Is WEF Investing Practice?

Color Commentary

1. Davos

I was invited by Aquamarine Capital to speak at the World Economic Forum (WEF) in Davos, Switzerland, about the future of intelligent investing – aka, what on Earth are we all doing here? Are computers taking over? Is the future of intelligent investing one in which companies must convince us of their “green” credentials?

I think companies must move towards being genuinely Mission-oriented, and the greenwashing and virtue signaling that is rampant these days will gradually get weeded out by intelligent investors. In fact, it’s our responsibility as intelligent investors to weed out the avaricious companies. That’s what I said at WEF, and added, as an example, that B-Corp certified companies in the US sound like they’re so super stakeholder-oriented, and they are a bit more than other companies because they have to include stakeholders in their operating documents, but B-Corp is not a legal designation. It’s a non-profit that companies pay to use their “B-Corp Certified” stamp on their products. It’s a marketing tool. However, nothing is black and white, and the B-Corp organization has done a tremendous amount of good raising awareness of companies that consider all stakeholders. The more people who understand the nuances of these “green” designations, the better, and I think we are moving in the direction of greater and greater knowledge.

I’ve been debating if that day I spent in Davos was really something I can include in my “practice of investing.” It was a day of chatting with attendees and speaking about the future of investing, but does that really count as investing practice?

I decided it totally does count. Talking with fellow investors is a wonderful shot in the arm for us solo investors. I got to ask another woman investor (there aren’t many of us) about her advice for creating a fund and pitfalls she’s been through. I got to talk with other investors about their ideas for companies, and make connections in the value investing community. That’s not time spent on my computer researching companies, but it is time connecting with people, which is critical to long-term happiness and growth in this investing endeavor.

Indeed, I’m writing this from Klosters, Switzerland, where I am attending the annual VALUEx conference, at which value investors gather to share ideas about companies, investing in general, and life in general. I wrote a bit about my experience last year in Issue #004, and it’s been just as good, if not better, this year. Attending VALUEx is another example of time spent not exactly head-down focusing on studying companies, but instead getting, as one attendee described it, “an intellectual jolt” of energy and new ideas. It’s not only the actual ideas, though, that are the reason for coming. It’s also the energy of the fellow attendees. I feel so lucky to be in the room with these people, and it makes me want to be better. I want to live up to their example. To deserve to be in the room with them next year. So, off I go soon to use that jolt to create an even better year of investing practice than the one before.

I strongly encourage each of you to find and attend events at which you can talk to other long-term investors. We are different sorts of people from the rest of the financial world, and it can get lonely over here all by ourselves. I’ve often felt I’m the only one dealing with a particular issue, and then I hang out with some other value investors and discover they’re all thinking about how to price Amazon also. It’s pretty great.

2. SuperCorporate

The most surprising thing for me from the whole visit to Davos was just how corporate and sponsored the World Economic Forum event is. It was like a convention hall fair, with booth after booth offering free tchotchkes with their company logo on it, and THAT I certainly did not expect. For example, walking into the hotel, I saw a huge Wall Street Journal alcove giving away free newspapers, at least three consulting companies offering coffee and power stations, and one company, I didn’t even notice which one, that had built an entire coffee shop with waiters and full service. It made it very clear that the WEF is the spot where attendees make business deals. Here’s an old article from Andrew Ross Sorkin about why companies spend so much money to send their people to Davos: to make deals in the backroom, which pays for the cost of entry many times over. The numbers in that article are almost ten years old, so assume they’ve gone up even more dramatically.

A friend of mine in Zurich used to go to the WEF and stopped a number of years ago, and I asked her a few days ago if, when she attended, the companies had booths and popups. She looked at me like I was crazy. So, the corporate booths and popups sound like they are a more recent development. Perhaps as the worldwide attention on the WEF has grown, so too has the corporate sponsorships.

Along the main street that runs through Davos, there’s a string of what looked like small popup buildings. Imagine popup shops, but for corporations, to feed passersby drinks and food. There was a Google building – we tried to get into that one and were barred by a very nice gatekeeper who said no appointment, no entry. Blackrock had a building, but it was dark and seemed closed. Very on theme for Blackrock.

In contrast, though, was the Facebook building – offering a full coffee and tea bar for free to anyone who wanted to walk in from the street. I stood outside the Facebook building for a moment and debated if I would be a huge hypocrite for walking in when I dislike Facebook so much, but then I reasoned that taking free coffee from a nasty privacy-busting company was at least one way to get a little bit of payment for the data I’ve provided to them. (After all, as you know, I am a huge hypocrite anyway because I use Instagram and Whatsapp, both Facebook-owned. Should be more strict and get off both of them? It would severely hamper my ability to communicate, so, as of today, I remain a huge hypocrite, struggling with the dilemma of practicality and ease versus principles. Would Charlie Munger wrestle with the same problem? I think not. He’d delete everything immediately and tell everyone that if they can’t find a way to contact him elsewhere, they’re not really trying. But, I do not have the worldwide positioning of a Charlie Munger. Yet.)

