Thoughts, Notes and Takeaways from the 32nd Annual Graham & Dodd Breakfast

I came across a tweet a couple of months back about a breakfast hosted by the Heilbrunn Center for Graham and Dodd Investing at the Columbia Business School which seemed intriguing. The featured speaker for the event was none other than Todd Combs who is the CEO of GEICO. How the tweet made its way on to my feed remains a mystery. I would like to send my thanks to the Twitter algorithm for routing it my way. This writeup features my thoughts, notes and takeaways leading up to and from the breakfast. It marks the third straight writeup that isn’t about a particular business and I can assure you that I didn’t plan for it to happen this way. It’s just how things have lined up on my calendar.

As a quick aside, I’d like to mention that the “Notes from the Graham and Dodd Breakfast” section is shorter than I wanted it to be. My original plan was to quote or paraphrase comments from Mr. Combs during his discussion with the host, but there was a notice at the beginning of the breakfast that everything he said was off the record. I discuss this in more detail later in the writeup.

Registering

• I thought the breakfast was only for Columbia Business School (CBS) alumni, but I decided to check out the link to the event anyway.

• I kept filling out information and getting through to the next page. I was then prompted to enter my credit card information and was sent a registration receipt immediately after. I was all set for 10/28/2022.

• I was in. I felt like I was big time for a split second. I know Columbia has an excellent business school so I thought I might be able to rub shoulders with someone important. I know Bill Ackman did and still does a lot of work with CBS so I thought he might be there. I saw him walking his dog on 57th Street once and got starstruck.

• Going to this kind of event would make most people’s eyes glaze over, but I felt like a kid again. I was giddy and excited. I was really doing it.

• The cost? $275. Not cheap by any stretch and a meaningful expense considering my financial limitations, but I made it work. I was almost happy to pay it. I told myself that the networking opportunities were probably going to be worth more than the registration fee. I also wondered when I would ever hear Todd Combs speak again because he doesn’t do a lot of press.

• What to expect? Who would be there? What would they talk about? Should I wear nice pants and a shirt or a suit? What would everyone’s favorite idea be right now? Are Ivey League MBAs as pretentious as the rest of us think they are? How many Patagonia (Patagucci) vests and Gucci loafers would I see? Is Todd Combs a good speaker? These are only a smattering of the questions that were in my head after I registered.

Preparing for the Breakfast

I’m busy. So, so busy.

Friday, 10/21/2022

• I observe a stain on my suit. A noticeable amount of stress pulses through my veins. It’s almost instantaneous.

• I take it to the dry cleaner where I point out the stain. They mark it and can remove it. Stress is gone.

10/21/2022 – 10/24/2022

• I work on finishing my most recent writeup which ended up being about the Big Six clubs in the Premier League and why I wouldn’t invest in them. It’s almost 5000 words. I was expecting it to be around 1000 words, maybe 2000, max. A link to it can be found here.

Monday, 10/24/2022

• I make my way into the FedEx Office on W 72nd St. an hour before my shift starts.

• I don’t like being here. It has 3.1 stars on Google Maps and for good reason.

• I haven’t been a huge fan of FedEx since they told me a storm was an “act of God” and wouldn’t be refunding the overnight package that I sent to my grandma for Mother’s Day back in the mid-2010s. It got there late and I just had to deal with it. Always remember to send Mother’s Day gifts several days early.

• This place is so stale. Perhaps it’s a microcosm of FedEx itself.

• I need to print off about 100 pages of documents and have them bound. Let’s see how long it takes.

• I ask the lady working the front desk about printing off my stuff and she points to a row of computers. She says I need to log on to one of them and I’ll be able to print all my stuff from there.

• I insert my credit card and the log-in works smoothly.

• I log in to my Gmail account. Works like a charm.

• I click on the email I sent to myself that has all the documents I need. There are seven of them in total and I need five copies of each.

• The documents include a one-page summary about me as an investor, five one-page summaries of actionable ideas and one full writeup on Esquire Bank. My plan is to have them bound into booklets and give them to people I meet and network with before or after the breakfast.

• I pull up the first attachment and request 5 copies.

• Only one copy prints. Here we go.

• I repeat the process in case I made a mistake.

• Only one copy again. The printer doesn’t show four other pending documents.

• Stress kicks in. All the focused breathing in the world can’t help me here.

• It’s 9:15 a.m. and I’m not even close to getting my stuff printed out. I’m also being charged by the minute to be logged in to the computer.

• I hate it here.

• I ask the front desk lady if she can help me. She tells me to close the attachment, re-open it and try again.

• I follow her instructions and get the same result. I wave my hands, contort my body and say, “Come on” aggressively under my breath to convey my annoyance with the situation.

• I ask her for help again and another employee tells me that I can email the documents to some FedEx account and I’ll be sent a code which will allow me to print all them from one of their standalone printer/copier machines.

