[00:02:36] Intro: You’re listening to The Richer, Wiser, Happier Podcast, where your host William Green, interviews the world’s greatest investors and explores how to win in markets and life.

[00:02:56] William Green: Hi folks. I’m absolutely delighted to welcome today’s guest, Samantha McLemore. Samantha, it’s really lovely to see you. Thanks so much for joining us.

[00:03:04] Samantha McLemore: It’s great to be here. Thank you so much for having me. I’m really excited for this.

[00:03:09] William Green: It’s a real pleasure and I feel a particular sense of delight in interviewing you today, now that you’re succeeding Bill Miller as the sole manager of the opportunity fund because I was actually present in Lexington, Virginia on the day when you first met him, which I think must have been September 25th or September 26th, 2001.

[00:03:28] William Green: So, this is, this is right after 9/11 when Bill was going back to his alma mater to give a talk. And I was writing a profile of him for Fortune, and he was about 10 years into his streak of beating the market for 15 years, which is totally unprecedented. And so, I was sort of trailing him and flying in on his Learjet so that we could spend a couple of days at his alma mater, and I could see him in action.

[00:03:53] William Green: And so, I wanted to get your perspective on what happened that day, because I was present at the creation. I was there at this very start of your investment career.

[00:04:01] Samantha McLemore: Yes. That’s an amazing coincidence. I didn’t realize it was you. I remember a reporter being with him and a colleague being with him, and so, yeah.

[00:04:10] Samantha McLemore: That’s amazing. Well, I was in an investment club at school and, you know, in an investment class and my professor was a complete Bill Miller fan junkie. He really talked up, he’s, you know, the streak and how this investor had beaten the market for 10 years in a row. And no one else had ever accomplished that.

[00:04:30] Samantha McLemore: So, when Bill was arriving, we were all ready to meet this, what we thought of as a God of investing. And so, you know, I remember attending, Bill gave a speech in the chapel, and I remember attending that first. That was my first introduction to Bill. And I remember only probably following, I don’t know, 50%, if that I’m maybe being generous, but I’m like, I know this sounds right.

[00:04:54] Samantha McLemore: It’s really smart. And then I met Bill at a lunch, which he had a lunch with the investment club, and he attended a presentation. I don’t know if you remember all this, if you were trailing him the whole time, I guess you were at these things too. And I think at one of the investment club presentations, I asked Bill if I could send him a resume.

[00:05:12] Samantha McLemore: I thought I was going to go into investment banking, but I was more interested in investments. And so I like to say I won the job lottery. I mean, it was the fall of 2001, the tech bubble was bursting. I’ve heard you tell the story about how Bill’s calmly buying stocks and my professor was very struck by that as well.

[00:05:30] Samantha McLemore: At that time, I didn’t know enough to know how difficult it was to do that, to buy stocks when the world’s falling apart, if the stock is falling apart. And then, yeah, I joined him right out of undergrad at Legg Mason.

[00:05:42] William Green: And what were you even doing there at this southern college in Lexington, Virginia?

[00:05:47] William Green: Because you had grown up in Vermont, right? Like it seems like an odd choice. You have ended up at Washington and Lee, where Bill had been as well.

[00:05:55] Samantha McLemore: It was a very odd choice. I didn’t have the most sophisticated college selection process. I grew up in Vermont. I was, you know, so sick of freezing, walking from my car to the school parking lot, not being able to formulate words.

[00:06:10] Samantha McLemore: I hated the cold. I knew I wanted a small liberal arts college, but I wanted to go south, and I thought, I want to be able to drive home in a about a day. So that put me, you know, in the Virginia area. I got something in the mail from Washington and Lee. And so, we visited it, I visited with my mom, she fell in love with it because it’s such a beautiful campus.

[00:06:31] Samantha McLemore: And I thought I was going to major in chemistry at the time, but my dad thought I should try to find a profession where I could actually make some money. So chemical engineering was better. And again, there weren’t many schools that had both chemical engineering chemistry. Not that I had a real interest in engineering, but I thought I could placate him a little.

[00:06:48] Samantha McLemore: So, I wound up at Washington and Lee after the first semester of chemistry. I quickly realized that was not the path for me. And so, then I looked around and said, what am I going to do with myself? And they had a business school. I knew I was analytical, and I thought, let me take some classes over in the business school.

[00:07:07] William Green: And I’ve heard you say before, I think that you were from a relatively modest background, and so it was actually second nature for you to look for bargains given that money was tight. Is that right? Was there some kind of predisposition towards value investing because of your background?

[00:07:22] Samantha McLemore: Yeah, we didn’t grow up with much money and so, you know, I started working when I was 12.

[00:07:27] Samantha McLemore: Every day I babysat every day after school. I would walk to a house and babysit for a couple kids. And so, I pretty much consistently worked from the time I was 12. I paid for, you know, a lot of my own clothes. So, I was always having to think about how do you make money go far? How do you get good value?

[00:07:46] Samantha McLemore: You know, I had car payments in college, so I think that was always, I don’t know if it was nature or nurture, but it was, you know, just a fact of life. I guess. My sister is not so much like that, so maybe, you know, there’s some nature, you know, in there, but I always, you know, that was just how my brain worked.

[00:08:04] Samantha McLemore: And actually, when I met Bill, so I was in an investments class and we had to construct portfolios of securities, and one of the names in my portfolio was Eastman Kodak, which was down a lot, generating lots of cash. Bill and I talked about it, sort of bonded over it. It ended up being one of both of our biggest mistakes.

[00:08:24] Samantha McLemore: So that was, you know, an interesting lesson. But this price and value, how much am I paying? How much am I getting? That was always a key part of how I thought about everything, you know, because of probably my background and how I was brought up and a lot of the stuff I learned from Bill afterwards were more learned on the job.

[00:08:45] William Green: Do you think that was one of the reasons why you bonded with Bill, that you came from a relatively modest background? Because Bill also, I remember talking to me about how he was the son of a taxi driver and he would, I remember him once saying to me, look, it was a treat when we went to Burger King for our birthday.

[00:08:59] William Green: That was like a big deal. And so, for him, buying stocks was kind of a way to make real money. I think he; I remember rightly from many years ago, him telling me that he made money umpiring baseball games and then invested it and bought a car and stuff. And it was like, this is the most amazing thing.

[00:09:16] William Green: I can make money without doing really serious work. So, do you think your background

[00:09:20] Samantha McLemore: Yeah, that’s his amazing story. He has the great story about learning about stocks because he was out mowing the lawn all day, sweating, like doing this hard labor. And then his dad’s looking at, you know, the stock quotes and in the newspaper and explaining to Bill what it was.

[00:09:35] Samantha McLemore: And he is like, wait, so what does this mean? Oh, it means it went up a quarter and Bill’s like, what’d you have to do to get it to go up a quarter? He is like, nothing. He’s like, you mean you don’t have to do any work? I just owed a lawn for two hours for a quarter. That’s what I want to do. And he said it took him a lot longer to realize you can make money by not doing any work, but if you want to outperform, you have to do a lot more work.

[00:09:53] Samantha McLemore: And interestingly, I actually got introduced to stocks from my dad. I didn’t have the immediate, you know, interest that Bill did. I was more like, okay, dad, yeah, whatever. Maybe I’ll be interested in that. We had; I had some insurance proceeds from actually a dog bite. And again, we didn’t have a lot of money, so this was my college fund, and you know, my dad worked in construction and so it was a big deal to him.

[00:10:16] Samantha McLemore: How am I going to invest this appropriately? And this was in the late nineties, so he asked me if I thought he should put it in the stock market. And I’m like, yeah, dad, whatever you think. Like, I have no idea. You know, that’s fine. I think he wanted my buy-in in case something happened to this. And it worked out quite well.

[00:10:32] Samantha McLemore: I remember he bought Dell, and it was the late nineties, so that mid-nineties probably when he did that and that, so that worked out great. Very well. And then when I was in college, obviously the market peaked, you know, in the late nineties, and I’m turned down and I remember my dad saying, should we get out?

[00:10:46] Samantha McLemore: I’m, and I was like, whatever you think, dad. You know, so he sold it all and he, he had great timing for me. And so that got me more interested to see, okay, wait, these markets go up. They go down. This is very interesting.

[00:10:58] William Green: So, it was kind of intoxicating in a way to see that you could make money, you could get bitten, and then take the money and actually make real money by being smart about this stuff.

[00:11:08] William Green: That must have kind of captured your imagination in some way.

[00:11:12] Samantha McLemore: Yeah, the whole concept, I mean similar to Bill, the concept of making money with money is very striking. If you come, you know, from humble means without much money and you’re used to working so many hours for what you make, and so you take note, you definitely take note and I was very, you know, interested in learning more about that.

[00:11:36] William Green: And what do you think Bill saw in you, because this is unusual, right? For someone to come up to a legendary money manager as an undergraduate, I think you’re in your, the fall semester of your senior year. And so, you come up to him and you basically say, yeah, can I send you my resume? And then you end up talking to him about Eastman Kodak and the like, what would he have seen in you that made him think, yeah, this person could be really good?

[00:12:03] Samantha McLemore: Well, it’s really interesting ’cause you hear so often, and I hear people say, you know, and I was told, you can’t get a job on the buy-side right out of college. So, I like to tell people, you know, don’t listen to that, try. And so, I think with Bill he had attended, again, a number of a lunch and presentation. I think in general he was impressed with the quality of the work of all the students, not necessarily me, but just overall what we were doing there.

[00:12:29] Samantha McLemore: Obviously his firm was growing quickly at the time, and he’d had some good experiences hiring young people right out of undergrad. He used, he likes to joke, he used to like to joke about getting people young so he could imprint them like the baby bird when it rises out of the nest and that’s the first thing it sees is its mother, right?

[00:12:47] Samantha McLemore: And then it learns from that point on, this is who I’m attached to. And so, I think a lot of people in the business like to train people young. So, he just said, sure, send me, you know, Bill loves optionality. So, he said, sure, send me your resume. And so, I sent it and then I went and interviewed everyone on the team there, on his team, you know, a lot of the analysts, the CFO.

[00:13:09] Samantha McLemore: So, I did broad interviews with everyone, and I guess I got good reviews. They talked to my professor, the investments professor who really talked me up. I thank him to this very day, you know, for that. And so, and I remember that there was actually CNBC was profiling investment clubs and I was one of our three speakers on that.

[00:13:29] Samantha McLemore: Now I’d already gotten an offer by them, but Bill told me they all tuned in and listened to, you know, that as well. So, I dunno what it was. I think they hadn’t come across many candidates right out of undergrad who had had that, you know, experience in investing. In an interest in investing. So, something about that worked out well in my favor.

[00:13:50] William Green: And you were a magna cum laude student, right?

[00:13:54] Samantha McLemore: I was.

[00:13:54] William Green: In business administration and accounting, so you were clearly smart. I guess you’d gone to his alma mater and that must have been nice. And you were obviously kind of a really independent thinker as well, which is important to Bill. Like, if you were interested in something as ugly as Eastman Kodak, which everyone hated at the time, that must have been appealing to him as well.

[00:14:16] Samantha McLemore: That’s very true. I mean, I was Magna Cum Laude. I won the accounting scholarship for, you know, one of the best student in the accounting degree. My investments professor, I think told them that I got the highest score. So, there were things that made him think I was smart and could do the job. But then, you know, I think Sir John Templeton talks about people either being price and value or trend in momentum.

[00:14:39] Samantha McLemore: He could clearly see that I was price and value. And Bill and I are very similar in many ways, which is one of the reasons that we worked, you know, so well together. Psychologically, I think, we’re quite similar. So, we hit it off. And I actually remember in the interviews, one of the analysts asked me what the worst thing about Bill was, which I was, you know, taking aback up to have that question in an interview.

[00:15:00] Samantha McLemore: I was like, what’s the right answer to this? And I remember saying, and I had only met Bill very briefly, so I didn’t know him at all well, and I said, well, maybe it’s that, you know, he seems so serious and smart. I don’t know if he jokes around at all. And then knowing Bill, you know, years later, you know, I think we were just discussing one of Bill’s jokes, so I completely got that wrong.

[00:15:22] Samantha McLemore: He loves to joke around, but I think, you know, we’re quite similar in many regards. And I remember in one of the interviews, this is how I knew I’d found my home, culturally at Legg Mason with this group of people. I was in an interview with Bill and, you know, this woman, Jennifer Murphy, who’s wonderful, and she’s a great mentor.

[00:15:43] Samantha McLemore: She was a CFO at the time. And she asked me, you know, I’d been asked at all of these investment banking, what are your weaknesses? And I was trained to say, you know, I’m a perfectionist, you know, I like to get everything perfect. And Jennifer said, do you have any siblings? And I said, yes, I have a younger sister.

[00:16:01] Samantha McLemore: And she said, well, what would she say are your, you know, the worst things about you, your biggest faults? And I said, oh, that’s easy. She tells me all the time, all of my faults, she thinks I’m bossy, controlling. I think I always know everything. And then I’m like thinking as I’m saying this, what are you doing?

[00:16:18] Samantha McLemore: You’re ruining, you know, your chances at this job. But Jennifer laughed and Bill laughed, and Jennifer said, that’s exactly what my younger sister would say about me. And so, I realized, you know, okay, these people actually do want to know who I am and, you know, accept me for that. And I think there were some similarities with both of them there.

[00:16:35] Samantha McLemore: You know, that came out in the interview process.

[00:16:38] William Green: That’s great. I actually, I wanted to tell you about my perspective on what was happening that day, ’cause I think you’ll be able to reflect on what I observed, ’cause you probably observed similar stuff over the last 20 years. So, what happened with me, I flew in with Bill one afternoon.

[00:16:55] William Green: Basically, I guess I’d been with him in the morning on the morning of September 25th. So, this is two weeks after 9/11. And the markets had just been closed for several days because the world was just in a tailspin. Then the market opens, and it has basically the worst week since the Great Depression.

[00:17:13] William Green: And so, I’m with Bill that morning in Baltimore and everything’s kind of going to hell. The market’s tumbling and he’s buying all of these things like Nextel, these kind of hot tech stocks. Well, previously hot tech stocks that have just been utterly killed. I mean, he was buying stocks that had fallen like 70, 80%, like really smelly stuff.

