Expert: Daniel Gladis – Invest in what will happen, not what you want to happen

[00:00:15] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing. Whether you're an absolute beginner or approaching Warren Buffett status, our aim is to help break down your barriers from beginning to dividend. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How you going? 

Alec: [00:00:30] I'm very good. Bryce. I am excited for this episode. We always talk about how more and more investing can be truly global others. Retail investors have more and more access around the world. The great news is that podcasting is also truly global and we have the opportunity to speak to experts all around the world. And I'm very excited for this one because we've got someone joining us all the way from Malta. 

Bryce: [00:00:53] Love it. Well, it is our pleasure to welcome Daniel Gladis to the show. 

Daniel Gladis: [00:00:58] Good morning and thanks for being with us. 

Bryce: [00:01:00] Not a problem. We are excited for this one. And if you haven't come across Daniel before, he's the founder of the TAVI Fund, a value focussed, research driven hedge fund launched in 2004, making it the oldest hedge fund in Central Europe. So plenty, plenty to unpack there. We first came across Daniel through his recent shareholder letter titled What Oil Prices Are Telling us. So we're going to be unpacking all of that in today's episode, as well as Daniel's thoughts on current market conditions. Inflation. There's just so much to chat about. But Daniel one, the way we like to start our interviews is with an introduction to yourself and we like to understand the story of our guests first investment. So if you think back to when you first started thinking about investing and putting your money to work, can you share the story of your first investment? 

Daniel Gladis: [00:01:53] Well, I would have to go back my 30 years in my memories. So I spent it's actually an interesting story. I spent 21 years of my life, the first 31 years living in a communist country and in a country with Portugal, Slovakia, then. So you can imagine there was almost no private ownership of the business. Those the market. No, no, no investments. Not none of these things existed or even crossed our minds. But then in 89, via the Berlin Wall fell down and communism collapsed. And a couple of years later, we we had a large three stage opening up in Prague. And that was all new, exciting world opened up for us. And so in my student savings that I got from picking fruit and stuff like that on farms and bought my first investment portfolio, and then from the moment I was completely hooked, I had no idea what I was doing though that's true. But our market had a big boom not ended, so it made it easier, but ended the same year. In 1983 we started the brokerage companies to my friends and it became a member station and we focussed on institutional investors and I was saving the foreign investors. So I had customers like Jeremy van Dam, the GMO or about close to them when I was visiting them in the US and in London. I listened to their stories and how they invest around the world, and I became immediately clear to me that I was going to be a broker. I want to be, so to speak, on the other side of the formula. Someone is running the money. So a couple of years later, we sold to a brokers company and I became a portfolio manager. And the quality and use of all, we started some of our funds and here we are still today. 

Alec: [00:03:47] So here we are. Daniel we've interviewed a number. 

Daniel Gladis: [00:03:49] Of time ago and. 

Alec: [00:03:51] We've interviewed a lot of people over the years, but I can say that's the first time someone has had the end of communism in Europe and a stock exchange opening as the start of their very first investment. I can only imagine how exciting and how different it must have been. But look, you you've been running this hedge fund since 2004. You've seen a lot of different market conditions over that time. Have you developed a personal investing philosophy? [00:04:21][29.8]

Daniel Gladis: [00:04:22] Yes, we have. The philosophy remains pretty much the same. What has been changing over time is how I describe it. So my current my current description goes like this I am I intend to see companies as entities where people create value. It was their efforts, their work, their ideas. It was their risk taking, etc. and then their value creation. And the combination is the capital the companies have at their disposal, and the investment rates they can reinvest to them... uh creates a lot of value and I just want to be part of it. So that's a simple story, but this is how we describe it right now. So we're looking for companies that we think we understand that they have a lot of that human factor and that also have a high returns on capital, because that then pretty much is a necessity. If you want to offer something where value is being created at high speed. [00:05:28][66.2]

Alec: [00:05:29] Yeah I love that idea of a company is just a vehicle for people to create value. And one of your one of your shareholder letters that we'll touch on a little bit later titled, Please allow me to introduce you talk about a number of those people leading the companies that you are investing in. But before we get there, you have also written two books, Learn to Invest and Stock Investments. Everyone should go and pick up those books. But for people listening who have, this is the first time they've come across you. What are some of the I guess, the key lessons or the key takeaways that you're really trying to get across to people in those in those books? [00:06:05][36.5]

