.
ALEX MORRIS (00:58:04): My buddy Bill Brewster has his podcast, called The Business Brew. That’s a great podcast. And as part of my research, I listen to a ton of old interviews and things like that that I find — like, I’ll listen to Reed Hastings from 2005 and listen to him talking about Netflix and what their strategy is. I find those, along with old articles, so helpful in terms of getting your mind to, what were people seeing, and what were they thinking at this point in time, and how did that translate from then to now? As an investor, I think that’s like a fascinating way to learn about businesses and people.
BARRY RITHOLTZ (00:58:33): So, our final two questions. What sort of advice would you give to a recent college grad interested in a career in investing?
ALEX MORRIS (00:58:42): I mean, I think it’s become harder, with Twitter and some of these other tools, over time, in terms of getting your voice out there. But I recommend to people — writing is the greatest thing that I ever did in investing, because it helped me to, one, build my audience. But two, it helps you to learn how to think, which might sound weird to people. But when you put something on a piece of paper and you read it and you go, okay, well, there’s no defense for that part, or, this doesn’t even really make sense — what am I trying to say here? When you sit down and go through that process, I think there’s so much learning. And to the extent that you do it — and I find this as well — when you reach out to people who are established in the business and you say, hey, I did a one-pager on XYZ, I really worked my butt off on this, and I’m a college grad — almost everybody is willing to respond if you’re really showing the effort and you’re, you know, conscious of their time. So take advantage of that while you’re young and people are willing to talk to you.
BARRY RITHOLTZ (00:59:31): And our final question: what do you know about the world of investing today that might’ve been useful 15, 20 years ago, when you were really first starting up?
ALEX MORRIS (00:59:40): Yeah — I know that I don’t know everything. I know that I’ve learned a lot along the way. As I said before, there’s different ways to play the game, and I’ve kind of found the version of this game that I wanna play, and that I think I can do well at. And, you know, just continuing to try to get smarter every day.
BARRY RITHOLTZ (00:59:56): That sounds like you’re bringing it back to the circle of competence.
ALEX MORRIS (01:00:00): Yeah. A lot of things come back to what Warren and Charlie have said. They’re pretty smart. They had some good ideas on investing and business.
BARRY RITHOLTZ (01:00:06): Those guys are definitely onto something.
ALEX MORRIS (01:00:08): It was hard to get this to 500 pages.
BARRY RITHOLTZ (01:00:10): Oh, really? Yeah, because they just repeat.
ALEX MORRIS (01:00:12): Well, I went through 1,700 questions, and I was like, okay — I tried to keep 1,100 of them. I think we gotta cut this down a little more.
BARRY RITHOLTZ (01:00:18): What was the original length of this monster when it first —
ALEX MORRIS (01:00:21): Oh, it was a huge Word document. I think it was seven or 800 pages. But then I had to go through, okay, which of these comments on value investing do I really need to keep? So that was one of the harder processes of writing the book.
BARRY RITHOLTZ (01:00:35): I could imagine. Alex, thank you so much for coming in. I have really been enjoying it — I’m about halfway through, and this isn’t like a book you pick up and, you know, read three or four chapters. It’s just dense with knowledge and information, and you really have to chew on everything on the way through. And I’ve very much been enjoying it. We have been speaking with Alex Morris, author of “Buffett and Munger Unscripted.” If you enjoy this conversation, well, check out any of the 659 we’ve done over the past 12 years. You can find those at iTunes, Spotify, Bloomberg, YouTube — wherever you get your favorite podcasts. I would be remiss if I didn’t thank the crack team that helps us put these conversations together each week: Alexis Noriega is my video producer. Sean Russo is my researcher. Anna Luke is my producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.
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