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The Education of a Value Investor

My Transformative Quest for Wealth, Wisdom and Enlightenment

By Guy Spier
16-minute read
Audio available
The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom and Enlightenment by Guy Spier

In The Education of a Value Investor (2014), Guy Spier recounts his transformation from greedy hedge-fund manager on Wall Street to a successful value investor. Sharing the incredible story of his career and the wisdom he acquired along the way, Spier has some surprising insights concerning, what he sees as a false choice between leading an ethical life and a financially successful one. With great admiration, Spier also names the people who were most influential to his professional life, explaining the specific effect each of them had on his mindset and career.

  • Anyone working as a hedge fund manager and frustrated with traditional business practices
  • Anyone interested in the value-investing philosophy
  • Anyone interested in the personal transformation of Guy Spier

Guy Spier is an investor based in Zürich who ran the Aquamarine Fund for 17 years and became a leading figure in the value investors network. His work was inspired by Warren Buffet and Mohnish Pabrai, and he’s now a regular commentator for the financial media.

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The Education of a Value Investor

My Transformative Quest for Wealth, Wisdom and Enlightenment

By Guy Spier
  • Read in 16 minutes
  • Audio & text available
  • Contains 10 key ideas
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The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom and Enlightenment by Guy Spier
Synopsis

In The Education of a Value Investor (2014), Guy Spier recounts his transformation from greedy hedge-fund manager on Wall Street to a successful value investor. Sharing the incredible story of his career and the wisdom he acquired along the way, Spier has some surprising insights concerning, what he sees as a false choice between leading an ethical life and a financially successful one. With great admiration, Spier also names the people who were most influential to his professional life, explaining the specific effect each of them had on his mindset and career.

Key idea 1 of 10

An elite education can be an obstacle to dealing with problems in the real world.

For all the prestige of an elite education, this kind of schooling often teaches skills that simply cannot be applied in the real world.

For example, highly educated people from elite business schools didn’t see the recent 2007-2008 financial crisis coming. Why? Because there are some fatal flaws in the way that these institutions teach their students.

Elite business schools and universities help students to develop specific technical skills based on certain theories. Those theories, however, neglect to take the real world into account, and therefore do not apply to the actual business world.

Theories and economic models are created under the assumption that one will have the perfect amount of information. In reality, things aren’t nearly as neat.

Take the price of ham. In theory, it’s possible to work out how much ham should cost. You could look at how many stores sell it, how many pigs are slaughtered, what the demand is and then work out the ideal price.

But in no way will this price be matched in reality. There are just too many other factors that must be taken into consideration. For instance, stores in certain locations, such as train stations, will make their ham more expensive; and other stores will often have offers, making their ham cheaper.

Since it’s impossible to have all of this info at hand in the real world, the theories taught in elite schools never quite match the reality.

Elite education focuses too narrowly on rationality, neglecting the power of human instinct and critical thinking. Rational thinking is revered, while unconventional ways of thinking are condemned.

So if in your studies you come up with an idea or argument that differs radically from the norm, it’s likely you’ll keep it to yourself, as sharing it may result in you being accused of lunacy.

Additionally, if you happen to be a very rational thinker, an elite institution can make you feel sublimely intelligent. Many people with a first-class education think they know it all, and when they enter the world of work they ignore the sage advice of more experienced people, because they consider them to be inferior.

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