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Cool Careers in Accounting Ep. 6 - Money Talks: From Accounting to Investments with Nate Palmer
256 Plays2 months ago
It’s not every day that you come across $1.7 billion. But for Portfolio Manager, Nate Palmer, this is his everyday number. Nate joins us to share his career journey from CPA to Portfolio Manager at a multibillion-dollar asset management firm, where he runs a long-short fund that creates revenue through smart investments. Learn from his experience building a career in his area of interest, constantly learning new skills to advance his opportunities.
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Transcript
Nate's Career Journey
00:00:09
Speaker
Nate, actually but before I butcher what exactly it is that you do, could you introduce yourself and and what it is you're working on, ah kind of your title and what it is you do professionally ah for everybody so they understand what where you're coming from?
00:00:21
Speaker
Sure. sure so I'm a portfolio manager and an asset management firm that manages between $25 billion and $30 billion in assets. At this point, I manage a long short fund ah with roughly $1.7 billion in assets.
Investment Strategies and Market Insights
00:00:33
Speaker
I joined the firm as an entry-level research associate back in 2009, got promoted to analysts, and then eventually ran our group that covered technology companies for eight and a half years. and Then at this point, again, run a long short fund. ah Really, what we're trying to do in the long short fund is generate a favorable long short spread. so You want the businesses that you own or that you're long to outperform the businesses that you have shorted. and Really, you want to generate alpha in each the long book and the short book relative to the the stock market or the Russell 1000. In terms of what I'm excited about this year, i mean we're always looking for mispriced businesses relative to what the normalized or mid-cycle earnings of those businesses are.
00:01:18
Speaker
you know There are always businesses out there that are being misunderstood and mispriced by the market, ah but those opportunities evolve over time. and you know We have to look in different places in different years, but I do think that you this current market environment is you know pretty attractive when defined, mispriced businesses and maybe businesses where the market has lost sight of what mid-cycle earnings are, given that it's been kind of a unique few years. ah It has been a very interesting maybe fake, maybe back to reality, maybe we're still not sure where we are a couple of years.
Daily Activities and Analytical Skills
00:01:50
Speaker
um and If I could recap again, that's CPA to ah portfolio manager for a $1.7 billion-ish long short fund. how how like What does the day-to-day of that even look like? What does your day-to-day look like in that role? and How is that accounting background? How does that help you in finding some of these undervalued companies that you're that you're looking for for the fund?
00:02:14
Speaker
Yeah, for sure. so The day-to-day is a lot of reading. i mean you know Research comes in different forms, but there's an enormous amount of reading done on a daily basis. I would say the majority of my day each day is you know spent sitting alone reading, which I think is great. I realize it wouldn't be for everybody. um but you know Some of that reading is you know preparation for conversations you're going to have, preparation for you know We do talk to management teams at times. um ah Really, what we're trying to do is understand businesses like a business owner would. and so you know Spencer, if you and I were going to purchase a business, we would do a lot of research on that business before we ah you know made the investment. and Then you know we really want to know these businesses well enough to think like an owner operator. It's one thing to know the business at a superficial level. It's another thing to
00:03:05
Speaker
really understand it to a point where you feel like, yeah, I could operate this business if I had to. and you know I'll admit that might be a bit of an overstatement in terms of how well we understand each business in the portfolio, but that mentality is really important to us. We view ah stock as you know ownership stakes in businesses. It's not just like pieces of paper that the prices move around. i mean We view it as, hey, if the business becomes more valuable over time, then our ownership stake becomes more valuable over time. and Again, what we're really trying to do is find businesses that the market is mispricing or misunderstanding. so The accounting background is really helpful when you're digging through financial statements trying to understand
00:03:47
Speaker
what exactly some of the financial disclosures mean for the future of the business, um you know how companies might use the accounting rules to portray what has happened in the business either more or less favorably than we might think is you know accurate or normal.
00:04:06
Speaker
um and you know I think the combination of accounting and finance, the the skill sets is is pretty beneficial. I mean have the CPA, I also have the CFA, um and you know I think there are plenty of benefits to each the accounting and finance background, but I think the combination of the two has been really beneficial to me. Awesome. and Is there anything in particular that you mentioned reading, a lot of financial statement reading, is there anything in particular that you can think through where
00:04:38
Speaker
Specifically, maybe that accounting background has helped you have an edge where you're reading, maybe maybe i'm I'm making up a scenario. maybe Maybe you've been following company for three years and all of a sudden, the transparency of the way they're accounting for something has gone from one page to half a page to a paragraph to now it's a footnote that barely is even mentioned. um making Making up a scenario here, but is is there anything in the accounting background that has helped you that that gives you a unique edge in this profession because you understand some of the nuances that maybe folks who didn't study accounting
00:05:12
Speaker
they don't they don't have the edge they don't understand the mechanics of how you're trying to hide something off balance sheet or with a footnote or something else is there anything that comes to mind of how you your background has uniquely positioned you to be able to find mispriced assets in your world today. Yes so interestingly one of the things we look at when a company files a ten k we can look at.
00:05:34
Speaker
each change in the 10k relative to the prior year is 10k and so sometimes that's you know not all that interesting but sometimes it is pretty interesting when you see you know you look at only the things that changed from year to year and then you think about okay why did those things change ah you know plenty of times there's a very logical reason why they might change the disclosure. Other times, you look at you know why the disclosure changed and you think, okay, well, I think I want to dig deeper here. I think I want to figure out um why this might have changed from last year to this year and whether there might be something more there ah that you know we want to be aware of as as owners of the business um or you know as we try to figure out what the business might be worth.
00:06:14
Speaker
i think Another couple of things I might mention is when I joined the firm again as an entry-level research associate, having the accounting background gave me an opportunity to i mean i was just looking to add value in any way I could. and i One of the things that I was asked to do pretty early on was look at the accounting for stock-based compensation and some of the some of the different approaches that company companies would take with equity-based comp and try to capture the true economics of what was going on. um and
00:06:46
Speaker
you know It gave me a way to engage with some people who were pretty senior to me. um and you know I like to think I'm pretty decent at taking complex things and making them simple. um and I think that was one opportunity to do that. i think you know Pension accounting over time has been another area where sometimes people are a little confused by it or just intimidated by it or don't don't fully understand it. and you know When you've spent the time with the accounting curriculum and going through the CPA and the CFA, um it's really not quite as complex as I think it sometimes seems. and so I think having that technical background and the comfort and the familiarity with how the accounting rules work and also you know how you might manipulate the accounting rules, if that's what you set out to do, um can be pretty beneficial when you're analyzing financial statements.