[00:17:33] William Green: And everyone’s kind of in a panic. And then we get on his plane, and we fly to your alma mater in Lexington, Virginia. So, you can imagine for a young journalist, I mean, I must have been, I’m 54 now, so this is an opportunity for me to display my brilliant mathematical skills. Okay. So, I’m in my early thirties and so I fly off with Bill, so I’m having great fun, right?

[00:17:52] William Green: And he has this beautiful Learjet that he bought partly because he owned a 110-pound Irish Wolfhound that he liked to fly with. Like, I’d don’t think I ever met the Wolfhound. And so, we go back to his alma mater and it’s the first time he is been there, I guess, to give this kind of triumphant speech after 30 years to talk to the undergraduates.

[00:18:10] William Green: So, you just got lucky that you were there at the time. And so, he gives his speech and we were standing outside the VIP house where, you know, they would have their A-list guests stay and he can’t get into the house. It’s like this kind of comedy of errors. Like the big guy has come back to his arm mater and no one has the key.

[00:18:27] William Green: And so he calls back to Baltimore and I think Lisa Rapuano, who was a star analyst there, who you would’ve known and then became a hedge fund manager, picks up the phone and he, and she’s like, Bill this stock that you bought this morning or you, I think it was that morning or yesterday, it was the previous day that he’d bought like a million shares off site, 27 million dollars or something.

[00:18:49] William Green: He had 4 million shares. So, it was like a hundred-million-dollar position has just announced that they’re going to miss earnings massively. So, Bill is like really annoyed. He’s like, oh my god, I can’t believe, you know, like he was sort of annoyed at the company, I guess. And so, then we go off and you know, he has his dinners and speaking to students and like, and then the next morning, I guess he spoke to your investment club and we come back to this sort of VIP house.

[00:19:15] William Green: And I only remember this ’cause I was checking my notes again this morning to see what had happened and the colleague of his who he was traveling with, who I think ran various institutional funds there, I think it was Kyle. Yeah. Says to him, have you seen AES? And then they both sort of look a little pale and she says it’s down to 13.

[00:19:37] William Green: And so basically it had halved. So, it’s not even breakfast. And I’m like, wait a second. So, this guy, he’s just lost 50 million dollars this morning and it’s not even breakfast. And what was really interesting to me, and sorry for this long rambling story, but it’s a rare moment to see a great value investor sort of in the heat of the moment.

[00:19:54] William Green: Like in one of the great market meltdowns of all time, he just gets really quiet, and he says, okay, let me grab my phone here. And he says, I’ve got to find out where my cash is. And he starts kind of pacing around with this very quiet intensity. And he’s calling the office and he, and I’m of course having a blast.

[00:20:12] William Green: I’m just standing there next to him watching all of this and taking notes and fearing of this is just heaven, like the world’s falling apart. And I’m like, what a great story. And he says, all right, let’s buy two and a half million shares today. Let’s just get it done. And it was an extraordinary thing because, so you see this guy just investing instantly about, I guess probably 30 million dollars or so more and later he just said to me, look, it’s, people hate moments where bad news comes, they don’t, they have this sort of behavioral tendency to overreact.

[00:20:43] William Green: So, he said, it’s highly probable that people are overreacting to news of this earning shock. And over the next couple of weeks, basically he built his position to 500 million dollars, and he sort of said to me. Look, this could be the thing that makes all the difference over the next couple of years. This actually could be our big winner over the next couple of years.

[00:21:01] William Green: And so, it’s kind of amazing to watch this whole process of a guy seeing the market get killed, seeing his stock get killed, getting really quiet, getting really focused, really intense and doubling his bet and sort of saying in the drive back to his plane saying, we better do some really serious work here.

[00:21:20] William Green: So, he was actually buying before he did the serious work because there was a sort of belief that people were just going to overreact because of the behavioral bias that we have. So, can you talk about how that’s kind of emblematic of the way that you and Bill have operated over the last 20 years?

[00:21:38] William Green: Because so much of what you’ve done has actually been taking advantage of volatility in these moments where everyone else is kind of panicked. Those are precisely the moments where you guys have actually kind of made money.

[00:21:52] Samantha McLemore: That’s a great story. I love that story and I love all the details and that you were there for it and listening to it now after, you know, working with Bill for over 20 years, there’s so much that we could discuss about that. I think, you know, maybe just to start, I feel so fortunate. I did win the job lottery. You’re right. They had tried to get Bill to come back for many, many, many years unsuccessfully. So, I got super lucky.

[00:22:17] Samantha McLemore: And I think starting in July of 2002, which was right at the bottom of the market after the tech bubble burst. And so, a lot of the initial work I did was on analyses on the market, some of it analyses on the market about, you know, odds of making money. You’d had, you know, rolling, we were looking at rolling five-year returns and it had gone negative and it doesn’t do that much.

[00:22:42] Samantha McLemore: And when it does, your odds of, you know, future five-year returns are, you know, much more positive. And so, there was a lot of work about that. Interestingly, you mentioned, uh, AES and Nextel and some of these names. You know, we have a poster board of, I think it was Money Magazine, and there was a cover, you know, that profile that was done of Bill, of his portfolio at that time called the scariest portfolio ever.

[00:23:09] Samantha McLemore: It was like shocking exclamation point, something else, outperforming question mark and it said starring like Tyco, AES, Nextel. And we tracked the returns of that portfolio relative to the market. That was part of my job. You know, I, we would update it monthly or quarterly and dramatic, dramatic outperformance.

[00:23:31] Samantha McLemore: And so, this idea of fear and pessimism, you know, Buffett talks about this a lot. When those are high, it’s a good odds that things can go right and no one can predict the future of the world. I’ve heard Bill, he’s been asked many, many times, what did you know about Amazon? What did you see in Amazon that others didn’t see in the early days?

[00:23:52] Samantha McLemore: And he’s very clear. Nothing, you know, I mean there was a lot of analysis about the company and the business model and the working capital cycle, the free cash flow, and Jeff Bezos, I analyze the fundamentals. You don’t know how the future’s, you don’t know anything about the future, you know, that other people don’t know.

[00:24:08] Samantha McLemore: But he thought it got really mispriced. He added aggressively to it in after the tech bubble burst. And so, you know, a lot of our work, I was fortunate to work with Michael Mauboussin, who wrote the book on Expectations Investing. And so, it’s those revisions to expectations that drive stock prices. So, you know, the great thing about value investing is you’re fishing in a favorable pond of low expectations.

[00:24:32] Samantha McLemore: But those expectations have to be wrong. They have to be wrong for you to actually make money, but it’s a good pond to be in. And so, we try to find low expectations, fear and pessimism. It’s exactly what you want in an environment like this, where especially after the market suffered big losses, that’s an advantage.

[00:24:51] Samantha McLemore: Time to be investing if you can be long term. So yeah, that was definitely one of the lessons. You know that Bill always reinforced.

[00:25:00] William Green: And Amazon had been crushed at the time to an extent that very few people will remember, ’cause this was actually the core of my article about him for Fortune, because basically the stock had fallen from, I think 90 to 6.

[00:25:14] William Green: And a lot of people were saying that it was going to go bankrupt. And really smart people, I mean, these weren’t idiots. And so, most of Bill’s peers, I was talking to him about this the other day ’cause we met in New York City a week or two ago and we were recalling this ’cause one of the people who’d been pillaring him at the time was at this, the meeting that we had.

[00:25:33] William Green: And this guy who’s like, you know, I won’t embarrass him by saying his name, but he is a very brilliant kind of elder statesman of the investing world, was saying, this is going to go bust and you’re not a value investor and why are you doing this? And Bill was sort of defending himself and was saying, look, well, it’s like Fannie Mae in the, its cost advantage is concealed.

[00:25:54] William Green: And so, in the short term it’s losing lots of money, but in the long term you’ll see that it has this cost advantage that’s kind of concealed, at least by gap earnings. And so, there was a kind of misperception there and it seemed like that was always the essence of what Bill and you were doing was exploiting people’s misperceptions, especially in times of real uncertainty when they would panic.

[00:26:15] Samantha McLemore: Definitely. We’re always looking for a variant perception and we believe the market is extremely difficult to beat. It’s pragmatically efficient. It’s mostly right most of the time. And so, there’s not many areas where you can get an edge on the market and informational inefficiencies, those are mostly competed, regulated away.

[00:26:36] Samantha McLemore: It’s very hard to get an informational edge. You can get an analytical edge. But again, in today’s day and age, it’s very, very difficult to do that. It’s hyper-competitive. So, the area where we believe you can mostly get an edge is the behavioral, the tendency of groups of people to act in similar ways to all the behavioral finance literature on loss aversion and recency bias.

[00:26:59] Samantha McLemore: And you know, when people have losses, they don’t behave optimally. They’re more likely to panic and sell. And those oftentimes create the best opportunities. And so, if you can find, especially if you can find companies that you really like where there’s any sort of panic going on, those are, you know, our favorite sorts of opportunities, you know, over the long term.

[00:27:21] William Green: I mean, at that time, I remember even when I wrote that article for Fortune, I basically said, look, if he’s right about Amazon, this will turn out to be one of the greatest contrarian bets of all time. Because it was so loathed. And he built this position where he bought 15% of the company. It wasn’t just that it was contrarian, it was unbelievably ballsy.

[00:27:43] William Green: I mean, it was so aggressive. I see that again with his bets on Bitcoin these days. And in his personal portfolio where he was saying to me a couple of weeks ago, he’s like, yeah, it’s basically, it’s the holy trinity, it’s Bitcoin, Amazon. And then I guess it was this security company Clear that he invested in when it was still private.

[00:28:02] William Green: What do you make of just the sheer ballsiness of someone who was able to buy 15% of Amazon when it was most hated, all the way down from 90 to 6, and then again to have, you know, 90 something percent of his portfolio in Bitcoin and Amazon at certain points and to use leverage.

[00:28:20] Samantha McLemore: We have always joked that Bill has guts of steel.

[00:28:23] Samantha McLemore: I have never met any other investor who can, I mean, many of the greatest investors can stomach much more than other people. That’s, I think that’s pretty common. But I have met no one who even comes close to Bill’s level of what he can stomach and tolerate, and he just doesn’t get perturbed by falling stock prices.

[00:28:45] Samantha McLemore: If he believes in the company, if he believes in the business, he will change his mind based on evidence. He will update his view. But if he believes in the company, then he will buy more of the stock. And the funny thing about it is we used to have this joke where internally, once Bill reached the point, if things were going badly enough that Bill decided he didn’t like a stock anymore, that was the best buy signal if the company was going to survive, that was the best buy signal there was because no one else was left to sell.

[00:29:14] Samantha McLemore: He’s the last one to get to that point. And so, he’s made some amazing and great calls. The other thing I really admire about him, so you know, his ability to stomach and just not get swayed and emotional, you know, in the markets is a huge benefit. I think Warren Buffett’s, when he talks about tease for, you know, being a good investor, emotional stability, a keen understanding of the behaviors of individuals and institutions and individual thinking, you know, there’s no IQ in there, but emotional stability.

[00:29:45] Samantha McLemore: You know, I, again, Bill is as good as it gets in my opinion out there. And he’s also, you know, just a very differentiated thinker. He’s willing to look at things early and form his own conclusions based on the evidence. And so, he did that on Amazon. He did that on Bitcoin. I mean, he was very early there. He loves to look at new things.

[00:30:06] Samantha McLemore: He describes himself as intellectually promiscuous. So, he loves new things. He loves learning. And so all of those things I think are great assets when it comes to investing.

[00:30:16] William Green: I always got the sense that when the people he respected most disagreed with him, whether it was Buffett or Munger or Templeton or any of the great value investors, it actually made him more excited by an idea, ’cause he would think.

[00:30:30] William Green: I remember in those early days, I guess it was after 9/11, he said to me, Buffett’s not buying Prince Alwaleed’s not buying, Templeton’s not buying. Like when all of the great value investors aren’t buying, that’s a buy signal. And so likewise, I think almost with Bitcoin, when he hears Buffett and Munger talking about it as rat poison squared, it doesn’t seem to put him off much as he admires them.

[00:30:55] William Green: What do you think the thinking is there?

[00:30:58] Samantha McLemore: So, I’ve seen Bill, you know, go both ways. So, I really do think he listens to their arguments, his background in philosophy. He’s going to listen to the merits of your arguments. When we did research for him, it was always based on the merits of what we were arguing and whether we could support it with evidence.

[00:31:14] Samantha McLemore: So, rat poison squared is not going to be convincing to him. You know, it might be catchy, and we might love to talk about, it’s interesting, but it’s not evidence based. And so, Bill would say there, Buffett doesn’t have any particular expertise when it comes to this sort of thing. He even swore off technology broadly for, you know, many, many years.

[00:31:34] Samantha McLemore: And so, if you look at the people who actually know something about this and the venture capital world, they’re really excited by it. And Bill will read all the details of what’s coming out. I mean, he’s again, a voracious consumer of information. So, I think, again, I, you know, as I see it again, if we kind of separate it into the expectations versus the fundamentals, you know, we want the expectations low and controversy and pessimism and fear and all of that’s a good thing if it comes to expectations.

[00:32:02] Samantha McLemore: And then we want the fundamentals to be good. And so, but that’s a different set of evidence and characteristics of what we’re looking at and analyzing there. So yeah, it’s not going to deter him, you know, that other people don’t agree with him. He will listen to what they think, and he will change his mind if they’re presenting good evidence, but they have to present good evidence, I think.

[00:32:22] William Green: You were kind of skeptical originally of Bitcoin and then sort of came around somewhat and put some of it in your patient capital fund and some of it personally or, what happened in terms of your own trajectory with Bitcoin and what would your argument be for owning it?

[00:32:37] Samantha McLemore: You know, Bill, when Bill’s asked, we’re often asked what are the main differences between us?

[00:32:41] Samantha McLemore: So, he would say, I have a much higher evidentiary threshold. What do I need to see and analyze in order to believe something? And that’s probably right. And so, I kicked myself to this day that I didn’t invest in Bitcoin. When Bill did, and he made a ton of money, we had this big Bitcoin bull cycle. And so, in 20, I guess it was at 2017 when it, you know, before it had gone from $300 a coin and when it got to 3000.

