Episode 411: The Secret to Investing in Retail
On this week's Stansberry Investor Hour, Dan and Corey welcome Alex Morris to the show. Alex is the founder of TSOH (The Science of Hitting) Investment Research and an author. TSOH, which boasts more than 20,000 subscribers, aims to generate attractive long-term returns while providing complete transparency on the research process, portfolio decision-making, and returns.
Alex kicks off the show by discussing the inspiration behind his new book, Buffett and Munger Unscripted: Three Decades of Investment and Business Insights From the Berkshire Hathaway Shareholder Meetings. He goes in depth on what he learned from Warren Buffett and Charlie Munger in the process of crafting his book, including understanding incentives, management turnover, and which macroeconomic factors are important. Alex notes...
If you asked a lot of people, "Here's a list of 10 securities. Tell me which ones are buy, sell, hold." Well, I know for sure you can turn on a couple of TV channels and you can find people who would very happily answer those questions for you for all 10 of those securities. And I think part of [Buffett and Munger's] approach has been more so, "We don't need to answer it for nine of them. If we can answer for one of them with a reasonable level of conviction – it's something that we're willing to truly put some chips behind – then that's all that really matters."
Next, Alex talks about the "pointed" questions Buffett and Munger got during the dot-com era from shareholders who doubted their abilities. Then he breaks down his own investing style, how that style has evolved over the years, and how he got interested in investing in the first place. This leads to a discussion about struggling retailer Five Below (which Alex is keeping an eye on to see if it can turn its business around) and Dollar Tree (which Alex owns and still likes today)...
Dollar Tree had almost all their price points at $1. Then a handful of years ago, largely due to the impacts of inflation... they went to $1.25 across the whole store basically... I think it effectively allows them to truly continue meeting a need for their core customer in a way that they were artificially constrained from doing basically with that $1 cap.
Finally, Alex delves further into the retail space. He discusses Costco Wholesale versus Walmart, the importance of retailers understanding their core customer base, why Dollar Tree is misunderstood, geographic retail strategies, President Donald Trump's tariffs, and a U.K.-based mixers company he finds attractive...
I do own Fevertree... They make premium tonic waters... If you go to a local grocery store, you probably see a liter of tonic from Schweppes. It'll be $2.49 or whatever. And the private label will be $0.79. And Fevertree came into this market and is selling four-packs of 10-ounce bottles for $6. The difference is that the ingredients are much higher quality, and the taste is much better as a result.
Click here or on the image below to watch the video interview with Alex right now. For the full audio episode, click here.
(Additional past episodes are located here.)
The transcript is coming soon.
This Week's Guest
Alex Morris is the founder of TSOH Investment Research and author of Buffett and Munger Unscripted. He launched TSOH in early 2021 after a decade in the finance industry as a buy-side equities analyst. The objective of TSOH – which now boasts more than 20,000 subscribers – is to generate attractive long-term returns while providing complete transparency on the research process, portfolio decision-making, and returns.
Alex is a CFA charterholder and holds a Master of Business Administration and a finance degree from the University of Florida.
Dan Ferris: Hello, and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and The Ferris Report, both published by Stansberry Research.
Corey McLaughlin: And I'm Corey McLaughlin, editor of the Stansberry Daily Digest. Today, we talk with Alex Morris, author of Buffett and Munger Unscripted.
Dan Ferris: It's an amazing book, folks. I can't say enough good things about it. You've got to get this book. If you are an investor and you own stocks and you want to know about business and investing and how to think about both, this is a must, must read. And with that, let's talk with Alex Morris. Let's do it right now.
Corey McLaughlin: For the last 25 years Dan Ferris has predicted nearly every financial and political crisis in America, including the collapse of Lehman Brothers in 2008 and the peak of the Nasdaq in 2021. Now he has a new major announcement about a crisis that could soon threaten the U.S. economy and could soon bankrupt millions of citizens. As he puts it, there is something happening in this country, something much bigger than you may yet realize and millions are about to be blindsided unless they take the right steps now. Find out what's coming and how to protect your portfolio by going to www.americandarkday.com and sign up for his free report. The last time the U.S. economy looked this, stocks didn't move for 16 years and many investors lost 80% of their wealth. Learn the steps you can take right away to protect and potentially grow your holdings many times over at www.americandarkday.com.
Dan Ferris: Alex Morris, welcome to the show. Thanks for being here.
Alex Morris: Thank you for having me. I appreciate it.
Dan Ferris: So, just to bring our listeners kind of up to speed, Alex, our guest today, Alex W. Morris, is the author of Buffett and Munger Unscripted: Three Decades of Investment and Business Insights from the Berkshire Hathaway Annual Shareholder Meetings. If you're familiar with Lawrence Cunningham's book based on the Berkshire Hathaway shareholder letters, Alex actually mentions in the beginning of his book that his book is the shareholder meeting version of that. And I like having people in the show where I can just gush and compliment them and throw them a lot of softball questions because that whole sort of more contentious thing that people do sometimes with interviews, that doesn't work for me.
I love the way this book is organized. I think it's organized brilliantly. So, it's subjects and then topics within subjects, and you give me all of the timings on where I can find these things in the meeting videos that are available on CNBC.com back to 1994. It's just – it's brilliantly organized. And another thing I about it, Alex, is that Cunningham's book is about yea thick, an inch or so, and yours is, like, two or two and a half times his because there was so much more content really, all the six or – five or six hours of question answering that they do at every annual meeting. So, I love the book. And maybe we'll start at the beginning with – if you could tell our listeners just a little bit about yourself before you came to write the book and do what you're doing now. And then why, how, when did you decide on the book?
Alex Morris: Sure. Well, I like the very complimentary nature of a podcast interview as well. I don't even have to talk then. I can just sit and listen the whole time, –
Dan Ferris: Oh, yeah.
Alex Morris: – which is probably more enjoyable for the audience than the alternative. But it sounds they might get stuck with a bit of the alternative. No, so the book and my history are, I guess, pretty intertwined at this point. As you mentioned, Cunningham's book was something that when I really first started getting interested in investing, which was call it the mid-2000s was one of the first books that I kind of stumbled across and was very influential to me. It was really – also intertwined with my learning about Warren Buffett and Charlie Munger and their teachings and their process and everything like that. So, it was a very important book for me and it taught me a lot about what I think I know today, and I've obviously built upon that foundation over time.
As the years went by and I attended – I've lost – I tried to go back and count, but I couldn't manage to do it. As I attended six, seven, eight, nine meetings, whatever it's been, those have also been very important to me, continuing that learning but also meeting other people in the industry and networking and things that. So, it's just become important in a more complete way than even just the lessons from all this stuff.
So, I always enjoy going out to Omaha. In the early days, it was kind of tough any years I wasn't able to go because you couldn't really get a good Q&A. People would try to cobble together as best they could what was said or some of the best answers, but you couldn't get a complete transcript, which was kind of annoying for someone who really, really looked up to these guys and wanted to know exactly what they were saying.
