Last year, The Manual of Ideas interviewed Arnold Van den Berg in what was, in my humble opinion, one of the most inspiring interviews I have ever read from a great value investor. Van Den Berg founded Century Management in 1974 with no formal college education. It was through self-study, dedication and experience that Van Den Berg gained his market knowledge. I won’t comment much on this interview, since his words are very candid and inspiring by themselves.
On perseverance:
It took a lot longer to get the business going than I thought and every month I’d be behind on my rent. I’d knock on Curtis’ door and he says, “What’s up, Arnie?” I’d say, “I only got about $200 for the rent this month. Can you spot me until next month?” He said, “Sure, don’t worry about it.”
Every month I had to go to him and tell him, but we always paid him and he was always cool about it. I stayed in that building for about four or five years and that’s why I named the company Century. It was Century City in California, so I named it Century Management. That’s basically how I got started. It was just a dream. That’s all I had going was a dream, but it was powerful.
On being a value investor:
You don’t lose that when you’re a value investor. I was giving a talk to a group of doctors and they asked me — this was when I was 65, I’m 74 now — “What are you going to do when you retire?” I said, “Why would I retire?” He said, “Most people retire.” I said, “No, no, you don’t understand. I go into my office and pick up dollar bills for 50 cents. I’d rather be doing that than chasing a little white ball around the golf course in the hot sun. What could be more fun than picking up dollar bills for 50 cents?” Once you become a value investor, it’s like an addiction.
On the power of belief:
Later on, I went through a divorce, and I had a lot of problems, and getting my business going — I was depressed. I went to a psychiatrist and I told him this story. He said, “This can be explained from a psychiatric standpoint. You got that image in your mind and you played that over into your subconscious. Once it gets into your subconscious, it programs you into that kind of person.” He said, “That’s what we teach in sports psychology. We have people visualize what they’re going to do, and their subconscious helps them.” I never knew about the subconscious mind. The minute he told me that, I knew he hit a truth. He said, “If you will do the same thing with your business, the same thing’s going to happen.” I went home that night, I was on fire. I cleaned out my apartment, threw out everything, put my desk in the middle of the room. I said, “I am going to start my business and I am not going to stop until it’s there. No matter what happens, total commitment.” I started reading everything about the subconscious mind, and I programmed myself. I used to hypnotize myself every day for 20 minutes. I learned hypnosis. I used it on my son for his sports. Tremendous breakthrough. The thing I try to teach young people is, no matter what it is, if you put it in your mind, and you visualize, and you see yourself successful, it will make it happen.
On sharing your faith:
I’m going to tell you one more interesting thing. I had faith after a while that it was going to happen. One day, my wife was doing the budget; she was doing the bills and she got tears in her eyes. I said, “What’s the matter?” She said, “Arnie, I see how hard you’re working day and night, and every month we get more behind in the bills.” I said, “I know that.” She said, “I’d like to go to work, help you out and get a job, help you pay the bills.” I said, “No, I’ve already been to a shrink, and I know if you go to work and the kids don’t have somebody to take care of them, you’re going to end up like me at a shrink’s office, or the kids will.” I said, “We’re going to keep it on. Give me one of your checks.” She said, “What for?” I said, “Give me a check.” I wrote out a check to my wife Eileen: “$250,000 for something you may like,” and I said, “don’t cash it this week, but one of these days you’re going to be able to cash it.” About a year or two years ago, she needed some money and I said, “You mean to tell me you spent all that money I gave you?” She says, “I still have that check.” I said, “It doesn’t do you any good because I changed bank accounts, but let me have it.” I have it framed now. If you put it in your mind — that $250,000 at that time, I was $20,000 in debt and I was grossing $8,000 a year — there was no basis, but I had that belief. This is the key to everything.
On what is needed to be successful in the market:
The world has changed, but people haven’t changed, and the mind hasn’t changed. I believe if there’s a young guy that wants to start a business, if he’s willing to pay the price, if he’s willing to make the sacrifice, if he’s willing to do without some of the frills people think are necessary, he is going to make it. You can’t help but get paid [if you do good]. There’s no such thing in the universe. If you serve people and you do a good job, and you love them and you take care of them like they are your family, there is no way you’re not going to make it. I don’t care who it is.
You need a certain level of intelligence, but you don’t need to be very bright. I don’t consider myself very bright. I never did well in school. I never did well on intelligence tests. My mother took me to one of the best child psychologists after the war because I had a lot of problems, and he felt that I was permanently damaged in the brain because of malnutrition. I almost died from malnutrition. I always had this image of myself that I wasn’t very smart, and the way I did in school proved that I wasn’t. But once I realized that if you dedicate yourself and you commit yourself, you can learn anything.