Daniel Gladis: [00:06:06] The key takeaways would be that as an investor, you only really need to master two things. One is to know how to value a business because you always have to think in different terms - the price and value - you know you should be trying to buy something for less than its worth. So the price should be less than the value. So you should have some, some understanding of what the value is. So that is that applies to all kinds of investments, not just equities. Private equity can be produced. They can be anything, you know. And then the other thing you need to master is how to handle, how to approach market movements. And also that has something to do with your own psychology, your own discipline, having long term view, etc.. So that would be a key takeaway. The second rule is more or less extension of the first one, and also it talks more about the current investment environment we are living in. There is an environment of long term negative interest rates and environment where money are losing its purchasing power faster than before. And the how to how to adapt to that. Hmm. [00:07:13][66.7]

Bryce: [00:07:14] Well, speaking of the current environment, wherein we're really interested to get your thoughts on oil specifically. So let's leave that for a conversation in a moment. How would you sum the current environment that we're in at the moment? You know, a lot of macro headwinds that we're coming into inflation, interest rates. If you were to sort of take a few moments to yeah. Just summarise or give us your thoughts on the current environment that we're that we're facing at the moment. [00:07:40][26.6]

Daniel Gladis: [00:07:41] I think the key to everything is to realise that whatever happens, we're probably going to have real negative interest rates for a very long time because in the past, usually when there was a high inflation, you have to go quite, quite way back in the developed markets. It was usually accompanied by very high interest rates and usually interest is higher than inflation rates. Well, this time we have quite high inflation everywhere, but interest rates still remain extremely low. So this is an unparalleled environment and it would probably remain like that because. Deleveraging the system, especially at the level of government, is so high because most governments are not able to sustain high interest rates. So we're going to have an environment where the money debasement and basically continue to foster because, you know, your money will be losing its value. So that's basically if you look around and it goes the various missed opportunities, it completely disqualifies all fixed income assets, basically, right? Because anything you buy, you're guaranteed to make loss of them. So you have to look only basically into assess where what you own. Something owns and property owns an equity that is able to create value and compensate at least partially for a managed investment. So that's that's a fund of course, this is a long term view, but currently currently there are many other uncertainties so that the inflation is too high, you know, too fast, you have a lot of disruption still on the supply side both from Covid and both from the war, there's a energy crisis brewing all around the world, which you might talk about later. So there's an uncertainty, but there's there's always uncertainties in the market. And you will never reach a point where you would be able to say, okay, right now we have no uncertainties. So that's that's I think pretty normal. [00:09:54][133.1]

Bryce: [00:09:55] That that would be nice. [00:09:56][0.8]

Alec: [00:09:56] That would be very nice. Yeah. [00:09:57][1.4]

Daniel Gladis: [00:09:59] If we if people think that we are in a in a situation where there's actually no risk on the horizon, then probably the the assets would be extremely expensive because they would be already showing the crisis. So you cannot expect to have low prices and blue sky at the same time. [00:10:14][14.5]

Alec: [00:10:16] Yeah, we'll we'll touch on the energy situation in a minute. And about your investor letter, what oil prices are telling us before we get there? It must be a quite an interesting time in Europe. Interesting might not be the right word, but the European Central Bank looking at raising interest rates for the first time in 11 years. At the same time, concerns that about Italy's debt in particular and what higher interest rates could lead to the whole Russia-Ukraine situation. Germany's reliance on Russian gas situation aside, it feels like there are other crises brewing in Europe as well. How do you how do you see it from the continent? [00:10:57][41.2]

Daniel Gladis: [00:10:58] Yeah, it's not good. Euro as a common currency for many states is really a problem... Because you have one central bank, European Central Bank, that still keeps interest rates at minus half percent. Right? But then you have countries like Italy or Spain where inflation is like 10%, but you also have countries like Estonia, that is using Euros and have inflation at 3%, and they still have minus half a cent interest. And they can do nothing about it because they cannot raise interest rates. They cannot change the exchange rate anyhow because they don't have their own currency. So it's it's totally I think it's unworkable. And then you have you had the ECB still hasn't started raising rates, despite the fact that the Eurozone inflation is over 9% and Italy is already complaining about high fixed income rate. So high horrible rates. So this is really insane. So the only thing that the ECB has come up with recently is that they will stop buying bonds from the better countries. So sort of Germany and maybe Netherlands, but they will keep buying the bulls in the weaker countries. So that's totally insane. So there's nothing nothing the individual countries can do about it. But then at the same time, you have the war here in Ukraine, which is which is terrible. And of course, Russia is using oil and gas, especially gas as their weapons. You know, they're still supplying gas now in summer where it's not a problem. But if they stop supplying for another six months, it might be a big problem in winter because... people will be cold. And at the same time in Germany, there's still this green idea, these green thinking, well, we know they're still going to switch off their last remaining nuclear power station at the end of the year. So, you know, this is making the whole situation even worse. So as an investor, you can do many things. You can ignore Europe. I mean, you can invest in other parts of the world. You can hedge currencies. You know, you can short it. You can try to buy European companies, which are really global companies. So there's many ways around it, but still, it's from a macro point of view. It's very, very complicated. [00:13:22][143.6]