• I follow her instructions, receive the code and start cranking out my stuff. This is much easier and cheaper than printing the documents from the computer terminal. Seems kind of shady that FedEx charges you more for the exact same document when you print it from a computer versus a copier.

• I get everything printed and organized and make my way to the desk to get my stuff bound.

• There are three people in line at another desk trying to send/receive packages.

• I got here forty minutes ago. No end in sight.

• Several minutes go by and I’m finally helped by the manager who is working at this location temporarily. He’s been working for FedEx for over 20 years. God love him. I really don’t know how he’s done it.

• The manager was helpful and said the binding would be done by tomorrow. Surprisingly efficient. I was nervous about handing over my documents to him because I thought they might get messed up. What can I do? It’s out of my control at this point.

• I get out of there a few minutes after 10:00 a.m. and clock in to work late. I’ll never get those sixty plus minutes of my life back.

• For all my initial complaints, the employees were nice and tried their best to help me out.

Tuesday, 10/25/2022

• Work.

Wednesday, 10/26/2022

• Work and pick up my stuff from FedEx. Gave it a once over and it was bound correctly.

Thursday, 10/27/2022

• Get a haircut. The barber I go to doesn’t use clippers. He’s crazy with the scissors. Highly recommend if you’ve never had a cut like that before.

• $37 for a haircut on the Upper West Side. Has anyone thought about rolling up barber shops?

• Picked up my suit after the haircut. It is flawless and the stain is gone. I feel great.

• I eat two celebratory slices of pizza.

• I make my way home and decide it’s time to shave.

• I shave a few times a year and rule that this event warrants a smooth face.

• I shave with a razor that is still good but hasn’t been used in at least six months. Bad idea.

• Somehow, I forgot about razor burn. It’s not bad but noticeable. Lotion helps a bit.

• I go to Duane Reade to get new razors. A pack of four costs $32. That’s not a typo. Damn you, Gillette. That price doesn’t seem like the best a man can get. Luckily, I have a $10 coupon and use it.

• Iron my button-down shirt and undershirt.

• I go to bed later than I would like, but what can I do? I have a hard time going to sleep the night before an event I’m excited for.

Friday, 10/28/2022

• Waking up at 6 a.m. is tough. It’s a nice change of pace though. New York City, like almost everywhere else on Earth, is quiet at this time of day. No one is honking their horn, blasting their music or yelling into their phone yet.

• All the investing events I’ve attended this year, the Berkshire meeting, MicroCap Leadership Summit and this breakfast, started early in the morning. I’m beginning to think there might be some wisdom in waking up before dawn and attacking the day.

• I need to get my ass in gear because the event starts at 8 a.m. and I’m taking public transit.

• I shave again with a new razor and clean up some spots I missed or aren’t perfect. It makes a difference. No burn this time.

• After my morning routine, I get dressed and head out the door a little after 7 a.m. My suit looks good and I feel great. I’m ready for this.

• I catch the train. Luckily, there are no delays.

• I stroll into the Pierre Hotel a little after 7:30 and am directed to the meeting room. The hotel staff notice me and assume I’m here for the event. I feel like somebody.

• This hotel looks elegant. I absolutely can’t afford to stay here.

• I make my way into a lobby where I see everyone schmoozing and talking to each other. I’m in the right place.

• Most of the nametags have the person’s name and what year they graduated from CBS.

• There are some heavy hitters here. I think I see a portfolio manager who works for Bill Ackman. Will he show?

• I was unable to speak to anyone in the lobby, so I lay low.

• I hear everyone talking about business and what they do for work. I’ll be speaking to them one day.

• The doors to the conference/ball room open just before 8 a.m. and we pile in.

• I’m here. I made it. The event is about to start.

Notes from the Graham and Dodd Breakfast

• Michael Mauboussin hosted the breakfast which was a welcomed surprise.

• The breakfast included orange juice, water, a fruit plate, yogurt, muffins, bagels and croissants. They even had lox. I didn’t eat the muffins, lox or yogurt, but everything else was good. The room, table, silverware and plates were pristine. The image below was the table I sat at.

• I had the entire table to myself for a bit until one other guy came over to sit down. It was off to the side, but I had a clear view of Mr. Mauboussin and Mr. Combs. Can’t ask for much more than that.

• I was surprised to see that the event was not sold out. I thought more people would be interested in hearing Todd Combs speak. Maybe there’s some truth to the saying that value investors make up a tiny percentage of overall investors.

• Mario Gabelli was there and had a good seat. There were others sitting with him but I’m not sure if they were his employees or other investors. I heard that his firm is known for blocking off seats at the Berkshire Hathaway meeting, so I wonder if that also happens at this event.

• Patagonia vests were everywhere as to be expected with this crowd. Why did these become status symbols in the finance/investing community?

• Not that many Gucci loafers.

• Mr. Combs acted like Buffett, especially the way he moved his hands and talked. Probably one of the many benefits of working closely with the Oracle of Omaha.

