Chamath Palihapitiya: What Makes Buffett, Malone And Simons Great

Johnny HopkinsChamath PalihapitiyaLeave a Comment

Here’s a great interview with Chamath Palihapitiya on CNBC with Scott Wapner discussing SPAC’s, the election, and what makes some of the great investors successful. Here’s an excerpt from the interview:

SCOTT WAPNER: What about, though, the non-Chamaths, the non-Bill Ackmans, the non-Gary Cohens, the non of ten people that I could go down the list and name, who now have SPACs? What about the risk, though? In the fact of what I said, it seems like everybody has one. Not everybody has the impeccable track record of doing this kind of thing as you do, and some of the other all-star names that I mentioned. And the other underlying risk in part of this, too, is you have to be betting on the sponsor to find a good deal and not garbage because the clock is running down in the 11thhour or 11thmonth, as it were.

CHAMATH PALIHAPITIYA: You are 100,000 percent right. This industry is the same as every other industry. There are great hedge funds, there are crappy hedge funds. There are great private equity firms, there are crappy private equity firms. It is crucial that people do due diligence.

It is crucial that people read the disclosures, that people read the S-1s, that people read the S-4s, that people go into communities that are talking about these things. Understand the diligence that’s been done. And you have to fundamentally then rank people. And at the end of the day, Scott, what I will tell you more than anything else that

I’ve realized in 44 years, of which 20 I’ve been investing in some way, shape or form, is those people who put more of their own money on the line tend to make better decisions than those people that are riding other people’s money.

And at the end of the day, if you look back on the single greatest investor of our generation, the most important thing that you would have done by backing Warren Buffett, you know, the best thing you would have done by backing a John Malone, the best thing you would have done by backing Jim Simons, is allowing them to compound their own money and going along for the ride with them. I think that’s a really important point. And so, at the most basic level, my advice to everybody is read the disclosures, read the diligence, and then ask one primary question:

How much of your own money are you putting on the line. Yours. Not other people’s, not your fund’s, none of that [garage]. How much of your own?

You can read the entire interview here:

Chamath Palihapitiya – CNBC Interview

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