So, as you noted, when CNBC in 2018 announced that they were releasing the archives of these events going back to 1994, I think it all kind of clicked that – at that point that there was going to be something valuable here. That didn't lend itself to starting the book until a couple of years later when a gentleman at Harriman House named Chris Parker reached out to me and asked about doing a book and eventually lit the fire and helped me along the way in terms of compiling all this. But yeah, so it really got rolling then and just came out here in early 2025. So, I guess it was a – kind of a three-year project to start to finish.
Dan Ferris: All right. Well, thanks for telling us all that, because I was just – I have to be curious because it's such a wealth of material. I think I read in the beginning that it was – was it 1,700 different questions that people asked? And you got it down to just 500, which – just 500 are in the book – 500 answers of Buffett and Munger in the book. So, I thought, "Well, that's a serious project." So, it's hard not to be impressed with it. And it just came out so great, the organization of it.
But the first thing I went to in the book, Alex, was the last thing in the book, the bit about writing and running an insurance company. The right way to run an insurance company – I forget exactly what it was called. Yeah, so, the appendix: The Right Way to Run an Insurance Company. And something was impressed upon me there. I haven't really had my head in Buffett and Munger for a little bit. I've got a whole shelf full of books. I've read almost all of them about Buffett and Munger and we've been writing about Berkshire Hathaway in our Extreme Value newsletter for a long time but I haven't really had my head in anything this. And I read that bit on NICO, National Indemnity Company, that you wrote in the appendix, and something struck me, which is very important. And as you dip throughout the book, as I've done, you see it, which is that they do things differently at Berkshire Hathaway. And that makes all the difference. It's not even – it doesn't even feel, the way they explain it, they're so smart and they're so brilliant – although they of course are. It's just that they did the right thing and made it simple and different. They make it seem anybody can do it, right? It's kind of a head-scratcher why more people don't do it.
Alex Morris: Yeah, I think – just to jump in real quick, I think that example is the – your description, I 100% agree with, that it is a fascinating thing to realize as you look at something that example of what really was the point of differentiation and it was the correct incentives, which a lot of people probably could have identified the correct incentives. It was then actually structuring the system to deal with that and having the ownership structure that could handle that, which was a point of differentiation from Berkshire between some publicly traded companies, right?
Dan Ferris: Right.
Alex Morris: And I think the part of it at the end that is really interesting, as people read through it, is the line where Warren basically says something like, "The culmination of this case study is a 25-year period where things worked out really well." If you cut it off six or seven years before the end of that 25-year case study, it would not have looked very good. And they were making the right decisions. And that part of it is – it just speaks to truly needing to understand how a business operates and what the objectives are and what is the right way to measure success or failure.
And they're masters at it, and they can explain it in a way that's really understandable to people. I would venture to guess that in a lot of public companies, one, the understanding is not necessarily there. The alignment is off between the owners and the managers. And I might even venture to say that in a lot of cases the managers may not necessarily grasp or desire to go through what National Indemnity went to during that period, especially from call it the mid-80s to the late 1990s. So, it's just a fascinating case study across the board. And I'm also glad that you shouted out the appendix because for people who haven't read the book yet, the vast majority of the content is Warren and Charlie talking and me doing the arranging. One of the few parts of the book that's actually written by me is the appendix.
Dan Ferris: That's right.
Alex Morris: So, it's nice to hear that somebody likes the appendix, because some people call me an author sometimes, as you did at the start, which I enjoy, but I still ask myself, "Did I really write this book?" Or "What is my role in the process?" as happy as I am to have that role in this process. But I think I did a lot more arranging than anything else.
Dan Ferris: Yeah, but in the course of arranging it's – just to take in that volume, something comes out of you. And that's what I'm really curious to get at today. And I just used the example of the appendix to show that's – just dipping in here and there, that's what I – that's one of the things that I gleaned from this. I can't imagine going through 1,700 of these questions from all the annual meetings since 1994. You had to have come out of that process a different man, a different investor with insights that you didn't have before. That's – see, that's not in the book. That's the part I want to get to. We know what's in the book. It's Warren and Charlie, and you've arranged it and edited and done a brilliant job. But I'm very curious – and we can talk about that certainly, about the Warren and Charlie stuff, but I'm sure you're – that will probably be a big part of your answer to this question, but how do we get at that? I want you to help me ask my own question. What were some of the great insights? What did – what – how is Alex Morris different from this process? You must – it must have done something for you aside from get you a book published.
Alex Morris: Yeah, there's something that Warren – that Charlie has said over time about understanding incentives along the lines of, "I think I was in the very small group of people in my peers that appreciate the importance of incentives, and I still underappreciate that most of my life." And I think that's somewhat applicable here in terms of taking the ideas here that are somewhat simple and straightforward on a lot of things, like management compensation and thinking about alignment and what does it truly mean, and then taking those ideas incredibly seriously and thinking about how they apply to – I mean, in terms of being an individual investor, how they apply to things like – I'm updating on Five Below right now, which is a relatively small retailer in the U.S. And one of the things that's become a lot more apparent to me, which I think has come through in the book a bit more, is these ideas of management turnover or C-suite turnover, even beyond the CEO. And thinking about, "Well, why does that happen?" And when someone leaves Five Below and goes to Walmart to become the head of HR, and it's a pretty significant jump to go from Five Below to – how does that work? And why does that happen in that way?
Just thinking about things like that that are relatively small signals, not quantifiable, but really trying to give those things their proper weighting, particularly if you're talking about being a long-term investor. That's the other incredibly important part of all this, is thinking about what's applicable to different styles or different approaches. And it comes through in the right way to run an insurance company write-up, which is they say, "The way that we approached employer relations as it related to the about a headcount and the need for attrition or not, was very different at National Indemnity than it would be at an auto manufacturer or somebody builds cars." You cannot run General Motors the way that they ran National Indemnity because of specific pieces to those two businesses. So, it's that same idea as well. Just truly understanding what a business is and then thinking about what the proper incentives are and then verifying that managers at a given company are doing that over time. Just really making the investment process back to the idea of what does it mean to run a business well and what does it mean to be invested in a good business? Those questions, which I think at times can certainly be over-quantified versus actually stepping back and thinking about what the real answers are, and it is also tough to deal with in a market system, basically, in terms of evaluations and the like.