Transition to Investment Career
00:07:37
Speaker
Yeah, no doubt. And I guess maybe to to back up a little bit too, just the the progression and career from a accounting major, MAAC, CPA, CFA into portfolio manager. how did you like How did you make that transition? First of all, yeah where did you start your career? And then can you kind of help us understand did you know it immediately you want to get back into this other profession because you're starting off in tax if i remember correctly now your portfolio manager how did that transition come about like did did you just decide and then how did you approach it where did you apply how did you make that transition. Yeah yeah for sure so i was pretty focused on becoming a cpa both of my parents are cpa's my grandpa is a cpa i had this idea that
00:08:21
Speaker
yeah You just have to become a CPA. um and and you know I'm glad I did. like it was Again, I really value the skillset and the the technical background that comes with ah the CPA. and so When I was in college, I was pretty focused on going into the accounting profession. um you know I had this idea that if you want to get the CPA, and yeah I was still pretty focused on the accounting career path at that point, um that you know getting a job at one of the big accounting firms was was what I wanted to do. um and and I did. I worked at Deloitte for a little over a year, as you mentioned, the corporate tax part of their business.
00:09:05
Speaker
and you know really prioritize getting the CPA done quickly. ah yeah Now, I will say i got I got introduced to Warren Buffett and Berkshire Hathaway kind of late in high school and over the course of college got ah pretty obsessed with value investing and you know the principles that yeah Warren Buffett and Charlie Munger and Berkshire had applied so successfully over a long period of time. and yeah While I was still committed to the accounting career path initially, I was pretty enamored with investing and investment research and you know kind of thought, okay, I'm going to do as much learning as I can in each area and you know kind of see what opportunities might present themselves along the way. so When I did the Masters of Accounting, i was you know I think there were maybe three required courses and then
00:09:56
Speaker
It was a way to get access to basically the MBA level courses that I was most interested in. and so Those were primarily investing in and finance courses. and you know I felt like it was a way to get ah a lot of the benefits that I would have gotten from doing an MBA at that stage without having to take two years to do an MBA.
00:10:17
Speaker
and so you know I went and worked at Deloitte. It was a great learning experience. I didn't personally love the work. I had gotten pretty enamored with investing and um I learned a lot about doing corporate tax work. I was working on ah there was a company that was doing a spinoff at the time and I was doing tax compliance work related to the spinoff for the majority of my time there.
00:10:40
Speaker
um And so, you know, learn some things, but ah with the passage of time, I became more and more focused on trying to get an opportunity in the investment industry. And so I think I mentioned I knocked out the CPA exams relatively quickly and immediately shifted towards taking level one of the CFA exam. So I passed level one of the the charter financial analyst exam while I was still working at Deloitte and, you know, felt like i mean I worked a ton between it was a demanding demanding job and you know between knocking out the CPA and the CFA. um and most Most people celebrate after the CPA and you're like, no, I'm going to go do this other one next. yeah right right it's ah but you know I feel like I got a lot out of the out of that year, a little bit over a year too. i mean
00:11:28
Speaker
it' I'm not somebody who likes to waste time. and so i you know When I was doing a job that I knew I didn't want to do long-term, I was yeah you know pretty focused on trying to position myself to get an opportunity to do something maybe more consistent with what I wanted to do long-term.
00:11:45
Speaker
Yeah, and and how did you position yourself? right So you're you're knocked out the CPA, now you're going on the CFA route, and there's this you're working full time. I mean, that alone is, I don't know, that could easily be 40, 50, 60, 70 hours a week when you're talking working full time and studying for under the CPA or the CFA. So how did you approach then getting to work in the investment field?
Investment Philosophy and Skill Development
00:12:07
Speaker
How much time did you dedicate? Do you recall how many places you applied before you finally found a place that that you were able to actually get in in the door? What was that process like? can you Do you recall what like what kind of time commitment? like How did you approach that mentally? like I'm going to apply to one thing every day for 30 days and see what happens. How did you approach kind of getting into that profession at that time in your career?
00:12:28
Speaker
yeah Yeah, so I was pretty focused on differentiation. i mean I felt like having the combination of I double majored in accounting and finance, so having that combination of skills you know was somewhat unique. I mean, not overly unique, but um yeah I think I had proven that, okay, you can get through the the CPA exam, so that's great. and Then I thought passing level one of the CFA while I was still working in public accounting was, again, another point of differentiation, um but i mean all that stuff is great to get an interview, then they're trying to figure out, okay, kenya can you add value through stock selection? really i mean this you know The business that I'm in now is about alpha generation. Can you outperform the market through stock selection? and so I was spending a lot of the time that I wasn't working or studying ah doing investment research on my own. i mean
00:13:22
Speaker
I didn't really have any idea how long it might take to get an opportunity ah in the investment industry. i mean It's not the easiest thing to do. um and you know I had a list of firms that I wanted to speak with. I didn't know how many of them would want to speak with me. ah but you know Fortunately, I did get an opportunity relatively quickly. um and you know When I was still working in public accounting, I did you know I took that job very seriously. I felt like, okay, I accepted this job. but I might not want to do this for the next decade or the next 20 or 30 years, but while I'm here, I'm going to do my best. and i wasn't It wasn't like I was taking my current job lightly while I was looking for the next one. um you know I felt like, hey,
00:14:06
Speaker
They deserve your best while you're here. um and you know so if you get i think I think there are 168 hours in a week. If I was working 60 in public accounting, like you still get ah a lot of time to figure out how you're going to use it. and I was trying to use as much of that time as I could to position myself to you know hopefully someday be a great investor. um and you know It's a process. i mean It's not something that I think anybody is great at on day one. i think The more you work at it, the more that you you know learn. There's some pattern recognition associated with it in terms of the types of opportunities that
00:14:46
Speaker
uh, you've tended to identify that work out and the types that you've tended to identify that don't work out. I mean, all the knowledge is cumulative and what you do, um, in a lot of things in life, but investing being one of those. And so, um, I was just focused on, Hey, how can I make my skill set as attractive as I possibly can to try to get an opportunity in the industry?
00:15:06
Speaker
Yeah. And so I'm going to recap a couple of things that I heard there, ah like in terms of setting yourself up for your next job, but even if it's in its a different profession. One is do your current job well, yeah right? Like still gotta to go do knock that out because you're going to be relying on these people for references and all kinds of things. Plus you accepted that job. So you better, you better own it. Uh, two is you're, you're proactively right.
00:15:30
Speaker
in proactively taking the CFA exam, you're going out and showing whoever you're applying to that you're serious. right You're not just applying, you're doing work on the side to indicate that you're serious about where you're going. And then three, it's also great to go get a certification, right but that's not necessarily really doing the work. And so third, what I heard is you're also doing your own investment research while you're going through this process. can i but Would it be fair to say, you're also whether it be small little chunks of money that that a first year out of college student has, or maybe you built yourself a mock, hey, if I had a million dollars today, how would I invest it? Can you help us understand that aspect?
00:16:10
Speaker
um in terms of differentiation, doing your research, and making sure you're set up to go get a job in this profession. What did that research entail? Again, did you were you investing on your own so that you could go for interviews and say, these are the things I'm looking at. Did you have a mock portfolio? How did you approach that aspect? It sounds like you were definitely doing something there.