I walked in. Once there, no one from Facebook even tried to talk to me. I’m not entirely sure there were even company representatives there. I didn’t see anyone who looked like they were hosting or talking to visitors about the company. I didn’t really understand what they were doing with this free coffee schtick until I went to the back area to find the bathroom, peered around a corner, and discovered a full TV studio with cameras, lights, curtains, and much better food than was on offer out front. The whole building, coffee, etc. was there really for Facebook Live, and this back area was where they brought VIPs they wanted to interview for Facebook Live. It’s not a bad strategy, and it all made a lot more sense to me after that trip to the bathroom. Companies are in Davos for the exposure and opportunity to connect with people who wouldn’t make a special trip to, for example, Facebook HQ. Go where the people are.

I suppose their one mistake was putting the bathroom next to the TV studio entry, but you can’t have everything in a small, jam-packed, ski town. Maybe they’ll pop up with a different layout next year.

Then, there was the Palantir popup.

3. Palantir is Reading This

Peter Thiel is one of the founders of Palantir. He’s the politically outspoken billionaire co-founder of Paypal who was outed as gay by the website/tabloid Gawker, and then years later secretly funded Hulk Hogan’s lawsuit against Gawker which Hogan won and which shut down Gawker completely – a completely fascinating story which if you haven’t read about it, implicates whether one can buy their way through the legal system and how far freedom of the press should extend. The guy REMEMBERS. He’s a Trump supporter and conservative libertarian. As Silicon Valley goes, that’s pretty rare. I don’t love a lot of his opinions, but I respect that he says what he thinks out loud, often to his detriment. He could keep quiet and play the role of Silicon Valley godfather billionaire, but instead he lives by his principles, and whether I agree or disagree with the substance, that’s at least something I can respect.

Palantir, though, might actually be harming the free world. It’s supposed to be a cybersecurity, but no one really seems to know what they actually do. We know they work for governments. We know they are in national and international surveillance. We know they know a lot about each one of us. Are they turning their knowledge to the dark side?

Palantir is not public, so we don’t really know. (Side note: when I typed in to Google “is Palantir public” it auto-suggested “is Palantir evil” instead. So I’m not the only one wondering.)

So we walked by the Palantir hut and my friends wanted to go in entirely because Palantir is so secretive. The opportunity to walk into the belly of the beast was too intriguing to pass up. The level of door security was in between Facebook and Google: there was a door guy, but we dropped a name and were able to get in pretty easily. It was just a big cocktail party. Soon after coming in, a guy came up, introduced himself, said he didn’t work at Palantir but knew some people there, and started asking questions. Theory? He does work for Palantir, and was sizing us up. I have no evidence for that theory except a tingling feeling. Overall, I took the whole experience as a good reminder that there are all kinds of forces at play that are not immediately obvious to me in my consumer life, and to remember that the dark exists when I’m reviewing companies in the security space.

I am curious to see if Palantir goes public. I don’t know why they’d want to, with theoretically unlimited funding from Thiel and great advantages to not having to publicly report what they do. Still, they have been floating going public for a few years now, and keep pushing it back. Curiouser and curiouser.

4. Jamie Dimon

I stood in line to get into a tiny event venue an hour and a half before Jamie Dimon was scheduled to speak. Totally worth it. He was just as outspoken and plain-talking as I hoped he would be, and in the way that it’s nice to put a face to the name, it was nice to put a voice to the face, so to speak, and see that the way he talks and holds himself in real life is what I expected. He didn’t say anything that was groundbreaking, but there’s something to seeing someone you’ve read about speak in person that gives you a better idea of who they are.

To that end, I’m going to host three Ask Me Anything video calls coming up over the next two months, and I am inviting all Invested Practice members to join. I’ll take questions about anything except (of course) financial advice and am really excited to talk directly with you. An email will follow with dates, times, and registration details. Yay!

In sum, going to Davos was indeed investing practice for me, and it has made me think a LOT about how I can guard my time better and more consciously so that the excursions I choose are ones that are as worthwhile as that one.

LET’S GET PRACTICAL

A few food-for-thought questions:

What events in your area connect you to other value investors?

What do you do off your computer and offline that you consider investing practice?

How can you inspire yourself by injecting that “intellectual jolt” that we all need from time-to-time?

Ownership Disclosure: Danielle Town owns shares in Berkshire Hathaway (BRK) and Square (SQ).

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