[00:33:11] Samantha McLemore: I was telling Bill, you know, it was a big position in one of the funds he ran, and I was like, Bill, you’ve got to cut this back. You know, like it’s going to crash again. You’re going to, you know, have losses in your portfolio. And at that time the investment case was about it displacing currency and you people tracking the number of transactions, you know, being utilized with Bitcoin.

[00:33:31] Samantha McLemore: Again, I didn’t see the evidence at that time that convinced me to believe in that bull case. And then I was completely wrong on Bitcoin. So, it went from 3000 to 20,000 and then it did crash, but back to 3000. So, if he had listened to me, you know, he would’ve been harmed because even riding through it, you know, it just went back to where I was advocating that he get out.

[00:33:54] Samantha McLemore: And so, but it was something we were following. I think in 2020, that’s when I put it in the fund that I run. And at that time, it had had a, you know, it had the cycle, it had crashed and started resuming its rise. The bull case had shifted from, you know, it was no longer about tracking transactions. And people were saying it’s not great for that, for a number of reasons, a cost to do that.

[00:34:18] Samantha McLemore: But they were saying, you know, and they were talking about it as digital gold. And that had been thrown around in earlier years. But again, there’s only, you know, one gold. So, the odds, the base rate of success there was very low. But interestingly, by 2020, Bill had been involved in this space for many, many years.

[00:34:36] Samantha McLemore: So, he was one of the experts. And he was on calls with institutions virtually every week who were interested in learning more about crypto and learning more about Bitcoin. And so, gold is basically just occupies a special psychological space in the investment universe ’cause of a belief state that, you know, exists broadly among people.

[00:34:58] Samantha McLemore: And so, it seemed to be following that path. And then there was some academic research that suggested it was, it actually did have, you know, quantitative characteristics, you know, that argued it could be a digital gold. And so, you know, I thought inflation was a risk and it could be a good hedge for inflation if it occupied a similar digital gold place with free option value on the upside.

[00:35:22] Samantha McLemore: So yes, I think I’m oftentimes I want to do, you know, more of the detailed work. I think that was one of the ways Bill and I were very complimentary to each other, but his investing early was a big benefit.

[00:35:36] William Green: How much of the story of Bitcoin for Bill do you think is really just about the supply demand case?

[00:35:43] William Green: Like that he just looks at it and he says, well there’s limited supply. The demand’s growing and there are so many millionaires in the world, and they can’t all get a coin. Even if they wanted one. All these institutions want it. And so, there’s some sort of deeply agnostic part of Bill that doesn’t really care whether it’s a value or anything that’s just like it’s going to go up because it’s a sort of scarce resource with demand.

[00:36:06] Samantha McLemore: No entirely. That’s entirely, I, you know, I think it’s two things. It’s that, it’s supply versus demand and there’s a fixed supply and that, that is the bull case. And so, if you have, you know, growing and sustainably growing demand for a fixed supply thing, the price will go up. And then it’s also just basic risk reward.

[00:36:25] Samantha McLemore: You know, expected values. What can I make if I’m right and how does that compare to what I lose if I’m wrong? And the upside, given those characteristics, if things work out well is so extremely high. If it is, you know, digital gold, you can get values, you know, 300,000, I think Cathie Wood’s out there with 500,000.

[00:36:44] Samantha McLemore: Those aren’t crazy values if it continues to evolve in that way. So that’s huge upside. And then the downside is, you know, to zero, 100%, that’s the most you can lose if it completely disappears. And I think he would say, and I would agree that at this point in its evolution, it’s very unlikely to completely go away.

[00:37:03] Samantha McLemore: I think that’s no longer, like they could have, you know, significant losses. But I think those two elements are the bull case, yes.

[00:37:12] William Green: I think that willingness to look for asymmetric bets with tremendous upside was always something that freaked out the rest of the value investing community, right? Because someone like Buffett really obviously loves certainty and avoiding risk like Munger prepared to take more risk probably and bet on things like Alibaba.

[00:37:30] William Green: And then you have Bill. I remember when he was defending himself, when he was being attacked about Amazon back in probably 2001 when I was probably first interviewing him about it. And he said, look, there’s a pretty good chance that it’s going to go to zero. This is when it was at about six. And he said, but if I’m right and I think I probably am, but I may not be.

[00:37:52] William Green: If I’m right, I’m going to make 50 times my money. And there was a willingness to buy things where you could go to zero and be publicly humiliated if the upside was great enough. And that seems to be a consistent stream through a lot of your investments with Bill in kind of emerging companies, early-stage companies that could be enormous winners.

[00:38:16] William Green: Can you talk about that? ’cause it’s actually, it’s a really unusual thing to see within the value investing community. You guys are sort of pioneers and outliers in being willing to take these big, these big, I mean, I think Li Lu does it as well. Li Lu, I think made enormous amounts of money on BYD with almost like a venture capital style bet very early in its life.

[00:38:39] Samantha McLemore: Yeah, no, I think that that’s exactly right and it’s, it is similar to venture portfolios and if you look at those portfolios, they do really well, but it’s driven by a handful, a small number of, you know, huge winners that go up a ton and the rest are losers. I think the risk is lower in the public markets.

[00:38:56] Samantha McLemore: Well maybe until recently when you had these early, really early-stage companies come public. But I think this idea of what do we make if we’re right and what do we lose if we’re wrong and the expected value there. And then at the portfolio level, you have to, you know, manage the risk and the exposure. But especially if you have, you know, pessimism and these earlier stage companies, they’re also, they can be more likely to be misunderstood.

[00:39:21] Samantha McLemore: I mean, I’ve heard Buffett, you know, what he likes is, you know, I heard the three criteria like 15 times, you know, next 12 months earnings, 90% confidence. The earnings will be higher in, you know, five years and 50% likelihood it can compound growth that at 7% a year. The challenge is the market’s pretty efficient at pricing things with those characteristics and with rates so low, the prices are pretty high.

[00:39:51] Samantha McLemore: Some of these earlier stage companies where the market, especially in an environment like today where names are down, you know, 80, 90, you know 95% and the market just cares about, you know, the next week, month, you can find some gems that, you know, businesses that could look entirely different in five years and the market would meaningfully, you know, revise how it valued those companies from a money loser to something that looks much different. And we’re looking when we’re doing analysis at reasons to believe that’s the case in the fundamentals. So we’re not just taking, you know, shots and saying, so we want to believe the market’s wrong.

[00:40:35] Samantha McLemore: So, we want that variant perception. But this idea that you can make a lot of money and if you look at how managers deliver returns, oftentimes, you know, it only takes a few big winners. And Bill, this is a lesson Bill imparted very, very early on to offset a lot of losers. So, if you have, you know, a couple one, two stocks that are up, you know, 10 times, one stock that’s up 50 times, that pays for a lot of losers.

[00:41:03] Samantha McLemore: And you know, even Ben Graham, I think most of his returns came from GEICO, you know, Buffett the same thing. Again, that’s time and a high quality business, you can get those sort of returns if you have really low expectations on something, the market, you know, the market doesn’t understand a business model where maybe you can’t see the market, can’t see or isn’t looking out far enough to see what it might be, you know, over the long term.

[00:41:27] William Green: I remember Bill once saying to me many years ago, someone had done a study of his portfolio and said to him, yeah, if you took out AOL or you took out Dell, you would’ve trailed the market. And he’s like, yeah, but I owned AOL and Dell and he said, and that was intentional. He’s like, I was looking for companies like that that could go up 50 times.

[00:41:48] William Green: And so, I’m curious, when you think about this portion of your portfolio, ’cause it’s only one bucket of your portfolio, ’cause you also have the old style, classic smelly value stocks and then some kind of steady compounders like the Amazons and the Googles and the like. But when you are looking at these early-stage things, that could become huge, what are you looking for?

[00:42:08] William Green: What are the characteristics of the companies in this bucket that could become 50 baggers, hundred baggers.

[00:42:16] Samantha McLemore: I mean, what we’re always looking for is some reason to believe that market’s current expectations aren’t reflecting the fundamentals that we see in the business. I mean, that’s similar across everything.

[00:42:27] Samantha McLemore: And some reason to believe that these things could go up a lot. So, some of the things we look for with these companies, large total addressable market, so you know, some competitive advantage within the market that they’re operating. We want to believe that there’s, you know, a compelling business model there.

[00:42:44] Samantha McLemore: So, there’s a lot of companies that came public over the last few years where there were a lot of questions about the long-term business model. We want to do the work there. And so, I would say, again, that the market doesn’t understand something about the business and that we have an edge. So, I think those are the similarities and that, and then if we’re right, obviously the upside is quite significant.

[00:43:07] Samantha McLemore: So, an example of this, I think, you know now is, uh, you know, there’s a couple of examples, but one that we’ve owned for a little a few years now is Farfetch. And this is a company that has a luxury goods marketplace, and they also have what they call platform services for luxury goods companies, which is basically they provide the tech backbone for, you know, luxury companies, kind of similar to AWS and then they own some luxury brands.

[00:43:35] Samantha McLemore: It’s losing money. It’s one of these names that, you know, we bought it a few years ago after they did a deal for, New Guards Group and the market thought this is a terrible deal. And when we did the work, we thought it was a great deal. So, there was something the market misunderstood, you know, in the short term, you know, Covid hit.

[00:43:51] Samantha McLemore: So, the stock initially traded down, but then the market realized this deal was good and then it was benefited from all sorts of things going on with Covid and from additional deals, you know, they’d done in China. So, the stock went from 10 to 75. So, we cut back a lot then, but still held it ’cause we still thought there was significant potential for the business over the long term.

[00:44:12] Samantha McLemore: It’s losing money in the short term it’s been hit by Russia, China, fx, so it’s gone back to five. And so, you know, huge declines, but we still see that sort of potential longer term for the business. Despite the near-term headwinds. They are the only company building this sort of technology for the luxury industry, and they’ve made deals with a lot of companies in the space.

[00:44:37] Samantha McLemore: Richemont is the biggest one that will double their GMV gross merchandise value as it comes on over the next few years. But this year they’re bringing on, you know, Ferragamo, Neiman Marcus. So, we can see a lot of positive things in the fundamentals that you can’t see if you just look at the current income statement and cash flow statement.

[00:44:57] Samantha McLemore: But as we look at the implications for the business over the next few years, we think that the company’s materially misunderstood and misprice. And so those are the sorts of things we’re looking for when we analyze these companies.

[00:45:11] William Green: It seems like so many of these disruptive, innovative companies that Cathie Wood and the like were chasing after in the last few years, that had incredible hype behind them, an incredible potential to be extraordinarily disruptive, got hugely overvalued.

[00:45:28] William Green: And there were people who were like, yeah, I can pay 50 times sales or a hundred times sales, right? I think you mentioned in one interview, a snowflake at one point was 155 times revenues. And it seemed to me that in some ways people were learning the wrong lesson from Bill’s success with Amazon and Nick’s Sleep’s success, Nick and Zak’s success with Amazon, which I’d written about in Richer, Wiser, Happier, where you know these really smart value investors like Nick, Zak, and Bill had kind of reinvented value investing by buying great businesses and holding them for a very long time.

[00:46:07] William Green: And so, it had become kind of this new orthodoxy where people were saying, well, I’m kind of prepared to pay almost any price because these companies are making this land grab. And it’s just as Amazon paid off because they made this enormous land grab and Bezos was incredibly patient in deferring gratification and getting the rewards for investing in the business, people sort of thought, well, maybe it’s Amazon again.

[00:46:31] William Green: And so, it feels like the pendulum kind of swung too far and everyone in the value, or a lot of people in the value investing community got that new religion and then got kind of killed as a result. Can you talk about that kind of conflict between the tremendous potential of these companies and the benefits of understanding these different ways of investing, like based on huge addressable market and the like, and also the dangers of becoming untethered from valuation?

[00:47:00] Samantha McLemore: This is a great topic. It’s one I’m really passionate about. I agree with you completely and it’s interesting on so many levels.

[00:47:07] William Green: We can stop there. That’s my favorite sentence already. The moment anyone’s, it’s so rare. Samantha. No, sorry. Carry on.

[00:47:15] Samantha McLemore: You know, I really do think, you know, if you look at Buffett’s evolution, it was in the same vein from cigar butt investing, to high quality compounders with GEICO, you know, Bill with Amazon, Nick Sleep again, you know, one of my favorite things in this business is capital cycles, behavioral cycles.

[00:47:32] Samantha McLemore: And so, when I first got it was at the bottom of the tech bubble. And then energy global cyclicals had this huge move up driven by, you know, emerging China’s growth. And that’s what ended the streak for Bill because he, you know, had never been a huge fan of those companies ’cause they didn’t earn above their cost of capital through the cycle.

[00:47:52] Samantha McLemore: And so, you know, getting into 2005, 2006, that was the only group of companies, those sorts of companies that outperformed. And now more recently you’ve seen this cycle for growth, and it’s reached, it reached the stage where again, we are always very valuation sensitive. That’s key across our whole portfolio.

[00:48:13] Samantha McLemore: So, we’re doing the valuation work, we’re not always right. We make plenty of mistakes on, you know, on the work. But we’re going to sell something if it exceeds our estimate of what it’s worth. We’re going to be patient and let our winners run. But you know, we’re going to track quite closely what do we think the business is worth.

[00:48:31] Samantha McLemore: And we owned Peloton at the IPO and sold it, you know, during the bubble at a greater than a hundred dollars ’cause we couldn’t make a valuation case where like it’s pricing in Apple-type duration and level of growth. And so, I think some people have taken the quality compounder argument, you know, so far that at least before this most recent bear market, they thought you could justify paying any price for a company.

[00:49:00] Samantha McLemore: But obviously you cannot, you know, you can have a great company that’s a poor investment if the price is too high. And that’s especially too, I think the risk, it’s even higher, you know, if interest rates are rising or even stable, you’re not going to have that sort of tailwind. So, I think, you know, in the growth space you have a lot of great investors, few of them are really sensitive about that valuation piece.