Bryce: [00:13:23] So, Daniel, you've written the letter that we want to chat to you about today all around the price of oil and the impact that it's it's going to have called what oil prices are telling us. So let's start with the here and now. I think oil price, a barrel of crude is about $100 a barrel. Correct me if I'm wrong. It has been up as high as about 140 over the last few months. What is the current like? Is this a high price for a price of oil? A barrel right now. What's the state of oil right now? [00:13:56][32.6]

Daniel Gladis: [00:13:56] Well, for for for people who are good used to oil around 56 days in the last two or three years, 100 110 may seem high. Okay. But 2008 was 140. But if you're adjusting for inflation and beyond that, to grow nearly to 200 today, to be at the same level, you're adjusted for inflation. So it can still go go much, much higher. And I'm afraid it will go much higher because that's what our analysis of supply and demand does. [00:14:29][32.7]

Alec: [00:14:29] Yeah. And so on. The supply and demand point, there's been a lot of commentary about the under-investment in the 2010s from the oil companies. Is that the key reason why you think it could go higher or what are the other factors that you think? [00:14:43][13.2]

Daniel Gladis: [00:14:44] Well, on the demand side, on the demand side, you have you have currently 101 million, 102 million of barrels consumed every day. So that's the current state of the demand. The demand can move up around, you know, or you can drop it in session for a couple of quarters. In 2021, the whole world shut down, but generally it tends to rise by 1% every year. So you can think of another million barrels per day next year, another one next year. And because a lot of people think naively that we will not need much more oil very soon, but these people tend to live in places like Germany and California. But we forget that the world is actually more China and India and Latin America and Africa. The people there are much poorer and they also want to have a more comfortable life. They want to have more and become richer. And, you know, if they do, and I wish them to do so, then their energy consumption would grow much, much higher because they still consume a fraction of what the West consumes. And a very large part of that would be from fossil fuels, including oil. So you can expect that the demand will continue rising, not on the supply side. The thing is that the oil companies would love to produce more, but they're basically being told that they are evil because they are producing oil. Okay. So while in a previous peak in 2008, every oil company was trying to drill, and drill and drill, and aquire excess, and aquire other companies, and grow and they grew too much. Right now they don't want to invest because it makes life harder for them because the governments, politicians, very often their own shareholders are pushing them for lower emissions. So they say to themselves, why would we make life harder for us? You know, let's just use the free cash flow and say to shareholders and basically they they don't invest enough. And if you look at the amount of investments that went into the oil sector in the last five or seven years, it's been declining and actually is at historic lows or 15 years low. And it's sufficient. And that's simply not enough to sustain the current level of production because you have a depletion of oil production, you know, like 6% every year. So you need to invest a lot of money just to stay at the same level of production, let alone to increase it. So that's that's where we are. And it is also important to know that realise that the supply area, the supply side, but the reaction time is very low. If you start increasing your investments into a new development and production today, you don't see anything within 12 months. Okay? You will need two or three or four years to see something. So basically companies need to see much higher oil prices for longer, convinced themselves that they want to invest. [00:17:51][187.2]

Alec: [00:17:52] So that's and so and so that's the supply side. You know, they need to be confident of higher prices, that the higher prices will last. And then there's the time lag while they get oil production up and running. So then the question turns to the demand side and this is where the term demand destruction comes in. And, you know, oil is it's pretty inelastic... The demand hasn't really softened as it sits over $100 a barrel. How do you think about the demand side and where we might start seeing demand fall off? [00:18:27][35.0]

