00:23moish welcome back hello Divia how's it
00:26going good good good good I noticed your
00:29background is uh the new library so I'm
00:31very excited that uh you're able to use
00:33it for this interview all right we aim
00:36to please that's great is that is that
00:38Warren Buffett and Charlie behind you
00:40that's Warr and Warr buff behind you
00:43right there that is war yeah we had the
00:45same bus maker make both the bus we had
00:48the same bus maker make both the bus and
00:50I sent one of those to Warren and he was
00:52really excited to have his bust at the
00:54booker headquarters so cool so cool um
00:58so I guess it's been a while since we
01:01last chatted it's funny the last time we
01:03talked we had discussed among other
01:05things meta and one of the things you
01:07had said was you know I think when we
01:09chatted it had crashed down from like
01:11380 down to 220 or something like that
01:14on its way all the way down to
01:17$90 and you had said that you know it'd
01:20be an easy double from current levels
01:22which at the time was like $200 you know
01:24lo and behold it has doubled and then
01:27some since then but I wouldn't say it
01:31definitely had I think Mark did a really
01:35great 360 180 can say where he really
01:39tightened up the expenses I mean meta is
01:41a great platform you know I think it's
01:43got a great franchise great platform
01:45they had a kind of country club attitude
01:47to spending you know and there was a
01:50wasn't that much discipline around when
01:51you have a great business like that you
01:53don't necessarily need to watch your
01:54pennies and it's amazing how they like
01:56turned on a dime and actually tightened
01:59up all the expenditures and the layoffs
02:02and basically got the ship pointed in
02:04the right direction and I mean then you
02:06had the cash flows just show up you know
02:08so it was awesome to see that yeah I I
02:11mean I I've I've written about this
02:13couple you know numerous times and I
02:15they are the fastest pivoting company I
02:18think I've ever seen I I I can't think
02:20of a single business that has pivoted as
02:23quickly at at anywhere near this scale
02:26as often as meta has so I remember in
02:30the depths of bad news when the stock
02:32was at it was like $88 a share the The
02:36Wall Street Journal put out a headline
02:39you know stating that they were going to
02:41reduce their employee base and fire like
02:45I think it was 11,000 people at the time
02:47and as soon as that happened you know
02:50the stock started moving I think that
02:52day it might have been up 8% or so but
02:55you know it took a while I think for
02:57people to realize that they weren't just
02:59paying lip service to cost cutting but
03:01that there was you know a fundamental
03:03change in terms of just the company
03:06being permanently leaner and a complete
03:08change in the philosophy of Mark you
03:10know in terms of what sort of was
03:13possible with a smaller team and like
03:15over the months and you know the years
03:17you know over the last two years he's
03:18kind of set on numerous time numerous
03:20occasions that you know he just feels
03:22like a leaner meaner team is better and
03:26it's coincided with his uptake of
03:29Brazilian Jitsu I don't know if you've
03:30seen seen a lot of that but he's he
03:33seems to have Incorporated this idea of
03:35lean you know um Behavior to his
03:39personal life um you know with with some
03:41of the fighting that he's been doing um
03:44and it's starting to obviously percolate
03:46through the rest of big Tech and now
03:48people are calling for Google to do kind
03:50of the same thing and you know really
03:52kind of cut the fat you've seen some of
03:54it in Amazon but I mean what's your take
03:57on which of these companies has the most
03:59kind of operational leverage within it
04:02and and and and also maybe as a coraly
04:05have the most room to improve from a
04:07cost standpoint well I think I think
04:09Amazon runs a pretty tight ship as does
04:12uh Microsoft I would say that in my
04:14different visits to alphabet
04:16headquarters that's definitely a country
04:18club I would say that they've done some
04:20I mean I think that some of the Google
04:22employees I've spoken to they don't feel
04:24secure in their jobs in the sense that
04:27the layoffs have come very suddenly
04:29they've actually gone after some very
04:31senior people in who they've cut but I
04:33think there's a lot of fat there to be
04:35cut I mean that's that's an incredible
04:36another incredible set of franchises
04:38with search and Android and YouTube and
04:41all that so yeah I mean I think that the
04:43company where Top Line is equal to
04:46bottom line you know in effect basically
04:49like where there's no expenses to speak
04:51of is Microsoft you know Microsoft just
04:55a incredible machine I mean you know
04:57when you see their revenues go up and
04:59like 80% or something will drop to the
05:02bottom line it's really I think Satya
05:05and and his team I think they've always
05:07had great execution even when they've
05:09had you know they've been doing really
05:10well they haven't had a lot of meat or
05:13or fat on the bone if you will they've
05:15run L lean but yeah I think alphabet has
05:17a ways to go but by the same token maybe
05:21that's an argument to own alphabet low
05:23hanging fruit for them absolutely that's
05:25right yeah I mean they actually trade at
05:28a multiple that's more in the low 20s
05:31versus you know take a Microsoft kind of
05:33mid to high 30s for yeah but there's a
05:37there's a little bit of a difference I
05:39mean I think that Microsoft is such a
05:41strong recurring Revenue business you
05:43know the the the recurring nature I
05:46think the The Meta franchise is awesome
05:48but but it's at the end of the day it's
05:49a it's an advertising franchise and on
05:52the on the Microsoft side it's very
05:55critical part of Enterprises that that
05:58revenue is not not going anywhere you
06:00could argue that it's higher quality
06:03yeah I've heard that argument and I
06:04think it's more like earning stability
06:07is is kind of the if you're going to pay
06:09a premium multiple for it you you kind
06:11of you can you can argue for that yeah I
06:13do think there's something to be said
06:15for meta being and you know I think this
