This past Sunday, one of those many Twitter interactions that almost always amount to nothing did not. I like to listen to podcasts and Patrick O’Shaughnessy does one of the better ones. It’s called Invest Like the Best. I follow O’Shaughnessy on Twitter and read a tweet of his about being grateful for getting called out on your (cognitive) shit by friends. It felt funny because I was just thinking about an episode on his podcast, and had the temerity to mention that to him. The episode is an interview he did with investor Brent Beshore, whom I had never heard about.
I had been thinking about that interview, and couldn’t figure out if what I had heard from Beshore was too good to be true. I mentioned that to O’Shaughnessy over Twitter and, to my surprise, Beshore himself replied, graciously asking what was it about the interview that had struck me as “nonsense” (his words). I replied to him that I would listen to the episode again, take some notes, and here’s the result.
Let’s start with me saying this feels weird. We listen to so many people every day, why bother going in the direction I went? I don’t know. I’m almost sorry. I did spend time thinking about myself in relation to my perceptions in this case but that’s not what Brent asked for.
I remember listening to about two thirds of the interview for the first time and stopping for some mundane reason with the sensation of having listened to a totally brilliant man. I also remember I found it because O’Shaughnessy had posted something stating how great he thought Beshore and the interview were.
After a few days, I started second-guessing myself. Certainly, I had heard a guy who could speak supremely well. Very well articulated, good listener, hesitating where it’s human to hesitate. The only sensation I could articulate was “too good to be true but I’m probably wrong”, and that’s what I tried to convey in the tweet-exchange.
Since I felt Beshore now deserved more consideration on my part, I listened to the episode again. Not only that, I spent some time on his company’s website, read a few of his writings on Forbes. I had already followed him and his company on Twitter. I suppose I dedicated about 2 and a half hours to the endeavor.
I will not be as ridiculous as to answer whether he’s “too good to be true” or not. He’s very possibly pretty great, but I can’t know with the amount of time I devoted.
A few things about what caused my sensation, though. Two silly things to begin with:
- His mention of EBITDA. Having heard him say he was a heavy Buffett-reader and so forth, I subconsciously disagreed with his use of EBITDA. He even says in the interview he doesn’t agree with EBITDA. Later, I read an article of his on Forbes titled “EBITDA is ‘BS’ earnings”. So my mistake there. But I still wonder why he uses something he doesn’t agree with, even if that’s what other people use.
- His ownership of Zapier. I told you it was silly. I use Zapier a bit. I just can’t fathom how that company makes money. I’ve been in the startup world for years, and I do understand that you can easily sell a tech company that has absolutely no profits, for a profit. I suppose this clashes with the Buffettian image I initially drew of Beshore, but he’s apparently never been even a stock investor.
Other things feel harder to explain, but may have been more determinant in my sensation. Whenever O’Shaughnessy asked for more specific examples, the level of detail was not too convincing for me. Needless to repeat that the misperception is probably mine. Beshore talks about the decision to pay for media in one of his companies using a credit card rather than cash. He mentions the use of float, and that they could use the 1 or 1.5% yield on the time they get from the credit card, and that it represented a yearly cash-flow improvement of $500k. I subconsciously rejected those numbers.
Later he talks about his company Influence & Co, and the description of what the company does and how that brings value to customer felt surprisingly generalistic to me.
We know incredible financial reporters who can hold conversations with any master in finance, keep it interesting, without really being, or needing to be, a great business manager. My feeling, right or wrong, was ever so slightly similar to that.
A Buffett or someone with a long life will do an interview and be extremely vague. But we can look up very fundamental things about him: his annualized returns, how he got his initial capital, how he relocated capital in pivotal moments. Those things are not touched upon in the interview, and understandably so. Their lack may also have contributed to my sensation.
Months ago I heard another interview on another podcast. Tim Ferris brought in a guy called Walter O’Brien, a purported software whiz, kid genius-turned-superman of computers. Now I am a programmer. I’m much better at software than at investing. I was a child programmer. I heard the entire episode with a slightly bitter taste in my mouth. Something was off. Days later I came back to it and, lo and behold, the guy was a total fake. And he fooled me for days.
I wish Brent all the happiness in this world, I appreciate the very polite response and let us all improve ourselves.
Here’s the link to the interview: http://investorfieldguide.com/beshore/