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Happy Thanksgiving Thoughts – Give and Take

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Grahamites
Nov 28, 2014
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Each year during this time of the year, I would take some time out and think about the things in life that I am extremely thankful for. The list usually ends up very long but a few of them jump out easily. On this year’s is a book recommendation by one of my heroes –

Mohnish Pabrai (Trades, Portfolio). And this book is called Give and Take, masterfully done by Adam Grant.

This book is about why helping others drivers out success. It is a fascinating idea. Essentially the author claims that there are three types of people – givers, matchers and takers. Takers are people who like to get more than they give, and they tilt reciprocity in their own favor, putting their own interests ahead of other’s needs. Givers are the exact opposite. They tilt reciprocity in the other direction, preferring to give more than they get. They are other-focused, paying more attention to what other people need from them. Matchers strive to preserve an equal balance of giving and getting. They operate on the principle of fairness: when they help others, they protect themselves by seeking reciprocity.

There are a lot of discussion points from reading this book. As this is an investment related forum, naturally I’d like to discuss how the concept conveyed in Give and Take is related to value investing and share with the readers my personal experiences over the past few years.

I had the luxury to meet with many legendary value investors during my relatively short investment career. Of those investors that I met in person, many of them are absolutely wonderful givers such as

Mohnish Pabrai (Trades, Portfolio), Don Yacktman, Tom Russo (Trades, Portfolio), Guy Spier and Jean-Marie Eveillard (Trades, Portfolio). I couldn’t believe how nice they are when I met them. For instance, I saw Mohnish for the first time at Omaha airport. We were both in line for food and I took the courage to introduce myself. To my greatest surprise and pleasure, he really took the time and effort in getting to know me. We chatted for more than 10 minutes and in the end, he gave me his contact information and told me to keep in touch. My experience with Don Yacktman is remarkably similar. I ended up visiting Yacktman in Austin one time and he was very generous with his time. From what I know, Mohnish and Don would also drive a few hours or fly somewhere on their own to talk to the students. I think there is a video posted on youtube in which Don drove a few hours to Texas Lutheran University and gave a speech there.

I don’t know any other profession in which you can name so many givers at the top of the profession. It is pretty amazing that in the world of value investing, we frequently meet givers who also share similar philosophy in life.

Incidentally, the father of Value Investing – Benjamin Graham – also appears to be a giver. In an interview,

Warren Buffett (Trades, Portfolio) said Ben Graham was a wonderful human being. He loved to help the students and wanted nothing for return. He also would use current examples and his students even made enough money to cover the cost of Columbia. Graham didn’t mind at all.

Is it there a correlation between whether you are a giver or not and the success of your career in value investing? I don’t know the answer to this question but my personal experiences have reinforced my belief that giving more absolutely helps with becoming a better investor. As Grant pointed out in the book, “It takes time for givers to build goodwill and trust, but eventually, they establish reputations and relationships that enhance their success.” I couldn’t agree more with this statement. When I started value investing in 2011, I had nothing that I can give to other value investors. However, I kept learning from those investors who are more experienced and a lot smarter than I am. I also kept building up my knowledge base and experiences. Over the past few years, I was helped by countless like-minded value investors, and most of them wanted nothing in return. They simply wanted to help me. But as a giver myself, I also had the innate drive to help other people and I knew in order for me to help others, I had to become more useful. And the way to become more useful is to be a learning machine and to talk to a lot more people. Over time, I’ve built a network of givers who help each other, share knowledge and ideas with each other, and discuss investment and philosophies with each other. We are all better-off by helping each other and ask nothing for return. We became more efficient and more knowledgeable over time because when we are stuck, our givers friends will help us and likewise when our givers friends are struggling, we waste no time offering help. It is a positive reinforcing feedback loop that works beautifully.

I can’t prove that by giving more and constantly helping others know more as a value investor, you will likely to achieve great success in the long run. But I think the odds are overwhelmingly good. Our mentor

Charlie Munger (Trades, Portfolio) once said that “the best thing a human being can do is to help another human being know more." There is some truth in this powerful quote. If you are a giver, keep up the good work and give more. If you are not a giver, I encourage you to read the book Give and Take, maybe you will find something interesting.

With that, I will end my Thanksgiving rabble/mumble and wish everyone a Happy Thanksgiving.

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