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TIP682: BUFFETT’S EARLY INVESTMENTS BY BRETT GARDNER
W/ CLAY FINCK
12 December 2024
In today’s episode, Clay reviews Brett Gardner’s new book, Buffett’s Early Investments.
Brett is an Analyst at Discerene Group LP, a private investment partnership that invests globally based on a fundamental and long-term value investing philosophy. Like us here at TIP, Brett is also a huge fan of Warren Buffett.
During Buffett’s early partnership years from 1957 to 1969, he compounded his investors’ capital at 23.8% net of fees relative to the Dow Jones, returning just 7.4%.
SUBSCRIBE
IN THIS EPISODE, YOU’LL LEARN:
- The primary factors that led to Buffett’s outperformance during early investing years.
- The parallels between Buffett’s investment in Philadelphia and Reading and how he ended up transforming Berkshire Hathaway in the years that followed.
- What led Buffett to make an unconventional bet on Disney in 1966.
- Why Buffett invested in American Express after the Salad Oil Scandal.
- And so much more!
TRANSCRIPT
Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.
[00:00:00] Clay Finck: Hey everybody, welcome to The Investor’s Podcast. I’m your host, Clay Fink. On today’s episode, I’m going to be chatting about a newly released book titled Buffett’s Early Investments by Brett Gardner. Brett is an analyst at Discerene Group LP, a private investment partnership that invests globally based on a fundamental and long term value investing philosophy.
[00:00:21] Clay Finck: Like us here at TIP, Brett is also a huge fan of Warren Buffett. During Buffett’s early partnership years from 1957 to 1969, he compounded his investor’s capital at 23. 8 percent net of fees relative to the Dow Jones returning just 7. 4%. We talk a lot on the show about the big bets that Buffett is making today, but I think what’s more interesting is studying what he did in his first 10 or 20 years as an investor and how his investment approach evolved over time.
[00:00:52] Clay Finck: Brett did a phenomenal job detailing 10 investments Buffett made during the 1950s and 1960s. And on today’s episode, I’ll be outlining three of them, Philadelphia and Reading, Disney and American express. There are certainly interesting takeaways from each of them and they also happen to be very fascinating stories.
[00:01:10] Clay Finck: The story of Philadelphia and Reading has unusual parallels to the way Berkshire was structured years down the line. Disney was an off the beaten path investment with a visionary leader in Walt Disney, but they operated in a below average industry and had fairly unpredictable earnings. With American Express, they were weathering through the infamous salad oil scandal where a businessman claimed to have more inventories of soybean oil than what existed in the entire country at the time.
[00:01:37] Clay Finck: American Express found themselves in the middle of such a debacle as they warehoused and accounted for such large inventories that creditors relied on. With that, I bring you today’s episode covering Buffett’s early investments by Brett Gardner.
[00:01:54] Intro: Since 2014, and through more than 180 million downloads, we’ve studied the financial markets and read the books that influenced self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Clay Finck.
[00:02:14] Clay Finck: Although we follow the investments that Warren Buffett’s making today, what I think is far more interesting is how he invested in his early days. Which is when he achieved his best investment returns. Buffett launched an investment partnership to invest capital on behalf of his friends and family in 1956.
[00:02:39] Clay Finck: And over the 12 years that followed, he vastly outperformed the market. And during that time, Buffett implemented many of the strategies he learned from his mentor, Ben Graham, who wrote The Intelligent Investor, which Buffett referred to as the best investment book ever written. To my surprise, Ben Graham did not achieve near the returns that Buffett did over his lifetime.
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- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
- Gardner’s book: Buffett’s Early Investments.
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- Related Episode: Listen to TIP573: Berkshire’s Beginnings w/ Jacob McDonough, or watch the video.
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