Crushing The Market Over Four Decades w/ Thomas Russo (RWH013)

William Green chats with Thomas Russo, a revered global investor who’s beaten the market by a mile over four decades. Tom, who oversees $8.5 billion, is the Managing Member at Gardner Russo & Quinn and Semper Vic Partners. Here, he shares the principles that drive his enduring success, along with key lessons he’s learned from three legends: Warren Buffett, Charlie Munger, and Bill Ruane.
IN THIS EPISODE, YOU’LL LEARN:
00:00:00 - Intro
00:00:36 - What Tom Russo learned from a life-changing encounter with Warren Buffett in 1982.
00:09:07 - Why “agency” cost is one of the greatest risks facing all investors.
00:14:40 - Why Tom favors companies that willingly endure pain today for gain tomorrow.
00:16:21 - How he rode Berkshire Hathaway from $900 to more than $430,000 per share.
00:22:14 - Why Buffett’s team of successors should do fine when Berkshire is in their hands.
00:29:29 - What Tom learned while working for investment legend Bill Ruane.
00:38:31 - Why Tom immediately sold Wells Fargo & Altria after realizing they’d lost their way.
00:46:12 - Why he loves brands where consumers believe there’s “no adequate substitute.”
00:51:56 - Why he’s bullish about Heineken’s long-term future, even after owning it for 36 years.
01:07:42 - How Tom succeeds by resisting short-term temptations & deferring gratification.
01:18:25 - What he failed to understand about Alibaba & the political risks of investing in China.
01:27:30 - Why he’s okay with tobacco stocks, not with companies that wreck the environment.
01:30:44 - How innovators like Nestlé & Heineken are helping to combat climate change.
01:41:28 - How Tom’s investment success is fueled by his insatiable curiosity.
01:44:32 - What he learned from Charlie Munger about the importance of trusting your gut.
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[@WeStudyBillionaires]

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[@Gcski]

Kje is r Oli😅

[@jaanliitmae6599]

Very honest and insightful, perfect!

[@WeStudyBillionaires]

Glad it was helpful!

[@davidwilson9976]

It is weird more people view financial KZbinrs with little experience rather than people who have a 40 year track record of making money.

[@cryptogoth]

They watch the first kind interview the second kind

[@martijntjeeh]

That’s because this is a long interview and not a short 7 minute infographic video haha

[@abhijeet.singh19]

Such a good point David. The herd will always follow jingoism.

[@jeffmilligan7030]

Very very good point! Many of the soi disant financial gurus on KZbin can’t speak grammatically and have lots of followers. That’s the world we live in!

[@faronskelton4085]

Another excellent interview sir. Thank you!

[@WeStudyBillionaires]

Glad you enjoyed it! 🎉

[@PhillCurtis]

I'm finally getting the chance to binge watch the content with william green - i wasn't aware of thomas russo before this chat - an interesting discussion. i like that you ask tough questions regarding china and the horrific treatment of the Uyghur people and the issues behind some of the morality of owning tabacco brands/ beer brands. it must be a narror field of companies you can own if brand strength is what you look for, especially when you have a large amount of money to invest.

[@WeStudyBillionaires]

Thank you for watching the show!

[@alexandersommer6492]

What a great conversation, William. Appreciate it. Alex😊

[@WeStudyBillionaires]

Glad you enjoyed it, Alexander!

[@gaetancharbonneau3902]

Very interesting interview, thanks! I looked at his portfolio and while I find many extremely relevant ideas, I couldn't see a single gold/silver related stock...

[@florentlabeille694]

Thank you for this great interview !

[@WeStudyBillionaires]

Our pleasure!

[@varunjain2250]

Loved it !!!

[@WeStudyBillionaires]

So glad you did! Thanks for watching.

[@abhipatil4844]

Too good

[@WeStudyBillionaires]

Thanks for watching, Abhi!

[@tulipmania4923]

Hi William How do you get access to Tom's letters? Are they available for public?

[@seanconcannon186]

Russo likes those dirty sin stocks like PM and Heineken. I love it.

[@mmm-cake]

🤙

[@ReflectionOcean]

What does "beaten the market by a mile" mean? What is his return exactly? Moneyweek said: "Between 1990 and 2016, Semper Vic returned more than 12% per year, compared with around 9% for the S&P 500".

[@lorenzmuller3542]

The problem with the See's Candy example is they started with a buy price of 30mn USD. Try to buy such an asset in an early stage in the public markets nowadays!

[@abhijeet.singh19]

There will always be mispriced assets.

[@lorenzmuller3542]

@@abhijeet.singh19 I'm all ears, haha. :)

[@abhijeet.singh19]

@@lorenzmuller3542 how many examples do you want ? Example one: Ptl enterprises. Indian stock market. Tyre company. High barrier to entry. Cheap valuation. Market cap of 400 crores. Investment book of 300 crores. Dividend yield at 8 percent. Ratio of car per 1000 in India is 22 per 1000 people. In US it is 936 per 1000 people. Direct all money here and go to sleep. We can celebrate when you buy a private jet out of the investment 10 years later :)

[@abhijeet.singh19]

PS I have a vested interest in the company.

[@abhijeet.singh19]

Also let me know if you want to chat about examples 2 to 10 :) happy to go on and on and on.

[@M3W3]

I wonder how many investors actually think deeply about the business they invest in … no matter how u think about it… alcohol brings no benefit to human body. The part whereby the speaker talk enthusiastically about more people coming to age to drink and the drinking market gets bigger and the smile on the face… somehow, just …. I am no one to judge but as average investor, I tend to avoid invest in such stock especially the business have no obvious benefit to human such as gambling, alcohol etc. I know these companies make lots of money but when I sleep, I can’t sleep well knowing the profit I get is from such practice. Seeing people lost their loved ones from drinking, obesity problem that getting worse and gambling issue that wreck families, it makes me more aware of the type of business I invest in. So many talk about investing in green environmental stock but overlook simple things that can affect human life like gambling , alcohol & junk food stock

[@robchesnutt]

Completely agree. Also Juul, Wells Fargo, Nestle. This guy doesn’t give a shit about anything but money.

[@dhirajmeenavilli5508]

I think if you're just an average investor you don't need to worry so much about that, because your money is not going to the company rather it's going to the guy selling you the shares. And if it genuinley troubles you so take the profits and proceeds of effectively investing in these companies and use them to fund your local AA or youth sports facillty and things like that. If you're in private equity or VC then it's a different story but public market investors I think don't need to feel such a heavy moral burden. Additionaly I think while yes alcohol when abused brings swathes of suffering so too does any drug, such as Vicodin or even video games or work. You could also view it as something which brings out the courage in people to go talk to the person who they end up marrying, or being able to connect with friends and family over a shared love of the expirience, or just as entertainement which adds to events the spice of life. I don't think it's so cut and dry or black and white, it's more gray and you're not really funding anything you would despise yourself for.

[@lorenzmuller3542]

A well made gin tonic or a nice scotch can be a thing of beauty.

[@abhijeet.singh19]

The tax you pay also has a cut which goes towards the benefit of the most unethical of business houses in terms of government contracts gifted by the government as favour. Doesn’t mean you stop paying taxes right ? I am also assuming you use steak. It’s the highest contributor to global warming. Changing your diet tomorrow ?

[@dhirajmeenavilli5508]

@@abhijeet.singh19 Wow so deep. So quirky

[@jimjackson4256]

Combustion is a source of harm.Now there is big pile of baloney.

[@wolfsden3]

Buffet 😂... tricking the customer that raising prices is good lol. Proving consumers are morons.

[@vijendrakumarpal3415]

Sir hindi me dale sir