Dan Ferris: Right. So, I feel what you're getting at is it's another way where they do everything differently. For example, one of the questions that somebody asked in the book was about cutoff [price-to-earnings (P/E)] ratios. There's a little section in the valuation section, I think, a topic about P/E ratios. And the question had obviously been something about do they have a cutoff? They said, "Well, no, there's no cutoff. And the P/E ratio now, it doesn't really relate very much at all to how we think. The company could be – could have negative earnings right now. And we like things where we can understand it maybe and other people have been cut off. They hit their cutoff P/E ratio, but we understand it better." It was – I'm just paraphrasing loosely what – one of the Munger quotes in that section. So, completely different again there. And really simple. "Well, we just –" and as these thoughts go by, you're like, "I know these people are incredibly brilliant but they make everything sound –" it's like Investing for Dummies, the way they communicate, isn't it? It's just – it's incredible, actually.
Dan Ferris: Yeah. I think a lot of it is – I think a lot of it, again, gets to this question of what is – what are you trying to achieve, basically? And what are the constraints or lack thereof around that? A way to say this maybe more directly is I think if you asked a lot of people "OK, here's a list of 10 securities. Tell me which ones are buy/sell/hold," well, I know for sure you can turn on a couple TV channels and you can find people who would very happily answer those questions for you for all 10 of those securities. And I think part of their approach has been more so "We don't need to answer for nine of them. If we can answer for one of them with a reasonable level of conviction as something that we're willing to truly put some chips behind, then that's all that really matters."
And I think it's variations of that type of thinking over and over again. What part of this – I think macros are a really prominent example of this that I think I have a more nuanced understanding of after having written the book and thought about some things like Clayton Homes, which is a manufactured housing business that they bought in early 2000s. It's not so much that they're completely indifferent to macro factors or their impacts in business. They have a really clear understanding of which ones are actually truly relevant to a given business and then how to think about that in terms of its long-term competitive position and its standing within an industry.
And in that particular case, I think as Warren was involved with making that acquisition happen, it was at a period of time where that industry was dealing with very significant financing pressures and he understood how Berkshire offered a benefit there that a lot of the standalone – or all the standalone competitors, they'd basically be disadvantaged relative to Clayton as part of Berkshire. So, again, I think it's – it's not saying, "I don't care about this at all" and being indifferent to it. It's just actually appreciating what part of it is truly relevant and then making that part of the decision-making. But that's not understanding every little thing about what the Fed's going to say tomorrow, what unemployment was, or what housing – you know what I mean? So, there's a there's a true distinction between those two things that kind of greatly changes how you think about answering the questions that you encounter as the part of the game, at least, I think.
Dan Ferris: Yeah, we recently interviewed a guy named Chris Mayer, an old friend of mine, a long-term investor, a bottom-up, long-term guy, and we were talking about the current sort of tariff tantrum macro situation, and I was getting to the end of the interview and I wanted the listener to note that Chris hadn't mentioned it once, and why wasn't that? And the short answer was that it's simply not an actionable item for him. And you're telling me that – it sounds you're telling me Buffett and Munger, they can identify the actionable macro item and just separate everything else and relate it directly to the business and then to Berkshire's role and it's all of a piece. It's not just this random headline that they feel like they have to react to.
Alex Morris: Yeah, exactly. And I think also, especially over time, as Berkshire started to include a larger number of wholly-owned businesses, I think Warren developed a more all-encompassing view of the economic picture and understood different pieces together. And again, not in a – I think Howard Marks has a similar way of framing it in terms of understanding where you are is different than predicting where you're going to go and making bets placed on kind of those conclusions. But having an understanding is very, very important.
And again, in the situation like Clayton, I think he then also appreciated what is unique about Berkshire as it looks at potential subsidiaries to acquire where it actually does add value. I mean, he's very prominently talked about "Hey, you don't have to run around and do a bunch of shareholder meetings anymore as part of Berkshire." But there's other ways that that's applied over time as well.
Corey McLaughlin: Hey, Alex. Thanks for being here, first of all. Is there anything – you're dealing with videos and recordings going back to 1994. Is – was there anything that – and you had obviously been to meetings, Berkshire meetings before, but is there anything that surprised you as you were going through it from '94? I'm thinking internet period and then beyond that. Is there anything that you – maybe you didn't think you fully understood until you really listened to all of these transcripts? Or that maybe people don't fully understand about Buffett and Munger, just from the timeline in general?
Alex Morris: One of the things that surprised me was some of the suits that Warren decided to wear. Some of those collars were pretty bad.
Corey McLaughlin: Yeah, right. Wow, yeah. Fashion.
Dan Ferris: Yeah, that's part of the schtick.
Alex Morris: Besides that, I think – yeah, exactly. Exactly. Exactly. He saved some money on a few of them. Most of it's not too surprising. There's some things where Warren especially – I don't think he does it as much now. He did things around commodities over time or arbitrage type things that at the end of the day are mostly a sideshow really in terms of the actual value creation of Berkshire over time. But they're things that he still enjoyed to do and Charlie would kind of needle him a little bit, saying, "You're spending – you're getting questions about gold and silver and all these things that it's basically a rounding error at the end of the day for Berkshire, and you're kind of just wasting your time and our time by doing this." But that was Charlie's perspective, which was different from Warren's. I think he's always had, or it seems he's always had a little bit more of that to him than Charlie did. You even saw it with the Activision arbitrage on the Microsoft deal a few years ago. And so, he still has – obviously, that was a fairly big deal where he put some money to work, but he still has that part of him.
Besides that, not a ton only because I've been following them for so long. The meetings around the late '90s into the early 2000s were obviously very, very interesting in terms of the questions got really pointed in a way that really hasn't happened since I've been going to the meetings. There's been some pointed questions around political and some of the stuff like utility and things like that, but they were never pointed questions around your ability to invest well and your ability to understand business. And they got a lot more of that in the late '90s, which in a way that wasn't overly critical to the questioner, allowed them to really express their understanding of business and valuation and why they did what they did. So, those were kind of enjoyable to listen to.
But a lot of it, for me, is really – especially reviewing in hindsight, it's really, like Dan was saying, in terms of just picking up little things, and especially at different points throughout your career and my career, they just kind of hit differently than they did previously, or my ability to understand what they're actually saying, or the words between the words. It just – it really makes it incredibly insightful, some of the things that they've said over time.
Dan Ferris: Yeah, every time I read either something your book or Cunningham, or maybe some of the other ones, there's the – I forget the author, but he's got the complete financial history of Berkshire Hathaway now. I've yet to really dip into that much. Any time I read these things, I come away saying, "Why don't I spend a lot more of my time reading this stuff again?" because there's no substitute for it. That's one thing I come away from all of this material with. There is simply no substitute for it. In other words, how do you own – how do you buy and hold equities for any length of time without knowing what's in your book, what's in the Cunningham book, what's in the Berkshire Hathaway – ? How do you – how can anyone – does anyone still do that? I don't even know. It's impossible.
Alex Morris: Yeah, well, I don't know how many people are out there investing, but I've seen the number of copies sold. So, there's some people who haven't bought the book yet. But yes, I –
Dan Ferris: It's not 100 million. You know?
