We are going to bring two interviews with billionaire hedge fund manager David Einhorn and Warren Buffett‘s protege Todd Combs. David Einhorn made some comments pertaining to Amazon.com Inc. (NASDAQ:AMZN), Netflix Inc (NASDAQ:NFLX), and Tesla Inc (NASDAQ:TSLA). We are going to get to these comments but first we are going to talk about Todd Combs. You may not know this but Todd Combs manages more money than David Einhorn. In 2010 Buffett recruited Todd Combs who is a FSU graduate. Combs currently manages north of $10 billion for Berkshire Hathaway. FSU’s VIRES Magazine had an interview with Todd Combs in the Fall issue of the publication (page 25). Here is an excerpt:
“Q: What is the best part of your weekly lunches with Buffett?
Warren loves teaching, and his ability to weave wisdom into storytelling and combine it with lessons from business history is really special. Warren credits his longtime business partner Charlie Munger with the best 30-second mind, but Warren’s ability to simplify the most complex issue is also unparalleled. Einstein lists the order of intelligence as “smart, intelligent, brilliant, genius, simple.” Warren’s mind is just frictionless in its ability to simplify issues to the core.
Q: What is the most important consideration for investing?
Howard Marks wrote a book titled “The Most Important Thing,” and I think it had 20 lessons. So, it’s hard to distill into one – but it’s really a judgment business at the end of the day. You want to find the best business you can at the cheapest price you can. You can have a wonderful business at a high price resulting in a terrible investment, and conversely you can have a terrible business at a wonderful price yielding a terrific investment. Charlie Munger compares it to the parimutuel system or betting on horses. Everyone may know who the best horse is, but if it’s more than reflected in the odds, then it won’t pay off. You want to find the great horse that no one else thinks is a great horse.”
Todd Combs is right about Warren Buffett’s frictionless ability in simplifying issues to the core, but Buffett has a slightly different view on investing which is summarized in the following quote: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
Next up is David Einhorn’s interview at Oxford Union. The interviewer mentioned Einhorn’s statement about “Greenlight’s reliance on value may have been wrong” and asked whether the trend will reverse and how Greenlight plans to adjust its investment philosophy. Here is what Einhorn said:
“This is the problem with communications. Sometimes when you do what is called rhetorical writing or ironic writing or maybe even slightly sarcastic writing, and so I wrote a missive to our investors in our quarterly letter and I was a little bit of sarcastic. And I think many people understood what I was trying to say and some people took it absolutely stone cold Emilia Bedilia literal and came to the opposite conclusion of what I was saying. So what I was saying is, look, value investing over time has worked. We think this is the best and right way to invest. It is not going to be true every day in every environment. We are in an environment right now where it doesn’t seem to be working at all. And in fact the opposite seems to be working
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