[00:49:28] Samantha McLemore: And we always are. And always have been. So, I do think, you know, in the value space, a lot of people have gotten into these sort of companies. I haven’t seen any value investors do the snowflake thing. And that was, you know, a great example of a company that I have never heard a bad thing about the company.

[00:49:44] Samantha McLemore: People love this company, they love the competitive advantage, but the valuation just got so high that everything had to go right. You know, extremely high expectation. Everything has to go right for the market, for the company, you know, for you to do well in those sort of situations. And if we have a decade more like the seventies, the risk is, you know, just much, much higher.

[00:50:05] Samantha McLemore: I still think we see that, you know, around in many companies that aren’t so quite so dramatic.

[00:50:11] William Green: I’ve been thinking about this a lot recently ’cause I spent a week with Guy Spier in Switzerland recently, and I interviewed him for the podcast, but also, I help him with his annual report every year, partly just an excuse to spend a few days chatting with him.

[00:50:24] William Green: And this was one of the big sources of agony for him over the last couple of years is that all of these really smart value investor friends of hits would tell him buy things like, you know, Spotify, Netflix, Twilio, Salesforce, and these were people he really admires and likes, you know, Carvana, and he would look at them and he’d get really excited when he was studying the business model.

[00:50:47] William Green: And then his heart would just sink when, you know, he would look at sort of Roku or something and we’ll just see how absurdly overvalued these things were. And I don’t know, you guys always seem to have more patience with more tolerance for high valuation, but at the same time you were also investing in this sort of ugly things like airlines and travel stocks and Carnival Cruise Lines and the like, or Norwegian Cruise Lines.

[00:51:12] William Green: Things that people hated. So, it’s interesting that you have both of these buckets in your portfolio.

[00:51:19] Samantha McLemore: Yeah, I think, you know, in terms of the high valuation stuff, Amazon would be the poster child for, you know, the name that we’ve owned for so long that has always looked expensive or maybe for a long time has looked expensive.

[00:51:32] Samantha McLemore: But I think again, our belief there is that it’s always been undervalued. It has such a huge total addressable market. 5 trillion on the retail side, they invented and created AWS. It has, you know, one of the best management teams we’ve ever met, maybe the best in terms of their data discipline, evidence-based, financially sophisticated.

[00:51:56] Samantha McLemore: I mean, you would be surprised how few companies can even understand that the proper metric to engineer the business for free cash flow per share. And this is a company that had it in its initial, you know, annual report. And so, all these companies that claim to be the next Amazon of this, of that or the other, they don’t actually behave like Amazon in many material ways around what they’re optimizing for and their shared dilution.

[00:52:20] Samantha McLemore: And so, all the things that matter long term. And then, you know, what’s difficult with this sort of companies is to separate out the investment from the cost structure. With a company like Walmart, as they were growing, you could analyze the store unit economics, you could analyze the income statement, and then you could see that all of the investment in future growth was coming through the cashflow statement.

[00:52:40] Samantha McLemore: New stores with companies like Amazon or more digital companies where it’s R&D based or you know, technology spend. You know, it’s harder to understand what that looks like. So, we spend a lot of time with that one or any names like this, trying to understand the long term operating model and the value, what the valuation would look like over a longer term time horizon.

[00:53:02] Samantha McLemore: And so, you’re right, many of those companies we owned at Netflix, you know, for many years. Did very well, sold it too soon twice. But that was based on, again, our cell discipline around the valuation. So, we are sensitive both on the buy side and the sell side. We don’t just own all of this sort of names forever.

[00:53:21] Samantha McLemore: I think the other compounders that we own, most of them look cheaper. So, name like Alphabet is much cheaper. Even on the current earnings, you know, now and the earlier stage companies, again, we’ll look at money losing companies, a lot of people won’t even do that. But we’re doing a lot of analysis around, can this business make money and what’s the value over, you know, the next 5 or 10 years.

[00:53:44] William Green: To go back to this question of Amazon, one of the remarkable things, I guess, in your investment careers, you’ve got to spend a fair amount of time with Jeff Bezos over the years ’cause Bill would have these dinners with him, fairly regularly. And I wonder if you could just talk about what that experience has been like, what you’ve learned from being so close to one of the great CEOs of our time.

[00:54:07] Samantha McLemore: I’ve been very fortunate. I haven’t got to attend as many of those dinners. I wished I’d gone every year. I would’ve been able to go every year. It took me many, many years to get, you know, a seat at that table. One of my first experiences in 2003, right after I joined, Bill had a big investment conference for all of our clients.

[00:54:24] Samantha McLemore: And Jeff Bezos was a speaker, and he gave, you know, the washing machine talk where he talked about the internet being like the early days of electricity where, you know, initially, you know, he compared it to this washing machine and it would hurt people and it would be outside, and he’d have to go over there.

[00:54:41] Samantha McLemore: And it was really clunky, and it didn’t work well. And then you got, you know, electrical outlets and things evolved and again, we were so early and, you know, Bill believes that he kind of laid out the case for AWS at that meeting. And then I remember attending a meeting with Bill and Jeff, where Jeff was soliciting advice about raising kids.

[00:55:01] Samantha McLemore: And so, at the time I had no idea, you know, how special it was to have a seat at that table. But in hindsight, it’s amazing. It’s amazing that I was there. And then I have attended, you know, some of the dinners, you know, with Bill and Jeff and got to meet him. And he is just, Warren Buffett calls him, you know, an authentic business genius.

[00:55:23] Samantha McLemore: And so, to learn from Jeff and hear about how he, and here Bill, you know, and Chris Davis asking Jeff Bezos questions about the business, you know, that’s just an amazing opportunity to have some of the best investing minds and business minds of one of the, you know, greatest companies in the history of the world.

[00:55:44] Samantha McLemore: So, I feel very fortunate for that experience. But I think that’s also when we’re doing work on companies. Again, Bill, for many years when meeting with Jeff would ask, okay, this is still a double-digit operating margin business, right at the core retail business, but then they’re investing. And so just checking in on that, you know, that Jeff still believed that and what the evidence was for that.

[00:56:10] Samantha McLemore: I mean, that’s similar to how we think about these companies. Again, as long as we believe a few key investment variables are true, you can withstand a lot of, you know, noise. And so, I think to the point about Buffett, he talks about what doesn’t change, what will be the same, what will people still be doing?

[00:56:27] Samantha McLemore: That’s similar to what Jeff talks about. You know, people always focus on change, and he says what won’t change is that people will still want low prices. You know, people will always want low prices. So, I think that that’s an interesting and an important thing to think about.

[00:56:43] William Green: I was talking to Bill about Amazon a couple of weeks ago and he said, he talked about how at one of those meetings with Jeff Bezos, Bezos was saying maybe this was around 2002 or something like that.

[00:56:55] William Green: He said to Jeff, what are you spending your time on? And he was saying basically shoring up the balance sheet, I think. And then the next year he said to him, what are you spending your time on? He said, the user experience, making sure the user experience is great. And Bill was like, Bill said how he kind of, he extrapolated from that.

[00:57:13] William Green: The company had turned a corner and was going to kind of be great if he could focus not on survival, but on improving user experience. And I thought it was really interesting just listening to Bill as a sort of former military intelligence guy, ’cause obviously that was an important part of his early training, that he was able to take little bits of information in this kind of mosaic way and piece them together.

[00:57:37] William Green: And he said something similar about, I think it was Tupperware, where he saw this company, I think it was Tupperware that hadn’t made money in so many years, suddenly said they were going to have a shareholder day where they would, for the first time in years, they would talk shareholders. And he was like, we need to buy.

[00:57:52] William Green: And I think he said, you were like, no, we need to do more work. And he’s like, no, no, that’s enough. We just buy because, so he was seeing these little clues. Can you talk a bit about that? ‘Cause you must have seen that so many times where a little piece of information seen with the right kind of pattern recognition is absolutely critical.

[00:58:13] Samantha McLemore: Absolutely. And we would sometimes call it triangulation. So, getting disparate pieces of information from different people or different sources that led you to the same conclusion would increase your conviction and belief state. And interestingly, I think Bill met with Jeff Bezos in 2012, I believe it was.

[00:58:31] Samantha McLemore: And that was, we had owned Netflix. We’d sold it too early in, in 2008. When we thought streaming was a risk and then they went on to dominate streaming. But in 2012, you know, they announced that they were going to separate the streaming piece of the business from the DVD piece of the business and the stock tanked and I think it was 300 before that and went back to like, you know, 120 a share.

[00:58:54] Samantha McLemore: I think it got down to 50, 60. And Bill had met with Jeff and Jeff said, hey, do you know Netflix? And Bill’s like, yeah, we’ve owned it. And he’s like, we don’t own it now. He’s like, well, do you have a sense of what it’s worth? And Bill’s like, well our work’s not current. And so, he came back to us, and you know, we were like, okay, if Jeff wants to know what that business is worth, we need to do the work on what that business is worth.

[00:59:16] Samantha McLemore: So, we started working on it and then Bill attended another meeting with John Malone, you know, where John I think, said that he would be buying every share he could of Netflix at those prices. And I think it rebounded back to like 90. By then he said that he was restricted ’cause some of his other holdings.

[00:59:33] Samantha McLemore: And so, you know, Bill was like, this is basically all you need to know. You know, John Malone, one of the best investors in the history of the world, you know, would buy every share he can. You know, Jeff Bezos inquiring about, you know, what the company is worth. And so I think it’s that classic sort of, you know, trying to triangulate different sources of information to figure out.

[00:59:55] Samantha McLemore: And then we did work, and we realized that it was trading at a very low multiple of the US earnings, but they were investing, again, all of this internationally. But those businesses were much earlier stage, but there was no reason to believe that they wouldn’t evolve in a similar manner to, you know, the US business.

[01:00:11] Samantha McLemore: So, you could buy the company at like 5 or 10 times what the US business is earning. So, for a company like that, given the stage, you know, where it was, it was an amazing opportunity. So, we, you know, built up a big stake in Netflix at the time, but it’s that again, are we doing our valuation work? What are other people that we respect, you know, seeing and saying different sources, mosaic theory, you know, classic analyst, analytical stuff.

[01:00:37] William Green: Yeah. So, in a way, in a world where, because of regulatory pressures, you can’t get such an informational edge, the ability to see the information in a different context, to take information that’s out there and see it in context and understand, recognize the patterns, that seems really key to your success over these years.

[01:00:56] Samantha McLemore: Yeah, I think pattern recognition, you know, again, Bill would probably tell you, I don’t know if I agree with him on this, but he likes to say there’s not many benefits of getting older, you know, in the business. I don’t know if I agree with him because that pattern recognition piece and having these experiences, you learn so much the more you have them.

[01:01:15] Samantha McLemore: And as Bill says, you know, there’s not many people like him who are investing through the 70s. Again, that’s, that’s an asset. And I think I, Charlie Munger has talked about how it is a big benefit to, you know, continue. There’s not many things you get better and better at as you get older and into your nineties, like they are.

[01:01:31] Samantha McLemore: But he said investing can be one. I think Bill’s point is when you’re younger, you can look at the world with fresh eyes and there’s a lot of benefits to that, to not, people get stuck on their worldview and it’s very important not to do that in investing ’cause things are changing all the time. It gets harder to do that as you get older.

[01:01:49] Samantha McLemore: But the sort of pattern recognition piece, the fact that low prices, high fear and pessimism, you know, leads to better investment opportunities. Again, it’s why we think that, you know, these behavioral advantages are so enduring. It’s like, I think of it like dieting, you know, or eating healthy. People don’t not do that because they’re not sure what to do.

[01:02:12] Samantha McLemore: You know, they don’t do that because it’s hard to do. It’s hard to not eat the cookie. It’s not like, you know, oh, I’m not sure if I should or not. No. It’s like, you know, you shouldn’t, but it tastes great and you’re going to eat the cookie. Right? It’s like failing things down a lot. I mean.

[01:02:25] William Green: I’m taking The Fifth Amendment.

[01:02:29] Samantha McLemore: You can justify, you can trick yourself in the markets a lot more. It’s hard to trick yourself to believing the cookie’s good for you. But in investing, you can make yourself believe, oh, there’s all these problems, there’s all these bad things going on. So, I’m actually better off selling. But at the end of the day, I think it’s mostly selling things when they’re down is not a good idea.

[01:02:46] Samantha McLemore: You know, it’s not a good idea. Buying things when they’re really high and expensive. Not a good idea. It’s not that it’s really complicated. It’s that it’s difficult to implement.

[01:02:57] William Green: I wanted to go back to earlier in your career, ’cause you really had this incredible trial by far, right? Where, so initially you become a junior analyst at Legg Mason where Bill was working at the time, back in, I think July 2002.

[01:03:11] William Green: So, you’re going through the sort of rubble after the dot-com bubble and after 9/11 and you guys buy like crazy and it works out. And then a few years later, I think, it must have been around July 2008, if I remember rightly, or maybe August 2008, you become, was it an associate portfolio manager on Opportunity Trust.

[01:03:30] Samantha McLemore: August of 2008, I became the assistant portfolio manager.

[01:03:33] William Green: Okay. So, this is right before Lehman Brothers blows up in September and the world basically goes into free fall and everything is collapsing. And Bill for once in his career, having done brilliantly during these previous moments where there was tremendous disruption, Bill for once screws up, totally gets everything wrong, bets that the worst hit stocks are going to rebound the best.

[01:03:56] William Green: And they continued to get killed. All these things like Countrywide Financial and Merrill. And it was just, it was a sort of nightmare. So, Opportunity Trust was down, I think 65% in 2008 and value trust down 55%. And I was reading a quarterly report of yours where you wrote, investment managers must face the prospect of underperforming at some point.

[01:04:19] William Green: This reality nearly drove me out of the business. My experience managing money in the financial crisis drove home the point that no matter how brilliant and hardworking you are, you will eventually underperform in this business. And I really wanted to talk to you about that experience of going through the kind of, the pain of short-term failure and getting stuff wrong and what it was like for you and how, you know, that’s fascinating to me that you said that the prospect of underperforming actually nearly drove you out of the business and you started looking for other professions that you should maybe be exploring.

[01:04:52] William Green: Tell me about this existential crisis in the early career of Samantha McLemore.