Alex Morris: No. No, it's not. But no, I completely agree. Again, I compiled this and I still open it at times and flip to sections where I go, "Oh." There's so much value and insights that they've shared over the years. To your point earlier on 500 out of 1,700 questions, that wasn't for lack of trying in terms of making it very concise and having as much value packed in as tightly as possible. They just say so much over time that's so insightful covering so many different topics that the book kind of had to be as long as it was at almost 500 pages there. That was as tightly as I could compress all the knowledge that they shared, which is – it's pretty nice to have three decades and kind of a fairly digestible source. So...
Dan Ferris: Yeah, it is. And it's nice – as you point out in the very beginning of the book, too, it's great to have it all arranged by these subjects and topics within subjects. That alone, that's your service. That's your – that's really what makes this. It's just like the Cunningham book. You know exactly where to go to find exactly what you want. And when you're studying a subject matter like investing, you don't necessarily just want to read this from cover a cover, although that would be extraordinarily valuable as well. But you do want to use it as kind of a reference. It's WWWCD: "What would Warren and Charlie do?" I'm going to get that little bracelet: WWWCD. And we can answer that. We can answer those questions. And you know that what they do, what they've found has been very effective because they've got Berkshire Hathaway to prove it. And they admit to all their mistakes and everything too. And you know that it's going to be simple and profound. And it's probably – it could very well lead you to some kind of a breakthrough. And you can find it. You can find your next breakthrough. It's great. So –
Corey McLaughlin: Dan, I can see you thumbing through this for quotes for Extreme Value at some point, right?
Dan Ferris: Oh, yeah, this is like – this is – it's a bible basically. It's – this and the Cunningham, you put them together, it's the Warren and Charlie bible. You've got the shareholder letters. You've got the meetings. You're good. And the difference in length – what are the meetings? They're all like, five or six hours, right?
Alex Morris: Yeah, they're right around – they were all right around four and a half or five hours, I believe, of the recorded – of the Q&A part, I believe, if I remember correctly now.
Dan Ferris: Yeah, so just call it five hours or something since 1994, however many couple dozen times or whatever it's been. A little harder to get through all that than it is to get through this. I'm just saying.
Alex Morris: Yes.
Dan Ferris: Never mind the organization, too, which adds – it's just – it's shorter, but it's organized. It's really great. So, if I had asked you – if I had run into you in a bar and we didn't know each other at all and I said, "What kind of investor were you?" would you say that you're sort of a Warren Buffett-style investor? Or is this just part of who you are as an investor.
Alex Morris: No, I'd say that's who I am. I think I very much came out of the value investing mindset as an investor, which I took a lot of – as a younger investor, as a younger person, I took a lot of, in terms of quantifiable and thinking about valuation, especially, which is obviously incredibly important. But I kind of developed, I think, a more nuanced view over time, especially in terms of my desire to kind of truly own businesses and to be a long-term shareholder, and as part of that to probably run a more concentrated portfolio. I mean, those two things kind of go hand in hand.
I've owned – just to pick an example, because I think it's kind of – I think it's relevant to how my thought processes evolved and my investment approaches evolved – I've owned Microsoft since 2011, and I bought it in 2011 when I was fresh out of high school. Didn't have a lot of money to just be very clear for anybody who thinks I've made a killing on it. It's up a lot, but I started at a very small number. But I bought it as a traditional value investment. And the thinking was really around Windows and Office, the things that I kind of understood. I didn't understand server and tools and things that incredibly well. And I certainly didn't understand cloud computing and those things as they first kind of came around. But I understood what Windows was and I certainly understood what Office was and I thought they had a certain amount of staying power. And I – as I looked at the valuation of the business, I thought it was a stock that looked attractive.
And then you fast-forward over the next couple of years and you get to the point where they hire Satya Nadella, and I think over time it's fair to say that the culture has changed in certain ways. And obviously the structure of the business has changed in very significant ways as a result of cloud computing and some other things that have come along. And as the valuation changed there over time and as the financial results changed over time, I think I opened up my mind a little bit more to the idea of not living within kind of these tight P/E ranges, for lack of better description, of what value investing can become. And I opened up my mind to the idea of "OK, if this person is truly a great manager, if this is a truly great business in terms of something that I might own for three, five, 10, 20 years, how do I think about what that's worth relative to –" pick anything else. Pick Bed Bath & Beyond or what it might have been at the time. That was kind of a traditional value stock.
So, that has had a lot of impact on the way that I think about investing. Over time, I've also tried to develop more of a circle of confidence among kind of smaller companies, which has been a bit of a long journey. My role in traditional – in the finance industry was always at investment advisors that were very interested in the Microsofts, the Pepsis of the world, which is fine. But as I've moved into my own, as I now run my own business, TSOH (The Science of Hitting) Investment Research, and thinking about managing my own portfolio, I've wanted to kind of move that to parts of the world that are a little bit less well known and may have a longer runway in terms of their growth trajectory.
So, that's probably the most prominent ways that it's kind of evolved over time. Still, a lot of it's still rooted in the exact same ideas, but maybe the application is just slightly different than at least how I first interpreted it.
Dan Ferris: Yeah, it's a – there's a typical evolution that kind of mirrors the Buffett evolution from the cigar butts to the great businesses, and I've found that quite a bit. And actually there's often, I've found, another step on the front end in the very beginning. A lot of people decide they want to get into the stock market and the most available data point to them is the price, so they obsess about trying to predict the securities prices. And mercifully that often goes wrong very quickly so they get away from it – I know I did – and then get into "What is it I own here?"
Corey McLaughlin: Yeah, but Alex, OK, in high school, you're into value investing. How does that work? What's that origin story?
Dan Ferris: Yeah.
Alex Morris: It started in college, to be fair.
Corey McLaughlin: College, OK.
Alex Morris: Yeah, I was – when I was getting ready to go to school, I didn't really know what I was going to do at that point. My dad's a plumber so I went into building construction. I did that for a little bit. And I did an internship, I remember, which was outside in South Florida every day during the summer. I was like, "Oh, man, this is – there's got to – I'm going to go to college and get a degree. There's got to be some way I don't have to be in the 100 degree heat from 9:00 to 5:00 every day. There's got to be some alternatives." I also took a physics class as part of building construction that was a bit above my pay grade in terms of what I needed to know. So, business and financing seemed a bit more straightforward than physics.
But yeah, then I had some – as I moved out of that and kind of became more interested in business and finance a couple buddies and I started a business in college, a small business. And yeah, I stumbled upon kind of the Berkshire letters. So, that was the start. There were some – to Dan's point a moment ago, there were some pretty questionable investments as I was still getting my feet under me. I remember a solar-panel manufacturer that – I don't know how long it takes a ray of sun to get from the sun to earth, but that business was out of business probably before that happened. Yeah, there was –
Dan Ferris: Was it AstroPower?