00:16:28
Speaker
yeah yeah Yeah, for sure. so i guess well Let me add one thing when you were talking about you know certifications or designations. I think you know some people look at them as just this terrible thing that I have to get through. I always approach them as, hey, this is an opportunity to learn. like Obviously, yeah I want to score well on the exams. ah but I think if you frame it as, you know hey, this is actually valuable knowledge. This isn't just like something that my employer is making me do or that I have to do. um I think you know there's a lot of good learning that takes place when you go through something like the CPA or the CFA. and you know I'm not saying all of it is great learning. like Some of it you do just have to get through, but um I was pretty focused on not just passing the test, but yeah hopefully learning a fair amount along the way too. and I think that made it
00:17:13
Speaker
somewhat more enjoyable. By its nature, it's kind of designed to be a grind. and That's why you know there are providers out there to help you prepare yourself in the best way possible, but I like learning. i mean I'm somebody who finds learning enjoyable and you know beneficial and all those things. and so I think you don't want to lose sight of the fact that, hey, getting these designations is also a pretty cool opportunity to learn and make yourself better over time.
00:17:40
Speaker
I want to jump in for a second there because and that reframing concept is so powerful. You could look at these as this is just this thing. I have to get through to get to the next step, right? And ultimately every time your energy thinks that way when you're going to study yours like how this is that thing I have to get through again, right? And that's not very useful.
00:18:03
Speaker
reframing that to, hey, what an opportunity I have to go learn and set myself up for something else or something better. like Now all of a sudden, your energy is different when you're going into studying. And yeah guess what? one One of those two ways of thinking about this, this is a drag and something I have to do versus what an opportunity I have to go learn, especially with CPA if the big four is paying for you to go get this this certification. One of those two viewpoints is useful. One of them is not useful. Which one do you think is useful? The one that says like, I'm here to learn, I'm here to go get after it and go set myself up for something better. And every one of us has that choice, right? When we're facing something that like, like these, these exams, ah this is a slog.
00:18:46
Speaker
I would have an opportunity to learn. I just want to highlight that point because you reframed that. It sounds like like years ago, a long time ago, and it's a very useful point of view because it just sets up the ability to go study for these things without it feeling like a drag all the time. um Anyway, sorry sorry to interrupt. Go ahead. How else did you approach? I'm curious to dig it. How did you approach the whole investing research on your own you know mock portfolio as a real portfolio so you had something more tangible also to talk through when you were looking for a job in that field?
00:19:16
Speaker
yeah Yeah, for sure. so I was doing a fair amount of investing on my own. ah and you know I ran a lawn mowing business all through college. so you know i had I had some money to invest. I always emphasize it doesn't actually matter the absolute dollars that you have to invest ah when you make an investment and it's you know whatever percentage of your net worth. yeah If you're wrong and you lose money, ah you know losing Losing $10,000 or something might hurt a lot more when you're 22 and it's whatever percentage of your net worth than it might when you're 35 or well whatever. and ah It's you know not as meaningful of a dollar amount. so I think sometimes people think, oh, I don't have enough money to invest on my own.
00:20:00
Speaker
um I would say you know even if you're investing $100 and that's $100 that you're going to miss if you make a poor investment and it and it disappears, um that's you know really beneficial experience to get. and I'd also emphasize once you get a job in the industry, it gets somewhat more complicated oftentimes to do investing on your own because they're plenty of you know compliance things that you need to be careful about. and so yeah your Your best opportunity to just invest unencumbered might be before you get a job in the investment industry if somebody's looking to do that. and so you know I would not worry about the dollar amount, I just focus on, hey,
00:20:40
Speaker
oh What types of opportunities do I think I can uncover? Is my logic and research sound when i you know I think putting things in writing in terms of why you make the investments that you do? And then objectively evaluating, okay, here was my investment thesis when I made the investment. What has played out and how consistent or inconsistent is what has played out with my original investment thesis? I think it's so a really valuable thing to do before you have an employer um making you do it um because you know you want to figure out what you believe about investing, not just what your employer tells you you should believe about investing. it's's It's really hard to go through a career if you don't know what you actually believe makes sense to you about investing. 100%. I want to highlight the concept of writing down your hypothesis and then
00:21:32
Speaker
a week, a month, two months, three months down the line, you might act the the market is giving you feedback when you're in the investing profession right if you were right or if you were wrong. and Sometimes, you can be right for the wrong reasons and sometimes you can be wrong, meaning you thought something would go up, the market's taking it down, but you look at your hypothesis hypotheses and say,
00:21:53
Speaker
I still stand by this. like Nine times out of 10, I probably would have been right. This is one of those weird anomalies where I was wrong. and I'll share an example. there was ah This is an investing in a company, but we we bought a business a couple of years ago. and I looked at their price points and thought, hey, I i think there's an opportunity to raise prices here.
00:22:10
Speaker
I had done a bunch of research about how um how many people bought which products, all kinds of things. So i I wrote down my hypothesis. Here's why. I think this is the case. And after a month, the results were terrible. After we changed price and wrote, the results were terrible. But then as we uncovered the results, there was like, oh, but the discount code wasn't working on the website for these two weeks. I was like, OK.
00:22:32
Speaker
And then they're like, oh, and this business involved live scheduling of classes. They're like, oh, and we've been really behind on our schedule. So we only have the schedule posted for the next month. Normally, it's like six months out. And I was like, oh, OK. So the results were terrible. but I'm going to go ahead and assume that my hypotheses were all still correct. But then these two factors I've since learned, if we get those fixed, like I still believe in this concept. We end up fixing those two things. And then the results over the next year were fantastic. They were all exactly what I thought. But I had to get through that little month of like, what in the world just happened here? And the point being is when you write down your hypotheses, these are the reasons why I believe this to be true. These are why I think this is a good risk to take.
00:23:16
Speaker
um It provides a ton of value on the back end when you're like, that didn't work, but did it work because of some external factor that I can correct that I still stand by hypothesis? um Anyway, I just share that because it's a fascinating example of like you got to write down why you believe something to be true and it holds a tremendous amount of weight when you're looking at results afterwards. Totally. The other thing I'd add, there's just time frame. In public markets, if that was a publicly traded business, the market might have overreacted to the negative near term,
00:23:46
Speaker
you know fundamental data points.
Long-term Focus and Career Growth
00:23:47
Speaker
And you know if you're a longer-term focused investor and you say, I'm pretty sure normalized earnings power of this business is well above what they're doing in the short term, you know those can be pretty interesting opportunities. if I mean, if you're right about the business, that's always the crucial part is you got to be right about the future fundamentals of the business. um But I think that, you know, that example applies in public markets too, because there are plenty of publicly traded companies that get things wrong in the near term that are fixable and those things get fixed. And, um you know, what what has really happened is you've been given an opportunity to buy the business at less than it's worth.
