James Delingpole

The Master of the Universe who taught me that life is about much more than money

An old acquaintance who’s a millionaire investor has given me a few ideas

14 February 2015

9:00 AM

14 February 2015

9:00 AM

God it’s nauseating when an exact university contemporary of yours turns out to have become a hugely successful investor with a fund worth many millions. The bit during our meeting where I most wanted to throw up my ravioli was when this fellow — Guy Spier his name is; read PPE at Brasenose with my old mucker Dave Cameron at the same time I was at Christ Church — told me how he’d once paid nearly £250,000 in a charity auction just for the privilege of having lunch with Warren Buffett.

A quarter of a million quid. Imagine all the things you could do with that. I could make a thousand and one such wish lists, I reckon, and no matter how many I compiled I still very much doubt a single one of them would include: ‘Blow the lot on lunch with the Sage of Omaha.’

But the rich, as we know, are different. One way that they’re different is that they’re much better than the rest of us at making money. This is something I found most definitely to be the case with Guy Spier. By the end of my lunch, I felt much the same way about Spier as I know he did after his lunch with Buffett: that the knowledge he had imparted was so valuable that even if I’d paid (which I didn’t: he being so much richer than me it seemed obscene not to let him foot the tab), it would have been worth many hundreds of times the outlay.

In Spier’s case this knowledge was extremely hard won. After Oxford and Harvard Business School, he was far too impatient and arrogant to waste any time learning the trade and paying his dues. Instead, he headed straight towards where he imagined the real money was: to a New York brokerage firm nearly as toxic as the one in The Wolf Of Wall Street.


Eighteen months later, he left riddled with self-disgust, having made no money and with his reputation in tatters. Such was the company’s low repute that simply no one in the financial industry would employ him. A less determined man might have found a different career, but not Spier. The secret to making money, he had intuitively grasped, is first to turn yourself into the kind of person who is good at making money. And who better to model himself on, in this respect, than the most successful investor of the last 100 years, Warren Buffett?

So that is what he did. In financial terms, this meant renouncing the excitement of shorting, of bubbles (like the tech one in the 1990s), of vertiginous rises and headlong falls, in favour of the slow, plodding business of value investing — that is, spotting which companies are going to do well and then backing them for the long run, confident in the knowledge that your clients’ portfolio will increase steadily over time.

FORTUNE Most Powerful Women Summit - Day 2
Warren Buffet Photo: Getty

Amazingly — and in my view this more than reason enough why PPE should be banned and replaced by something more useful like needlework or My Little Pony studies — he had been taught at Oxford something called the efficient markets hypothesis. This theory holds that ‘financial prices reflect all of the information available to participants in the market’. It’s self-evidently bollocks, yet Spier, one of the brightest undergraduates in his year, had swallowed it without question. Maybe that’s why there aren’t more value investors in the City: maybe these people actually believe that there’s no point trying to seek hidden value in the market because it will already and always be ‘in the price’.

Anyway, once Spier had got that theoretical nonsense out of his system, he was in a much better position to make money the Warren Buffett way. This means, first of all, being able to study a company’s balance sheet, decipher what the auditors are really trying to tell you (or not tell you), as opposed to what the management would like to tell you, and decide whether it’s the Apple of the future or a pile of pants.

But I don’t want to dwell on the financial aspects of his career: you can get all that from a book he’s just written called The Education of a Value Investor. What interested me more about his story were the more esoteric techniques he used to propel himself from near-abject failure to his current Master of the Universe status. A lot of this has to do with realising that the quest for value extends far beyond financial markets into a whole way of thinking about how to live your life.

One of these is learning to shut out the noise and to concentrate on what really matters. That’s why he decided to quit the buzz of New York in favour of the pleasant boringness of Zurich, where the public transport system is so good that even billionaires use it. He located his office well away from the financial centre (so he wouldn’t be distracted by the violent mood swings to which brokers are prey as markets, especially in these uber-volatile times, rise and fall) — and also, following the model of Buffett (who operates out of dull-as-ditchwater Omaha), ensuring that he had just a ten-minute commute from home (long enough to establish a psychological separation; short enough never to be a chore).