06:17applies to Google and and and Amazon's
06:20been picking up on this as well being
06:22kind of the you know the distribution
06:25channel for corporate enterprise
06:28Enterprise as well as small business
06:30like if you want to reach an audience
06:32you got to go through like one of these
06:34channels yeah and also it used to be
06:36that you know half your advertising
06:38worked and you didn't know which half
06:40and that's gone you know I mean that was
06:42that was old adage with with advertising
06:44like you know there was so much waste
06:46and the thing with platforms like meta
06:48you don't have that waste because you
06:51have such a direct relationship what
06:53you're spending and what you're seeing
06:54come out the other end and the ability
06:57to pinpoint that is really powerful and
06:59I think that's a core part of what their
07:01franchise is yeah now one of the other
07:04things you said previously indifference
07:07to the metaverse or maybe skepticism
07:09towards the metaverse now that
07:11conversation has shifted to AI so it's
07:13not really about the metaverse so much
07:15um now as it is about AI how do you
07:19think about that Visa the mag s or or
07:21kind of these you know kind of these
07:23these Blue Chip names do you have a
07:25viewpoint on who's best position to take
07:28advantage of that I would say that
07:30Microsoft you know has historically been
07:32a great cloner it has not been a great
07:35innovator but they're acceptional at
07:37cloning sometimes it takes them 10
07:39versions to get it right or 15 versions
07:41to get it right but they get it I would
07:43definitely put them in the winners Camp
07:46just because they're so good at the
07:47execution I mean I mean what I'm saying
07:49is the company has woken up to the
07:51potential for AI and they're doubling
07:54down in a big way I would put them near
07:56the top I I would say that obviously
07:58Google has had a lot L of strengths in
08:00this area for a long time but they don't
08:02have the execution discipline and the
08:05intensity of of going after the way
08:07Microsoft does it's a no-brainer for me
08:10that with the partnership that Microsoft
08:12has that they've got a PO position here
08:14you think that that sethan Adella is on
08:17a personality level maybe a little bit
08:19more ruthless versus a c pay like what
08:22is it that because you know you hear
08:24this in the news about how Google's kind
08:27of dropped the ball on on this AI Trend
08:30I'm not sure what to make of it because
08:32I feel like they have incredible
08:34technical expertise across the board and
08:36they you know they use AI a lot with
08:37search but there does seem to be a
08:39personality difference between the
08:41management team at Microsoft and when
08:43I've heard sinder speak and he's done
08:46Congressional testimony you know you see
08:47him with at conferences and whatnot he
08:49comes across as maybe a little bit more
08:51relaxed but I'm just curious if you have
08:52any thoughts into that quite
08:54accidentally I didn't expect this but
08:56quite accidentally when I was in Omaha
08:58in may I usually go for a dinner that
09:01Charlie would invite me to there's a lot
09:02of whoo who who show up at the dinner
09:04they seated me next to Bill Gates so so
09:08I was quite a quite a surreal situation
09:11where I had had dinner with Bill and of
09:14course his son was sitting next to him
09:16and I chatted about all kinds of things
09:18with him for about two and a half hours
09:20we talked a lot about many of these
09:22areas and I even played a game with him
09:24I said look I'm going to mention a
09:26company you tell me if you want to go
09:27long or short you know and he said he
09:29said yeah no problem you know so I I
09:31said you know Amazon he said long you
09:34know and I said Google he said short and
09:36then then Apple he paused he said look
09:39basically Apple's a situation where they
09:42don't really have R&D in the way we we
09:45would most of us would understand it so
09:48he mentioned that Microsoft has had
09:50Microsoft research Labs forever right
09:53and I also pointed out to him then that
09:55nothing has come out of Microsoft
09:57research Labs ever you know that is been
10:00that has been of any use so he actually
10:03was quite agreeable to that even though
10:08that statement probably didn't make him
10:09happy he said look we have two kinds of
10:13research at Microsoft we have the Ivory
10:17Tower Microsoft Labs which is like a you
10:19know academic bunch of phds you know
10:22whatever doing their thing and you have
10:24your opinion on that that's fine and
10:26then we have of course development and
10:28then R&D TI to development and he said
10:30that has been really effective so that's
10:33the engine which has the more you know
10:36bread and butter Engineers who are the
10:38masters of cloning right so basically
10:42Google has always had a huge leg up on
10:45the pure research for a very long time
10:48and they've done a really good job the
10:50transition from the real
10:52research from this in very Innovative
10:55Research into a bit a business is not
10:59not something Google has been able to
11:00pull off too many times they pulled it
11:02off for search but then after that if
11:04you look at it YouTube was an
11:06acquisition Android was an acquisition
11:09and many of their other bets are just
11:11wild you know like there's like a
11:14free-for-all spending but nothing has
11:16really come out the other end Microsoft
11:17on the other hand doesn't take flyers
11:21you know when they see that something is
11:23gaining traction and they don't they may
11:26put some people on Microsoft Research
11:28into it but but I don't think Bill and
11:29Company and Satya and Company count on
11:31those guys they they pull in people who
11:33are more you know died in the world
11:35development Engineers with some research
11:38background and those are the guys who
11:40pull the teams and things through so I
11:42think that from an execution point of
11:44view I just think that it's just a lean
11:46mean fighting machine it's it's really
11:49exceptional and they will be able to do
11:51this and they've done this repeatedly
11:54when the Paradigm has changed the
11:55Paradigm has changed on them so many
11:58times if you think of Microsoft I know