00:24:20
Speaker
Yes, which then you're you're betting on a long-term play, not what's going to happen next week. um Could you share one more on this note, Nate? Just because I'm curious about this one, could you share a little bit more again about the process of going and and transitioning from public accounting tax into the investment world in the sense of how long did that process take? Do you remember how many places that that you apply and reapplying all over the country? Could you just help us understand kind of ah Specifically that process of that transition and how long that took versus how long you thought it would take Versus how long you were prepared for it to take because some people are like I'm gonna put my resume out there for the next month And if nothing happens, I guess it wasn't meant to be but some people are like ah I'm gonna do this for two years until I see success because so can you just help us understand kind of your mindset and how you approach that transition at that time ah From what you can remember and then how quickly you got the result that you were looking for
00:25:08
Speaker
Yeah, definitely. I realized pretty early in my tenure doing corporate tax work that it wasn't what I wanted to be doing. I felt like I made at least a year commitment to the employer. Like I said, I was going to work my butt off for the period of time that I was there. I wanted to be great at that job for as long as I was doing it.
00:25:30
Speaker
I did have a fair amount of time to you know think about once I got to that year mark, how I was going to approach the process. and Like I said, I had a list of firms I was interested in speaking with. I started with just a couple really. um and you know It worked out that you know one of the firms I was most interested in speaking with, ah I got the sense that they were pretty interested as well. Now, the process did take ah I don't know think a few months maybe from you the first conversation to actually you know signing the offer and getting started and everything. i mean um Different industries approach things you know their own way, but I think in the investment industry, it tends to be a lengthy interview process. you you know you don't
00:26:15
Speaker
ah hire that many people. and so um you know You don't want to make mistakes if you can prevent them. so you know i didn't When I was going through the process, I didn't really have a sense for how many rounds there were going to be of conversations. It wasn't it wasn't like the most structured process in the world, um for better or for worse. and so you know I tried to do the best that I could in each conversation that I had. and um i mean it was It was sincere on my part. like I was really you know just a young guy,
00:26:45
Speaker
hoping to become a great investor, have the opportunity to develop into a great investor over time. um and you know i I think that kind of came through. i wasn't I wasn't as much looking for a job as I was looking for an opportunity to continue to build my skill set. ah when you know For me, at the time, it wasn't really about money as much as it was about hey i just want somebody to give me an opportunity and i think that i'll be able to prove uh you know what i'm worth over time if i can get an opportunity and so you know i'm not saying i mean i'm not saying anybody should go work for free but i think at times too early in people's careers they can prioritize
00:27:27
Speaker
comp and get themselves on maybe a different path than what they really wanted to from a career standpoint. um and you know like i mean I'm not somebody like money matters to me. I'm not somebody who's going to tell you like oh you shouldn't care about money over the course of a career. It's just a question of you know what the right time to prioritize it is. and you know For me, I was pretty realistic about ah you know in your 20s, no matter how good you think you are at something, I'm not sure we're ever quite as valuable as we like to think we are. um and so I was just looking to you know develop and and get better. um and you know it's It's a long career. I mean i think, you know hopefully, you have 50 or so years working um if you like what you do. and so
00:28:10
Speaker
you know um I personally wasn't somebody who was trying to maximize my comp in the early years. I was trying to get myself on a trajectory that was consistent with what I wanted to do long-term. Awesome. and Very quick question just because you brought in comp and like you were trying to set yourself up for long-term. Out of curiosity, was was pay from ah if you're if you're willing to share this, right pay from big four tax to your first investment job,
00:28:36
Speaker
about the same? did you were you actually Did you actually take a pay cut because you were you were okay with where that was going long term because it was more but more based on incentives and how you performed? How did you approach that? and did you actually Did you actually end up in the same place, take a pay cut, get a raise? just You don't have to say your numbers, which is ballpark. I'm just curious.
00:28:52
Speaker
yeah Yeah, so based on what I knew at the time, I thought that it was like from a comp standpoint, a lateral move. um I think that you know my base comp in my my first job in the investment industry was pretty similar to what I had made in that first year in public accounting. Now, what I didn't fully appreciate at the time ah is that incentive comp is really the majority of your compensation and in this industry. and so um yeah I was a little naive. It was kind of nice to find out that all like incentive comp is like real money. It's not just ah you know like, oh, here's $200 for doing a good job. and so you know I guess I would have been willing to take a pay cut to you know get into the industry and everything. ah
00:29:40
Speaker
I didn't realize that I was actually getting a meaningful comp increase. I thought I was making kind of a lateral move from a comp standpoint. um But you know i mean I will say kind of related to this, I do like that incentive comp is a substantial portion of your your total comp because you never have a hard time getting motivated when you know that um you know there's not that much guaranteed. It's got to be earned every year. Yeah. yeah yeah okay That's awesome. and and Now, you you're here.
00:30:10
Speaker
like you You had a dream a long time ago, you read all these books, you knew you wanted to get into this this field. Now you've you've been in this field for, I don't know, going on. ah Close to 15 years ish more than 10 Like how how is it? Is it what you thought it would be so many times people people chase something and they get there They say oh, this isn't this isn't this is it. This isn't what I thought it would be You've stayed here. So I'd imagine you like it. But can you help us understand? um You know, has this been what you thought it was going to be? Are you enjoying it as you're having fun with work? um Is this is this everything that you thought it was gonna be when you were looking from maybe the outside in saying I want to get there Is this what you thought it was gonna be?
00:30:48
Speaker
Yeah, yeah, I mean, I think ah there are always things where when you take something from a hobby and make it a ah profession, you know, it's like, oh, this is like, this is like work now. It's not just like from a hobby anymore. But no, I mean, I do love what I do. Finding um or you know Searching for and hopefully finding mispriced businesses is something that I get a ton of enjoyment out of. and you know If you're good at it, it ends up being pretty valuable from an investment performance standpoint. um I mentioned it's a long-short fund that that I manage. and so Not only are we trying to find businesses that the market is undervaluing, but we're trying to find businesses that the market is overvaluing as well. and i'll say that yeah
00:31:28
Speaker
um you know Building and running a short book is something that ah I find to be really, really enjoyable. um yeah I think the world's full of people who you know are excited about the things that they own.
00:31:42
Speaker
i like you know kind of balance in terms of the analysis. Not only are we trying to find things that we're really excited about, we're trying to find things that the market is valuing in a far too generous way, or that you know you could say that other people are too excited about relative to what the future fundamentals of those businesses are going to be. um And so you know the other benefit from ah i mean what we're really trying to do is generate risk adjusted returns. And so from a risk adjusted return standpoint, on the long side,
00:32:11
Speaker
you know own a group of businesses that you think are undervalued. and Then with the short book, you offset some of your broad market exposure with businesses that you think the market is meaningfully overvaluing. and you If you're good at it, then you end up delivering to clients pretty attractive risk-adjusted returns. so Hopefully, pretty decent absolute returns with meaningfully less of volatility than they would get if they just own the overall market. um and so you know It's a lot of work. i mean I work a lot of hours, but I'll say that working a lot of hours doing something that you're pretty excited about doing is pretty different than
00:32:49
Speaker
when i was uh you know kind of expected to hit charge our goals and things like that um you know i'm sure that i know there are plenty of people who love doing corporate tax work and so the charge our goals don't feel like work to them i wasn't one of those people the charge our goals always felt more like something that uh a requirement that i needed to satisfy rather than something i was really excited to do um but you know my My wife kind of makes fun of me because on the weekends, a lot of a lot of the time what I'm really excited to do is you know catch up on something work-related that you know got got pushed to the side during the week when there were things that were maybe more urgent than needing to be taken care of or whatever. um and so you know I think that's a pretty good situation to be in where um a lot of times the work doesn't doesn't necessarily feel like work. it's um know It's something I'm pretty excited about doing.