Alex Morris: No, I think it was called Evergreen Solar, if that rings a bell.
Dan Ferris: Oh, Evergreen. Yeah, Evergreen Solar.
Alex Morris: Yeah. It went bankrupt quite quickly after I bought it, I'm pretty sure. So, yeah, there were some things I got involved with that, needless to say, I did not know anything about. I thought that's where the future was going. And maybe it still is. I don't know. But Evergreen Solar might not be part of it. So, there was there was a long, long learning journey that started there about – coming up on 20 years ago now.
Dan Ferris: Yeah, I –
Corey McLaughlin: Yeah, wow. So, you found the letters – you first came across the letters while you were getting that business off the ground, is that – that's right?
Alex Morris: Yes, that's right around that time. It was basically a – I went to the University of Florida. At that time they had student tickets that were distinct from kind of general admission tickets for alumni and anybody else. And we effectively were trying to create a – an online ticket platform comparable to a PayPal that was just for student tickets because there were some other schools that had a similar thing. We also didn't know much about website design or a number of other things that were pertinent to operating that business, so we learned some lessons along the way.
Corey McLaughlin: Cool.
Dan Ferris: Yeah. Yeah, that's – Warren always says, "Being an investor makes me a better businessman and being a businessman makes me a better investor." So, that is – I think that's true of everyone. I've been actually a fairly lousy entrepreneur in my life. I'm much better as an investment analyst than I ever was as absolutely anything else. Maybe a guitarist. I was a pretty good guitarist for quite a few years. But guitar doesn't really pay. So, here I am.
Corey McLaughlin: Neither does writing on its own. So, here I am.
Dan Ferris: That's right. So, here you are. That's right.
Alex Morris: Exactly.
Dan Ferris: So, do you have – I know you sell your research at The Science of Hitting, TSOH. But I wonder do you have a current stock – you mentioned Five Below. Is there anything current that you're excited about that you want to – that you can tell our readers about? And if the answer is no, it's fine because I know you sell research. So – but is there?
Alex Morris: No, I think – so, Five Below is a company I've followed for a while. To be clear, I've never owned it. And actually, for anybody who doesn't know, I'll give maybe a short background. Five Below's history is it effectively started as a retailer that the co-founder saw an opportunity to kind of do what Toys "R" Us was doing in a way that was better suited to kind of the needs of the core customer demo, which is call it kids and young teens, basically. And for a long time, the model worked pretty darn well, primarily by focusing on $1 to $5 price points, which is where the name Five Below comes from.
In the last couple of years, in addition to very significantly growing the number of stores, which I think put a certain amount of strain on the business anyways, they've expanded with something that they called Five Beyond, which is where they introduced a certain number of price points of things that were at $6 or $7 but also at $10, $15, $20, and even higher than that for certain SKUs. And I think what's partly happened over time is they've lost their focus a bit on who that core customer demographic is and serving them well. They've also had some other pressures that are kind of not unique to them in terms of retail with things like shrink and obviously now tariffs being a very notable one for them with the majority of their goods being imported from China.
So, long story short, it's a company that was – the stock was well north of $200 a share and today is more like $60 a share. So, it's something I've been looking at but, again, that I don't own currently. I think it's an interesting story in terms of them getting back to their core focus and them – that position being in my mind pretty unique to the extent that they actually do focus on kind of that core value proposition.
A company that I do own that is related to that is Dollar Tree. It's something I've been – I started buying. And people can always confirm this – so, TSOH Investment Research, I always tell people what I'm doing in my portfolio before I do it. The day before, I tell them exactly what I'm buying or selling and also the weightings of the portfolio just so people understand that. So, someone can confirm this. I think it was last year that I started buying Dollar Tree and it's now become, depending how prices move at any given day or week, it's either my top or second largest position. And the main reason why I've done that is Dollar Tree, somewhat similarly for a long time, had almost all their price points at $1. Then a handful of years ago, largely due to the impacts of inflation and it just becoming so strenuous in terms of trying to have SKUs at that price point, they went to $1.25 across the whole store, basically, and they also introduced a select number of multi-price SKUs, things at call it $2, $3.
And what I think this allows them to do in a way that is somewhat different from what Five Below has done with the Beyond assortment is I think it effectively allows them to truly continue meeting a need for kind of their core customer in a way that they were artificially constrained from doing basically with that $1 cap. And there's a relevant case study here that I've written a lot about in terms of a company called Dollarama up in Canada that kind of pursued a similar trajectory over the past 15 years in terms of going from one low fixed price point to something that's a little bit broader. And again, with the idea being in my mind it's not a money grab or anything that. It's making the box more effective in terms of serving the core needs of the customer with that, having a little bit of incremental revenue and gross profits that can then be used to fund admittedly some necessary investments on things like labor and maintenance that have been a bit lacking historically.
So, it's a really interesting situation, especially now with the tariff announcements that kind of sideswiped us here a couple weeks ago. so I just hear a couple weeks ago. But it's a company that I think for one has a pretty bright future, especially now that they've dealt with Family Dollar, which was hanging around their neck for a very long time and at a valuation that I think kind of underappreciates the strength of the core Dollar Tree banner. So, I know I said a lot there. Happy to talk about any particular pieces of that if interested.
Dan Ferris: Well, for me, the first question is, as a Buffett-style investor, retail is kind of hard, isn't it? Retail is – there's a riskiness about it, isn't there? It's hard to get a real good moat, I guess, in that world.
Alex Morris: Yeah, for sure. I think you have to – I think there's obviously a couple different approaches at retail in terms of what the value proposition is. And what Costco is doing is in some ways similar to what Walmart's doing in terms of a lot of focus on price, but they also have different pack sizes and some of their strategies are a bit different than a Walmart. Someone like a Dollar Tree, historically they've served a very different role than what someone like a Walmart or a Target would. In a lot of cases, they like to be in the same plaza because of that fact. They're serving a different type of customer use case that I think is difficult for kind of a superstore to necessarily do in one big box.
I guess another – an example that is slightly different but kind of speaks to this is a Floor & Decor and a Home Depot. I mean, they both sell flooring, but there's something that Floor and Decor is doing that is – that Home Depot is basically precluded from doing given the nature of what their model is. And that's OK for Home Depot and it's kind of an opportunity for Floor and Decor.
I think Dollar Tree has historically served a similar need, particularly around, well, one, things like seasonal greeting cards, helium balloons, Christmas and Easter decorations, etc. But then they also provide a certain amount of value in terms of convenience and what they can do at particular pack sizes that, again, is not necessarily the core focus of a Walmart or certainly a Costco or something like that .So, it's not totally relevant in terms of – one person's definition of value is "What's the lowest I can pay per Tide Pod?" or something that, but if the prerequisite for one of those retailers is that you've got to buy 156 of them, well, then it's not necessarily applicable to all customers. So, there's considerations like that that, again, I think for a long time have been somewhat evident in the strength of Dollar Tree's results in terms of that core banner. Family Dollar is a whole another issue. But – so, yeah, the bet is – it's rooted kind of, in my mind, in a lot of the historic financial results that this banner has delivered.