Some of the tricks he describes may be rich man’s luxuries. Most are not. At the bottom of his philosophy is this: the happier you are in your skin and the better you are at making others happy in their skin (e.g. writing lots of nice friendly notes), the more easily you’ll generate an environment in which you thrive not just personally but financially.

I went to meet him mainly because I’m fascinated by rich people and how they got rich. It was a good call. This Guy has changed my life. Watch this space.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10


Show comments
  • Foxy Loxy

    Excellent!

    And when you’ve got your successful investment firm up and running, the first thing you must do is to offer me a well paid job, based in Zurich, naturally.

    • A Theologian

      Zug.

      • Foxy Loxy

        That would also be entirely acceptable.

  • little islander

    All the best. You might want to check out what Nassim Taleb had to say on such riches stories, now or later.

  • tjamesjones

    yes, and before you’re too smug about the ‘efficient markets hypothesis’, unless you’ve got some way of establishing how a particular price is too high or too low vs available information, then it’s the working assumption you make about prices – that they are correct for all known information. If on the other hand you can establish how a stock is mispriced, you won’t be mocking the efficient markets hypothesis, you’ll be buying (or selling) yourself.

    • Pacificweather

      Isn’t that why Britain outlawed insider trading 10 years after Singapore?

      • tjamesjones

        I have no idea

  • Jean de Valette

    Ahh the ubiquitous (in NY) Oxbridge alumnus networker-extraordinaire Guy Spier. Well known for ‘friending’ perfect strangers so long as they went to certain schools to the point where that is mainly how people know his name. “Do you know someone called Guy Spier? I was friended by him the other day and I can’t…” This phrase has been uttered many a time, especially in NY.
    Proceed with care, James. Could be perfectly harmless, but I would remain cautious nonetheless.

    • Pacificweather

      Some say James is rather gullible.

  • little islander

    “efficient markets hypothesis. This theory….is self-evidently bollocks, yet Spier, one of the brightest undergraduates in his year, had swallowed it without question.” Classic Blame-The-Messenger. Sir, you don’t seem very bright, not to know the meaning of theory and hypothesis, and to have swallowed Spier’s Spiel, hook, line and sinker. “Wines, James. Wines,” if you wish to swallow anything. Your colleague Mr Clarke could have told you that.

    • jamesdelingpole

      And you, sir, seem arrogant and quick to judge. Unlike you, I have the advantage of having read Spier’s book in which he says that for about a decade he believed that the efficient markets hypothesis was “true” and acted accordingly. I’m not shooting the messenger. Merely reporting, which is what journalists do.

      • whs1954

        The gentleman has a point though. It’s not poor old much-maligned PPE’s fault if Mr Spier thought the efficient markets hypothesis was always true and acted stupidly. It is, after all, called a hypothesis; and presumably PPE tutors don’t sit there and say ‘Go forth and believe all the theoretical stuff I’ve taught you is just how the real world works in practice’.

        • little islander

          Thanks. Please see my clarification to James below.

          • whs1954

            Mind you, I read maths at Keble so what do I know about what Vernon Bogdanor goes telling his charges. Maybe they do get told to throw money down the drain.

          • David S

            Which year? I was there 73-76 and don’t recognise the initials.

      • little islander

        What was left out in the quote was the banning of PPE. I am not PPE so it’s not only arrogant but it’s most presumptuous of me to say you are wrong if you think you have ‘more than enough reason’ for suggesting the ban.
        I apologised also that I wasn’t clear about the messenger. I was referring to the ‘e.m. hypothesis’ text author or whoever taught Spier. I swear I wasn’t accusing you of shooting Spier.

