Tom Gayner Talks at Google, Part I

Tom Gayner: The Evolution of a Value Investor

On June 22nd, 2015, Tom Gayner from Markel visited Talks at Google. The theme of the talk was The evolution of a value investor, and for about approximately 60 minutes, Tom—who started out as a CPA and now is at Markel—shares his ideas and thoughts about investing, tells the story of how he evolved as an investor, and also lays out his four points, or what he calls the four lenses, and talks about what he looks for in a certain business in coming up with a decision to invest or not.

The following are the main topics of Tom’s talk:

  • The language of business: Accounting
  • Quantitative selection bias (Quantitative figures are good, but they’re not enough.)
  • The Four Lenses for Analyzing a Business
  • Q&A Session

The Language of Business: Accounting

In this post, except for the link to the talk, I just want to share what Tom had to say about accounting, and why it’s an important part for all investors.

So, Tom starts his talk by briefly discussing the importance of accounting as the language of business, and goes on to give his answer to the question from people who’s trying to figure out what they want to do:

“Among the things that would be a reasonable choice for what you’re studying, would be accounting. And people ask me “why accounting?” And I say, well, if you’re going to go to Germany and you wanted to be a successful person in Germany, what would be the very first thing you should do? And my answer is, you should learn German, because that is the language that people are going to communicate in, and work in, in Germany. So if you want to go to Germany, and want to be a success of any sort, I think it would be very hard to do that without having a working knowledge of German. Well similarly, in business, and by business, let’s translate that further to investing, the language of business is accounting. So to understand what’s going on, you don’t need to be a CPA, but I think it’s important to have a rudimentary knowledge of what accounting is and how it works, and what words and numbers mean when they’re in the context of financial statements and business, the language of accounting.” [4.23-5.24]


Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company or individual mentioned in this article. I have no positions in any stocks mentioned.


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