12:00it's like a nearly a 50y old company I
12:02mean I think this year is like year 50
12:04for them 48 sorry they're 48 years old
12:06now it's like really old you know so but
12:09you know for a 48y old business with all
12:11the paradigms they've jumped through
12:12they look like a young company you know
12:15they look like a really young executing
12:17company it's just got some great DNA on
12:19that front yeah they're not they're not
12:21resting on laurels actually on a on a
12:23related note and this this transitions
12:25to some of your other Investments
12:27somebody asked on the topic of Topline
12:29Revenue increases going straight to the
12:31bottom line the almati airport in kakon
12:34of your Turkish holding Tav airport
12:38dutyfree as well as potential air and
12:40passenger fee increases that may go
12:42straight to the bottom line there's a
12:44pavlovian response to macroeconomic news
12:46how do you think about their tav's
12:48valuation lately do you ever double down
12:50on bets that are 10% you you obviously
12:52make large bets so have you have you
12:55doubled down there or what's your what's
12:56your take on that yeah let me just give
12:58you some back background I think so that
13:00people can kind of understand uh the
13:02business a little better the almadi
13:04airport was an acquisition that Tav did
13:07in the middle of covid when passenger
13:09traffic was Zero it was like basically
13:11you're buying this airport when there
13:13are your revenue is zero basically they
13:16got the deal of the century in terms of
13:18what they paid most of these airports
13:20that come up for privatization are Bots
13:23they build operate and transfer which
13:25means you get a concession for like 25
13:28years or 30 years or 50 years and you
13:31pay the government something for that
13:32concession and after that 25 year period
13:35it goes back to the government and so
13:37you are a a tenant if you will milking
13:40the the situation for you know two or
13:43three decades or something Tav the
13:46almari airport was an outright purchase
13:48they own it forever they own it for the
13:51next thousand years they don't have to
13:53pay anyone anything anymore and part of
13:55the deal for them to get their airport
13:57was that they wanted to put in
13:59a new international terminal which is
14:01going to actually go live in about six
14:03or eight months they've been building it
14:06I visited that airport in 22 and the
14:09almari airport is a very unusual airport
14:11in the sense that I don't know of any
14:13other airport in the world where inside
14:16the airport some of the real estate was
14:18sold so for example the the current
14:21duty-free operators in the current
14:24terminal own that space inside the
14:26terminal even though Tav owns the
14:28airport and Tav today at that airport
14:31gets zero duty-free Revenue now what Tav
14:34is doing is it went and talk to those
14:37guys saying Hey listen can we do a deal
14:39and the price was so high they said okay
14:41you keep the dutyfree it's okay when the
14:44new terminal comes up which is happening
14:46in8 months all the international moves
14:48to the new terminal and all the dutyfree
14:52automatically goes to the new terminal
14:55which means that Tav will now Own 100% %
14:58of the duty-free and the people who had
15:01those duty-free shops in the old
15:03terminal which will become a domestic
15:05terminal can basically go pound sand
15:08they'll convert them probably to coffee
15:09shops or something you know so it's like
15:12there nothing and yeah and just to tell
15:14you just to uh show you how dutyfree
15:17works just in case of some of your
15:19listeners are dutyfree affectionados
15:21when you go to some you know dutyfree
15:24shop and there's a $100 bottle of Johnny
15:26Walker or shivas or something the
15:28Factory gate price of that liquor is $25
15:33$30 okay so what you're paying $100 for
15:37which would cost even more in your home
15:39country the factory gate price is $25
15:41$30 the airport operator charges 40% of
15:46Top Line as their rent to the dutyfree
15:49operator so Tav has its own subsidiary
15:54which runs a dutyfree shop so what tab
15:56will do is it'll bring in its own
15:58subsidiary as a tenant that tenant is
16:0150% owned by Tav so 40% of all the
16:04duty-free Revenue will come to Tav as
16:07rent that Johnny Walker bottle $60 is
16:10left for the dutyfree operator who pays
16:12about $30 for it $25 or $30 they have
16:15$10 or $20 in expenses to run the place
16:18and they make a 10% margin the airport
16:22operator the duty-free part of the
16:24business is an incredible business every
16:27flight every international flight that
16:30comes in on average about $1,500 gets
16:33spent amongst all those passengers on
16:35dutyfree and the airport operator ends
16:38up with about $600 per flight as their
16:41fee which if you divide it by let's say
16:44100 passengers or something it's like $6
16:47per per passenger the terminal fees
16:51which is also what they charge for
16:54international which normally is about 7
16:59per passenger currently in Kazakhstan
17:02that number in almari is like3 or4 that
17:06is being bumped up about 20% a year by
17:10Tav they they're not taking it to eight
17:11in one shot but it's going up so
17:13basically if you think about the per
17:15passenger Revenue the international per
17:17passenger Revenue which Tav is going to
17:19get when the new terminal is up it'll be
17:22like something like $6 per passenger
17:24from dutyfree and probably another five
17:28from the passenger fees which used to be
17:32three so what used to be $3 per
17:33passenger will soon be $11 on its way to
17:37about $15 the other thing that has
17:39happened is that the the traffic at
17:42almari the the passenger counts they
17:45just actually today released some
17:482024 passenger count and aircraft
17:51movement numbers are about 40% higher 30
17:56or 40% higher than 20 2019 which was the
17:59last year preco when things were normal
18:02so they they are basically getting an
18:06airport in 24 which is 30 40% larger in
18:10size in terms of Passenger throughput
18:12and aircraft movement almari is also the
18:15only one of the only airports where Tav
18:19does the fueling they don't have the
18:21fueling rights at the other airports
18:23it's very unusual for the airport