        • Terry Field

          Is PPE some sort of prostate based condition?

          • little islander

            Close but not quite. Some think PPE brains are located somewhere near there.

      • Terry Field

        Only a plonker would believe such an idea – superior knowledge always prevails, and convergence requires divergence initially?????

      • davidofkent

        I believe the other well-known saying from the markets is “the trend is your friend”. I’m sure that works for a lot of traders, at least for a while.

    • Terry Field

      ‘efficient markets hypothesis’ is a means of getting the hordes of the ‘Little People’ to trust the ‘professionals’
      It woks well, since the smalls have no self confidence – they attend State Comprehensives you see – and thus their resources are beneficially redirected to their betters.

      • little islander

        Sorry, you are being presumptuous. LOL. (Only) Little People pay taxes. Not enough for tax purposes. Not yet a state scrounger, as even some with PPE’s might think. State Comprehensives? You guessed right, something like that but not in Little Britain. So it would be ‘little little little people’.

  • rtj1211

    Ways to get rich:
    1. Set up a Ponzi scheme which you sell before it becomes evident it IS a Ponzi scheme.
    2. Buy Greek assets at 5p in the pound and bid them up to 15p in the pound before selling them.
    3. Get the Americans to balkanise Russia once you’d gone short on the ruble.
    4. Short the oil price once you know the Saudis are squeezing Vladimir Putin’s balls into a pulp.
    5. Buy some gambling dens in deepest China, bung some journalists in London to relay the next set of fixes and clean up rigging football matches.
    6. Buy some North African sand, use Keypoint principles to turn an area of desert into green land with superior subsoil water retention and sell it in 5 years to Big Ag for a 1000% profit.
    7. Promote the murder of at least 1 million people through writing pathological lies about some far-off conflict which the CIA have been generating the previous 5 years and then earn £100,000 a day promoting world peace whilst flying first class, staying in 5 star hotels and consulting for billionaire dictators.

    Note that only number 6 actually adds value to eh world and might require some valuable skills to actually execute……….

    • Terry Field

      I assume you failed and write here in pique?

      • davidofkent

        I think this is rtj1211’s standard rant.

        • Pacificweather

          It gives him much peace though.

  • porcelaincheekbones

    He won’t be smug for long, the markets are gonna crash.

    • little islander

      He’d exit earlier and others would then bid to eat with him.

    • Terry Field

      I do hope that they do – how else will the next tranch of wealth be earned?!?!?!

      • little islander

        Steady, ready, get set….

  • jamesdelingpole

    I fear that the illustration and current headline – which I didn’t write and which I hope will be changed soon – give a misleading impression. Or perhaps I didn’t make it sufficiently clear. So I’ll say it here: I didn’t come away from lunch thinking “Right now I know how to get rich.” I came away thinking: “Now I know how to live a better, more fulfilled life.”

    • little islander

      I thought most probably you meant a more fulfilling life. You mentioned Spier’s book, so I thought you should check out what Mr Taleb said about Mr Buffet. I however can’t recall if it’s his first or second.

    • It’s actually quite surprising how many very rich people grasp that. It’s also a great difference between we who believe in individual liberty and the far-left who don’t. They’d have fixated on his wealth, and spent the entire lunch haranguing the poor guy about how he should give it all to greenpeace and learning precisely nothing.

      • Terry Field

        It is unsually the greasy grinds – the ‘hardworkingstriver’ types – you know, the Bilimands of this world, who obsess about the loucre

    • Terry Field

      You never used to say that Delli!

    • little islander

      Not sure the new one is any good. I am now thinking he’s golng to pay more visits to his father. You could have told yourself that, no?

    • sebastian2

      Interesting you took the time to clarify that James. A more fulfilled life is not automatically the same as a life with more money. If this is what you meant (and I guess it is), you are correct.

    • Pacificweather

      Give your money to the Bill and Linda Gates foundation like Waren Buffet did?

