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GUY SPIER EXPOSED! The Education of A Value Investor (Book Review)

September 09, 2014

As I flip through the pages of Guy Spier's new book, The Education of A Value Investor, a recurring theme keeps launching out at me from my margin notes. Here they are:

"Guy is bold and honest in his experiences! Not afraid to talk about mistakes, insecurities and abstract ideas."

"Bold. Honest. Generous info."

"I love that he gives examples of his inward journey as well as the external."

For years now I have personally devoured as much Value Investing wisdom as possible and have been attracted to the ideas and discipline that it involves, but I have been left wanting more. How do these successful investing professionals really think and feel? What really makes them tick? Guy's book expands on this.

The Education of A Value Investor is a very honest and revealing account of Guy Spier's transformation into a better investor as well as a more fulfilled individual. He speaks candidly about the lessons he learned along the way and gives the reader a detailed set of investing tools. More importantly, this book attempts to show how to apply specific Value Investing principles and lessons to your own life, whether it be investing related or not.

His journey begins as a young man just out of Harvard Business School brimming with overconfidence. Guy writes, "But Harvard also accentuated my hubris ... and my glossy academic credentials reinforced my feeling that the world owed me a living in return for my general awesomeness." He goes on further to admit that while at Harvard, he actually got the chance to see Warren Buffett speak and wrote him off as a guy that was just lucky. With this fresh out of school mindset, he ran off to New York City to become the next Gordon Gekko.

An even more expensive education came on Wall Street when Guy got a job as an investment banker at the "Boiler Roomish" firm DH Blair. He found himself surrounded by men of greed and self-interest. This experience motivated him to leave the firm and change the direction of his life. Many companies such as Goldman Sachs and Credit Suisse would not hire him due to his tarnished reputation working for DH Blair, which ultimately closed down indefinitely with multiple counts of securities fraud. These rejections forced him to look inward and reeducate himself.

Guy armed himself with the knowledge of Tony Robbins, Napoleon Hill, Benjamin Graham, Buffett, Munger, and Mohnish Pabrai... and has never looked back.

He dedicates much of his personal transformation to specifically following the lessons and principles of Warren Buffet and Mohnish Pabrai. I enjoyed how open Guy was about some of his early meetings with Mohnish and exposed how humbled and inspired he was in his presence. Spier describes that "Mohnish came from a place of personal abundance, which was not merely a matter of financial wealth: he was comfortable with who he was, and he was happy to share his wisdom."

Pabrai and Spier later team up and win a charity auction to have lunch with Warren Buffett.
This is where the book differs from other value investing books. Guy digs a little deeper and really gives an intimate account of his thought processes and internal monologue, which exposes a vulnerability rarely ever shared. For example, he felt self-conscious being in the presence of Buffett since Spier's Aquamarine Fund was, at the time, charging a management fee not linked to performance. So much so, that he ended up rearranging the structure of his fund to remove this management fee and better align himself with his clients before the lunch meeting with Buffett ever took place.

Buffett obviously inspired him to be a better version of himself. Guy explains that he started making his full transformation immediately after this lunch. I find it fascinating that in a single meeting a person can be so inspirational. Buffett really must have a strong presence, obviously earned from his own great journey through life.

The book has more solid information for Value Investors with chapters such as:

Creating the Ideal Environment: Guy touches on how critical it is to create your own decision making and learning environment in order to block out the noise of the market, the media and certain friends.

Learning to Tap Dance: Reveals the importance of not taking things so seriously and how to enjoy life a little along the path of your journey.

Investing Tools: Building a Better Process: Gives some hard rules that Guy lives by before he makes his investment decisions. One of my favorites is "if a stock goes down by 50% don't sell for 2 years." This is a great lesson often learned from selling while you see a stock go down dramatically, only to see it launch to great heights in the future. You knew you did your homework, you knew that the value was there, but Mr. Market (or "The Great Humiliator" as Ken Fisher calls it) seduced you away from it. A great rule to stay disciplined.

An Investor's Checklist: Survival Strategies from a Surgeon: Guy takes real life case studies of his mistakes here so you won't make them!

Here are a couple of quotes that take this book from good to great:

"A goal that seems impossible in one instant can become entirely possible in the next if you are only willing to devote every ounce of your mind, body and soul to reach it."

"The paradox is that, as I became more authentic and discarded my agenda, people became more interested in investing in the fund. This was an unintended consequence of becoming less selfish and more honest about who I am."

"... when you begin to change yourself internally, the world around you responds. I hope this idea resonates because it's important-more important, perhaps, than the fact that I had lunch with Warren Buffett. As I hope you can see from my experience, when your consciousness or mental attitude shifts, remarkable things begin to happen. That shift is the ultimate business tool and life tool."

The Education of A Value Investor is a revealing and detailed account of Guy Spier's journey of how he transformed into a better investor as well as a person. I believe what Guy wants is for his book to inspire people to look within and become the most authentic version of themselves. Do Value Investing (or anything) your own special way and this will lead to personal success, both internally and externally, even beyond monetary rewards.

Thank you, Guy, for sharing your wonderful experiences and wisdom you have acquired over the years. You should be very proud of yourself! Your book is now quietly resting on my bookshelf in-between "The Dhandho Investor" and "The Warren Buffett Way."

Rating: 4.7/5 (16 votes)



Ney123456789 - 5 years ago    Report SPAM

Excelent book , allows you to understand modeling, everybody writes about ratios, risk management... but how does it feel to get there, what sycological issues will you encounter, now thats is valuable and rare.

Investor77 - 5 years ago    Report SPAM

How much of the book is in deep valuation of stocks?

ThinkValue - 5 years ago    Report SPAM

Sorry for the delayed response.... This is not a book about deep valuation. It supplies case studies, an investors checklist and investing principles. However, it's more about the actual journey of Guy Spier's experience discovering the world of Value Investing, running his Aquamarine Fund and many lessons he has learned along the way.

Ikarus - 3 years ago    Report SPAM

This is a candid look into the thoughts and processes of one of the best Value Investors in the business.
Guy walks us through his investment life and highlights each major decision that turned him to the person / investor he is today.
While the book does not tell you what to invest in, it does something better. It helps you understand who you are, how to avoid common pitfalls, and provides an investing checklist.
All in all a must read for any serious investor that would like to be succesful for any length of time.

Exact2pass - 1 year ago    Report SPAM

This is where the book differs from other value investing books. Guy digs a little deeper and really gives an intimate account IT Exam Braindumps of his thought processes and internal monologue, which exposes a vulnerability rarely ever shared. For example, he felt self-conscious being in the presence of Buffett since Spier's Aquamarine Fund was, at the time, charging a management fee not linked to performance.

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