18:25operator other the fueling it's like you
18:27have a monopoly Gap gas station for like
18:30500 miles and that fueling business has
18:33like a 40% margin it's beautiful okay
18:38and and all these flights from Russia
18:40got diverted and whatever so the long
18:42and short of it is the tab the entire
18:45company used to have a market cap which
18:48was 600 to$ 800 million us just the
18:52almari airport is probably if they
18:54wanted to put it on sale in a few years
18:57would go for I don't know 3 to 5 billion
18:59and they have 15 15 other airports
19:02besides almari so we are long and strong
19:05with no plans to lighten that and the
19:07current market cap is 600 million market
19:10cap used to be 600 it's moved up it's
19:12approaching about two billion now but
19:15but it's still very low it's very low
19:17for the size and scale and and you know
19:20Turkey just dropped all visa
19:22requirements for US citizens their
19:25tourism business is through the roof
19:272020 for numbers are looking like about
19:3030% higher than 23 all the Turkish
19:34airports are on fire I mean they're just
19:35doing exceptionally well yeah and all
19:38their International passenger revenues
19:40are very high so company's executing
19:41really well firing in all cylinders it's
19:43a very good management team yeah
19:45basically that almari airport that they
19:47bought for 400 million including the
19:49capex which was 2/3 Finance at like 4%
19:5230-year fixed was just an incredible
19:54deal what percent of your total
19:56portfolio is turkey now rough it's I
19:59think probably more than half it's not
20:01more than half because I put money into
20:03it it's more than half because it's Ras
20:06used to be like you know 16 million
20:08market cap and it's about 30 times that
20:10now and and such so it's moved up I
20:13haven't checked lately because some of
20:14our us bets have done very well as well
20:16but like 50 60% probably at this point
20:18but still very undervalued speaking of
20:20your us bets what's your favorite us
20:23name now in in the portfolio if you
20:25looked at I mean I don't like to talk
20:27about what we what we own so much but if
20:29you looked at our last 13f filing which
20:32is only our that only shows our us
20:34positions it only had coal so basically
20:38we had some coal bets that showed up on
20:40that filing and we'll have another
20:41filing that will show up in another week
20:43or something for our year end numbers
20:46but yeah we had a pretty extreme
20:47mispricing on the Cal front and so and a
20:50lot of things were misunderstood about
20:51it so we went into that so basically
20:54metallurgical coal which is what is used
20:56to make Iron and Steel we will be using
20:58that 50 60 years from now because
21:01there's really no substitute and those
21:03stocks were trading at like two times
21:05earnings they were doing massive
21:06BuyBacks and so on at two times earnings
21:09doing BuyBacks at two or three or four
21:11times earnings is really good for your
21:12health and your wealth wow how did you
21:15did was that something where you knew
21:16about the coal industry from the past or
21:18how did that hit your radar in the first
21:20place you know I don't have any original
21:22ideas Dava everything is cloned from
21:24somewhere like my buddy Bill Gates he
21:27also has no original ideas you know
21:29we're very similar that way I'd seen a
21:31filing by David Einhorn where his
21:34largest position this was in first
21:36quarter of last year so that that filing
21:39came out middle of May May 15th or
21:41something and his largest position was a
21:44company called console Console Energy
21:47which is a big thermal coal producer I
21:49just basically wanted to answer one
21:51question for myself I said why is David
21:54Einhorn so hot and heavy on stupid coal
21:58you know and so I went down a rabbit
21:59hole to try to answer that question and
22:03I emerged from that rabbit hole massive
22:06Co bet because it was just such a
22:08no-brainer and one of the things about
22:09coal is that you know I don't have any
22:11endowment money or anything in my fund
22:13but if I had some of those guys in the
22:15fund they would have exited because of
22:19all the ESG mandates and so we have a
22:22irrational kind of behavior in terms of
22:26what people can and cannot invest in
22:29which leads to mispricing of some of
22:31these Securities that makes a lot of
22:33sense did you talk to David Einhorn at
22:35all I didn't speak to him I just
22:37basically went in and just said okay
22:39let's try to understand what is going on
22:41and I and I'd seen some commentary he
22:43had made his complaint was that these
22:47companies that he's buying that are
22:48really cheap from a valuation
22:50perspective because of all the you know
22:52emphasis on the big seven Tech Etc they
22:56are kind of left by the wayside right no
22:57nobody's really interested in these
22:59companies and he was kind of moaning and
23:02groaning in some of these public
23:03comments of well how do I get paid you
23:05know how do I get paid when I own these
23:07names when no one's interested you know
23:09the answer was you get paid when they
23:12when they buy back stock valuations are
23:14very low and console is an interesting
23:17company because they forward sell all
23:19their production at least a year in
23:21advance so we already know for example
23:25in 2024 even though it's a commodity we
23:28already know within a band what their
23:30cash flows in 24 are going to be because
23:32they've already sold it they've already
23:33said what the prices are we already know
23:35what their costs are and they're like
23:38that's a business which says that 100%
23:40of discretionary cash flow they cancel
23:42the dividend is going to BuyBacks so we
23:44had a company that had a 1.8 billion
23:48market cap last year that not of 600
23:51million in earnings last year you know
23:54pumped into BuyBacks so that's very ENT
23:57are you you still involved with or
24:00invested in India energy exchange are
24:02you still still in that one or I think
24:04what I'm finding is that we're finding
24:07more things that make a lot of sense in
24:09the US and in places like turkey India
24:11is a company with some great
24:14Tailwinds but also it's not a cheap
24:17place we have some great businesses and