    • davidshort10

      I agree. The headline is totally misleading.

  • pointlesswasteoftime

    How nice of you James, writing about a friend when he has a book coming out. Maybe that’s another way he makes money.

    • little islander

      He’s a journalist. A meal is all they get for plugging things.

      • pointlesswasteoftime

        James may only get a nice three-course out of it – but how many extra copies will be sold as a result of this litle sideways plug and additions of wealth accrue to Mr Spier ? Every little helps! And I’m sure it will make him even happier in his skin.

  • FreeKip

    I am always facinated by how people become rich, but perhaps oddly, I have no desire to join them. I find the challenge of being a miser far more fun because not only does one not have to work so hard, but in a consumerist society it is the ultimate two-fingered salute, which I find rather amusing and baffles people who cannot live without the latest phone.

    • Terry Field

      It is a pleasant experience; the more so since one knows that it comes from right thinking and an upright life.

      • FreeKip

        I must ask, what is an upright life? Not an expression ive heard before!

        • Terry Field

          I thought that I would smoke out an urban dweller who is unfamiliar with an upright life!!!! Welcome, de-gen, quo vadis?
          AN upright life is ‘right thinking,’ pure thoughts, pure water, pure actions, the evisceration of the degenerate, a relatyve absense of typos.

          • Pacificweather

            And the acknowledgement of global warming?

          • Terry Field

            Obviously AGW is real, will be the death of billions, and the rich assume they will buy survival so they do not care. The US also thinks it will survive better than will China, and I suspect that they are correct. Britain, however, is another matter,

    • Chris Hobson

      I am like this, i make do and i am often baffled by the huge trolleys of food people push around.

      • FreeKip

        Ah yes, usually the people claiming they have no money with the full trolleys too. I have a food budget of £1.70 per day, per person for three meals. Some call that poverty, I call it a challenge and I dont sweat it tbh. It isnt unheathly either as the cheapest food I buy is veg and lots of it.

    • Dogsnob

      Dunno so much. I’m poor and it’s shite.

      • FreeKip

        I suppose it depends on the person and what you consider to be poor. I live on £500 a month and I dont find it very difficult but I know people who earn twice as much who think they are in total poverty.

        • Dogsnob

          Eh? £500/month? Are you that bearded chap who sits there on Bridge Street with the polystyrene cup and the lurcher?

          • FreeKip

            Haha, afraid not, dogs cost money for a start!

  • Aaron P

    Guy Spier gives a talk here…
    https://www.youtube.com/watch?v=ifDCmRBElPY

    • little islander

      Why? He’s as……..good-looking as his $250K-a-pop lunch-mate?

  • vanLomborg

    It appears to me that the entire dire line of thinking that unquestioned capitalist do-goodery was good has been called into question. When trickle down economics do not work and and are repeatedly found to cause severe societal anamorphosis, what does?

    • Terry Field

      Trickle down economics works very well indeed, since almost none of the good stuff in fact trickles down at all!!!!

    • justsomeone

      Sounds like you forgot what awful places Socialist countries were.

  • Terry Field

    Delli has always had a touch of difficulty with our accretions of the good stuff; still, apart from that, his is a decent sort. Did I ever tell you about his socks?

    • little islander

      Socks? OK, as long as it got nothing to do with his fashions.

    • little islander

      You and I think his is a decent sort. Does he? Or is he one of your smalls with no……prostate?

  • sebastian2

    The heads of powerful drug cartels are enormously wealthy. They are also enormously repulsive. It is better, in my view, to pursue what’s worthy. If that makes you rich on the way, then do something as worthy with the money; and don’t ever look haughitly down on others’ worthy lives that may be poorer.

    • Pacificweather

      I am just a simple boy who runs a coca business! Like Coca Cola.

      • sebastian2

        🙂

  • Pacificweather

    Thanks to Mr Spier, Mr Dellingpole now believes in anthropomorphic climate change?

