Guy Spier is an investor of Israeli, German and South African descent. He runs the Aquamarine Fund, which has produced outstanding performance since he launched it in in 1997. His strategy has been to follow the value – investing approach of Mr. Warren Buffett’s Berkshire Hathaway, focusing on investing in relatively few firms that are undervalued and have good cash flow. He hold these with a long-term investment horizon. Spier started his fund in New York and now runs it out of Zurich, where he and his family live. Mr. Spier was educated at Oxford and at Harvard Business School.
Upbringing and Education
Mr. Spier grew up in London and was raised by his South African mother and German/Israeli father. He attended an independent school in Surrey and at the time was unaware of the public school system. With four A grades at A level, Spier he was accepted to Brasenose College, Oxford. There he read PPE - politics, philosophy, and economics – and graduated at the top of his class in economics. While at Oxford, Spier had the opportunity to get to know a number of world leaders – including Dominic Barton, former global MD of McKinsey, David Cameron, former British Prime Minister and Jeremy Hunt – who is the current Foreign Minister for the UK.
Upon graduating from Oxford, Mr. Spier worked for a few years as a management consultant, after which he joined Harvard Business School’s MBA program. There, he met several fellow students who would later become successful entrepreneurs and investors, including Bill Ackman of Pershing Square, Chris Hohn of TCI, Mark Pincus of Zynga Games and Sherry Coutu of the London Stock Exchange. While at HBS, Mr. Spier came to realize that continuous learning would be key to developing a successful career, i.e., to become a “learning machine.”
However, Mr. Spier later reflected, “…a finely trained but rarefied academic mind can be damaging to your long-term success. You can easily end up with the mental equipment of a Formula 1 Ferrari, when what you need in the real world is a hardy Jeep that can operate adequately in a variety of environments.”
Development of the Aquamarine Fund
Mr. Spier’s Aquamarine Fund was launched in 1997 with $15M in assets, mostly from his father. After five years, the fund had $50M under management, and it has grown ever since. The fund has performed very well, with more than 460% returns during the 15 years since its foundation versus 170% for the S&P 500 index in the same period. And although the fund has experienced “a few tough years recently,” the average return remained around 10% per annum, net of fees, surging in 2017 to a whopping 35% for the year, net of fees.
Zurich
Mr. Spier and his family moved from Manhattan to Zurich in 2004. A major motivation for the move was to attempt to create a relatively quiet setting in which to run a fund. New York City’s hectic pace was leading to too many “distractions.” In comparison, Mr. Spier found Zurich a relatively small, quaint city—perhaps a little boring; but “boring is good. As an investor, that is exactly what I want.” In creating a work context relatively similar to Mr. Buffett’s Omaha, Mr. Spier also wished to avoid unnecessary distraction from the latest technological advances. So he created an office with two parts—one which was void of all technical gadgets, where he might be able to read and think, and one where all the latest technological gadgets were in place, allowing him to act and invest.
An active member in more than six networks, including the Young President’s Organization (YPO), he sees these organizations as linchpins to networking and learning. Spier is also a warm supporter of the Lorange Network.
Q&A with Guy Spier
1. Where did you spend your childhood, and what was it like?
I grew up many places in my childhood. My father is of Israeli origin while my mother is South African. With such a background, we were travelers by default. We lived in four or five countries before settling down in the UK. My father is an entrepreneur, and our travels were a part of plans to seek out new opportunity for the business. Today, I want to explore new parts of the world with my own children. Looking back, I see the importance of those formative years.
2. Do you have any anecdotes you want to relate about your mentor, Warren Buffet? Have you had other mentors?
My lunch with Warren Buffett is now somewhat infamous in business circles, as I had to pay quite a sum to charity in order to have that lunch. But I truly feel that it was worth it—that it is worth putting oneself in contact with people with exceptional experiences, track records, and perspectives. That is also why I am part of several business networks, including the Lorange Network. It is a no-brainer, really. It provides so much energy to be in contact with people who are accomplished at what they do, who have energy, have taken risks and have tasted success. Being part of a network is a way of systematizing such exchanges of ideas instead of one-offs, such as our lunch with Buffett. As Warren Buffett says, “Get around people who are better than you, and you can only help but improve”.
3. Could your fund business become a family business, or does it solely hinge on your investment acumen?
It could be, but it is far too early to tell. We have three children, ages eleven to fourteen.
4. How do you see the markets in the near, medium and longer term?
As a value investor, I have no market view. Trying to make market calls is a waste of brain cells in my view.
5. How do you handle losses and challenging times?
It may sound a bit overly intellectual, but I go to the Stoic philosophers. For men and women in business, I can recommend reading the Meditations of Marcus Aurelius. A general once complained to Marcus Aurelius that fighting battles was so hard, whereupon Marcus Aurelius retorted, what did he expect? Valor and bravery has little value on its own but must be proven in action. In that sense, adversity can be seen as something positive, as an opportunity to hone our personalities and character and to prove our resilience, bravery and other virtures.
6. What are your personal hobbies? Travelling?
I thoroughly enjoy using my randonée skis and going on ski tours. Living in Switzerland is such a blessing in this regard. Also, I am a cyclist. I spend a fair amount of time on my bike. Did I mention that I am also a reader? Shane Parrish says everyone should try to read at least twenty pages per day, and I try to heed Shane’s advice. I try to focus on my reading in the mornings. You could say that I try to find time for more than just work; I try to find time to work on myself. I have tried to reflect on the meaning of wealth, and for me it boils down to one’s quality of experiences, much more so than the amount of monetary wealth one can amass during a lifetime. Monetary wealth can let you realize a lot of great experiences, but it is also possible to be wealthy and poor in experiences. That is why travelling becomes so important, again. I wish to explore things with my children while I can and while they want to spend time with my wife and me. As mentioned, our eldest is already a teenager.
7. Do you see any long-term trends and opportunities that investors should be aware of?
I could mention AI, cloud computing and biotech, but I am going to mention something else: transparency. Investors should search for companies that value transparency and that pursue it realistically and credibly. These companies are transparent with their customers and with their stakeholders. They strive to operate honestly, and when they do so, they will be more likely to succeed in the long run; their business models will prove more sustainable in my opinion. As examples, I could mention Coscto and Berkshire Hathaway.
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