24:19great franchises there but some of the
24:21valuations are pretty heavy so we've
24:24been net sellers in India and net buyers
24:27in the US when you look at something
24:28like tab airports and you look at
24:30something like almari that's a big aha
24:32moment because you look at an airport
24:35like that and look at what kind of what
24:37kind of cash flow that asset can produce
24:40and you look at the pricing of that
24:41asset you know it just doesn't make any
24:42sense when I see these big price and
24:45value Deltas for reasons that I can
24:48understand like in that case there was
24:50you know the whole issue was turkey and
24:53you know who wants to buy an airport in
24:54Kazakhstan and all these other things
24:56that are going through people's minds I
24:59think when you get to those anomalies
25:00then you can you have a basis to do
25:02something so I think metallurgical coal
25:04is an anomaly in terms of where it's
25:07priced and what it's worth I think the
25:09large car dealerships are anomaly about
25:11where they're priced and where they what
25:13they're worth and I think turkey's an
25:14anomaly like that right so I'm basically
25:17Mish anomaly PAB that's who I am do you
25:21feel the same about the auto oems so
25:25like the GM Ford like company that have
25:28not you know gotten the EV Credit in the
25:31way Tesla has and are still selling or
25:34like a Toyota I think the oems the oems
25:37are a really bad business and the reason
25:39they are bad business is that if Tesla
25:42makes a 10% margin so in the end in the
25:46end we will all be driving EVs and that
25:52transition may happen in 10 years or 20
25:54years or whatever you can debate that
25:56but that transition is going to happen
25:57when whenever that transition happens in
26:00nmass if the margins of a company like
26:03Tesla are like 10% then the margins for
26:06a company like Ford and GM will be
26:07negative because the execution here is
26:11so much better so I think that most of
26:13these players go up against Tesla except
26:17companies like byd maybe the Koreans
26:20will have a very hard time making any
26:22kind of profit margin so I would not be
26:24surprised if in the end the Fords and GM
26:27of the world really have a tough time
26:30they may even become terminal because
26:32you know if you have a negative margin
26:34and the ice cars are gone that's a
26:36really tough place to be and I think
26:38when you have Elon you know who is an
26:40anomaly when you have someone like Elon
26:42that you're competing with the only
26:44thing you should do is go find something
26:45else to do it's not good for your health
26:48or wealth to compete with El and then
26:50you know we have Chun Fu
26:52Wang at byd in China Chang Fu Wang is
26:56Elon to the power of Elon when you have
26:58to compete with Elon and Elon squared or
27:02Elon to the power of Elon you definitely
27:04want to take your ball and go home go
27:06find something else to do so yeah the
27:08auto oems I think long run they have
27:10some difficult times ahead now on Turkey
27:13we didn't we didn't we didn't get to uh
27:15discuss race sauce any change in your
27:18views on the company or it's still just
27:20one of these long-term kind of uh
27:23stories that you plan on sitting on for
27:25many years to come my view of the people
27:27who are running Ras and the quality and
27:30nature of the business I've been a
27:32shareholder now for almost 5 years you
27:34know made the bet in 2019 and we haven't
27:37made any changes you know we we would
27:40like to hold that for as long as we can
27:42my perspective on the business the
27:45quality of the assets the quality of the
27:46people running it how good they are has
27:49only gone up every year I think it's
27:51it's an exceptional set of assets really
27:53smart capital allocators I have never
27:56seen them in the last 5 years make a
28:00mistake I I just haven't seen them do
28:02anything dumb and the other thing which
28:03is really great about turkey is that we
28:06had these very crazy monetary policies
28:10coming out of erdogan's government Etc
28:12but after he got re-elected he put a new
28:14team in place and that new team is
28:16really an exceptional team and they
28:18basically have raised interest rates
28:20interest rates now are in the in Turkey
28:2340s and they are taking a sledgehammer
28:26to the way they should have and so
28:30probably in another year or
28:33two they already starting to see some
28:35green shoots on that front in terms of
28:38inflation is really hard to get back
28:40under control once it gets wild and
28:42crazy but they're going after it pretty
28:44aggressively so I think their the
28:47policies they have in place are working
28:49quite well so turkey may actually you
28:53know all these investments in Turkey had
28:55made was assuming that the macro never
28:58improves you know the bets worked
29:01because you like for example tab
29:03airports is listed in Turkey but
29:06Kazakhstan Mar has nothing to do with
29:09Turkish monetary policy you know it's
29:11just a it's like it's just the baby got
29:13thrown out with the ba bath water if you
29:15will so I think that there there may be
29:17some real Tailwinds because at some
29:19point it looks like in the next year or
29:20two the actual monetary situation will
29:24be a lot better and if we ever get
29:28people coming back to Turkey the foreign
29:30investors and institutional investors
29:32then some of these names these are the
29:34most Blue Chip names you know these are
29:35the ones that people will want to own
29:37but we don't need that to happen it it
29:39would still work even without that I
29:41think that the good news with turkey was
29:43that we could because it was so cheap we
29:47we went after the very best assets and
29:50these are kind of iconic Monopoly type
29:55assets like you know we own the coke
29:57bottler we ownn the largest beer company
30:00we own the best airport operator in the
30:03region and we own very Prime Warehouse
30:07assets all across turkey so these are
30:09just great assets have you speaking of
30:12kind of hard assets have have you looked
30:14at all into like the the real estate
30:16industry in the US commercial real
30:18estate where there's been a lot of you
30:19know a lot of turmoil anything in that
30:22space where you feel like there's maybe