00:33:40
Speaker
Yeah, actually, I mean, do you do that on weekends where just, okay, hey, I i wasn't able to get to this. i need two hours to go I need two hours to go back into the office and go read financial statements on Company X. And and that's something you're your're and you you you enjoy it. You actually genuinely enjoy. Is that something that does come into your weekends? And you're like, actually,
00:34:01
Speaker
I would like nothing better than to be in the office for two hours. It's a recharging moment for me to do that work, and then I'm that much more fun for all the fun stuff that comes later in the weekend. Is that is that how you approach weekends sometimes? Yeah, I mean, often it's a lot more than two hours, but but yeah. it's it's i mean I mean, often my ideal ah Saturday morning is to get up pretty early, um do several hours of work, and then you know by early mid-afternoon, you feel pretty good about what you've accomplished and you know get a workout in, and then you've kind of earned, at least from my standpoint, I've kind of earned earned the weekend at that point. um
00:34:34
Speaker
but you know it's That's part of liking the work that I do though. i mean If I was doing work that I ah didn't like as much or that I didn't think was useful or valuable, then then that would be different. but um you know i mean I do think back to when I was ah doing corporate tax work and um I'd get home at 9 p.m. and do a few hours of you know investment research on my own as kind of you know just what I wanted to do with the time I had before I was going to go to sleep or something like that. so um you know I don't take for granted that ah you know it's it's nice to be excited about the work that I get to do on a day-to-day basis.
00:35:14
Speaker
yeah No doubt. and Knowing what you know now, would you still go back and and go down the accounting CPA route? um has like Has that helped you enough to get where you are today that you'd still look back and say, yep, I'm glad I went that route. I'd still take it. and Would you recommend that route to others? Yeah, yeah I am really glad I did it. um i think i I mentioned the technical knowledge that comes along with getting the CPA designation. I think that's really valuable.
00:35:38
Speaker
and then yeah Working in public accounting, I think there are some things you learn in an environment like public accounting that you might not learn other places. i mean Work ethic being one of them, um just a level of professionalism in terms of you know knowing what's expected, knowing how to conduct yourself ah in a professional environment and dealing with clients and um getting exposure to a relatively broad set of ah companies and industries. so Well, I will fully acknowledge that I didn't want to spend too much time doing public accounting work. It has been really beneficial experience early on in my career to kind of you know establish a foundation off of which I was able to build. so
00:36:20
Speaker
i do think i mean I talk about differentiation a fair amount. and I do think that having the CPA continues to be kind of a differentiating thing relative to a lot of people who were solely focused on finance. um and so yeah I'm glad I did it. um I think it was a really beneficial way to get my career started and you know have a skill set that I feel like if you have the accounting Background and you're you're decent at doing the work they're always going to be opportunities for you in the accounting field. um yeah I think i think it's pretty well documented that there's a shortage of accounts in the us and so um you know it's a nice.
00:37:00
Speaker
um you know, kind of safe, valuable skill set to possess um over a long career. I think if you get the CPA very early on in your career, you get to benefit from it for decades. And um I think it was a pretty worthwhile investment to make, at least from my standpoint. Yeah, awesome. And now look looking back on just cool stuff that you've done at work. Well, again, sounds like you're having fun with this,
Successes and Challenges in Investment
00:37:27
Speaker
right? You're excited to go spend some time on the weekends, you're excited to go do all this, all the reading that it that requires to be good at at the profession that you are serving today. Does anything strike you that makes you look back and light up and smile of proud work accomplishments that you look back on and think that was a fun time, or that was an amazing investment, or I really went out of them on this one,
00:37:47
Speaker
but my hypothesis was strong, it was unconventional, and it worked out. Like, does anything strike you as you look back on your career of what has been, what has would have been peaks? What do you look back on and that you're still proud of and still makes you smile? Yeah, yeah, for sure. so I think when I got involved with the long short fund, i mean shorting is hard. There's a reason that a lot of investors choose not to do it, or they start doing it and then eventually choose not to do it. obviously was so When I got involved, it had been after a rough stretch in the short book. and you know I had some ideas of what I thought we could do better, what I thought would work, and we did an analysis of
00:38:26
Speaker
you know We had a lot of data at this point. We had you know performance data going back to 2003. I wanted to look and see, okay, what had we done well and what had we done poorly in terms of what we thought about different investments and and you know what ultimately transpired from a performance standpoint. um and yeah We identified a couple ah kind of themes or patterns of the shorts that had ended up being least successful for us or most painful for us. um and you know I basically ah said to the team, we're going to have a really high bar to get involved with these types of situations going forward. and yeah I think we had a pretty good sense of what but we were good at or what playing to our strengths looked like in shorting. and um Over the past five years, the short book performance or the alpha generation in the short book has been very very favorable. so
00:39:21
Speaker
um that's you know That's been fun to you know have a view of, yeah, we can do this better, and then actually doing it, rather than just you know saying we could do it better. and you know sos It's been fun to see ah the benefit of all that all that work you know be reflected in in performance data. i mean yeah think A couple of other situations I'll mention. i mean one of the Things that i've enjoyed overtime is you do a ton of work on these businesses and then you know typically if you want to you can have the opportunity to speak with management. ah I'll give you a couple quick examples of this so when i was.
00:39:59
Speaker
very junior here, there was a company that we were short and I took a meeting with the CEO of one of their peers and I was talking to him. I mean, I didn't, I wasn't, uh, I didn't volunteer that we were short the competitor. Uh, but we were talking about the industry generic, like I may be invested in a, in a competitor just generic, no, no long short. Do you remember how you phrased it? I'm just curious.
00:40:25
Speaker
Yeah, mean we tend to not even volunteer ah okay that much. i mean they they They tend to not really ask and we tend to not volunteer the information. so um yeah i mean we're We're always just trying to gather information about individual businesses and industries and all that, but we were talking about you know their competitor um that that we were short at the time. and ah He said to me, yeah I don't understand how their what their sales team does all the time like i look at their sales productivity numbers and i just don't understand how they have so many sales people and you know they don't generate more sales and you know i kind of made a note of that i mean obviously we were short the business so ah you know we had a less than favorable view of that business at the time also ah but
00:41:11
Speaker
Years later, he acquired that business and changed the cost structure for him out. It's actually been a nice, ah successful acquisition for them. and so It is just kind of interesting sometimes to hear um you know what management teams of peer companies might say about companies that we're interested in. um and I'll give you one other quick example. There's a company that I had done a lot of work on ah just kind of in my spare time because I thought it was an interesting situation.