Daniel Gladis: [00:18:29] Demand curve is very inelastic, as you said. And in 2008, when oil was 140, we still didn't see any demand destruction. And I don't think we see it yet. And that's despite the fact that actually the gas prices for cars are actually much higher than the oil it would suggest, because they also reflect refining margins, which are also record high, because you just don't have enough refineries because no one would let any to be built. So we don't see any demand destruction. It's also important to realise that only, only a smaller part of oil is actually used for transportation. The oil is used for other things, for energy generation. And right now in Europe, when Russia stopped supplying gas, some of our power stations will be switching from gas to oil. So it is actually quite bullish for oil. Then all these resources are used for plastics. I mean, for for you, I don't know what you're wearing, but I bet that is made from gas or oil. It's every every fibre, every plastic, medicine, and fertilisers, you know, that there's a lot of a lot of uses for oil that one cannot live without. So I don't see a demand destruction happening anytime soon. [00:19:45][75.8]

Bryce: [00:19:46] Big bull case for oil. [00:19:47][0.8]

Alec: [00:19:48] Yeah. [00:19:48][0.0]

Daniel Gladis: [00:19:49] Yeah. [00:19:49][0.0]

Bryce: [00:19:49] So Daniel, there's a one of the headings in your in your letter is 'Politicians are making the whole situation still worse'. So can you can you elaborate on that for us? [00:19:59][9.9]

Daniel Gladis: [00:20:00] Well, it's basically what we I said that the green agenda is basically pushing oil companies to not to produce. Okay. So that the hurdles are quite high for them to overcome. Although the the governments are coming, these brilliant ideas like windfall tax on oil companies because they think that their profits are unjustified. But if you want lower oil prices, well, you need first if you need to have a lot of profits for oil companies so that they can invest - ok, if you tax the money away right now, then they will not invest. So this is not going to decrease oil price. And at the same time, they're subsidising the demand, you know, because they see that gas and petrol is expensive and heating is expensive. So they're basically doing those subsidies to to consumers, which is you is delaying the demand destruction. So that that's the whole the whole situation is making making the even worse, you know. So that is very difficult environment for oil companies to do a film I'm no fanatic for also the future for fossil fuels and all it's talking about. I wish to happen because I think it's important to realise that investing is not about would you wish to happen, but what you think will happen. And these are just going to be completely two different things. Know, I also want oil to go lower, I want living to be cheaper, I want the environment to be cleaner. But the world one is not there. One doesn't care what I wish, you know. So I should invest in reflecting what I think will happen then about what I wish to happen. So this is what I'm looking for. [00:21:41][101.6]

Alec: [00:21:43] Yeah, it is a it is a funny situation we found ourselves in this year, for years ESG investing was the, the, you know, the, the biggest buzzword in the, the hottest part of the market. And all of a sudden everyone realised that the transition hasn't happened yet. And oil and you know, we're in Australia and coal companies are some of the best performers of this year. And it's not because people say the future there, it's just because we're still in 2012. [00:22:11][28.1]

Daniel Gladis: [00:22:11] I think the politicians have a totally wrong vision of how fast things can change, you know, and if you just push too hard, it will be counterproductive. This is what we're seeing right now because a lot of these high oil prices are definitely driven by the green policies. [00:22:33][21.3]

Alec: [00:22:35] So, Daniel, we I think we've spoken enough about oil. We want to move on to some of the other positions in your portfolio. But before we do, we're going to take a quick break to hear from our sponsors. [00:22:46][11.6]

[00:22:49] So, Daniel, before the break, we spoke about the price of oil. What we can learn from it, where it's going are all really based around one of your investor letters, what oil prices are telling us. If people want to go and read that letter, they can read it on your website. But there was another investor letter we came across titled Please Allow Me to Introduce. And we thought this was a great introduction to some of the bigger holdings in your portfolio. And the the premise of the letter is really it aligns with the investment philosophy introduced earlier about, you know, people creating this value and trying to find the best executives and the best entrepreneurs and being involved in their value creation. You step through some of the names of your list, on your list, and there's some really well known, I guess, managers, Jamie Dimon from Jp morgan, Warren Buffett from Berkshire Hathaway, and then a number of great entrepreneurs that we haven't that we're not as familiar with here in Australia at least. So let's start with the two that we know quite well and then we'll move to some of these other companies that we don't know as well Berkshire Hathaway and JP Morgan. Why are these companies a big part of your portfolio and why do you love the managers? [00:24:06][77.0]