30:24been a potential dislocation you know
30:27well I think I think you have to you
30:29have to segment it I think the the
30:32office vacancies I I think what the
30:35number they read is something like 20%
30:3720% is a ridiculously high number we
30:39didn't see that during the financial
30:41crisis we haven't seen those types of
30:43vacancy rates in offices in the US for
30:47more than three decades you have to go
30:49really far back to to get that so it's
30:51nuclear winter in the office Market in
30:54the US we are seeing some signs of some
31:00distress in some of the banks smaller
31:03Banks who were wild and crazy lending to
31:06these people like I think New York
31:07Community bankor you know the stocks
31:10Been Under Pressure I haven't looked at
31:11it but I think that the
31:13exposures because what happens at some
31:15point is the landlords just you know
31:17hand you the keys and move on you know
31:18and then the bank is left high and dry
31:20you know they can't they can't sell it
31:21they can't do anything so we went
31:23through a big crisis a few decades ago
31:26where they formed resol ution trust
31:28Corporation to try to move some of these
31:30commercial assets you know and get them
31:33kind of basically kind of like a chapter
31:3511 process if you will so I think office
31:38my suggestion and perspective is to just
31:41stay away you know it's it will take a
31:43long time because we had a secular
31:45change in how people work it will take a
31:48long time I mean the US
31:51population the growth rates are really
31:53low so we used to as a country because
31:57you know immigration is not solved and
31:58all this thing if the if the country was
32:00growing at something like 1% a year
32:03which it used to do then eventually this
32:06space would get you know chewed up and
32:08we would get back to some kind of normal
32:11situation I don't know if even 5 years
32:14or 10 years from now whether the office
32:17Market it'll definitely be less the
32:20vacancy rate will go down but it may
32:23still not be healthy so I think that's
32:25that's a nuclear winter for long time if
32:28you look at some other areas like I
32:30would say like home builders I think
32:32that's that's a much more promising area
32:36to look at because what has happened
32:37with the home builders is that many of
32:39them are getting religion like NVR you
32:42know NVR was the poster child which did
32:44so many BuyBacks and the stock went from
32:46I don't know $10 to 4,000 over the last
32:4830 years or something and many of the
32:51others like py and some of the other
32:52guys are following that Playbook now I
32:54think home building is a much better
32:57area I haven't made any bets there yet
32:59but basically they don't really have a
33:02overhang we're likely to see interest
33:04rates come down and we don't have a lot
33:09stock and such so that once we see
33:12interest rates go down the home building
33:15industry maybe be doing even better than
33:17it is today I think in the office Market
33:19in the US you kind of have to avoid some
33:21of the office stuff you kind of go more
33:24residential and then kind of take it
33:26from there but it's not a sector I'm
33:28playing in right now shifting gears a
33:29little bit do you have any views on the
33:31upcoming presidential election in terms
33:33of how that might affect your portfolio
33:35or or kind of sectors you might be
33:37looking at I wish I had better choices
33:39you know I think the the range of the
33:44candidates no the I mean I would just
33:46say that you know we are the leaders of
33:48the Free World We Are The you know
33:52carrying the torch of democracy and you
33:55know I mean I love the United States
33:57one of the most amazing thing about the
33:59United States and the founding fathers
34:01and the kind of form of government they
34:02set up is it's basically
34:05bulletproof and you see that you know
34:07this the the craziness that goes on in
34:10Washington and the economy still does
34:12well and everything still going running
34:14and working it's thanks to the founding
34:16fathers but I think it's a sad State of
34:18Affairs in Congress it's very sad state
34:21of affairs with the candidates on both
34:24sides and I wish there were better
34:26choices so it's just I mean the just the
34:29US is doing so well with you know just
34:35moras and you know complete deadlock in
34:37Washington just imagine what we could do
34:40if we actually had somewhat half
34:42functional government you know it would
34:44just be night and day so On a related
34:46note on a related note we were talking
34:48to the winkl BOS Brothers earlier today
34:49and they were they were complaining
34:51about the fiscal situation in the United
34:53States and you know I I was saying that
34:56you we we've been talking about debt for
34:59decades and you know when will we come
35:02to a point where the government will
35:04actually have to grow up and re in costs
35:07do do you have any thoughts on that I
35:09mean do you feel like we can continue to
35:11mass deficits year after year at the
35:14scale that we are without any
35:16repercussions and how do you put a a
35:18duration on how long it can last well
35:21it's a much bigger problem at higher
35:23interest rates that we have now and I
35:26think that it's not good for a
35:29civilization to uh test the limits you
35:32know the the US has pristine credit we
35:36are borrowing in our own
35:37currency we're never going to have a
35:40default because we we own the printing
35:42press but I think that it could cause
35:45issues it could I mean I think it makes
35:47the monetary policies a lot harder it
35:50makes it more likely that we have
35:52runaway inflation so yeah I mean I think
35:55that a small deficit deficit is probably
35:58okay and but I think that there needs to
36:00be some structural changes in the way we
36:04you know do our taxes and all of that
36:06and that requires Washington to be
36:09functional and it's not functional so
36:12it's unfortunate sort of situation but
36:14yeah I'm not an alarmist about it I
36:17think that country has a lot of
36:18strengths but I think we definitely need
36:21some grown-ups in DC there seem to be
36:24more politicians being you know kind of
36:26talking locally about the deficit
36:28problem but I I it's just it's an