00:41:39
Speaker
At the time, it was too small for us to get involved in, but you know the business continued to grow and eventually it did reach a size where um it made sense for some of our strategies. and um you know We did end up making an investment and you know their their CEO was in our office two times last year. um so It's interesting, you you follow some of these companies for years and years and years, um and you know all kinds of things about them. and then you know Sometimes that's what it takes to eventually get an opportunity to make an investment. um is you know Many years of research and following the company and you know kind of understanding what the opportunity might look like if and when it presents itself. ah and you know it's It's always ah always kind of fun when you do get the opportunity to make the investment.
00:42:26
Speaker
Yeah, on that note, so your that last story sounds like following a company for a few years, and then it it takes multiple years before there's finally an investment opportunity that makes sense. um out of like Out of every, I don't know, 10 companies that you're doing research on, whether the longs or the shorts, so combine them all into one big bucket, because you're always researching some for the long, some for the shorts, I'm sure, right? Out of every 10 that you're doing deep analysis on, how many ballpark do you end up making some investment in either way, long or short? Is it is it one out of 10? Is this one of these things where your hall of famer, if you're a three out of 10 actually hit? it's like how often like because the The point I'm making is, you might look at 100 companies then, and is it again, is it three that actually like get through your radar or this is worth going deeper on? Out of all that reading, how many out of 100 or out of 10 or whatever is the right ratio end up it, being interesting enough to go to another round and potentially investing it. Yeah, not many, as you kind of alluded to, I think. um i mean but we often With our analysts, we often say, you know on average, roughly one per quarter, so you know four or so over the course of the year. and and you know that's That's a pretty high bar, honestly.
00:43:42
Speaker
just given the amount of research that we do on on each investment that we make. and so you kind of The way it often works is you're doing a ton of reading, things come onto your radar, and then you might start digging into a business. and Often, you know something came onto my radar, I started doing some work on it, and then as you do more work on it, you realize like, no, this isn't going to be something that I want to go ah you know all the way researching, I'm going to move on to something else. um which That can be a trap too because if you just do 40% of the research on 50 companies over the course of a year and you don't get anything to the finish line, then you know that's not all that beneficial either, because ultimately, we need to make investments, not just eliminate everything. um and so you know i think yeah like when youre When you're in an analyst type role, i mean different firms approach it differently, but um I think the way we approach it,
00:44:32
Speaker
If on average you you find one thing per quarter um yeah that you know truly warrants a recommendation, I think that's ah you know that's pretty good. That tends to be kind of what we're aiming for. Yeah, that is a very different than client service model of rack up as many hours. This is almost wreck like I'm not trying to rack up hours. I need one great pitch every quarter that that that crosses my plate that I can take a home run swing at. Very different mentality.
00:44:58
Speaker
It is. it is yeah and i mean that's I do think that's kind of appealing. i mean One of the things I would mention just in terms of different career paths, i mean making sure that you're aware of what the metric is that makes the most successful people the most successful people. um you know In our industry, it's it's ultimately investment returns. i mean you know There's so some nuance to it. i mean If you generate really good investment returns, you tend to attract assets and um you know Your revenue and profit tends to be a function of the level of assets under management that you have in ah in a strategy. but ah yeah I think I was a little naive when I got into professional services that you know the metric that tends to matter most is Bill Blowers. That can be a great thing, but it's just different. and
00:45:47
Speaker
you know if If I want to maximize the monetization of my skill set, ah you know i mean can you get to 80 or 100 billable hours a week? i mean You can, but you might not like it if you do that every week. and so um and you know The business models are set up so that there's some leverage as you advance um in the you know in the business and you rise. like I guess I would just say, make sure you understand what is valuable to the business and what is valuable to your employee or to your employer as an employee. and you know if i If I was working in professional services and you know I tried to make one client happy every quarter, that would probably be a pretty foolish thing for me to do.
00:46:33
Speaker
Yeah, that would may have to be a major project that you had exactly on. Yeah. Yes, indeed. very It's just, again, it's not that one's good or bad. It's just, again, there's different it's a different mentality. It's a different view of what success looks like, right? um And again, that's an important factor when you're people are looking to change jobs. That's just an important factor to consider, right? Because some people might look at one I've got to maybe find one win per quarter. like how do i know if i How do I know if I'm doing a good job if I didn't find one in that quarter? like that That maybe is a too slow of a feedback loop for some people. um The point being is one's not right or wrong. They're just they're very different in kind of how you approach work and how you approach success.
00:47:12
Speaker
um on a separate more related threats. What are peak moments you've had in your in your working career? Any fork in the road, oh my gosh, I'm not sure where to go. Wow, I just made a terrible mistake. Am I going to not be in this profession anymore? Are they going to fire me? Are there any any of those type of mistakes um that have had a big impact on your thinking or that maybe set you up for for greater success down the road? Can you recall any of those dark, hard times and and what was the lead up and then how did you get through it?
00:47:41
Speaker
Well, COVID was interesting because I had been in San Francisco in February of 2020 meeting with management teams and it was interesting to look back on.
00:47:53
Speaker
some of the things that we all thought about COVID at that point, particularly some of the things that you know management teams said pretty confidently about COVID at that point that ended up being you know not even remotely right. um And so ah I think the world changed a lot in a very short period of time ah when kind of we started to understand the full impact of COVID for some indefinite period of time and you know we had a large position in one of the one of the airlines at the time which was not ideal when the world changes and um I would say probably a majority of the population was ah not going to be getting on airplanes for some indefinite period of time
00:48:36
Speaker
and so you know I think we do a ton of work to try to understand the range of outcomes for given businesses. That was certainly you know that event was outside of the range of outcomes that we had considered. i mean you know When you own an airline, you consider things like terrorist attacks or you know the potential for plane crashes. things like you know You think about a lot of things that can go wrong, but yeah We had not spent a lot of time thinking about what a pandemic might look like for the business model. and yeah I mentioned the topic of management teams saying things very confidently. um you know There were a lot of things said by CEOs early on in the pandemic that
00:49:19
Speaker
i guess ah um generous interpretation, you could call it false precision. um But, you know, I think they spoke confidently about things that did not age well. um and And the reason I bring it up is it just there's no substitute for thinking for for yourself. um yeah You know, you listen to what other people say, and that's fine. And that's great. But um you ultimately have to have your own thoughts and, you know,
00:49:45
Speaker
do your own critical thinking and not just think that there's somebody out there who's going to give you the answer or who even knows the answer ah to give it to you. um You got to think for yourself. um You have to develop conviction on your own. You can't just say, hey, this other really smart person owns this business, so I should too. If you don't do the work, you're not going to really know ah why you own the business if something goes wrong with the business. and so you know I do think that COVID period of time was um yeah it was challenging in many ways for investors to try to figure out what some of these businesses were going to look like on a normalized basis. Typically, when we talk about normalized, we think about economic cycles. We don't think about
00:50:31
Speaker
you know things where your well-being is truly in question like it was early on in covid when we just really didn't understand exactly how it was spreading and how we might ultimately get through the situation and i think in the with with hindsight now sitting here four years later we kind of understand that okay the worst case scenarios didn't play out uh but you know early on, ah the the range of algorithm know yeah the range of outcomes was very, very wide, certainly wider than what we had considered with plenty of the businesses that we owned. um Yeah, no doubt. I can remember there was very, very early data released from Italy. And it was something like, oh, like, so there's like 10% of people who get this COVID thing, they pass they pass away. yeah And I remember thinking like,
00:51:23
Speaker
What? And I remember going to buy gas one day, and like I didn't have any wipes, and they didn't have any wipes. And I was like, do I really want to touch this gas handle? I don't know what I actually want. i like i Maybe I'll just go to the next one. That was how ah was how much it was it was unclear, and there was very little data, very little information. We just didn't know. I mean, we had no idea what to expect.