[01:04:58] Samantha McLemore: So, I had joined Bill again, he was a hero. A God having done things no one else did. I had such respect for him. He was completely dedicated to the job, you know, spent all his time doing it. No one could read more voraciously, have more knowledge, you know, have had more success.

[01:05:18] Samantha McLemore: And then we go through this terrible period. I mean, you know, it could hardly have been worse. And then I had my first child shortly thereafter too, which completely changes your priorities. So, at that point, I was thinking, and then as I learned more, also, I thought, wow, if you look around, all the best investors have periods of underperformance.

[01:05:38] Samantha McLemore: And as a professional investor, my job is to outperform and deliver value to my clients. So, at the time I thought, if I underperform, I’m failing. I’m failing at my job. And so, this is a job where even if you’re successful, even if you’re at the top of your game, you’re destined to fail for periods of time and you’re going to have to work really, really, really hard.

[01:05:59] Samantha McLemore: ‘Cause you know, it’s super competitive. There’s super intelligent, smart, capable, the most capable people you’ll find in the world are drawn to this profession. And I thought, you know, and I a new baby and I thought, is this what I want to, is this what I want to sign up for? Is, you know, working really hard, you know, taking time away from this beautiful baby to fail.

[01:06:21] Samantha McLemore: And so, I was like that. When you frame it that way, that doesn’t sound so appealing. So, I did, I looked around at other things and said, is there something else, you know, something else that would be better for me. I didn’t find anything else that I loved as much as this job. I hadn’t yet, you know, I know you have talked and written and done interviews on stoicism and I hadn’t yet come across many of those learnings and, you know, Buddhism and these more spiritual principles on a different way to view the challenges. And so, you know, ultimately, I concluded though I couldn’t find anything else. Like, I love this work. I love learning about companies. I love doing valuation work. I think I’m, you know, well suited to it. I think I am emotionally stable, and I can tolerate losses. I can buy things down. That doesn’t bother me. It does bother me to, you know, underperform significantly.

[01:07:14] Samantha McLemore: But I think there’s a lot of value that we can deliver by educating people, by helping them make better, you know, decisions and choices. I also think the way the markets of, and I stopped equating short-term underperformance with failure, also, I think we’re playing a long game and if we can deliver long-term outperformance for people, that’s the objective.

[01:07:37] Samantha McLemore: Again, you know, no one else has outperformed 15 consecutive years. That’s an unreasonable expectation. Bill would tell you that, you know, that was an accident of the calendar. If you measured it, you know, January to January, February to February, it didn’t happen any other time. So, you know, that’s not the right metric.

[01:07:53] Samantha McLemore: And then, you know, some of these, you know, more philosophies around stoicism and how to confront challenges and how to benefit from them and how to kind of be more stable, and look, you know, we create all of our suffering more internally. I think finding some of that material and understanding that better was super helpful.

[01:08:14] Samantha McLemore: And then we try to educate our investors as well in terms of what we’re doing. And we can have short term periods of significant underperform. You know, ’cause we’re playing a long game and we hope to make that up over rolling three to five-year, you know, time horizons, that’s our time horizon. And so that’s the period over which we’re assessing ourselves.

[01:08:33] Samantha McLemore: And so, I think I got comfort with it in many ways. But yeah, there was a period where I was, you know, I was not quite sure this was, you know, the correct place for me.

[01:08:44] William Green: Did Bill ever try to persuade you? No, no, stick with it. ‘Cause I remember like about a hundred people lost their jobs. Right. I mean, it was mayhem, and it was torture for him because, I mean, I remember him saying, we had a meeting, I think the first time I met you in person was I came to Baltimore and I met with you and Bill and Bill IV, Bill’s son.

[01:09:03] William Green: And he was talking about how painful that period was and he was saying, you know, look, the most painful thing was we wasn’t losing my own money, even though he lost a fortune of his own money, but, and had to sell his yacht, which is tragic, which I gather was the biggest yacht in the country at the time.

[01:09:18] William Green: But he had to lay off a more than a hundred people and lost masses of client money. I think it was torture. In terms of your experience of watching him go through that and him trying to persuade you to stay in it, what was going on there behind the scenes?

[01:09:32] Samantha McLemore: Well, no, that, I mean, that was exactly the experience, again, of all of the pain of the layoffs and it impacting people’s, you know, again, I have never seen Bill, I can lose my own money just fine.

[01:09:44] Samantha McLemore: Like, I’m totally fine with that. I have no problem with that. I know what I’m doing. I know over long-term period times it’ll come back. So, it was all the other stuff. Organizationally, you know, clients, all the stress around it, the press obviously, and what happened and how Bill was covered there. It was so public.

[01:10:04] Samantha McLemore: You know, a lot of people when they face these, you know, personal challenges, much more private. Not if you’re, you know, an investor that’s well-known. It’s very public. So yeah, all of that was why I was, you know, reconsidering it. I think Bill is great about, you know, he wants people to make their own decisions.

[01:10:21] Samantha McLemore: He wouldn’t want to unduly influence. I mean, if I ever considered doing other, he would. He told me he thought it was of stake and you know, he’s been very complimentary of, he thinks I’m well suited to this line of business. He never, I mean, he will be open about the challenges, and you know, I remember in March of 2020 when Covid was causing the markets to crash and Bill and I are both reading like stoicism and emailing each other, you know, the quotes and like dealing with it together.

[01:10:55] Samantha McLemore: So, it’s been great to have, you know, him to go through these things with, and I learned tools to adjust and adapt to it. But I think, so that was pretty early in my career and so Bill had always said, I’m going to make it an expensive proposition for you to decide to do anything else. And so, I considered going back to get my MBA and he was like, that would be really dumb.

[01:11:16] Samantha McLemore: He’s like, you’re going to learn far more here. That’s a really stupid thing. You’re going to go pay a lot of money to go do that. So, there were certain things he had very strong opinions on and any specific example that I would talk to him, he would say like, you’re much better. You know, like you’d have a lot of good reasons why I was much better off staying here.

[01:11:33] Samantha McLemore: I think he never tried to change my perception. I mean the challenges were what they were. You can see the magnitude of the challenges. So, he didn’t try to persuade me that it wasn’t a very challenging business that you had to be entirely committed to. But he did help me, you know, find tools to deal with that.

[01:11:51] Samantha McLemore: You know, like the stoicism and the different readings and, and those sort of things.

[01:11:56] William Green: Can you talk more about how you use Stoicism? ‘Cause I saw, I saw you, you quoted in one of your letters a beautiful quote from Marcus Aurelius that I use in my book as well, maybe when I was writing about Bill in the epilogue where he talked about being like a rock and the waves kind of crashing over you, but you remain still within it all.

[01:12:14] William Green: Can you talk about how some of these teachings have helped you?

[01:12:18] Samantha McLemore: Yeah. So that is my very favorite quote. I love that. I love that image of stillness in the storm and then the storm calms around you. So, I think, you know, like I said, reading it when things get challenging, I, you know, I took up meditation.

[01:12:35] Samantha McLemore: I love meditation, learning about breathing techniques, so actually doing things to compensate or offset and manage and mitigate, you know, a) it helps you focus more, but it also calms you down and improves your decision making and what can be a very stressful environment. So, I mean, if you have any good stoicism, you know, recommendations, I cannot claim to be an expert there at all.

[01:13:00] William Green: I mean, I got turned onto stoicism by Bill all those years ago, I think back in about 2001, 2002, that sort of thing. And so I read things like Marcus Aurelius’ meditations, which I’ve read multiple times, which I think is an extraordinary book because he was so in the thick of everything. I think you’ve written about this, that he went through a plague, he went through, you know, obviously being a military leader and all of the political machinations.

[01:13:25] Samantha McLemore: Yeah.

[01:13:25] William Green: I think he had sickness as well, right? So, he was in the trenches dealing with pain and insecurity and, right. So, he is great. Epictetus was great as well, and Seneca. So, Seneca’s letters are great. So, you know, and then Bill got me to read. Thoughts of a Philosophical Fighter Pilot by Vice Admiral Stockdale, which I thought, I’m sure you’ve read right?

[01:13:46] William Green: That was extraordinary. Where he was tortured for years.

[01:13:48] Samantha McLemore: I don’t think I’ve read that one.

[01:13:49] William Green: That’s really good. And so, I mean, basically this guy, Vice Admiral Stockdale is shot down over Vietnam. And as he’s being ejected from his plane, knowing that he’s going to be captured and tortured, he whispers to himself something like, I’m leaving the world of engineering or something like that.

[01:14:10] William Green: And entering the world of Epictetus, ’cause he knew he was going to get tortured like Epictetus, who was a slave, was tortured and he was in sultry confinement for years. And he writes about being tortured and how he dealt with it. And one of the things he would say over and over was, I think he had this mantra, whereas he was going in to get tortured ’cause he knew he was going to break while he was being tortured.

[01:14:32] William Green: He would just say to himself over and over again, no fear, no shame. And so, he knew that he couldn’t really control his behavior, but he could control his mindset. And so, he was drawing on the stoics, like Epictetus, and saying, well, so I can control my internal sense of honor. And so, one of the things that he did, because he was very senior, they said to him, you can go home.

[01:14:55] William Green: And he was like, no, I’m staying. And so, he refused to take early release even though he was getting tortured. So, it was an astonishing thing, but he felt like he needed to keep his own sense of honor because he was so broken by the fact that, you know, the shame that came with confessions while being tortured.

[01:15:13] William Green: So that was a book that Bill got me to read. And I still think it’s kind of a remarkable book ’cause it’s one of those things where it’s like a modern age stoic going through how—

[01:15:23] Samantha McLemore: Yeah. That’s amazing. I’m going to have to read that one. But that’s the sort of stuff I love, and I love that piece of the story where he kept repeating it to himself.

[01:15:31] William Green: Yeah.

[01:15:31] Samantha McLemore: Because I know, I think you’ve had conversations with a number of people and I know, there’s a number of, a lot of people like to talk to Bill about, do you feel the fear? Do you actually feel it, or do you not feel it? And are investors wired differently? You know, the great value investors are, they wired differently.

[01:15:48] Samantha McLemore: And at one point, you know, people were considering conducting an MRI study, which I think would be super interesting. And so, you know, again, I don’t know what the answer is. As I said, Bill has guts of steel, so I know he feels a lot less than most people. But it’s not that there’s zero feelings.

[01:16:04] Samantha McLemore: ‘Cause like I said, when things get really extreme, again doing things like reading stoic passages, like we would be reading them and sharing them with each other again, I can only remember doing that in March 2020. So that was like an extreme time, or you know, meditating or for me doing things that keep me focused on things that I think will help me do the rational thing.

[01:16:26] Samantha McLemore: So, in this period after this, you know, selloff a), you know, I’ve grown up in an environment of optimists and so Bill, you know, people like to joke or he jokes that he has two, two modes bullish or very bullish. And, his partner, Ernie Kiehne, who started the Value Trust with him and came into work almost every day until he was like 92, he was amazing.

[01:16:50] Samantha McLemore: He was an amazing man, and he was so optimistic. And he would sit at our investment meetings, and he would tell us about all the wonderful things going on in the world. So last year as the market’s crashing, I felt there was a vacuum of this sort of perspective. And so, you know, just, that’s when we started looking at, okay, the market’s down a lot.

[01:17:10] Samantha McLemore: We’ve entered bear market territory. Back to, you know, kind of what I learned when I first started. What does that imply for markets going forward from here? You know, are returns higher? Are you more likely to make money? And that data was highly supportive of yes. You know, you actually are. If you buy now after the markets had a 25% decline, you know, the average one-year return is much higher than average.

[01:17:31] Samantha McLemore: It’s like 18% versus you know, 12% over the whole data period. And you know, you’re 97% likely to make money, at least given the dataset that we looked at. So doing those sorts of things when it gets ugly, when it gets harder, when you might be more at risk of making a poor decision and getting scared by the environment, I think is helpful.

[01:17:52] Samantha McLemore: And sharing that knowledge and data with people, you know, repeating things to yourself about returns or you know, no fear. I think those sort of practices are really important for the vast majority of people and everyone can benefit from that. I mean, I know Ray Dalio has talked a lot about meditation and the benefit he’s had from that.

[01:18:13] William Green: What kind of meditation do you do?

[01:18:16] Samantha McLemore: Transcendental meditation.

[01:18:17] William Green: Oh really? That’s interesting. And you find that very helpful?

[01:18:20] Samantha McLemore: I find it really helpful. You know, I, again, I do it once a day. It’s hard to find the time to do it twice a day. You’re supposed to do it twice a day. And I would, I heard Seinfeld say during his time, you know, working and, and creating the show, he did it once a day and when he stopped, he started doing it twice a day.

[01:18:38] Samantha McLemore: And he found that so much more helpful. So, I, you know, I’d be better off if I did it more, but I find it extremely helpful.

[01:18:46] William Green: I had a podcast episode with Daniel Goleman who co-wrote a book called Altered Traits. It’s an extraordinary book on what meditation does to your brain. And Dan said, the best meditation is the meditation that you’ll do.

[01:18:59] William Green: And I thought that was really helpful. It’s like, it’s really easy to feel guilty and be like, I’m not doing enough. I’m not doing it right. And he said it is dose dependent. Like I asked him a year or so ago, like, how much are you meditating now since you wrote that book? And he wouldn’t tell me, which I assume means he’s spending hours a day, but he said, after studying what it does to the brain, he’s like, yeah, I do a lot.

[01:19:20] William Green: You know, and this is after 50 years. But I thought that was really helpful actually, just to say, look, it’s, the best meditation is the meditation you’ll do. And so, I mean, 20 minutes a day seems amazing to me. That’s fantastic.

[01:19:32] Samantha McLemore: Yes. No, you’re right. I should have a better perspective on that, and any amount is helpful.

[01:19:36] Samantha McLemore: I love that episode of yours. I thought it was a fabulous episode and it, and, you had someone else on with him, right?