36:31ongoing it's just been talked about for
36:34so many years and you just wonder like
36:37what will be the the the turning point
36:39where you know the parties actually
36:42agree to make substantive changes be it
36:44to entitlements or tax reform whatever
36:46it is or immigration even and it just
36:48blows my mind that nothing ever happens
36:51as as the problem gets bigger and bigger
36:52but anyway be it as it may lastly monish
36:55you've written extens Ely about Charlie
36:58Munger and and obviously with his
37:00passing we wanted to just I don't know
37:03if you could tell a story about a time
37:06dinner or moment you shared with him but
37:08just if you could give us you know maybe
37:11even an iot like what he meant you and
37:14also you know some of the wisdom that he
37:16imparted on you I'd love to hear it I'm
37:18sure the rest of us would as well I miss
37:20Charlie a lot you know I used to see him
37:22a few times a year for dinner we'd play
37:24bridge and in fact I had my last
37:26one-on-one dinner with him exactly a
37:29month before he passed away which I
37:31didn't know at that time it would be my
37:32last time seeing him and we had a great
37:34time actually his his mind was very
37:36sharp and he was always very kind he was
37:40always very funny Charlie always had the
37:42best jokes I mean he just had a huge
37:44repertoire of jokes that he would you
37:46know say on demand I I always have a
37:48hard time remembering great jokes but he
37:50was really good at it I remember one
37:52time a few years back we used to meet on
37:54Fridays at the LA Country Club on to
37:56play bridge and it we used to start by
38:00having lunch at the in the dining room
38:02and then we'd go play four or five hours
38:04of bridge so I was sitting in the LA
38:07Country Club dining room and across from
38:09me was Rick guran and Charlie Monger you
38:11know just just little sitting across the
38:13table from me and I told them I said you
38:14know you guys think this is just okay
38:16you know there a bunch of people having
38:18lunch before bridge but I'm sitting with
38:21two you know historic icons and you know
38:24this is like a surreal moment guy grew
38:27up in bandra in Mumbai you know sitting
38:29with you guys you know just shooting the
38:32breeze so I said you know when you guys
38:34were doing your deals in the 60s where
38:37you say you were shooting fish in a
38:39barrel with the water drained out what
38:42are some of the tell me about some of
38:44the deals that stand out you know they
38:47looked at each other and then Rick Goran
38:51tells Charlie tell him the story of the
38:57so Charlie Charlie goes on to say that
38:59there was a company in California where
39:02this Maverick entrepreneur had come up
39:05with auto erative that would go into an
39:08engine where if you put this kind of
39:09liquid in the engine it would seal all
39:12small leaks like it would make the
39:14engine not leak anymore and this guy
39:17basically was like a super salesman so
39:20what he used to do is he used to go to
39:21these auto mechanic shops and whatever
39:24and he'd take his gun with him and he
39:27shoot the gun into his engine block of
39:31his car and then he would pour the
39:33liquid into the engine block and show
39:35the mechanics that look there's no leak
39:37and you know his sales took off like you
39:39know like people like there's no-brainer
39:41right but the guy was kind of Maverick
39:44and not a very good manager of cash
39:46flows and all that he suddenly passed
39:49away you know kind of untimely death and
39:53the business owed a lot of money to the
39:55banks and basically the business was for
39:57the most part bankrupt and so what Rick
40:00and Charlie did is they bought up all
40:02the bank debt like you know 3040 cent of
40:04dollar and they had control of the
40:06company but the Widow of the of the guy
40:09technically had the ownership of that
40:11company and they did not want to play
40:13hard ball by saying hey we own the debt
40:16and that's the end they wanted to make
40:18some small payment to the Widow to
40:22basically get a proper sale from her so
40:26Charlie said that when the guy passed
40:28away the Widow finds out that the the
40:32guy was having an affair with a nurse he
40:36basically in his will made the nurse the
40:41executor of his will and the Widow was
40:45going to get the title to the business
40:47but the nurse was the executor so the
40:49Widow was extremely pissed off okay and
40:52the nurse was also extremely pissed off
40:55they were both pissed off off with each
40:56other and Charlie and Rick in the middle
41:00of all this they just trying to get
41:01their kind of deal done but the women
41:03basically were not interested in
41:06cooperating so Charlie said okay I'm
41:08going to meet them and you know try to
41:09kind of pacify them and say yeah we know
41:11he was a jerk and whatever to the to the
41:13Widow and to get it done so he arranged
41:16a meeting with the nurse at the
41:20California Club the California Club is a
41:22club in Downtown LA that's the first
41:24place I met Charlie when I first met him
41:28it's you know he used to love going to
41:29have lunch there it's a very you know
41:32Blue Blood old money kind of place and
41:35Charlie always had the same table in the
41:37dining room he'd probably eat lunch
41:38three times a week over there and the
41:40nurse was blonde and well endowed I will
41:44not use the language Charlie used on
41:46this video but let's just say it was a
41:48lot of colorful language he used and she
41:51showed up for lunch with Charlie in her
41:54nurse's uniform because she came came
41:56straight from work and the uniform was
41:59about three sizes too small okay and and
42:04so so so Charlie is saying that all the
42:08members of the California Club was
42:11sitting having lunch there they like
42:14gasped you know when they saw this woman
42:17enter and then sit down with Charlie and
42:20Charlie said they thought I'm having
42:22lunch with some porn star okay and so he
42:25said he said anyway I met her for lunch
42:28I pacified her then Rick and I met the
42:32Widow we pacified her just enough for
42:35the two women to cooperate get the deal
42:38done and then we moved on with that
42:40additives company this would be kind of
42:43like the stories I'd hear from them I
42:45think just we would not have a bursha