00:51:46
Speaker
um And yeah, that was a wild time. We obviously learned a lot
Influential Encounters and Recommendations
00:51:50
Speaker
since then. It was very early preliminary data. That's where, again, it going back and doing some of that thinking for yourself is critical um based on, you know, I'm getting these third party data points. Can I trust those data points? Are they valid? Like, can I can I go see the sources underneath that? Oh, it's 10 percent, but it's actually only there's only this many people who are of a certain age who that's part of. like oh like Again, you got to really go go deep, deep, deep, which your career sets you up or very well because you got to go deep, deep, deep to really understand these things. yeah That was a wild time. um how about i mean That may have been a wild one, but any other wild crazy from the stories of investing that that you can share? i mean one One is an interesting one where you're shoring a company, you're talking to the CEO of a competitor, you ask a casual question about a competitor. He says,
00:52:38
Speaker
I don't understand what their sales people do all day and then eventually it requires that company. That's a pretty wild one that you kind of had a little bit of a front row seat kind of talking to the CEO about this and seeing this materialize over a couple of years. so mean That's already a pretty good one. But any other just weird, wild, crazy stories that that you're able to share from your from your investing career, ah anything that's just just worth other worth worth sharing, entertaining, crazy, wild, anything that you're able to share.
00:53:04
Speaker
Yeah, yeah. well So I mentioned earlier that and when I was in high school, I started reading about Warren Buffett and kind of became a pretty big admirer of Warren Buffett. ah When I was doing the Masters of Accounting program, so kind of my fourth year of college, I got a chance to go out to Omaha with a group of students and spend the day with Buffett and meet Buffett. And so, you know, that was pretty cool. ah That was, you know, one of those kind of ah dream come true type scenarios for somebody like me who had spent so much time ah reading about Buffet and listening to him speak and, you know like I said, admiring him to get the opportunity to go meet him was, um I mean, it was really special. And then another one that ah that was really cool to me, John Bogle, the founder of Vanguard, I got a chance to meet him. ah you know I had started my investment career at that point, but I was in the first few years, I got a chance to meet
00:53:56
Speaker
meet him. That was also really cool to me because I have a ton of admiration for what he did and how he structured Vanguard and the benefit that index funds have been to investors, essentially providing a nearly free um option to gain exposure to ah markets, I think is um you know really admirable ah the way that he did that. and so Getting to meet him and you know talk briefly with him with him was also something that they kind of stood out to me.
00:54:30
Speaker
Yeah, and um you said spend the go back to Buffett. You said you and a group of students spent the day with Buffett. I mean, like, is there a lunch? Did you speak with him? Was it like eight people in a private room with him for a one-on-one? Like, did you sit down with a burger and fries and a cherry Coke? Like, can you what what more can you share about the detail behind that experience? That sounds amazing.
00:54:50
Speaker
Yes, it was a relatively large group. I think there were maybe 25 or 30 students from our school. And then I think there were maybe two other schools, so three schools total that he hosted that day. So, you know, i rough very rough numbers, maybe 100 students or so that day. So we toured ah Nebraska Furniture Mart. He did Q and&A for um a decent period of time. I think it was over an hour of just answering questions. There was a lunch. I think we also toured Borshan's while we were there. i mean it was It was a full day between touring a couple of the businesses, getting to do Q and&A with him, getting to do lunch with him, and then we each had an opportunity to get our picture taken with him. um it was yeah It was a very memorable day. Awesome.
00:55:39
Speaker
Awesome. and For those who don't know that Furniture Mart in Omaha, there's a fascinating story. I can't remember when one of one of the books written about him, of him buying this furniture store with what was was the woman name who owned it? of Grandma B or something like that? Rose Blumkin. Rose Blumkin. And how she just like drove every... like She was the number one player in selling furniture in Omaha. Big store. i mean Worked seven days a week. Was just phenomenal. Giving great quality at low prices.
00:56:06
Speaker
Anyway, there's some just an old school blunts like work hard, treat people well type person. Anyway, there's some great stories and some of those old ah Warren Buffett biographies about how he met her and and ended up investing in that business.
00:56:22
Speaker
Fascinating stuff. A couple quick hit questions here while we're kind of wrapping up here. na if you don't mind's ah and You mentioned a lot of reading. I can see a whole lot of articles and newspapers or the back of your on your desk right now. Is there anything right now, book, article, something along those lines that that you have not been able to put down? What's a recent book that has just captured your attention. One of those where you're 20 pages in and you're like, I've got to keep going. Does anything stand out as a recent read ah that you just couldn't put down that you loved?
00:56:52
Speaker
yeah Yeah, well, Spencer, you sent me The Great Depression, a diary, which is ah a very interesting read. I'm still um'm still in the first half of that book, but it's been a great, yeah I think, particularly given what a favorable economy we have been in in the US since the financial crisis with some pretty brief ah maybe um slowdowns, but yeah we haven't really seen normal economic cycles over the past 15 years or so. ah I think it's a good perspective ah to remember that you know economic cycles exist for a reason. It's not always maybe like it's been um in the US over the past 15 years or so. so um I've thoroughly enjoyed that one. I think a few other books that I've read recently, Same as Ever by Morgan Housle,
00:57:39
Speaker
um he you know Morgan House also wrote The Psychology of Money, which was an excellent book. um But yeah, same as ever, I think was a great book to kind of emphasize, as the title implies, some of the things that just don't change over time. ah There's plenty that that does change in the world, but there are certain things that are really you know pretty consistent over long long periods of time. and so I thought it was a great book and just kind of reinforcing some of those things.
00:58:06
Speaker
um you know The Railroader is a book about Hunter Harrison, who was a railroad executive, ah that I think was was an excellent book. Chipboard by Chris. You recommended that one to me. I'm about 200 pages into it, and it is a fun story. Just an incredible tale of a guy who's from kind of nothing Memphis, Tennessee, who works his way up in the rail yards to become CEO of multiple different railroad companies through the United States and Canada.