Dan Ferris: Yeah, it's interesting that you mentioned Walmart, Costco, and Dollar Tree all together, because in a way they're so different. I mean, Walmart's customer, I think the average income is, like, half the Costco customer. Costco, I think, is still in the 70s, whereas last time I looked Walmart was in the 30s. It may be different now. But – and then Walmart, you've got a super store with 150,000 SKUs. Costco has 4,000. There's 30 kinds of mustard at Walmart – there's two at Costco. And you're buying it at about a half gallon practically. It's just such a – and you're paying a membership fee to walk in the door at all. And the per-ticket is huge. They're just – they wind up being different. And then, now you're telling about Dollar Tree. It's sort of like – this is almost a retail triangle, isn't it? You get these three very different points. I'm glad you mentioned this. It's a very different model compared to the other two in a way that you would say, "Well, what else can anyone do?" People have done the dollar thing. And the dollar thing broke – kind of broke over time, didn't it? It just – inflation's wrecked it a bit. More than a bit.
Corey McLaughlin: I remember that in 2020 when it became Dollar and a Quarter Tree. Yeah. Yeah.
[Laughter]
Alex Morris: Right. Right. Yeah, they discussed bagged ice as a very prominent example where they were at the point where the vendor was making a special – I believe it was a five-pound bag for them when the rest of the retail marketplace had moved to seven pounds or 10 pounds because it didn't work at a dollar anymore. And basically the vendor eventually told them, "We're not going to – we can't do this anymore. It doesn't make sense." It's just a very prominent example of them being artificially stuck at a dollar and it reached a point where – and you can see it on things like pack sizes where you'd go by aluminum foil and you'd stretch the thing out to cover a dish and you're out of aluminum foil.
So, it hit a breaking point. And again, I think it's – it was somewhat of a defensive measure for Dollar Tree. And I think the example of Dollarama shows, as you walk around the store and shop it, there's certain parts of it that are offensive. And kind of to the point you were saying a second ago, I also think it's really relevant to – it's relevant to think about why the customer is there to begin with and how the trip can be supplemented with some of the other categories as opposed to leading with someone going there for mustard or something that. I think it requires a certain understanding of who the customer is and how they're shopping the box and how that that trip is – it's supplemental to other trips that they're making to some of these other well-known retailers.
Dan Ferris: Yeah, it's interesting because just listening to you talk, I'm suddenly aware that I don't understand – if you look at the sourcing, the products, all the big name retailers – they have to be in Walmart. They have – the big name – product makers, they have to be in Walmart. They have to be in Costco to some extent or another. Who has to be in Dollar Tree, I wonder?
Alex Morris: Yeah, they are – and they also can lean on private label and they also deal with a lot of – I would call them the secondary vendors in terms of think of Jif and then Skippy, whoever else it may be. They'll deal with branded vendors that are – but Dollar Tree also still does a reasonable amount of volume where if you're a beverage company or a snack company, you certainly would rather be in there than not. But the constraints of that relationship are going to be slightly different than, again, maybe what a Walmart is optimizing for or what a Costco is optimizing for.
So, yeah, I think it's – I think they're –it's funny because it's always a problem with retail in terms of thinking about the competition. I don't know about you guys, but for me, I probably shop at 10 different retailers throughout the course of a given month or year or something, and seven of them may sell Doritos, and they all managed to coexist. And I think it's partly because they're – in a lot of cases, they're doing different things. They're serving different customers. Now, as the Five Below example shows, there certainly is a risk as you then start to change that or as you evolve your model to try to go after a different piece of that business or market. You may be dropping something along the way, which is what I think happened there. So, that's something that Dollar Tree has to be obviously very cognizant of as they kind of redo their pricing architecture.
Dan Ferris: Yeah, I don't think I'd want to be Dollar Tree these days. It seems a tough environment. But I suppose if they come out on top and then has it worse – if the competition has it worse enough, then they become more successful. Just even relative can be pretty wonderful under the right circumstances.
Alex Morris: Yeah. And again, I think it's relevant to understand what the competition is in terms of what you're selling. I think you might be surprised if you peruse the options that are available at the local Dollar Tree or at a Five Below or at Walmart, Target, Costco, etc. What of the merchandise is truly comparable to what you're potentially buying at one of those other retailers? What does the pricing look like? You can include online in this comparison as well. There's certain categories where in my mind, Dollar Tree – and the financial results speak to this to some extent – where they really shine. And again, it's supplementing that with other parts of the trip that can be served. So, yeah, I think it's a retailer that has – I think is somewhat misunderstood in terms of who they actually are and the role that they serve for the customer.
Dan Ferris: So, similar to Walmart, Walmart started out and they said, "Well, nobody's serving these rural customers, so we're going to serve them and give them great prices and locate stores – we want to be right where they are." And everybody else said, "Oh, OK. Well, whatever." And we see what the result was. And the dollar stores are similar in that way, too. I remember we covered Dollar General for a while years ago and I thought, "Wow, this is so interesting. They're in so many communities that have populations of 1,000." And they were your only option. In a lot of them, they still are, and for a long time. Is there a similar – similarly important real estate strategy at Dollar Tree, would you say? Or no?
Alex Morris: No, it's not as much. The way you described it, I think, is perfectly applicable to Dollar General. By the way, Dollar Tree owned Family Dollar, which was basically Dollar General's most prominent competitor. They're in the process of selling that business, which is a deal that they did in 2015. That was – it was effectively a disaster. They paid $8 billion or $9 billion for the business and they just sold it for a billion. It's honestly the thing that kept me away from owning Dollar Tree for a very long time. The announcement that they were looking at strategic alternatives and were going to sell Family Dollars is why I finally did invest in the business.
So, kind of to that point, as this new buyer takes over Family Dollar and they've already started closing some stores, I've noted in two or three of my articles, you can just pull up a map and look at certain places throughout the country, and if you pull up a list of Family Dollar closures that you can find in kind of local news articles and things like that, you'll see a lot of really interesting examples where there's a town where the Dollar General and the Family Dollar are three miles from each other and now it's the Family Dollar location that's closing, and the closest Walmart will be 20 miles away. So, effectively, you have towns where I think what probably happened is you had two of these competitors where really the market could probably handle one or one and a half of them, and now you're going to go to a situation where there's only going to be one of them. So, it'll be interesting to see what that does even just from a sales lift perspective for DG.
