Book Review: The Education of a Value Investor

book cover imageSpier, Guy. The Education of a value investor : my transformative quest for wealth, wisdom, and enlightenment. Palgrave Macmillan, 2014.

Aquamarine Fund founder Guy Spier wants university educators to search their souls for the role they play in the greed, superficiality and bad judgment among the bankers, brokers and capitalists on Wall Street. In his new book, The Education of a Value Investor, Spier writes that his own privileged education (Oxford and Harvard Business School) trained him to respond to other people’s approval rather than to an internal moral compass. Spier’s book is about his own personal journey to wisdom and maturity.

Spier begins his story as a newly minted MBA, who accepts a position as vice president at a shady brokerage house, D.H. Blair, where Spier’s Ivy League credentials dress up sketchy deals to sell to investors. The competitive environment at the firm motivates employees to push the legal and ethical boundaries to be successful. Even at the elite firms like Goldman Sachs and J.P. Morgan, bankers distort the truth to further their own self-interest. From this experience, Spier learns that a person’s environment causes one to slowly change over time.

After Spier leaves D.H.Blair, he finds it difficult to find another position in the financial sector. He reeducates himself by reading classic business books and by modeling Warren Buffett’s investment and life choices. He asks himself, “What would Warren Buffett do?” Then one day his father and a small circle of friends and business associates give him $15 million to manage. Spier founds the Aquamarine Fund and manages his fund as Warren Buffett would do, finding “companies that are cheap, have an expanding ‘moat’ around them, and that are awash in cash.” A charity lunch with Warren Buffett becomes the turning point in his life.

The Education of a Value Investor is an engrossing book. Guy Spier tells his story openly, in an easy conversational style. He writes about attention deficit disorder and the non-rational part of his brain that lead him to make bad decisions. He speaks frankly about his own flaws, including arrogance, pride and envy. He discusses the behavioral changes that he makes in his life to compensate for his emotional challenges, including relocating away from the temptations of New York and London. He shares his strategies for managing his personal vulnerabilities as well as his investments. In the end, he concludes that nothing matters as much as bringing the right people into your life.

This story of personal growth is recommended for most readers. However, Spier seems reluctant to take responsibility for his early career choice and casts the blame on his elite education. As an MBA student at Harvard, he attends Buffett’s presentation to students but barely hears the man who would later become his mentor, because he is distracted by a woman in the audience. And while it is true that some graduates of prestigious universities end up on Wall Street, compromising their ethics, not all do. Some students read their own moral compasses long before they graduate.

© Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

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