[01:19:43] William Green: Tsoknyi Rinpoche came on. I did one just with Dan Goleman and one with Dan and Tsoknyi Rinpoche, who’s an extraordinary Tibetan Buddhist. And I was reading something of Tsoknyi’s yesterday and I mean, I read a lot of his stuff and he was telling a story about his father, Tulku Urgyen Rinpoche, who was very extraordinary, is great sage and meditation master, and Tulku Urgyen Rinpoche means precious ones.

[01:20:06] William Green: It’s sort of like a, like a big deal, reincarnated lama. And he talked about the great equality that you should get to this state where there’s no fear. There’s no hope, everything is fine, whatever. So, he was in incredible pain during some surgery and he was like, total suffering, total bliss. And it was like, it was all equal. And I think—

[01:20:28] Samantha McLemore: That’s amazing.

[01:20:29] William Green: Yeah.

[01:20:30] Samantha McLemore: That’s my life goal right there, is to reach— I, you know, so far from that state. But that always amazes me. Stories like that.

[01:20:39] William Green: I think that’s one of the things that’s fascinating to me when I study both Buddhism and Stoicism and also Kabbalah, which is the other thing I study a lot where you can see it’s all about trying to gain control over your inner landscape.

[01:20:52] William Green: And so, the discovery that by doing things like meditation or how you talk to yourself or mantras and the like, or how you breathe that you can actually gain some control over your inner landscape so that the stuff that’s swirling outside doesn’t mess you up quite so much. That’s an incredibly valuable discovery, I think.

[01:21:12] Samantha McLemore: Yeah, I agree. I do all of that mantras and, you know, I meditate for 20 minutes a day, but I’ll do breathing for a minute or something later in the day. So, I think those things are so powerful and, you know, can be so helpful. And the other, one of my other favorite episodes and people that you’ve written about Arnold Van Den Berg and his story.

[01:21:36] William Green: Yeah.

[01:21:36] Samantha McLemore: Amazing. I mean, and he had some great recommendations for books that I, you know, that I picked up, the Power of Now and one of the back pain books about—

[01:21:46] William Green: Yeah.

[01:21:47] Samantha McLemore: Really willing, like the story about how he, you know, grew up and ended up in the orphanage, right? And was in really bad physical shape, and then sort of willed himself to get better and compete at climbing ropes and that sort of thing.

[01:22:01] William Green: Yeah. And he, yeah, he hypnotized himself and he would, he was so full of rage and anger and bitterness after the Holocaust where he’d been in a concentration camp. Sorry, his parents had been in a concentration camp, and he’d been in an orphanage while they were in concentration camp.

[01:22:17] William Green: So, he’d been hidden in this orphanage. And then he gets out and he’s sort of, you know, he could barely walk. I mean, he would crawl ’cause he was so malnourished. And so, his early life was just kind of a disaster. And then he gets divorced, his wife leaves him for someone else. He barely graduated from high school, didn’t make it to college.

[01:22:34] William Green: And so, his transformation through gaining control of his mind is such an extraordinary thing. And one of the things that I always remember is he would, he was so aware of how much rage he had, and he would just walk around saying, no, I’m a loving person over and over again. And you see him now and he’s such a lovely bloke.

[01:22:51] William Green: And so yeah. I mean, he transformed himself partly through hypnosis, partly through having an extraordinary therapist. And partly he got incredibly lucky with his second wife, who is just like one of the world’s loveliest humans. And so, I, you know, but that made me think, well, so if Arnold could gain control over his, in a landscape, he could turn himself around given what a bad hand he was dealt, then the rest of us stand a much better chance.

[01:23:18] William Green: But he was obsessive.

[01:23:19] Samantha McLemore: Yes.

[01:23:19] William Green: He was fanatical, in doing it. And so, I think some of it is just the persistency. So, I think stuff that you are doing where you’re doing the meditation every day, there’s a kind of, and the breathing and the mantras and like, there’s something cumulative about it.

[01:23:34] Samantha McLemore: Yeah, no, I think so. I agree. I was so struck by his story because of how extreme it was and how extreme, you know, what he accomplished on the other side. And his belief states about belief states, about, you know, willing yourself to do certain things and the power of that. I mean, there couldn’t be a better story to share with my kids about, you know, they mostly don’t want to listen to me when I share stories like this with them, but you know about how to transform your life really through your mind.

[01:24:06] Samantha McLemore: And we just understand so little about it. But I think it’s powerful. And so obviously that has a lot of applicability to investing.

[01:24:13] William Green: Yeah, totally. ‘Cause you’ve got to somehow sit in the middle of uncertainty and failure and disappointment and somehow deal with it and stay calm within the maelstrom.

[01:24:24] Samantha McLemore: I was just going to say, I think one of, you look at, again, many of the best investors, one of my favorite stories is worth things to remember is, you know, Buffett obviously an amazing, you know, accomplished career.

[01:24:36] Samantha McLemore: And he wrote, I mean, he fulfills such a special role for the world, I think. But he wrote in October of 2008, Buy American. I Am, and I think that was in the New York Times, his piece on buying America. And he wrote about, you know, be fearful when others are greedy and greedy when others are fearful, and how the best time to buy is, you know, during horrible periods.

[01:24:59] Samantha McLemore: And he talked about the depression and the wars, and you know, the buying opportunities there. And years later at an event, I’m not sure if it was a Berkshire meeting, but someone asked him, how did you know that that was the right time to buy? And he said, you know, I don’t know time, I know price.

[01:25:18] Samantha McLemore: And if you look, actually, so that was October of 2008, the market was down like 25 to 30% more to the bottom in March. So, in the short term, it looked and felt like, although I’m not sure Buffett cared a terrible mistake. I just, you know, if you were to buy then you had this 20 to 30% loss over, you know, less than six months.

[01:25:40] Samantha McLemore: But if you could even hold for a year, I think his one-year return was like 24%. And then he compounded over 2, 3, 5, he made, he was very clear in that piece that he had no idea in the short term what the market went into. But he compounded over, even at, if you could even have a one-year time horizon, it bounced back and you made more on the other side and over, you know, 2, 3, 5, 10 years.

[01:26:00] Samantha McLemore: You compounded well above long-term, you know, market rates. And so, I, you know, in this sort of environment, again, we keep talking about that ’cause the market’s down and if you buy it could go to new lows. You know, no one knows what’s going to happen or where it’s ultimately going to bottom. But the amazing thing to me is you don’t even have to be that long term.

[01:26:19] Samantha McLemore: You know, when we’re down this much, you know, the odds that you’re going to go down a lot more, you know, could it go down 30% or could, that’d be, I think unlikely from here. But you know, again, 90 plus 5% plus over a one year, it’ll be up a lot more than average. I mean, it’s amazing to me that people don’t talk about that more.

[01:26:38] Samantha McLemore: They focus all on the next recession and the macro, you know, all this other stuff.

[01:26:43] William Green: I was reading a lot of your writing both for the Opportunity Trust and also for Patient Capital, a firm that you launched in 2020, which I guess is going to, has its own fund, but also is taking over the management of Miller Value Partners, the firm where you were working with Bill for all those years.

[01:26:59] William Green: And this emphasis on having a long time horizon seems like such a recurring theme and such an important aspect of your success. And it’s no accident that the firm itself is called Patient Capital. But I was struck by a couple of things that you said. There’s one thing where you said that the market only rises a little more than half of days and 63% of months, but it gains in 73% of years.

[01:27:22] William Green: And then you said on a rolling basis, it’s up in 89% of five-year periods, 93% of 10-year periods and a hundred percent of 20 year periods since 1927. And I thought that was a very striking statistic. Can you talk about that sense of, because Bill is often accused of being permanently bullish and he’s always like, well, yeah, but the market goes up 70, you know, more than 70% of the years. It’s smart. Can you talk about this sense of how, as you extend your time horizon, the risk of loss sort of diminishes?

[01:27:56] Samantha McLemore: Yeah, I think I remember learning those stats and it was one of those transformative events for me, as I thought about investing because, you know, half of days, if you’re going to invest for a day, I mean, no one will tell you, you should put it in the equity market.

[01:28:10] Samantha McLemore: It’s, it’s a gamble. It’s a coin toss. You know, you could make money, you could lose money, who knows? But the stats on, you know, 20-year periods or even 10 year periods, you know, 100% of 20 year periods, when do you get a hundred percent odds? I mean, not saying perspective would be, but historically, I mean, even the worst of periods in America, you know, made money and 10-year periods.

[01:28:34] Samantha McLemore: And again, you look at even over five-year periods. So, it’s just, it’s so crucial. And I think we talk a lot about time, not timing. Again, the whole world, the media so focused on timing and giving you data that no one can predict the future. No one knows what’s going to happen with recession and inflate, like no one knows.

[01:28:54] Samantha McLemore: And so, all that talk is noise. And actually, what you do know is that when the market’s down and when you’re long-term, you know, the historical evidence is overwhelmingly in favor of very strong long-term returns. And so I think one, we want to make sure that our investors understand, I just think it’s so powerful for anyone, any individual investor to understand, you know, if you just put it away and you buy more at lower prices, so a systematic investment program, or, you know, even better do the buffer thing, have cash on, evidence isn’t as clear that you should keep any cash on the sidelines.

[01:29:31] Samantha McLemore: Like, oftentimes the numbers don’t work out. But if you systematically invest over time and put anything more, you can, you know, in markets that are down, that’s so powerful. And what I love and what we’ve written about are these stories about individual people. Like, I think this guy named Ronald Doll from Vermont, and that’s why I can remember this one better, but a janitor who, you know, became a multimillionaire just by saving, consistently investing in blue chip companies again, he passed away.

[01:30:00] Samantha McLemore: His family had no idea that he had all these millions stashed away, and he gave it to charity. And he didn’t do that because he was really sophisticated in his knowledge. He did it because he had long, long periods of time. The power of compounding is just so important in markets. I try to teach my kids now who are, you know, 11, 9, try to teach the four-year-old.

[01:30:21] Samantha McLemore: But you know, this, this principle, my son was, you know, we’re going to Disney World next week, and we heard about this VIP program, which is egregiously expensive. And so we were looking up the price, and he was like, mom, do it, you know, that sounds amazing, do it. And I was like, you know, it’s at the high end, $7,000.

[01:30:39] Samantha McLemore: I was like, do you know, okay, you have, you know, 60 years to retirement. So, we went through the math of, if I put this in your account now $7,000 and you compounded at 10% a year, which is long-term market returns, what would that be worth in 60 years? It was like 2.1 million dollars. And he was like, you know, astounded and he’ll be like, well can you put it in my account?

[01:31:00] Samantha McLemore: And no, I don’t. I’m not putting it, that’s smooth, but I’m not going to do that.

[01:31:04] William Green: Smart kid.

[01:31:04] Samantha McLemore: But just this power of compounding, it’s just so important. And finding signal in the markets and abstracting away from noise is such an essential concept and it’s so difficult to do. So, things like those data sets about longer term return, I think help you do that when people are so focused on the near term downside over the next month, three months, you know, the macro stuff that no one has any idea about.

[01:31:32] William Green: I totally agree. And then at the same time, you had that sort of in passing caveat where you said, in America, and I was looking the other day at Guy Spier’s returns ’cause I just finished editing his annual report and he was comparing his returns to various benchmarks and when you look at, you know, he’s, the fund has been going for 25 years now.

[01:31:51] William Green: So, it’s kind of interesting to see the different benchmarks when you look at the FTSE 100, which is kind of relevant ’cause a lot of his investors, like his dad live in England. It’s gone nowhere basically in 25 years. And that’s kind of extraordinary. And that makes me think, yeah, this is all true. And you want to diversify internationally because you don’t want to be the one who’s living in Cuba when the market gets closed down or in, you know, in Ukraine when the market gets closed down, have all of your money in your home market because you assume it’s going to be okay.

[01:32:24] William Green: And so, given that none of us knows what’s going to happen in the future, it seems to me it’s smart to be optimistic about the future and to know that good times follow bad, which is one of the great lessons, of your career and Bill’s. But at the same time, to hedge against the possibility that you’re in a country that goes nowhere for 25 years.

[01:32:42] Samantha McLemore: Oh yeah. That’s definitely, you know, those sort of returned statistics, as you said, are not true for every country. And so, the risk reward profiles, you know, very different. Again, when Buffett writes about this, he talks about by American specifically, you know, that was his piece. Now I am, and he’s talked about the golden goose being here and all the things that have made America in particular so special.

[01:33:03] Samantha McLemore: I mean, I think diversification makes a lot of sense and can help a lot, you know, in terms of international, global sort of diversification. And especially some of those markets now are down a lot more, so I bet they’re, you know, quite attractive too. But the risk profiles I think, differ across, you know, different places.

[01:33:22] William Green: What do you do with your personal portfolio? Are you as wild and aggressive as Bill with his holy trinity of three investments and margin, or are you a little more conservative?

[01:33:33] Samantha McLemore: I mostly invested in our funds, and I have a handful of stocks and a little bit of Bitcoin. Not, I don’t do the same leverage thing that Bill does.

[01:33:43] Samantha McLemore: I also don’t have access to the same margin rates that Bill has historically had access to. And I just, one of my things is I, you know, I just don’t want to ever deal with being a forced seller, so I have a little bit of margin, which I put on in this market in particular, you know, with higher yielding stuff that could, you know, more than pay the rate.

[01:34:01] Samantha McLemore: So, and then the securities I own outside are mostly older legacy things, and they’re names that we own, you know, in the funds too. So, names like Amazon or OneMain Financial, or Farfetch or some of the banks, those sort of things.

[01:34:16] William Green: You mentioned your three children and so what, they’re between 12 and 4, did you say?

[01:34:21] Samantha McLemore: Four, nine, and eleven.

[01:34:22] William Green: Okay. I’m just wondering like how you handle the intensity of parenting, family life. I know you mentioned before we started talking that your husband is a teacher in a nearby school, so obviously, you know, you’re not doing all of this alone, but still it’s incredibly difficult given how intense the work is.

[01:34:44] William Green: And how super competitive, how do you just manage in practical terms to juggle this stuff?

[01:34:51] Samantha McLemore: Well, I am fortunate to have a lot of help at home. So my husband’s a teacher, you know, next year all three will be at the same school where he is. That’s a huge help. I’m super, you know, fortunate I have more help at home.