But no, on Dollar Tree again, I think that the real estate strategy is not – Dollar General used to say, "We went where they ain't" in terms of markets that Walmart wasn't in. That's not really Dollar Tree's play. In a lot of cases they want to be in plazas down here in Florida. They want to be in plazas with a Publix or they want to be in plazas with a Target, again, because they're serving, if not a completely different customer, they're serving a slightly different type of trip or a different type of basket. So, there – it's not as much of a geographic play as – Dollar General is very much a geographic play in terms of their definition of value.
Dan Ferris: Very interesting. It's an interesting business. I'm kind of – you've made me more interested by telling me it's your top one or two position. Wow, I don't think I know anybody else who can say that, by the way. We know a lot of investors. We've talked to hundreds of them on this show. No one else has said that. So, cheers.
Alex Morris: Yeah. Well, and again, it's something I didn't know a year ago. So, I think that's – there's a component of this that is – which is not common for me, by the way. The other – my other top positions are Microsoft, which as I said before, I've owned since 2011, Berkshire, which I've owned since 2011, Meta, which I've owned since, I believe – since 2018 at this point, Netflix, which it's only been since 2022, but still something I've owned for... So, it's certainly less common for me to have something that is – had a particularly large weighting that has gotten there quickly. Again, we'll see how the situation plays out. We've had a little wrench thrown into the equation here in the last couple of weeks that, yeah, is – as we talked about before on macro and some of these things being macro where especially I think I may have come into this period without at least a sufficient appreciation for what potentially was on the table. Not that I have any clue where this is going, but I've had to come up to speed pretty quickly in terms of understanding what exactly is going on. So, that has been a – it's been an interesting little learning experience in the last couple of weeks.
Dan Ferris: Well, maybe we should ask you what kind of is going on because I'm not sure I know.
Alex Morris: Oh, I still don't have the answer there.
Dan Ferris: Yeah. I see. OK.
Corey McLaughlin: Yeah, I don't think anybody has the answer.
Alex Morris: Yeah, in terms of – Five Below is – Dollar Tree, again, is different because they have a decent chunk of their business that's consumables and things that are going to be less impacted and there's more of a – some of the things they sell, like decorations for the holidays and things that, they surely are still discretionary. You don't need that. But it's not as discretionary as a lot of things that are truly discretionary. Five Below is really the more prominent example to me because as one of their co-founders said, "We sell stuff that nobody really needs." That is their model. And it'll be an interesting test when the majority of your cost to goods sold is potentially subject to a hundred-percent-plus tariff and consists of products that, as you say, nobody really needs. That's an interesting case study. So, we'll see how that plays out.
Corey McLaughlin: Wow.
Alex Morris: I don't know. I imagine – there was an article here at the end of last week in Bloomberg about them basically turning away shipments that were going to be leaving from China – Five Below. I think some other retailers have done this, too. But at some point, you're going to run out of product on the shelves if you do that enough, unless you find other things to put there. So, I don't know. It'll be – I'm fascinated to hear in the coming weeks and months how does a company like Five Below intend on navigating through this period? What can they realistically do? It'll be very interesting to hear.
Dan Ferris: Well, if I ever learn that you own the stock, I think my jaw will hit the floor after what you've – you've looked way into it and you've described it like something I wouldn't touch with your money. You know what I'm saying? It's like...
Alex Morris: Yeah, it's also – to be fair, this is why valuation has its place in the process. Maybe it shouldn't drive the boat, but that's why this stock now trades at less than one time sales and has historically traded at three or four time sales and was a – kind of a favorite growth stock for a stretch there. And as I always try to remind myself or at least as I talk about this in terms of my portfolio with subscribers to TSOH Investment Research, there is the part in this too that it's a business as part of a broader portfolio. And 5% of the book being in something sounds like a lot, but if you're thinking about it from the perspective of truly owning these things, and if you're comfortable with the, let's say, Chinese tariff-specific risk in the other parts of the portfolio to the extent that you reasonably can be, I mean, at some point it's just life and it's just business in terms of there are going to be specific risks to given businesses that hopefully you can understand. But you can't avoid them all across the board. So, it's kind of a reality of life to some extent.
Dan Ferris: Right. As soon as you mentioned – as soon as anybody mentions Microsoft, I always wonder if they own Constellation Software. And that prompts another question: Do you own foreign stocks?
Alex Morris: Not on Constellation software. I think I was late to the party in terms of understanding exactly what they're – actually, I probably am still late to the party.
Dan Ferris: Everyone says that about Constellation. They keep going – it just – it goes and goes and goes.
Alex Morris: Yes. Exactly.
Dan Ferris: It's like you're either brave enough to pay 35 or 40 times earnings for it or you miss – or whatever it is lately, I don't know. But yeah.
Alex Morris: Yeah. My miss has probably been even at an earlier stage than that. I still haven't gotten to the point of completely appreciating what they do, which is not a very strong excuse. But I do own Fever-Tree, which is a – basically a premium mixers business that's based out of the UK.
Dan Ferris: Oh, OK.
Alex Morris: That is – yeah, basically they make premium tonic water as their primary product. They went after a – to the extent you're not familiar with it, they went after a kind of established but also kind of tired category in terms of if you go to a local grocery store, you'll probably see a liter of tonic for – from Schweppes. It'll be $2.49 or whatever and the private label will be $0.79. And Fever-Tree came into this market as selling four packs of call it 10-ounce bottles for $6. The difference is that the ingredients are much higher quality and the taste is much better as a result. And if you're mixing it in a gin and tonic and you're paying $50 for the bottle of gin or whatever it may be, there's a certain you know sub-segment of drinkers that go "Hey, I'd rather have a good tonic versus a cheap tonic." So, that was kind of their founding story. And now, without going into too much detail, it's evolving into more of a premium drinks business more broadly, I think. Or that's part of my thesis.
Dan Ferris: OK, so – but premium nonalcoholic.
Alex Morris: Yeah. It's a mixer, so most people mix it with alcohol, but yes, they also have kind of what they call premium or adult sodas that don't have any alcohol in them. They're just, I would say, a healthier, slightly healthier in terms of sugar content and things that but also better tasting than kind of the mainstream options.
Dan Ferris: Interesting. Well, we recently discussed Monster Beverage on here, so if you can come up with a new nonalcoholic category – and we talked about Red Bull, too – good on you if it works over time.
Alex Morris: Yeah, Monster is a fascinating business.
Dan Ferris: Yeah. So – and the thing – every time – I can't – I'm sorry, I just can't help myself. I know the listeners just heard me say this a week ago or whatever, but – or a week or two or whatever it's been. I can't stand the taste of any of these things. And that was like with – Red Bull was the first big one and everybody went, "This tastes terrible. Nobody's ever going to buy it." And I hate the taste of all of these. And they're the greatest winners in – Monster is one of the greatest winners in stock market history or something. And I'm like "OK. Talk about being out in touch with folks."
Corey McLaughlin: Well, people started mixing Red Bull with alcohol too, back – originally.
Alex Morris: There you go.