I mentioned it above, but I have some bad news regarding the discussion between Mr. Mauboussin and Mr. Combs. There was a request at the beginning of the breakfast that everything said during their conversation was off the record. I reached out to CBS last week and asked if they would be okay with me paraphrasing some of the discussion. I was unfortunately told that they would not be cool with that, so my hands were tied. I wish I could give you some direct quotes, but I want to respect CBS’ wishes.

• What I can tell you is that Mr. Combs preached a lot the same values as Buffett and Munger. He seemed like a fusion of both. I could tell that both have influenced who he is as an investor, CEO and person.

• Like Buffett and Munger, he seems like an analyst, investor and businessman all wrapped in one.

• He said a few interesting tidbits, but nothing that was groundbreaking in terms of how things are done at Berkshire or GEICO.

• He works A LOT. I wrote that I was busy earlier in the writeup, but I can’t imagine what his schedule looks like. This is something to consider if you’re going to try and move up at a company. You are going to have to sacrifice almost everything else in life if you really want to get ahead in your chosen field.

• He seemed like a complete investor. He considers both the qualitative and quantitative aspects of a business.

• Here are links to three interviews featuring Mr. Combs. Sadly, they’re not one-on-one interviews. As stated above, he doesn’t do a lot of press, so these are all I got.

• Bill Ackman showed up. Almost everyone, including myself, turned their head when he walked in. If you end up reading this Bill, bravo. You know how to arrive fashionably late and make an entrance.

• There was a question-and-answer session for about 30 minutes after the conversation between Mr. Mauboussin and Mr. Combs ended. The quality of them was decent. Sorry, I can’t give you specifics here either.

• I wanted to ask Mr. Combs how he thinks about returns on incremental invested capital going forward in time. I wonder if he thinks about it generally or tries to model it out with some base rate assumptions. Maybe it’s a mixture of both?

• The event concluded about 90 minutes after it started and a solid chunk of people left. I still needed to give out my booklets. It was time to work.

• I chatted it up briefly with the guy who came over to sit at the table I was at. We talked for a few minutes and I gave him my first booklet. I’ll be honest with you, I don’t remember his name, but he seemed nice. I had four booklets left.

• I hung around and eventually started talking to a guy who runs a private equity fund. I told him about myself and what I was trying to do with my newsletter and career. He seemed receptive and talked to me for several minutes. He told me to add him on LinkedIn and peeked at the booklet I gave him. I had three left at this point.

• I then went up and talked to a student who asked a pretty good question during the Q&A session. We chatted it up and I was almost shocked when he told me that he knew about Best of the Best, which I have written up previously. A link to the writeup can be found here. He’s the first person I’ve met in real life who had prior knowledge of the business. He mentioned that he was able to get an internship with Constellation Software over the summer which I found impressive. We talked for fifteen minutes or so and I gave him my third booklet.

• I then got in line to speak to Mr. Mauboussin. There was also a line to speak to Mr. Combs, but he was able to wiggle out of it after about ten minutes. I could only imagine that he probably had something baller going on such as grabbing lunch with Jamie Dimon or an early afternoon tee time at Winged Foot.

• Mr. Mauboussin couldn’t have been any nicer to me. Plenty of people lined up to talk to him after the event and I was one of the last. I just thanked him for what he does and for making some his research public like the recent update to his work on returns on invested capital. A link to the article can be found here. I didn’t give him a booklet. I still had two left.

• Things were really winding down at this point. I made sure I had all my stuff and saw one last group of guys talking about stocks. I meandered over and started listening to their conversation. I tried not being too awkward. I didn’t want to seem like I was hovering. I eventually started talking with them and got their thoughts on some ideas they liked. I ended up giving one of them my fourth booklet.

• I talked with a couple of them on the way out and that was that. We went out on a side entrance close to 5th Avenue and my morning was complete.

• Was the breakfast a success? I think so. I was nervous going into it but was so happy I decided to go after it was over. I was able to hear a world class investor and businessman give his thoughts on investing for ninety minutes and network with several people. I would call that a success any day of the week. I still have one booklet left, but maybe I’ll keep it as a sentimental piece. If you’d like a copy, then let me know and I’ll send it to you. You’re responsible for the shipping and handling if you want a physical copy 😂.

• I plan on going to the breakfast again in the future and would highly recommend it to anyone who’s considering it. Besides the Berkshire Annual Meeting, where else am I going to be able to hear a world class investor speak candidly and network with so many high-powered people in the industry? The preparation, time and money were well worth it.

That’s all I have for today. Thanks again as always for reading. If you liked this writeup then please feel free to share it and subscribe!

Please reach out to me at possiblevalueresearch@gmail.com, @PossibleValue on Twitter and @Heshy on MicroCapClub with any comments, concerns or questions. Lastly, don’t forget to tell someone that you love them.