Daniel Gladis: [00:24:07] Well, Warren Buffett... It's hard to come up with something that wasn't said about him. You know, when I when I was younger... I had a I had a rock band and I wrote all the songs, you know, and it's often when you want to write a song, it's you always realise that Bob Dylan has already written something. So when I thought about investing, I always realise Buffett has already said something like that before. He's an absolute legend. His performance is totally, totally amazing. He basically started from zero and those don't have anything to do with today's size. So he made many people rich doing during this period, during 60 years, he inspired many investors. You know, he wrote a lot about what he's doing. So he is an excellent teacher and he wants to give all his money to charity, so you know. So he's just one of the best stories ever in that in the investment world. And his track record is now 67 years and over 20% per annum, so there's absolutely no one that can compare. So I'm extremely happy to be a long term shareholder of Berkshire Hathaway, you know, because just do not know, not only because this is a this is a great, great conglomerate of businesses which are undervalued and present quite low amongst businesses. But also the idea that all these people are working for me know, literally is just is just the best thing, you know. So this is the way I want to think. I tend to think about buying companies. If I buy JP Morgan with Jamie Dimon on top of it, he's working for me, you know, and even if I sleep, he's still working for me. And so it's it's pretty good. And he's also an amazing he's been he's been with his company for many years, actually. He came before from from the big one. He became CEO of the company and he's not achieved achievement for many years is by far the strongest and the best the bank as a bank in the world. And I'm you know, I'm just amazed every time by the power. I like a lot of companies in the financial sector because that's what I spend my thirty years of my career working. So I think I feel I have a good understanding of of the banks and insurance companies, of speciality finance companies, etc. And most of the businesses are really driven by my, my people. I mean, just the rest of the business that we are in basically in the the the fund a fund is a commodity product where everyone says basically it's a commodity product and there's huge competition and it is very difficult to differentiate yourself from competitors, but there are some that are much better than others. So it must be it must be because of their human skills, you know. So that's why I always buy companies. This is good, good people. And if I look at in our portfolio, we have about 20 or 22 stocks in our portfolio and I would say at least half of them are run by founders or people that have a very large portion of their own wealth in the business. So they have definitely their skin in the game and also they see the business as their own. Buffet has created Berkshire from nothing, basically. So he definitely runs it with his best effort, which is not something that is automatic in every company. [00:27:55][227.9]

Bryce: [00:27:56] So many words of wisdom in that. So one another company that. So that was buckshot and JPMorgan a couple of other companies we want to touch on that are the community you might not have heard of. And I haven't heard of this one. And forgive me if I get the pronunciation wrong. Alimentation couche-tard Canadian convenience chain. Is that correct? [00:28:17][21.4]

Daniel Gladis: [00:28:18] Yes. Yes. [00:28:18][0.4]

Bryce: [00:28:18] Yes. Now, so why is that in your portfolio? Do you have the same approach from a founder led? Is that the people? Yeah. Can you tell? [00:28:27][8.8]

Daniel Gladis: [00:28:27] Yes. It's one of the one of the most fascinating Canadian growth stories over the last 30 years or so are the company's was started by a gentleman called Allen Usher in the inner French Quarter of Canada. He started by opening one convenience store. Right. And today the company has, I think, 17,000 convenience stores and petrol stations in Canada, US and in Europe and some in Asia. And it is extremely is extremely well run business, completely driven by the, by the management and by the philosophy. And I just love being part of it. You know, it's silly to me what I'm company. Mhm. Mhm. [00:29:14][46.4]

Alec: [00:29:15] Yeah. I think in your letter you said he came up with the idea of keeping a store open 24 hours a day. [00:29:21][6.1]

Daniel Gladis: [00:29:21] Yeah, that's true. Wow. [00:29:22][1.2]

Alec: [00:29:23] Big innovation. Yeah, it's funny. It's funny. [00:29:26][2.6]

Bryce: [00:29:26] I was born 711. [00:29:27][0.8]

Alec: [00:29:28] It's funny in hindsight. I like so many because Bryce and I both have a retail background. We worked at the two largest supermarkets in Australia and so many of the innovations in hindsight look so obvious, but it still takes someone to, you know, to come and do it. I know the biggest retail award, one of the biggest retail awards in Australia is named after the guy that introduced shopping trolleys. And it's like in hindsight, well, of course that was going to be a thing. But similar to this 24 hours a day thing, it still takes someone to actually do it. Another company that you did hold, I'm not sure if you still do is a Sberbank. The Russian bank, yeah. Can you tell us a little bit about the company? Obviously, with everything going on in Russia at the moment is so a company that you like, what are your thoughts on it? Yeah, it's. [00:30:18][49.6]

