Arnold Van Den Berg (Trades, Portfolio) is a renowned value investing legend, featured both in the book "The Great Minds of Investing" as well as in the book "The World's 99 Greatest Investors."
I first met Arnold Van Den Berg in 2012, and then had the utmost honor and privilege to work for him for four years before starting on my own. To me, Arnold Van Den Berg has been a great teacher, mentor, friend and perhaps even a grandparent-like-figure who I admire and respect enormously. He is truly an extraordinary human being. I have learned tremendously from him. Our many inspirational dialogues are some of my best memories. His wisdom extends above and beyond investing.
Thus, in the next few articles, I’d like to share some of the lessons I’ve learned from Arnold Van Den Berg. But before getting into the lessons, I’d like to share some background stories of how I met Arnold and ended up working for him. The way he mentored me and helped me before I joined his fund shows what a generous and wonderful human being he truly is.
I had studied accounting both for my undergraduate and graduate degrees. After graduation, I accepted a job offer with one of the big four accounting firms as a financial auditor. I stumbled onto value investing in 2011 from a video called "Gates and Buffett Go Back to School," which really changed my life. First of all, Buffett said you have to figure out what turns you on and go for it. Back then I wasn’t very passionate about auditing but I was thinking about suffering through audit for at least a few years to make my resume look good. Secondly, Mr. Buffett also said you want to work for somebody you admire. Well, value investing immediately sounded like something I was really interested in, so I decided I wanted to do what I love to do and work for somebody I admire, which meant I wanted to be an analyst for one of the greatest value investors.
I first met Arnold Van Den Berg on Nov. 2, 2012. I didn’t enjoy auditing, but it’s very difficult for an auditor to transition to a buy-side analyst, not to mention I needed a H1-B Visa sponsorship. Then I read a book called "How to Get a Job As an Equity Analyst." The book offered basically two main methods – to work a few years and go to a top MBA program, or to find a sell-side shop and work a few years. But I found something spectacular in a little hidden paragraph. The author said well there’s a third way and it’s a little unorthodox and not suitable for most people – you can write hand-written letters and cold call them. That sounded like the most economical and effective way to me, so I compiled a list of gurus from Gurufocus.com and did some research on about a dozen or so investors that I thought I really wanted to work for and sent out handwritten letters. Only a few responded. Of those few extraordinary people, only Van Den Berg invited me to meet him in his office.
I went to Austin in November of 2012. By then, I had already obtained my CPA license and had passed level 2 of the CFA program. Van Den Berg scheduled the whole Friday with me, just the two of us, in his library. He showed me his value line study, his subconscious mind collection and a few yoga moves. He listened to what I wanted to do and what I have done. At the end of the meeting, I thought what the heck, what did I have to lose? So I said, “I really wanted to work for you. I can make your juice. I can be your accountant. I can organize the library for you. Whatever you need, I’m willing to do it for free.” Being a great value investors, Van Den Berg immediately saw I was a value trap, but he was too nice to turn me down. He said to me, “well I don’t have any openings now but you go back and keep doing what you are doing and some day you will be an analyst.”
I was a little disappointed, but there wasn’t anything I could do about it. Then a month later, Van Den Berg's assistant reached out to me right after I got back and she told me he wanted me to come to a value investing session his fund was organizing. I booked another trip to Austin in December 2012. After the seminar, I had another talk with Van Den Berg and I threw myself to work for him for free again. This time, he didn’t turn me down immediately and even called a meeting with the senior executive team. Then he came out the meeting and told me they just couldn’t hire me. I said I understand and I’ll keep working on my investing skills.
Then I started writing articles and continued making progress on the CFA exams. I would also send Van Den Berg and his portfolio managers my stock pitches. Perhaps you have heard the story that Warren Buffett tells about how he offered to work for Ben Graham for free, only for Graham to turn him down because he was overvalued. Buffett was probably joking, but I think my case proves that someone could be overvalued even for free. I pitched JC Penney (JCP, Financial) when the stock was at more than fifteen dollars a share, and it went to less than six dollar a share a few years later. After I joined Van Den Berg's fund I asked him, “My JC Penney pitch was a disaster, why weren’t you bothered by it?” He replied, “Don’t even worry about it, I didn’t read it. Young aspiring analysts make mistakes, but it’s the passion that will make you better analysts.”
In summer 2013, I transferred to New York City and started auditing a hedge fund. By then I’ve pretty much become desperate, because it had been a while since I started trying to find the job I love and it seemed like a dead end. I even started interviewing for corporate finance and accounting jobs. Then I wrote to Van Den Berg again in September of 2013 asking for help. He wrote me back and scheduled a call with me. He repeatedly said, “Listen, I want you to listen and remember this quote from Lincoln – I will prepare myself and opportunities will come. Don’t give up.”
A month later, Van Den Berg invited me back to Austin. This was the third time he agreed to help a young person that he rarely knew. At first, he said he'd be happy to write a recommendation letter for me to work for some other funds he knew. I was pleasantly surprised and flattered. Then we talked for a few more hours. At the end of the conversation, he offered me a job on the spot. I was too excited to remember the details, but we shook hands and had a great walk. At the end of the day, he said he will be in touch. A few weeks later he sent the offer letter and his team took care of the Visa sponsorship.
After I joined the fund, Van Den Berg and I used to go for long walks and talk about life and investing. During one walk, I asked him why he was willing to help someone like me who he barely knew. He told me the story of how a nineteen year old German girl risked her life to smuggle him and his brother, who she didn’t know, out of the German border and saved their lives. He said that he too was helped by wonderful people who he doesn’t know in life. You don’t think about reciprocity when helping people. He’s helped many people in the world. Some of them might never return the favor. Some will not only return the favor but eventually go out and help other people as much as they can. That’s the wonderful power of love and kindness.
Having closely worked under Van Den Berg's apprenticeship for four years, I resonated strongly with his following statement during an interview with MOI Global in 2014:
“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. You can’t help but get paid if you do good.”
He meant it because he practiced it all his life.
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