00:58:32
Speaker
and how he's just a turnaround expert, demands a very high bar of people. um So sorry, that book, Railroader, you recommended to me and I've been reading it, and it is just a fun ride to hear someone who is just very, very good at what he does. So sorry, I continue after Railroader. I had to throw a plug in there for people who are interested.
00:58:48
Speaker
Now, for sure. for sure ah Chip war is another one that's pretty good. you know In this world that we live in today where semiconductors are so important to so much of what we kind of take for granted in our daily lives, I will say with Chip War, and Chris Miller is the author on that one, the first half of it is um maybe a little dry in terms of the history and evolution of the semiconductor market. I think If you make it through the first half, you'll be glad you did because I think the second half tends to be maybe somewhat more relevant in thinking about ah semiconductor companies today and going forward and kind of what that could look like. And again, I mentioned range of outcomes. I think thinking about some of the range of outcomes associated with ah the chip industry can be
00:59:34
Speaker
you know pretty interesting and and also pretty valuable. The last one I'll mention, Bubble in the Sun by Christopher Knowlton. It goes through some of the real estate development in Florida in the 1920s. There was a lot in there that I was not aware of just in terms of everything that went into the development of that era. and Interestingly, how despite incredible success, many of the developers actually kind of ended up broke.
01:00:02
Speaker
after you know they overextended themselves and you know things things ultimately weren't a straight line up for um the for the development. and so um Yeah, those are a few. i mean I think reading books is one of my favorite things. so um Those are a few that came to mind.
01:00:20
Speaker
Awesome, and any any timeless classics that you keep coming back to every couple years because they're just such fantastic. You know, maybe there's a level set for you. Any any timeless classics that you just recommend no matter what, because you just keep coming back to there is fantastic.
01:00:35
Speaker
Yeah, I mean, um anything about Warren Buffett to me is is excellent. um And so, you know, Alice Schroeder, I think, wrote the most comprehensive ah biography about about Buffett. But there are so many out there and, um you know, virtually all of them are are very good. So I think, you know, anything about Warren Buffett to me is is worth reading.
01:00:57
Speaker
Okay. And since you're so excited, you're reading about him in high school, still fantastic. but what What's the highlight reel? What stands out most to you about Warren Buffett? What makes you respect him so much and and still keep coming back to these books?
01:01:09
Speaker
Yeah, i mean I think part of it is the longevity. ah you know He's been doing this so successfully over such a long period of time. and yeah I think so often you see people who have some success doing something and you know they either get bored with it or they get complacent with it. or They get distracted and you know drawn into something else. um I think you know seeing Buffett and Berkshire and you know Charlie Munger was an enormous part of that as well. Apply the same investment philosophy over um many, many decades has been ah you know fun to watch and also just
01:01:48
Speaker
To me, i mean you know seeing how much wealth has been created from ah Berkshire and um Warren and Charlie you know really emphasizes the value that can be created from doing something really well over a really long period of time. I think that's you know so many investors have kind of maybe strayed from their initial investment philosophy over time. I really respect that. ah you know I think Buffett's continued to refine his skills and you know he hasn't been perfect, but ah you know just the returns generated over really long periods of time, it's it's much harder than they've made it look.
01:02:25
Speaker
yeah Yeah, that's why he's the he's the one who everyone talks about and why there's so many but biographies about him in particular. fact any any advice Any advice looking back as as there's maybe folks who are in in school right now in accounting, potentially thinking about getting into accounting as a major, maybe a year or two out, um any advice for folks in that world today or or maybe set another way, if you could go back into that same time period,
01:02:50
Speaker
what knowing what you know now What advice might you go back and and give yourself? what What are some of the things that you you wish you knew then that you know now? I would say be very focused on your career trajectory. ah you know If you don't make investments in your skill set and career early on, it can be very difficult to close that gap later on with the people who did make those investments. and so I think especially early in your career, but really throughout your career, make sure you're continuing to get better. you know Go above and beyond. um and you know you don't get an opera You can't get time back. and so you know Don't waste time. ah is yeah something that i think is really important Make the most of time. if If you're not excited about what you're doing from 8am to 6pm, then do something to sharpen your skill set outside of those hours. Either get up early in the morning and do something to get better.
01:03:40
Speaker
you know do something in the evening to get better, but I think making sure that you're thoughtful about what you want your career trajectory to be and do the things that it takes to you know have a career that's consistent with that trajectory. um I think you know having a plan is really important because yeah I think people rarely accomplish things that they didn't set out to accomplish i mean there's a reason that have an aspirational goals tends to be pretty valuable is because the absence of aspirational goals you know tends to keep you from achieving really great things um
01:04:14
Speaker
and Then you know if you struggle with things along the way like the CPA exam or you know something in a job, you know don't get discouraged, don't give up. It's not like getting discouraged and giving up is going to make it better. I would say, you know as long as you keep pushing yourself and you get through it, I can almost guarantee that when you look back on it in hindsight, it's not going to seem like nearly as big of a deal as it does when you're when you're in the moment struggling with it. and so Just kind of keeping that perspective and making sure that hey, if you struggle with something, what really matters is that you get through it and that you don't you know get down on yourself or um give up on yourself, things like that. I think looking back, you will get even more satisfaction from how you persevered and and and got through it even when it wasn't easy. Yeah. Awesome. and any Any other last fun, valuable, interesting tidbits to share with the group? and Any last words of wisdom you want to leave people with?
01:05:13
Speaker
you know I might just kind of reiterate, just given that I think part of the audience here might be either considering doing the CPA exams or have done the CPA exams. um you know When you do make investments like getting the CPA designation or you know I did the CFA designation as well, early in your career,
01:05:33
Speaker
I mean, you get to benefit for the rest of your career from those things. And you know sometimes people would say things to me like, well, I'm not even sure I would use that. Why would I want to do it? not you know My counter has always been, well, what if you find out down the line that you need it and you didn't do it. Wouldn't you rather you know have made the investment early on and maybe you don't need it, which is probably a pretty great thing if it plays out that way because um that probably means that you know enough opportunities presented themselves that um you know your career has gone pretty well. But if you get to a point where you're limited by something that you could have spent six months or a year knocking out in your 20s and you didn't do it,
01:06:16
Speaker
I think the regret that would come along with that type of scenario might be far greater than you know enduring some temporary discomfort to do something hard that you'll get to benefit from for the rest of your career. um you know ah Obviously, I'm biased. You guys can see what I did, but you know I've never regretted getting through those exams relatively early on.
01:06:37
Speaker
Yeah. Awesome. Good advice. um Awesome. Thanks so much, Nate, for for doing this. And we'll we'll give it a wrap right here. Thanks. c CPA to CFA to portfolio manager of a $1.7 billion dollars long short fund in just about 15 short years. Amazing stories. Great stuff, Nate. Thanks so much for doing this. Appreciate you. um Thanks for having me, Spencer.