Daniel Gladis: [00:30:18] Yeah, it's a very, very exciting story with a very unfortunate entity that he so far ago I first came across. I actually was a gay man myself at the end of 1996 when it was still a post-communist dinosaur. And I've been foreign company ever since. And in 2007, a gentleman called Head McGrath became CEO, and he actually turned to bang into probably the best thing I think was extremely profitable, totally dominant position in Russia and always perfect corporate governance, extremely shareholder friendly, technologically advanced. And we owned the store for like six or seven or eight years and it was performing soon well. But then when it became clear to us beginning of this year that Russia is going to invade Ukraine, we took frothiness in the stock and because we didn't want relations with Russia. And so that's like the sad, sad ending of the story so far. And also the company is extremely good, but unfortunately it's in the country where the government went crazy and basically destroyed our business. So I don't know what the management thinks about it, but if you can imagine that the CEO spent last 14 years or seven years trading his business, which was now household, I don't think he's very happy. There's nothing you can do so and so important. You should also be flexible... because... Very often people fall in love with companies they own and we do as well. But things changed and when things change you have to you have to change your thinking as well. And in this case, the change was very quick and very dramatic and we just decided to get out and we're happy to have nothing to do with Russia. [00:32:14][115.9]

Bryce: [00:32:16] Me So Daniel, another company that's one of your top holdings, I believe is Magna, is it Magna International? Can you tell us what the company does and the thesis behind. [00:32:28][12.2]

Alec: [00:32:29] This unheard of this one before. [00:32:30][1.2]

Daniel Gladis: [00:32:31] Yeah, no moderniser is a automotive car supplier probably one of the not seen where it's actually probably the only company in the world that can create and design assemble. Manufacture of the whole car. From from. And it's based is based in Canada. Again, it's an interesting story. It was founded a couple of decades ago by an Austrian general of Austria, Frank Stoner, who moved to Canada and again from Russia. He built the company to, I don't know, 40 billion or $45 billion of sales. So very large. He's not running it anymore because he's not he might be 85 or 90. So he left ten years ago or 15 years ago. So the company is still doing very well. And we like it. You know, it's a it's a cyclical business and over a cycle of things is doing is doing is doing very well. [00:33:35][64.4]

Bryce: [00:33:36] Nice. So, Daniel, before we move to our final three questions, I've I've just got a question on another question. Obviously, we spend the first half of the this discussion talking about the macro headwinds and a lot on the oil price and where it's going and the implications on inflation and all of those sorts of things. And then we've spent this part, the second half of the interview talking about some of the positions in your portfolio and the investment philosophy that you take from founder led companies and having a longer term vision. For someone who's listening at home and starting their investing journey and looking at all the headlines around inflation and oil price, but then hearing about how you actually invest does everything around oil and all of that, it should it be something that we're focussing on? Does it really matter what should be the sort of take away from that half of the conversation versus actually taking a long term investing approach? [00:34:29][53.4]

Daniel Gladis: [00:34:30] Well, one takeaway can be a message that should look way beyond the horizon of the current events because they will end, they will change, new things will come up. And I think there's long term investment horizon, many of these things can be ignored. Right. So your investment horizon must be sufficiently long. And was that sort of the approach you should be looking the big investments? I mean, our largest investment is Berkshire Hathaway and we've only for 11 years, probably and probably only for nine, 11 years. And our faith allows us and I'm sure that during the during the last 18 years to just think what will happen. You know, many things happened and was quite terrible in drilling coal. Everything shut down globally overnight with two totally unexpected. But the company survived. You know, the stock price is probably four times as high as is reported in first place. And I mean, the next ten years will also bring many things that we cannot envision today. But I'm sure they'll do quite well and will be much higher than just now. So this is the way I prefer to look at stocks always look beyond the current times because it's completely unpredictable. Just think six months or nine months back.... Would you say a year ago, when inflation at that time was 2% - would be 10% now? Or would you say that the oil price would double? Or that gas prices would quintuple in Europe? Or that Russia would invade Ukraine? I mean, none of these things would suddenly come out of your mind. And think about the next four or five years, it's going to be the same you know. So I think that that might be the takeaway. [00:36:19][108.4]

