In their latest episode of the VALUE: After Hours Podcast, Braziel, Taylor, and Carlisle discuss You Only Need One Good Investment In Life. Here’s an excerpt from the episode:
Thomas: Have you guys are read the story about the guy that bought a–? It was a tiny $100 or $150 million market cap company that he bought. It was the bridge that connected Detroit–
Tobias: No way.
Thomas: Do you know the story?
Tobias: [crosstalk] No.
Thomas: He literally bought one bridge. [crosstalk] It goes from Michigan into Canada. I wish I can remember the story. He bought it for a few $100 million dollars. It’s now worth $5 billion bucks. It’s literally a toll road. You know what else he does? Y’all love this. He strategically buys land along the coastline [laughs] so no one can build a bridge. Because they were talking about building a competing bridge 10 years ago.
Tobias: He’s like, “I’ve get some land I can sell you. The price of land is $5 billion.”
Jake: If I remember right, there are two bridges. There’s one public and one that’s private that goes into– [crosstalk]
Thomas: Okay. He must own the private one. [crosstalk] It’s one of the stories where I love reading about stuff like that. Because I’m a believer that you just need one good investment. I love Buffett, because he’s public and we learned a lot from him. But he could have just done GEICO and just gone home. He didn’t need to do Berkshire, he didn’t need to buy John Mansfield or whatever else he did. He didn’t do all his– [crosstalk]
Tobias: Well, I think it’s See’s. He got the See’s. And See’s has been– [crosstalk]
Thomas: Yeah. could have been some See’s.
Tobias: There’s not much you can invest. If you take the money that you get out of See’s, which is now in the billions of dollars and you just stick that into the market, like you just reinvest.
Jake: You don’t have to. You don’t do anything. Literally, just put it under your matress.
Tobias: That’s gargantuan. What did he pay for that? $27 million or something like that?
Jake: $25 million.
Tobias: $25 million.
Jake: I think $35 million with $10 million in cash, something like that.
Jake: Roll out our Buffett fact checker. [laughs]
Thomas: We’re the Buffett fact checker. [crosstalk]
Jake: Well, all of — [crosstalk]
Thomas: What do you think–? [crosstalk] We can’t get him?
Jake: We’re looking for metaphorical toll bridges.
Tobias: Yeah. He was just looking for the real thing. [laughs]
Jake: He’s just like, “Hey, dummies. But the actual physical toll bridge. Go straight to the finish line.”
Thomas: I’m sure there was some turmoil. It’s like what’s the guy that owns the Irving Company? That’s another one. It’s one deal, man. One deal. The Irving Company, what’s his name? He’s a famous developer. He owns basically all of Orange County. Irvine, California, was orange groves. And I’d read in a book, which is actually a great book. I don’t have it here, so I can’t remember the name of it. But there’s a great book by the Tolman guy. He was a famous real estate guy. They had bought, I think it was called the Irvine Company, which basically a huge– I think, rancher or like orange groves.
Tobias: His name wasn’t Irvine?
Tobias: Irvine Companies?
Thomas: No. This guy’s name is– [crosstalk]
Tobias: No, I’m reading that–
Thomas: His name’s like Ron. You can google it. No, the buyer of it. The guy that owns it today is worth $50 billion or something. He did one good deal. That’s my point. All of these one-good-deal stories, because it’s somewhat true. You need to get a hold of a rocket ship and just realize, it’s a rocket ship.
Tobias: The trick is there is not selling it right. Most people buy it and then you get that runup and then before mean reverts, you’ve got to sell out of it. Trick is just to let go.
Thomas: I don’t know about that. I don’t know. Okay, maybe.
Jake: Munger has that story about the guy that in bought all the land around Stanford. John [unintelligible [00:59:03] or something like that. I’m probably not getting that right, obviously. But it was actually a funny fact. The father-in-law to Marc Andreessen, I think Andreessen married his daughter. But anyway, he just bought a bunch of orchards around basically all of Silicon Valley and just developed that. Never left that little 15-mile area and is multibillionaire from that one smart place. Munger uses it as a circle of competence. You don’t have to go too wide. You just need to make sure you stay within it.
Tobias: It does help to be buying land in California right next to Stanford.
Jake: That was a smart move.
Thomas: Yeah, but it was a long time ago,
Jake: Hewlett-Packard and yet some other stuff that was maybe already there. But it wasn’t obvious that that was going to be such a place where money from all over the world was going to come in there just like a torrent.
Tobias: There are some ghost towns around that were once boom towns.
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