“Tell me and I forget, teach me and I may remember, involve me and I learn.”
Whenever I think about the missing link between a promising investor and a successful one, I always seem to come back to mentoring.
Giving advice to people on why they should look in certain areas, focus on certain things that matter most, or even staying away from certain things; is often overlooked in our society today. Whether it’s taking a new analyst to breakfast or lunch or showing him/her how to practice the art of business valuation (and it is an art), these type things are vital to both the mentor and mentee in terms of them both growing as an individual and investor…
No matter how far you’ve come or how little you have, never fail to tap into the knowledge of those who have been successful (or unsuccessful) or see differently than you do. Everyone needs a philosophy and a code to live by, but as humans, we sometimes have a difficult time wanting to use someone else’s philosophy or code.
I’ll admit — I had a tough time with it too. It takes openness and nerve to seek out others (even if you think you know everything as I did). However, it’s been my experience that the most successful individuals (and investors), are secure enough to admit that they don’t know everything. They are always in search of greater knowledge and insight through their mentor-mentee relationships.
“If I have seen further, it is by standing on the shoulder of giants.”
Sir Isacc Newton
If you look at all great athletes — they’ve all had great coaches and mentors to help them along the way. Even Warren Buffett had a mentor in Benjamin Graham. At the young age of 19, Buffett read the Intelligent Investor written by Benjamin Graham — and his life was changed forever after. He applied to Columbia Business School to study under Graham, and they eventually developed a lifelong relationship in the process. Although Buffett’s philosophy to investing has evolved somewhat, Graham’s early mentorship to Buffett helped shape his philosophy and understanding of value investing. The importance of mentoring cannot be understated enough.
“When the student is ready the teacher shall appear.”
Mentoring was extremely important for me personally — Without it, I would not be where I am today. So I am forever indebted to this person.
For far too many nights, I remember laying in my tiny apartment wondering how I was ever going to be successful at investing. Would I ever have a real understanding of these businesses? Would I ever be able to grasp investing?
Then one day in my early 20’s, I saw a man on TV talking about value investing. His rhetoric and aptitude for investing was beyond anything I had heard before. He was passionate about investing and seemed to speak my language. I kept thinking to myself, “I want to learn everything that this guy knows. It just makes sense.”
His name is Whitney Tilson, Portfolio Manager of Kase Capital (formerly T2 Parners).
Although I am usually quite skeptical of personalities on television or the internet, Whitney truly comes from the heart. He is an incredible investor and educator, but he’s an even better person. And I saw it first-hand.
That night I convinced the Investment Fund I was working for at the time to give me time off to attend the Value Investing Congress, and the advanced value investing class with Whitney in NYC. I was in my early 20’s and didn’t have a great deal of money at the time as a young analyst, so I told them all I needed was the conference ticket and plane ticket, and I would find a place to stay (I would figure that out when I got there — thankfully I did).
They agreed, and I was able to see Whitney in person (and other incredible value investors). I got to ask him all kinds of questions, which helped clear things up. It helped me focus on the components that mattered most to investing success.
The advanced session walked through each investment he had made, and why certain decisions were executed. It opened my eyes to investing. More importantly, it made me realize that I wanted to do this for for the rest of my life. And it also made me realize I wanted to help other people too.
I can say without any hesitation, that this one seminar and advance training changed my life, and put me on the path to value investing.
In the years that followed, I listened and read materials from the greats. From Benjamin Graham and Warren Buffett, to Peter Lynch and Charlie Munger, to Seth Klarman to Leon Cooperman to Mohnish Pabrai to Guy Spier to Bill Ackman and David Einhorn. I did anything I could to improve my investing process and philosophy. And because of these incredible human beings, I was able to gain the insight and wisdom to not only help me invest better, but also be able to show others how to invest better as well. And I will be forever grateful.
These investors have helped so many people throughout the world to better understand investing. So I suppose it’s a common story. But it got me thinking (i know it’s scary for me to be thinking) — Without that mentor-mentee relationship would I be where I am today? It’s an interesting question, and one I cannot answer. I’d like to say I would’ve figured it out eventually, but who knows. All I know — Whitney was able to help guide me in the right direction in developing my philosophy of value investing.
The point is this whole process started with Whitney being a mentor to me and guiding me on the right path.
It pains me to say it, but I initially sought out this knowledge and developed these mental models for selfish reasons. When I was creating and developing these Mental Models in mid-2009, they were initially made to help myself, and educate potential investors in my future fund about my process of selecting and investing in stocks.
As I finalized the process and mental models, I asked friends and family to look at them and let me know what they thought? Would they invest in the fund? They said, “not only would they invest in the fund, but they learned more about investing through the content and material than they have their entire lives.”
This ultimately opened my eyes to the possibilities of helping others invest better. They said, “You should offer this to everyone, not just potential fund investors.” It was at this point when I thought I could be a mentor to people too. I thought everyone should have these philosophies and the mental models associated with value investing. It helped me, so I knew it could help others too.
Ultimately, the potential to touch millions of people’s life’s and impact them and their families in a positive way was too much to pass up. After years of putting these processes and mental models together, I quit my “cush” job at the investment fund, and decided to write a book about everything I had learned from these incredible investors while professionally managing money. The book is being released on March 30th: Value Investing: A Value Investor’s Journey Through The Unknown…
It was a difficult endeavor to get off the ground, but it was worth it in the end. Seeing people’s life’s changed forever is worth ALL of the trials and tribulations it took to get here.
BOTTOM LINE: Our society has discounted the value of mentorship and proven processes (or systems) and mental models. We need more mentor-mentee relationships in the world. As Sir Issac Newton said, “if I have seen further it is by standing on the shoulder’s of giants.”
If you are a seasoned investment professional in a position to share your skills, give something back by becoming a mentor yourself. If you are just getting into the business or trying to get your foot in the door, I encourage you to try to find a mentor. Please send me stories of your mentoring relationships and the impact it’s had your life. I know it has for me and countless others.
I look forward to hearing about your journey!
Grab your copy of Lukas’s book today on Amazon while it’s available for its pre-release discount (till March 22nd):
“Finally! Lukas Neely lays out the path to mastery of value investing in an incredibly understandable, easy-to-read and enjoyable way. This book will benefit dyed-in-the-wool value investors and newcomers alike. Highly recommended!”
– John Mihaljevic, Manual of Ideas
50% of book proceeds go to the Non-Profit Family Resource Center in Lukas’ home town (US Virgin Islands). The Family Resource Center is an essential organization in the Virgin Islands. They help serve as the bridge to help families, that have been through severe hardship, get back on track in their lives.
So please share and get the word out there. It truly is going to a great cause!