  • Denis B

    How cheap, how tawdry that our columnist should grovel before the sniff of immoral wealth, expropriated from others.

    • justsomeone

      That attitude will keep you poor and frustrated. If you have children and infect them with your attitude, they’ll be poor and frustrated.

  • CeciliaNicole

    He heals and solve most of the problems & sickness which are failed to be healed by other doctors/healers. He solve bad luck, pregnancy problems, lost lover, sexual weakness, early ejaculation, witch-crafts, broken marriage, poverty, debts trouble, divorce, court cases, domestic problems, gambling losses, Lost jobs, promotions at work, Do you need penis enlargement? Do you want to be Rich? Do you need many children? Are you tired of jealousy people, Evil dreams, all long illnesses, blood pressure, HIV & aids, skin infections? etc. He use strong herbs & magic spells as well as powerful ancestors. Get healed today by this greatest miracle doctor who has healed many people through his experienced ancestors. Join the rest of the world to cerebrate his miracle healings. he can even read and tell you your problems before you say anything to him. He can connect you to talk to the spirit of a deceased of your family member or friend. he can also tell you your future through reading palm, play card, a mirror/water. He uses many ways of healing just to make sure that he certify his clients all over the world. he is the only traditional healer who does fully corresponds with all religious beliefs. contact him on his email address at fiokporspiritualtemple@gmail.com

  • Sean L

    It’s perfectly reasonable to assume that stocks are bought to the best of their buyers’ knowledge at the time: that their price therefore reflects the available information. Of course that information can be variously interpreted. But if you discover a reason to believe something is worth a punt and act on it, then you’re affirming the hypothesis, whatever that reason might be; you’re responding to the information available to you, your transaction in turn becoming further ‘information’. Thus ‘information’ and ‘price’ are necessarily continuous.

    • Damaris Tighe

      As far as I can see there are two sorts of share dealing: technical, short term manoeuvres & long term investment based on perception of value including the concept of under-valuation – in other words the market can be faulty, not perfect because it’s driven by fallible human beings. The idea of under-valued stocks does presuppose the use of information to make this assessment, but the point is that this information is not reflected in the price.

      However, I think you’re correct to say that – at a certain point, presumably when the price increases because a critical number of investors have agreed that the stock is undervalued – this information does become incorporated in the price.

  • davidshort10

    Not the first time Delingpole has expressed envy that his old friends are much wealthier than him. Of course they are. They chose the City not journalism! Journalists, apart from a lucky and talented few, are like paupers nowadays. Some of them even work for free, to get a foot in the door, financed by the Bank and House of Mummy and Daddy. Which means they are middle or upper middle class Londoners, many of them with not much to say and coming from the same mind set. The internet is not the only reason for the fall in newspaper sales.

  • davidshort10

    Most rich people, the ones who didn’t inherit, did something dodgy at the start and then had the capital to get properly rich – one foolproof way is property. I could give you many examples, but I’d be sued for libel and so would the Speccie. Also, and I know this from experience, most if not all rich people are not very nice and you wouldn’t want to socialise with them. People in London are so challenged now by house prices and other financial pressures such as school fees that they dream of real wealth. Not much more than a generation ago, the ambitions of middle class were a secure job, particularly in the professions, and a decent though unremarkable house and a decent life for their children. You did not have to be grasping. Salaries and house prices were fine. Now their children and grandchildren live in crap areas in crap houses, paying huge mortgages to, erm, the financial sector.

    • Jody Taylor

      I can understand your anger about this. But I lived and worked in London (from Australia) for a while in 1971 and I vividly recall people then had much the same issues as you are now talking about; house prices were astronomical even then!! I got to know many Brits working at Shell Mex in the Stand (I think it was) back in the days when the company paid for a hot lunch for staff in the cafeteria. So, I did learn a lot about problems of living in London. Rental was astronomically high too – I know this from personal experience.

Close