Guy Spier’s Education of a Value Investor – A Review

Reknowned investor Guy Spier (Aquamarine Capital) published his autobiobraphy late 2014, a book entitled The Education of a Value Investor (Palgrave MacMillan). As Spier explains himself, the book recounts his journey from Wall Street where he started as a junior investment banker to becoming a Buffett’s groupie (like many value investors, including myself) and a famous value investor, with an outstanding track record (here it is as of end 2012).

There a many reviews of the book online, so mine won’t probably add more value to the discussion, it’s just a personal reflection after having read the book.

As I said, it’s a very personal journey, described I suppose as honestly and in a transparent manner as possible. The intro of the book lays out its purpose:

« This story is not an investment how-to. It’s not a road map. Rather, it’s the story of my journey and of what I’ve learned along the way. » (page 1)

Lunch with Warren

The 2 most interesting contributions of the book are the recount of his lunch with Warren Buffett and Guy Spier. Although, you can imagine that all is not said, it is very nice of him to share some of the discussion and just shows what anyone interested in Buffett knows: he is a nice, open person who’s not here to give a lesson but who enjoys the company of other people.

Just reading this part is worth buying the book in my opinion. Fortunatelly for the reader, there is more.

Investment process

The other interesting contribution is about Guy’s investment process and his check-lists. That’s a very interesting mental model for investing.

The process includes useful tips such as:

– Ignore market quotation

– Don’t talk to management

– Gather information research in the right order (read to book to know more about it but I suppose you can figure out which information is the most important there)

– Don’t trade stocks in the open market

– Don’t sell a stock for 2 years if its price has collapsed (Mohnish Pabrai has the same rule)

Checklists

Logically after the process, when Spier decides to buy a stock, here again there is a process, in the form of « checklist » (the same kind of checklist pilots use before they take off).

That’s something I don’t do when I invest and I’m considering doing so. Yet, it will take some time (since managing money and reading annuel reports are helas not my primary occupation).

The idea is basically « to avoid obvisous and predicatable errors » (page 151) There Spier doesn’t give much detail about his own checklist since, to his opinion, this is a very personal thing so you can’t have on size fits all approach there.

Yet there are some examples given, here related to some investment cases. But I’m not sure you can derive much from it for a personal use (you always have to start somewhere, and as Munger has put it, it is always better to refer yourselves to the most prominent figures in a field to start doing things right).

That’s probably one thing I missed there… Maybe for the next edition of the book ?

The last part that I enjoyed in the book is the reading list available in it. Obviously Guy has had some time to read a lot, and there is probably a lot to derive from his reading lists. Those lists are not only about investing, they are about psychology, self-help, games, litterature and philosophy.

You can also find other reading ideas in the following interview with MOI, posted on Aquamarine’s website.

When you know that Buffett and Munger spend their days reading and have been doing so since the beginning of their careers, and see the result, there must be something good about it…

Just a final note: Guy Spier explains in his book how he has learned to say « thank you » and write a note for what other people have given him. Well I take this opportunity to thank him for having written his book. I’m sure many other readers will enjoy his book the way I did and will feel the need to send a thank you note.

PS: you’ll find another fine review of the book here (Investing by the Books).

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