42:47haway as we know it today if there was
42:50no Charlie Monger if I don't think the
42:53market cap of bsha haway would be even
42:5410% of where it is today without a
42:56Charlie the impact it was really one
42:59plus one became 11 he pushed Warren
43:02towards the better businesses the better
43:05people and all of that and he pushed him
43:08in a way where he never took credit you
43:10know and like he was always happy to be
43:14this partner in the background whatever
43:16so I think he had an enormous impact on
43:18Berkshire he had a huge impact on a lot
43:21of Institutions that he got involved
43:23with you know the Harvard West Lake
43:26UCSB and Stanford and University of
43:30Michigan and and so on just never really
43:33wanted to talk about it know just all
43:34these great things he was doing and a
43:36few times couple of times I brought up
43:39personal challenges I was facing and he
43:42was just so helpful to me I mean just
43:44always there and just incredible advice
43:46and I I just always followed what he
43:48said and things worked really well but
43:51another time he was I give you one of
43:52the Munger jokes you know he was saying
43:55that there was this Jewish couple and
43:57they had this kid who really didn't like
43:59to study much you know his kind of
44:02grades were like pretty poor even though
44:03the parents were pretty smart and the
44:06the parents were kind of frustrated so
44:07they found there was a really good
44:08Catholic School in the area and they
44:11moved the kid to the Catholic school and
44:14after the move to the Catholic
44:16School the kid suddenly started doing
44:19extremely well in school in fact he used
44:21to come home the kid used to come home
44:23drop his bags and stuff and just go to
44:25his room and start working and math was
44:28especially hard subject in the sense
44:30that the kid had no interest in math his
44:32math grad used to be the lowest he had
44:34some of the best math grades so after a
44:37few weeks the parents sat down with the
44:41kid and they said you know we noticed
44:42that you know you're doing so well
44:43you're engaged with this all the math
44:46and everything so what changed like you
44:50know do you like the school they said he
44:51said you know when I went to the school
44:54and they I saw that they had put that
44:56guy on the plus sign and I just knew
45:00that they were really really serious
45:02about math and he basically said that I
45:06didn't want to be crucified and so I
45:08just decided I'm going to focus on the
45:10math M you're you're one of the best
45:12storytellers in the industry so we're
45:13getting a compounding effect here
45:15between you and Charlie which is well I
45:16had to I had to take out all of
45:18Charlie's colorful language you know
45:20which which was which was quite yeah I
45:22can fill that in I'm sure we can all
45:24fill that fill that in
45:26yeah it's funny because he's he he it's
45:28funny you say that he's he's happy to be
45:31kind of in you know the backdrop not
45:32necessarily the foreground of Berkshire
45:35hathway but every time he talks you can
45:37tell he he isn't holding back I mean
45:39I've I've seen many ask I asked Charlie
45:42what I I told Charlie in all your
45:45Partnerships with all the different
45:46businesses that you're in you are the
45:48dominant partner you are the typ a main
45:52main partner and the other guy is you
45:55know sub servant to you in some ways the
45:57only one which is not that way is the
46:00bushire hathway partnership with Warren
46:02Buffett so I said how could you knowing
46:06the personality you are how could you
46:09accept the role of a junior partner
46:12because you've never been a junior
46:13partner in any of the other Ventures
46:15with any of the other guys that I've met
46:16right he said it was a no-brainer to be
46:20a junior partner to Warren Buffett some
46:22things are total no-brainers that was a
46:24no-brainer so he said yes even though it
46:26went against my natural grain I just
46:29knew that that was the right thing to do
46:31yeah it's like he joined uh you know the
46:33major leagues or like a major league
46:34baseball team and you know or something
46:36to that effect that's amazing um mon
46:39this is this was phenomenal always such
46:42a pleasure to have you you know chat on
46:44some zero and tell us all your learnings
46:47yeah amazing I I will I'll follow up
46:50with you after this but thank you again
46:53and thanks to everyone else on the call
46:55for for tuning tuning in will certainly
46:57be back next year for top stocks 2025
47:00but uh and you know quick plug for
47:02monish even though I I know you can't
47:04talk about it um check out check out the
47:07wagon mutual fund um when youall get a
47:09chance uh Braden do you have anything
47:11else you want to add before we uh close
47:13it up no nothing else everyone uh that
47:16joined us today obviously we appreciate
47:19we hope you had fun and and found it as
47:21informative as we did um and monish
47:25thank you it's always fun always fun
47:27hearing from you and getting to hear a
47:28little bit about Charlie and your time
47:30with Bill Gates too telling nothing's
47:33coming out Microsoft it's quite a lot we
47:36should do we should do a call about
47:38conversations at the LA Country Club
47:40that that could be a good like hour long
47:42or longer discussion yeah there was some
47:44a lot of fun times I I really missed
47:46Charlie it was just surreal never
47:47expected that but it was a lot of fun
47:49you know one thing I found about Charlie
47:51which was really so different about just
47:53quickly to tell you is that he was so
47:55careful in life you know he would never
47:57take risk you know he would want these
47:59no-brainer BS Etc I noticed that when he
48:02played Bridge he was more of a gambler
48:04it took me some time to figure out once
48:06I figured it out then I would trap him
48:08because I knew that he'd kind of overbid
48:10and kind of overplay his hand and I told
48:13him I said Charlie you can't get away
48:14with this because I know what you do you
48:15know and I can I can uh I can call you
48:17on it and so it used to be a lot of fun
48:19to play bridge with him anyway I enjoyed
48:21it and thank you guys we'll see you
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