Bryce: [00:36:20] Yeah. [00:36:20][0.0]

Alec: [00:36:20] Good title. Yeah, it's a good takeaway. And I think the second takeaway I have for this interview, Daniel, as we move towards our final three questions, is just a reminder that there are great companies and great entrepreneurs everywhere in the world. Of the five companies we spoke about tour in the States, touring Canada, one's in Europe and there's also great investors everywhere in the world. And we want to say a massive thank you for sharing your time with us. And I think it's about 6 a.m. over where you are. So we appreciate you getting up early and joining us on the show. If people want to find out more about you, they can go to the website and it's. Apologies if I get the pronunciation wrong Vltava they l t I've a dot com so go and read the investor letters, which. [00:37:14][53.5]

Daniel Gladis: [00:37:14] It's actually a lot of fun. [00:37:16][1.3]

Alec: [00:37:16] Oh, I was thinking so much about the pronunciation. I got the URL wrong, but yeah, people can go and read the investor letters that we've been speaking about today and there's plenty more that you've written there as well. But Daniel, we will move to the final three questions. And the first one is, do you have any books that you consider a must read? [00:37:36][19.0]

Daniel Gladis: [00:37:36] Yes, I made a list of things that just goes too quickly through them. I think everyone should read Grahame's the intelligent investor, especially Charvis eight. And when we should do that again and again and again. Then Berkshire Hathaway's letters to investors were published as The books are absolutely absolute treasure. Then regarding the psychology, Robert Shiller and these irrational exuberance is excellent and quite old book from the 19th century called Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay's Absolutely fantastic. And about an insight into the cycles and how our markets the most important things I would recommend and on valuation. Anything written by Mr. Doom with your own set of rules and valuations. So you pick up many of them basically, and that you have, you know, businesses. [00:38:29][52.4]

Alec: [00:38:29] That's their six great books. I think any investor would do very well if they read all six of those. The second question, Daniel. Forget valuation or what a company looks like as an investment opportunity today, just purely based on the company's fundamentals. What's the best company you've ever come across? [00:38:50][20.8]

Daniel Gladis: [00:38:51] Berkshire Hathaway. If you tell me I have to put all my assets in one stock and go away for five or seven years and I choose this one. This would be the one that I would choose. [00:39:00][8.9]

Alec: [00:39:00] Nice. And is it is it because of the people or is it anything about the structure of the business as well? [00:39:06][5.9]

Daniel Gladis: [00:39:07] No, it is the people, the structure of business, the move that it has and the motivation for anything. So everything is in favour. [00:39:15][7.9]

Alec: [00:39:15] Love that. Love that. And then, Daniel, final question. If you think back to your younger self, just starting out as an investor, opening up that brokerage as the Berlin Wall comes down, what advice would you give to your younger self? [00:39:30][15.0]

Daniel Gladis: [00:39:31] Probably make things the most simple, possible. I made mistakes quite often when I tried to prove how good I am, you know, frankly. And I try to complicate things and overdo things and try to create something just totally unnecessary and if I... And over time, I tended to make things in the most in the most simple way and it's probably the best. That would be my advice. [00:39:58][27.2]

Bryce: [00:39:59] I love that. I think we often try and remind ourselves that, you know, particularly when it comes to investing, it's very easy to get caught up in. Things have to be different and complicated for it to be successful. And sometimes the most simple right in front of you approach is going to be the best outcome. So great way to finish, Daniel, and we seriously appreciate you taking the time to share your thoughts with us today. It's been an absolute pleasure. I thank you very much. [00:40:22][22.5]

Daniel Gladis: [00:40:22] I think you it was it was a pleasure. [00:40:24][1.6]

Alec: [00:40:24] Thanks, Daniel. [00:40:25][0.4]

Bryce: [00:40:26] Hey, thanks for listening to this episode of Equity Mates. We love hearing from you, so drop us a line at Contact@equitymates.com. Or even better, go to your podcast player and leave a five star review. Also a reminder that the Equity Mates content train doesn't stop when you've run out of episodes to binge. We've got a brand new website, a Facebook discussion group. We're on Instagram, YouTube and slowly making our way as an influencer on Tik-tok. Well, that's Ren. So come and say hello and join the community. We'd love to welcome you. Until next time.