[01:35:03] Samantha McLemore: So, I feel very fortunate to have that sort of help. But it still is challenging ’cause they are my most important priority and so I want to make time and space for them. And so, I am pretty maniacal about my time and trying to only spend my time on the most important things and trying to say no to everything else.

[01:35:26] Samantha McLemore: And fortunately, I’m, I don’t know if this is fortunate, but I’m pretty introverted and so I don’t have a need for, you know, a big social calendar. I am just fine spending zero time on that. You know, I do spend some time doing some charitable stuff. I have a great team, you know, at the office and spend very little time on anything organizational.

[01:35:46] Samantha McLemore: So, it’s really, you know, I try to spend most of my time, you know, during the day on investment stuff and then we’ll have a family dinner together. We try to do that every night. I travel sometimes, so we can’t do that every night. But that’s our, you know, time to be together. And really now with remote work, it makes things, you know, so much more efficient.

[01:36:09] Samantha McLemore: And so, I can meet with a lot of companies on Zoom and have to travel a lot less to do that, which is, you know, a huge, a huge benefit. And so, I can sneak out to a game once in a while, though my kids tell me I don’t attend enough of their stuff. So, it’s always, you know, I don’t have this, you know, this totally figured out.

[01:36:28] Samantha McLemore: It’s like I’m either missing something here or missing something there. But that’s the sort of, you know, I think Jeff Bezos says it’s, he doesn’t like the word balanced. It’s more about harmony. So again, can I just make everything sort of work harmoniously and fulfill all my obligations? That’s sort of, I’m like, if everyone’s a little bit upset that I’m not doing every, I’m probably balancing it, you know, pretty well.

[01:36:53] William Green: Tony Robbins once, I don’t think he said this to me, I think he said it to Peter Diamandis who then said it to me that Tony says it’s not about work-life balance, it’s about work-play integration. I saw there’s a really interesting insight that you can’t, you’d never really get work-life balance, but it is possible to have some degree of work play integration where you, I don’t know.

[01:37:15] William Green: This has always alluded me and I’m very struck when I see a lot of the greater investors at the sacrifices they’ve had to make. And I remember Jean-Marie Eveillard telling me once saying, that he felt like he’d neglected his daughters a bit, and he said, yeah. I asked him if you had been a less neglect for father, would your returns have been as good?

[01:37:35] William Green: And he said, I don’t know. I really don’t know. I thought that was a very interesting admission.

[01:37:41] Samantha McLemore: I think that’s part of what I struggled with, ’cause I, you know, I knew I never wanted to make that mistake. As soon as I had a child, I was, you know, changed and I had such love for this thing, and I wanted to be with her all the time at the beginning.

[01:37:54] Samantha McLemore: And so that’s part of what, and what led me to have those questions at the beginning. And Bill had always said, you know, about Peter Lynch that he had left the business, and again, this is where I feel so fortunate to be doing this now. And he said, there you can only be in two modes, overdrive, or stop.

[01:38:11] Samantha McLemore: And then I remember hearing the story about how Peter never took a vacation his entire career. He took one vacation and when he went away, the markets were crashing. He was on the phone. I think he had to fly. I think he was overseas, he had to fly back to the office. He never took another one. And so, you know, that’s amazing.

[01:38:29] Samantha McLemore: I probably wouldn’t have been able to do this if I wouldn’t have wanted to make that choice if it, if I had done this, you know, 20 or 30 years ago, when those were the options. I mean, now we have Bloomberg on phones. So again, I’m a phone addict. My kids will tell you I’m on it all the time. I, you know, I, we try to put it down at dinner and not pick it up.

[01:38:50] Samantha McLemore: So, we have spaces where it’s not. But I can be on top of what’s going on in the markets and still, you know, duck out for something and then if I know if emergency is going on, or, you know, the tools we have today, I think make that integration, which is actually something I was horrible at earlier in my career and it didn’t really matter, you know, then as much as it would matter now, I would’ve had to figure that out of like a work life, and I was in the office all the time when I was younger, and so I, before I had a family, I was fine.

[01:39:18] Samantha McLemore: That was like my preferred lifestyle. And then when I had kids, everything changed and so it became much more important to figure out how do I integrate this? How do I stay on top of, you know, all my responsibilities? I mean I’m very fortunate. I try to make all of my home responsibilities. I can’t do this completely, but I try, revolving around my children and not a lot of the, you know, home things.

[01:39:40] Samantha McLemore: And again, not everyone can do that and has that privilege. I understand that. But I feel very, very fortunate to have a very good situation with that.

[01:39:49] William Green: You’ve mentioned before that I think less than 10% of all fund managers are women and I know that as you were coming into the job, you were reading books on leadership by people like Ray Dalio, and you’d mentioned a book by Colin Powell, I think is autobiography.

[01:40:04] William Green: So, you were sort of studying leadership and I’m wondering what you’ve thought about the type of leader you want to be and as you assume the leadership possession in the firm. You know, what kind of leader do you want to be in order to be a role model to other women and to your own children?

[01:40:22] Samantha McLemore: Yeah, that’s a great question. And I would say that’s still a work in process. I’m a, I think I’m a slow learner. I like a lot of time, it’s the evidentiary threshold thing again that Bill says, like, I like to, you know, really study things, spend a lot of time, get a lot of data. So, I was very explicit about reading about that.

[01:40:38] Samantha McLemore: And really before, you know, before that I didn’t have any organizational responsibility, so it was all investing and that suited me just perfectly. You know, I like to sit at my computer and buy view by myself and read and do research and build models. And so, it’s a whole new challenge and one that I find very exciting, but that I had to, you know, figure out, I knew I was not like Bill.

[01:41:01] Samantha McLemore: And so, I oftentimes compare myself to Bill and this was an area where we were, we are not alike. And so, I had to find, you know, my own voice. And I know that I’m very passionate about women and women having, you know, equal opportunities and women having the confidence. You know, I think some of the stats of women are that, you know, at least in investing, they just don’t have the confidence that men have.

[01:41:25] Samantha McLemore: And actually, that can help their results in performance, ’cause you know, they don’t trade as much. But I think they’re just as well suited to invest if they so choose, and you know, may have many benefits. So, I think helping them understand it in that educational aspect, I’m passionate about, that we’re building up the team and capabilities.

[01:41:43] Samantha McLemore: I think that’ll be an important part of the approach. I mean, more broadly, just helping people invest better and, you know, hopefully being a voice that can help people make better decisions as we go forward, will be important in Patient’s future. In terms of leadership, I think, you know, as I’ve read about these service leaders, that resonates with me well in terms of the sort of leaders who want to help their people accomplish their objectives.

[01:42:09] Samantha McLemore: You know, one of the things I loved about working with Bill, and we worked so well together is I always loved the feeling of helping this, you know, great master accomplish these great things and growing on my own is a part of that. But I, you know, I realize I find a lot of fulfillment in that. So, you don’t just have to do that to people you report to.

[01:42:30] Samantha McLemore: You can also do that to people who work for you. And so, the big challenge that I’m still working through is making sure you have the right time and space, and you know, efficiently, how do you most efficiently do that? And figure out the scale and leverage to do that. So that’s what I think about, you know, if I’m really inspired by helping people, I’ve learned about myself.

[01:42:51] Samantha McLemore: So, if it’s help, you know, that also abstracts away from, it’s not just about the numbers, although what I love about these businesses, at the end of the day, it is about the numbers. So, you can either do it or not. You need a long time horizon to assess that. But you can help people, you know, in many other ways to make good investment decisions.

[01:43:08] Samantha McLemore: I think you do great work there; you know.

[01:43:10] William Green: Thanks.

[01:43:10] Samantha McLemore: That’s, you know, I find your work so inspiring ’cause I think you’re helping people do that and I would like to do that as well.

[01:43:17] William Green: I asked Bill a couple of weeks ago how you were different from him. And one thing he mentioned that I thought was really interesting was he said that, look, I could look at eight people’s portfolios and I’d be able to tell you who they belong to. And so he said there are certain things about your portfolio that are distinctive. And one of the things that he said is that you like to invest in companies run by women. And one of the reasons for that is that they tend to be underestimated. And I was saying that to my wife this morning and I was like, it’s so true.

[01:43:45] William Green: And she’s like, yeah, absolutely. I mean, can you talk a bit about that? I thought it was such an interesting observation. Men suffer from so much overconfidence in so many ways. I mean, these are absurd generalizations, but also there’s something to them, I think.

[01:43:58] Samantha McLemore: You know, it’s so funny, I, you know that you asked Bill that I wouldn’t have guessed that he would’ve said that.

[01:44:04] Samantha McLemore: I haven’t had that conversation with him. So, it’s really interesting. So, there’s a number of different things here. One, yes, I think it’s completely true and Bill’s explicitly talked about it. I think, you know, women are underestimated. And some of my favorite stats, again, I don’t know the veracity of this, but I’ve heard this stat where, you know, it was at some woman’s conference I was listening to and they said, if you ask a woman or a group of women how much do you need to know about a topic to raise your hand and say, yeah, I know about that. I’m, you know, I’m expert at that. Or even, I’m well equipped to answer that. They said it’s like 90%, they need to have covered the whole landscape and know a lot about it. And with men it’s more like 30%.

[01:44:43] Samantha McLemore: They’re like, have I read a few things? Have I ever been exposed to this? Oh yeah, I know something about it. Again, I don’t know if that’s true. I have not found this study, but, you know, you can see some areas in life. Like with my two kids, they were asking me about is Santa Claus’s real? And my daughter who’s older, she was like, I don’t know, I mean, I’m this, this, I don’t think you guys really, you know, know what I like.

[01:45:04] Samantha McLemore: And so, and my son was just like, he’s not. And I’m like, how do you know? And he is like, I just know he’s not, he was entirely confident of his, he did not have more information. He wasn’t me. But again, that’s an anecdote, but it’s a fun one.

[01:45:17] William Green: He has a low evidentiary threshold.

[01:45:19] Samantha McLemore: Yeah. So, I do think it’s true.

[01:45:22] Samantha McLemore: And, but you know, I don’t, it’s not a search strategy. I don’t go searching for women CEOs. Again, they make up a greater percentage of the portfolio. And I do agree that I think their underestimated or maybe expectations are low, but I also think that’s the value of diversity. And Bill was really early on the values of diversity on the team is that women just happen to, you know, we’re different in some ways.

[01:45:46] Samantha McLemore: And the stuff that I look at, I end up finding things, you know, more things that are run by women. And so, or what they say resonates with me in a different way, and then I do more work on the stock and the company. So it is, you know, I do think we overrepresent on women CEOs relative to the market overall.

[01:46:04] Samantha McLemore: I did look into that, but, and maybe I should make it a search strategy. I haven’t done that so far. I think it just is the value of diversity, and people from different backgrounds or, you know, that have different characteristics, you know, have a different life and they find different things.

[01:46:20] William Green: It’s interesting. It sounds like a weird digression, but I was just thinking back to my interview with Fred Martin on the podcast, and this isn’t something that came up in the podcast itself, but it came up in my research before it where he had said to me years ago that when he’s looking to hire someone, he finds serious underdogs.

[01:46:36] William Green: And he had hired these people who were really hungry. They tended to be minorities, foreigners who come from poor backgrounds and like, and were really smart and really driven. And I think in general, finding people who underrepresented in some way and hungry and overlooked it, it’s powerful in every area, whether it’s hiring or investing.

[01:47:01] Samantha McLemore: Definitely. And I think the other interesting thing is, you know, Danny Kahneman’s done work on confidence and how confidence is the key thing that convinces people of things. And, you know, there’s a lot of good data and evidence on men having more confidence, you know, the data that I’ve seen is trading and, you know, overconfidence as it relates to that.

[01:47:21] Samantha McLemore: So that’s where we do have better data. But I think that confidence really helps you sell yourself. And I know plenty of women who undersell themselves and, you know, one of my friends who works at a big company and, you know, she does PowerPoints all the time, and she was applying for this other job and it asked her to rate how she would rate herself on PowerPoints, and she gave herself like a mediocre grade, and her boss came into her and said, what are you doing? You do PowerPoints every day. Like, you, no one does them more than you. Like, what do you, more do you expect to know? Go change that and rate yourself higher. And so, and I’ve heard, you know, some people in the asset allocation world talk about this as it relates to investors, and advise women to present themselves differently in a more confident manner.

[01:48:07] Samantha McLemore: Again, I’m, you know, I’m not sure I agree, but that’s the optimal solution to that problem. But I do think that, again, if there is some difference there, my guess would most be most women who make it to the CEO level are on the most confident end of the spectrum of women. So, but if there is some lower confidence, lower, you know, presentation that leads into how they’re being perceived by the world and lowers those expectations, again, low expectations I think, are always helpful when it comes to investing.

[01:48:37] William Green: You also shared a really interesting thing on Twitter some time ago. That was an article from the New York Times, I think, where they were writing about a study that Fidelity had done of something like 5 million or so customer accounts between like 2011 and 2020. So, it’s quite a significant study and they found that their female customers earned, I think 0.4 percentage points a year more than their male customers on average.

[01:49:02] William Green: That’s really striking. And what, like, what’s going on there that women do seem to have better judgment?

[01:49:10] Samantha McLemore: There is broad, again, all of the data I’ve seen, you know, on that sort of thing is similar. And it’s that women do a little better ’cause they trade less again, they just trade less. So, men, you know, men trade more, they’re more confident, they think, you know, and they must be doing the wrong.

[01:49:25] Samantha McLemore: So, if something’s down, they sell it, they buy something out, you know, they do, they’re obviously trading in a way that, but there’s a lot of good evidence that doing less helps returns. You know, there’s cost to doing that. So again, I think I love that data on the returns, but I think it relates to that, you know, overconfidence piece.

[01:49:44] William Green: Yeah, it’s humbling for us men. I definitely feel like I suffer from overconfidence a lot of the time. I’m proof of the Dunning–Kruger effect. So, I wanted to just ask you one last question ’cause I’m aware that I’m exhausting your patience and you have better time management skills than I do, so you probably have to go somewhere.