Dan Ferris: You have to.
Corey McLaughlin: Like Monster.
Alex Morris: Some still do, I think.
Dan Ferris: Yeah, you have to.
[Laughter]
All right, Alex, we have reached – time for our final question. This has been a lot of fun. It's a lot of fun to talk with you. Final question is the same for every guest, no matter what the topic. Even if it's a nonfinancial topic, it's the same identical question. If you've already said the answer, by all means, feel free to repeat it. And the answer is simply for our listeners' benefit. If you could leave them with a single idea today, a single takeaway, what would you like that to be?
Alex Morris: OK, I've got one. I think it's relevant to Buffett and Munger Unscripted, writing the book. I think it's also really relevant to my career, which started in a very traditional 9:00 to 5:00, working for financial advisors but also writing online and that eventually becoming TSOH Investment Research over time, which is the idea of in today's world, especially for the younger listeners – I guess it could apply for anybody, but the younger listeners who are maybe a bit nervous about starting to do this, I would say to embrace things in your profession or career or of things that interest you, embrace optionality and find ways to – for the things that you're really passionate about especially, find ways to start learning about them, or joining communities – online is obviously a way to very easily do it these days, and to the extent that it's something that you can write about or start recording podcasts about or do videos on YouTube, whatever makes the most sense to you, I would highly recommend to embrace the optionality that that may present over time and to be curious and to be learning along the way and to, at least in my experience, to know what you do very early on and maybe beyond very early on do some things where the quality of the work is not too good, because that's how it kind of goes when you're just learning. Just be OK with that and try to do the best you can and continue to get better over time.
And I think we're at a day and age where when you get in front of certain people that you may want to work for or partner with or whatever it may be, especially the right people, in my opinion, they're concerned with where you went to school and things that, not that it's completely irrelevant, but it will be secondary to the passion that you show and the work ethic that you show and the time and effort you're willing to put in. And if you do those things, I think you'll get to where you want to go, wherever that may be. And you might not know out of the gates. But that's kind of been my experience over time, and I think you'll be happy with yourself if that's what – if you're really interested in a particular topic especially, too, I think that you'll be happy with where you end up if you kind of do that.
Dan Ferris: All right. So, embrace the optionality in – that comes with pursuing your interests to the fullest. Sounds like a good way to sum that up. And I'm not saying I didn't the way you explained it. I liked it very much. And I – as you were talking, I thought, well, if Warren Buffett hears this, he'll say, "Oh, yeah, yeah, yeah." And if Charlie Munger is listening from the Great Beyond, he's nodding along with it. So, thanks for that. And thanks for being here, Alex. I've really, really enjoyed talking with you. And I'm really enjoying dipping into your book, Buffett and Munger Unscripted.
Alex Morris: Thank you so much.
Dan Ferris: You bet.
Well, I love Alex's book and I really enjoyed talking with him. Have you looked at the book at all?
Corey McLaughlin: I actually haven't gotten a copy yet. I've seen parts of it, but I don't have a copy yet. But I know it's like, as we were describing it, a reference book of the best organized material of all the Berkshire meetings. And so –
Dan Ferris: Yeah. And you don't – I ask because you don't have to read it to appreciate it. You just – you open it up, you look how it's organized and you go, "Oh, this is genius." It's that obvious. You open it up, you look at the table of contents, then you page through it to see, and you're like, "Oh, my God, this is incredible." And it's quite a piece of work: 1,700 questions whittled down to 500 answers, all the meetings since 1994. That's a lot of stuff, man. It's just amazing. I marvel at people who do this, even though I know it's not – they're not curing cancer and solving the ultimate mystery of quantum physics or whatever, but it's still an amazing piece of work.
Corey McLaughlin: No, yeah, no, it's amazing. Keep all these stories going, all the perspectives going from – at some point – Charlie Munger has already passed – at some point Warren Buffett will, too. And you'll have to – somebody 30 years from now will be discovering this book and being like, "Oh, my gosh, what – these guys already figured it out. What am I doing?"
Dan Ferris: Yeah, exactly. It's like I said, if you haven't read all the Warren Buffett – you can – all that the shareholder letters or Lawrence Cunningham's book and now Alex Morris's book, what are you doing as an investor? What in the world are you doing if you haven't read this stuff and you're buying and holding stocks in a regular sort of way. I don't even know. You're missing something very, very, very important. And also, I found Alex to be just delightful to discuss businesses with. We got into the retailers that he's looking at and we learned about those. We differentiated them. And he talked about Costco and Walmart. So, it was a good – it's a good learning experience, I hope, for our listeners and for us. Just a cool guy. He's a cool guy to talk to, I guess. I don't know how else to put it.
Corey McLaughlin: Yeah. No, yeah, he's got a newsletter, a model portfolio over there. TSOH, he said a couple of times, that's the name of it, but it's from The Science of Hitting, which as longtime investors know is related to that essay about fat pitches and Ted Williams. So, that's where that comes from, too. So, again, that all fits in with Buffett and Munger and that whole theme. So, yeah. Check that out, too.
Dan Ferris: Right. That's Ted Williams' book, The Science of Hitting. Yeah.
Corey McLaughlin: Yep.
Dan Ferris: So, when – I don't know, is he still the greatest all-time batting average? It was, like .400 or something? When he writes a book on hitting, it's like Warren Buffett writing a book on investing. So, it all fits together.
Anyway, that was really a lot of fun. I didn't know – you don't know what to expect because, like Alex said, he wrote very little of this. He just organized and arranged it all. But a delightful guy, very, very knowledgeable, of course, and sounds like a pretty darn good Warren Buffett-style investor.
So, that's another interview and that's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as we really, really, truly did. We do provide a transcript for every episode. Just go to www.investorhour.com, click on the episode you want, scroll all the way down, click on the word "Transcript" and enjoy. If you liked this episode and know anybody else who might like it, tell them to check it out on their podcast app or at investorhour.com, please. And also do me a favor, subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts. And while you're there, help us grow with a rate and a review. Follow us on Facebook and Instagram; our handle is @InvestorHour. On Twitter, our handle is @Investor_Hour. Have a guest you want us to interview? Drop us a note at feedback@investorhour.com or call our listener feedback line, 800-381-2357. Tell us what's on your mind and hear your voice on the show. For my co-host, Corey McLaughlin, until next week, I'm Dan Ferris. Thanks for listening.
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Stansberry Research, its affiliates, and subsidiaries are not under any obligation to update or correct any information provided on the program. The statements and opinions expressed on this program are subject to change without notice. No part of the contributor's compensation from Stansberry Research is related to the specific opinions they express. Past performance is not indicative of future results.
Stansberry Research does not guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this program. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this program may not be suitable for you. This material does not take into account your particular investment objectives, financial situation, or needs, and is not intended as a recommendation that is appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this program. Before acting on information on the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
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