[01:50:00] William Green: I wanted to ask you, when you look back on your investing career and think of all the stuff that you’ve learned from working with Bill or from your own experience of dealing with all of these tumultuous periods and how they’ve ended up turning out right in the end, are there lessons that you’ve drawn that you’ve tried to pass on to your three kids because they apply not just in investing, but are really important life lessons that you can carry from your investment career into life that are sort of important things for young kids to internalize?

[01:50:30] Samantha McLemore: You know, there are so many overlaps. I think a), just the power of time, and more the stuff that we talked about on stoicism and the power of the mind. You know, for my daughter specifically, the confidence stuff, I, again, my four-year-old’s too young, but my eleven year old, I try to teach her that sort of stuff, but I think I shared with them, you know, some of the story about Arnold and his history and it was just so striking that you can go through such horrible times and then, you know, will yourself to be better.

[01:51:07] Samantha McLemore: I think it was really transformative to my kids. My son last year, you know, had a ruptured appendix and then he had all these complications, abscesses, and it was really jarring for him to, you know, and it made him much more fearful, I think, about his health. And so, you know, we talked a lot about mantras and, you know, repeating things and the power and how your body can heal itself.

[01:51:31] Samantha McLemore: And he’s really probably internalized the most, the power that the mind can have. I mean, I’m always trying to come home and share with them little lessons that I learn, you know, in the day. And I think one of the thing, I mean, there’s so many things we could go on forever, but one of the first lessons Bill taught was a), to go directly to the source, if, you know, if you get information, and that was, you know, in 2002, 2003 today, misinformation is, you know, an even greater thing.

[01:52:00] Samantha McLemore: And for my kids who are growing up in an age of the internet and social media and the amount of it out there, I’m constantly telling them to look for credible sources, go directly to the source, look for information in different areas that can confirm your understanding of something. Again, this triangulate view, I think that’s so important in today’s day and age.

[01:52:21] Samantha McLemore: So, you know, I talk about that a lot to be based on the evidence and inform your view before having a position on something. Again, the power of the mind and mantras and how powerful that can be. I’ve taught them little tools that, you know, they’ll use from time to time. So, yeah, I think there’s a lot of, you know, things that you learn as you’re in this line of work that can be helpful far more broadly.

[01:52:47] William Green: What would be a typical tool that you taught them? Like a little, like a mantra or something?

[01:52:52] Samantha McLemore: Well, we do mantras, so you know, my son, after that my body can heal my body was like his mantra.

[01:52:58] William Green: Oh, lovely.

[01:52:59] Samantha McLemore: And he would say in a funny way, and if he starts like he says it, and it really helped him. And he helped, it helped him believe.

[01:53:06] Samantha McLemore: And he had this complication where again, he was at risk for another surgery and it’s not clear that it’s entirely healed. So, he continued to tell himself that. And you know, it, I think it’s helped him. And then, I don’t know if you’ve heard of this, Neuro Emotional Technique. So, there’s a practitioner, you know, that I see locally who’s pretty advanced in this Neuro Emotional Technique.

[01:53:26] Samantha McLemore: And I love her, and I love this technique. And, but you, the body can tell, you know, she can tell by doing different things on the body, like moving your fingers if it weakens to certain things. You know, you have these neural networks in the brain. If you have an emotional belief state that’s not helping you, it’s a way of trying to figure out a), what is that belief state.

[01:53:47] Samantha McLemore: And then, you know, through some breathing and feeling and kind of going into that feeling, working through it and letting it pass through you. And so, it’s much better when it’s done by a practitioner, but you can, you know, do it a little bit on yourself. And so, you know, at least I, you know, I’ve tried that, and I’ve taught my kids to do that.

[01:54:07] Samantha McLemore: And I think it’s quite helpful, you know, for them. So, if they’re feeling scared, my, you know, if they’re feeling scared, mom, I’m feeling scared. I think someone’s going to break in my room at night and you know, everything I tell them, oh, that’s not going to happen. Here’s all the reason, you know, all the rational reasons why that’s not moving to them.

[01:54:24] Samantha McLemore: But if they, you know, you kind of put your hand on your forehead and hold your wrist and you close your eyes and you go into that feeling. And you just stay there until the feeling passes and then you take a couple of deep breaths and then you can, you know, test and see if you’re still weakening to that thought.

[01:54:42] Samantha McLemore: And so, it’s just a technique to use in the moment when you’re having points of stress or worry or concern to really feel those and allow them, you know, allow yourself to work through them, which I think is a super helpful tool. I think they’ve both found, you know, again, I haven’t done it with my youngest, it’s a little trickier with her, but my older kids I think have found it quite helpful.

[01:55:04] Samantha McLemore: I find that, you know, quite helpful as well. And some people have likened the technique more broadly. My practitioner has likened a, you know, you can go to a therapy session, and you can talk for an hour about what’s bothering you or try to get to that and then work through it that way. This is a really efficient way to let the body diagnose it.

[01:55:22] Samantha McLemore: Or, if you know something, you can go directly to it that way too. And then it takes, you know, again, a few minutes, you know, to clear it. And maybe you need to do a few rounds of this, but it’s a highly efficient way to process some of that stuff.

[01:55:36] William Green: And is there a good resource for people if they want to go to a website or a book or anything like that for them to learn more about this?

[01:55:44] Samantha McLemore: There is a website, there’s a Neuro Emotional Technique website and it has practitioners, so you can search your local area for practitioners. It has both information and practitioners. I don’t know if there’s a good book more on more broadly on it. I’m sure there is. I haven’t, you know, read one, but there’s a lot of good information on the website.

[01:56:03] William Green: I don’t know if it’s, and we’ll include that in the show notes for the episode. I don’t know if it’s relevant, it sounds related, but there’s a lovely book by, co-written by Kristin Neff, who’s a great psychologist at the University of Texas, I think in Austin. And she’s a Buddhist meditation practitioner, but also a psychologist, an academic as an expert on the brain.

[01:56:23] William Green: And like, and she wrote a co-wrote a great book called The Self-Compassion Workbook. And there’s something really interesting in there where she talks about different ways of soothing yourself by, you know, touching your hands, touching your face, things like that. And I remember her saying there’s one point where she’s talking about some technique and she says, this works for about 50% of people.

[01:56:43] William Green: And it was really interesting that, you know, for some people putting, you know, rubbing their arm is going to help them. And for some people putting their hand on their face is going to help them. But it was really interesting to me that the way you talk to yourself, the way you put your hand on your face or whatever, would have huge benefits.

[01:57:00] William Green: And she’s just looked really deeply into the scientific arguments for self-compassion rather than beating yourself up, which is the approved technique of kids who go to English boarding schools.

[01:57:11] Samantha McLemore: Yes. You know, I was raised in a Catholic school, so I am well-versed in that. And so, you know, those of us who are in that environment, it takes us many years to work out of it, I think. That’s interesting. I haven’t heard about that, but there’s a lot of these interesting modalities, I’ve read about tapping and I know, you know, a number of smart health practitioners have said some benefit to like tapping on different parts of your feet while repeating some of these mantras and how powerful it is.

[01:57:37] Samantha McLemore: It’s an interesting, I love stats so that it works for 50%. I’d love to have more of that on these different things in terms of, but I think most of them are pretty evidence-based that I’ve seen in terms of, you know, good data to support that. Again, working through a lot of these things can be more, they’re far more physical than I would’ve expected when I started learning about this stuff.

[01:57:56] William Green: Well, I think that’s what’s great when you study people like Dan Goleman, who has a PhD in Psychology from Harvard and is an expert on the neuroscience of meditation or Kristin Neff, who’s not only a serious meditator, but also an expert on the science of self-compassion.

[01:58:14] William Green: And so, you look at this stuff and you’re like, this isn’t just ancient wisdom that’s been tested for 2000 years, which is pretty good, but it’s actually, you know, now they’re able to show that these things work, which I think is interesting. So, it gives you kind of hope that within the maelstrom of investing and life and parenting and all of these things, you can gain more control over your state of mind, your equanimity.

[01:58:35] William Green: So, it’s hopeful, but it also gives you a sense of how important it is that if you want to have a full and happy and truly abundant life, it’s not just about getting amazing returns. You actually kind of want to have peace of mind. And that, I think that’s one of the things I’ve most admired about Bill over all these years is that when I was younger, I thought, God, he’s just got the most beautiful mind.

[01:58:55] William Green: He’s got this really thrilling intellect, and it kind of bold me over. I would always be very excited after I finished an interview with him, I would come away sort of on an intellectual, an emotional high. And increasingly when I look back, I’m more and more admiring of the fact that he showed such resilience and sort of sense of honor and good humor when he had, but when he had things kicked out of him and then managed to come back from it.

[01:59:20] William Green: And that seems to me such an extraordinary thing. And I, when you wrote a thank you letter to Bill that I read recently, you know, you talked about the power of resilience and perseverance and the importance of positivity and a great sense of humor. And so, it’s interesting, like there were really personal qualities that we admire.

[01:59:35] William Green: You weren’t mentioning just his brilliance. It was like his character and his ethics and resilience. So that’s, it seems central to me, really.

[01:59:43] Samantha McLemore: I agree 100% with that. I mean, I agree that he’s brilliant and you can talk to him, and one person described it as. You know, usually with people it’s like peeling an onion and once you get past a layer, you know, I don’t know.

[01:59:55] Samantha McLemore: But like him, it’s like more and more and more. And so, it was a great privilege to work with him. But when I think about, you know, you mentioned being really wealthier, peace of mind. I would choose peace of mind all day. You know, there’s plenty of evidence of people who can be happy if you have that and satisfied and fulfilled if you can achieve that.

[02:00:16] Samantha McLemore: And there’s plenty of evidence that there’s a lot of people extremely wealthy who have none of that and who are miserable. So, I think the markets are a great, you know, venue for working through helping you work through a lot of stuff to get to that. That’s why I just, I find the mixture and overlap of these things so interesting.

[02:00:36] Samantha McLemore: And, you know, I’m so fortunate to spend my time on it, but yeah, when you look at Bill and his history, I mean, you know, the fact that he had that resilience, that he did it magnanimously and you know, I’ve never, you know, I’ve never heard Bill throw anyone under the bus say anything negative about anyone else.

[02:00:58] Samantha McLemore: He fully owns any decision that he makes to a, you know, to the complete degree. You know, again, I think those are the things. And he works on himself. He reads these things. He tries to improve all the time and I think that’s another interesting topic. You know, just improvement in getting better and how that never stops that potential and the plasticity of the brain and, you know, Bill reading stoicism in a covid crisis, but then also being the voice of reason that goes on CNBC, you know, days from the lows to tell people like, this is one of the five best buying opportunities of, you know, my investment career.

[02:01:39] Samantha McLemore: And it takes a lot of gall when the stocks are falling out of bed to say that. And I was at an event with Bill last fall, a charitable event, and he’s been gracious enough to speak at it. Every year I’m on the board of the group that puts it together. It raises money for, you know, educational institutions.

[02:01:58] Samantha McLemore: And afterwards, you know, this woman said, I want to go out and buy stocks. And she’d been to the event every year. She was involved with one of the, in, you know, the educational institutions. She’s like, I’ve never done that before. She’s in her fifties. So, I was like, what made you want to do that? And she was like, Bill, because Bill had said, you know, the markets are down a lot and I think you can basically, you know, throw a dart and make money from where we are now.

[02:02:22] Samantha McLemore: You just pick any stock. And so, he has a way of communicating with people in a way that really resonates. And he can do it at any level. Any level, you know where you are, he can communicate with you. You could be at the highest level of academia, PhD in whatever topic, and he can talk to you about your field and research going on, and he can talk to the average person in a way that makes it compelling for them to make the right decisions.

[02:02:46] Samantha McLemore: And I find that just amazing.

[02:02:49] William Green: Yeah, it’s a beautiful thing. He is a remarkable man , and you definitely hit the jackpot, going to be a mentee and sidekick of his, and, I’m really thrilled for you that you’re taking over the reins and it’s a huge compliment to you that someone as brilliant as Bill trusts you, wants to give you his money to invest the money that’s not invested in Bitcoin already.

[02:03:09] Samantha McLemore: He does have money in our funds, you know, he didn’t include that in his trifecta, right?

[02:03:14] William Green: Yeah, absolutely. And also, stake in your firm. So no, it’s, and entrusting you with the fund that he’s worked on for more than 20 years. So, no, it’s a huge vote of confidence in your talents, and it’s going to be really fun to watch your next chapter.

[02:03:26] William Green: And so, I thank you so much for joining us today, and I’m excited to see what happens and how it works out. And, I’m placing my bets on you. I have great confidence that it’ll be a great new chapter.

[02:03:35] Samantha McLemore: Thanks, William. This has been fun. Thank you so much for your time.

[02:03:39] William Green: All right, folks, thanks a lot for listening to this conversation with Samantha McLemore.

[02:03:44] William Green: I hope you enjoyed it as much as I did. As you may remember, Samantha mentioned that she was deeply affected by a previous interview on this podcast with a remarkable investor named Arnold Van Den Berg. If you’d like to listen to that interview, I’ve included a link to it in the show notes for today’s episode.

[02:04:02] William Green: You may also want to check out the conversation that I had last year with Samantha’s mentor Bill Miller, where he explained why he’s made an enormous bet on Bitcoin, which he first bought at around $200 per coin. Again, I’ll include the link in the show notes for today’s episode along with various other resources that I hope you might find helpful.

[02:04:23] William Green: I’ll be back very soon with some more terrific guests, including Jason Karp, a superb investor who I profiled in the epilogue of my book, Richard Wiser, Happier. My interview with Jason is one of the most valuable and candid conversations I’ve ever had with an investor, so please do keep an eye out for it.

[02:04:42] William Green: If you haven’t subscribed to the podcast already, it’s probably worth doing so that you won’t miss it. I’m then heading to Omaha in early May for Berkshire Hathaway’s annual meeting, so I hope to see a lot of you there. In the meantime, feel free to follow me on Twitter @WilliamGreen72, and as ever, do let me know how you’re enjoying the podcast.

[02:05:03] William Green: It’s always a pleasure to hear from you, but now take good care and stay well.

[02:05:08] Outro: Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday we teach you about Bitcoin, and every Saturday we study billionaires and the financial markets.

[02:05:23] Outro: To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional, this show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.