Ted Weschler Q&A Transcript || 2022 NFM Podcast

"I always want to be able to look myself in the mirror and say that I’m reading enough weird stuff that nobody else is reading the same stuff that I am."

On April 27, 2022, Berkshire Hathaway investment manager Ted Weschler joined NFM’s i am home podcast and spoke for nearly an hour about his investing career.

Over the past few weeks, I transcribed (and lightly annotated) his remarks for posterity and future study.

A few notes:

• My main focus is accuracy and readability.

• Each of these transcripts is done by hand — without any AI or transcription software assistance — so any mistakes are my own.

• I summarized some of the questions to save space. All of Ted’s answers are transcribed verbatim.

• I added footnotes with additional information at relevant points. Hopefully, these will prove useful to readers.

• The full transcript is available to all paid supporters. Free subscribers have access to the first 2,000-ish words. (That’s longer than the typical Kingswell article.)

  • I’ve tried to do my best to ensure that no one feels short-changed.

So, without further ado, here is the complete transcript of Ted Weschler’s appearance on NFM’s i am home podcast…

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NFM: Ted Weschler is one of Berkshire Hathaway’s top two investment managers. You got started at W.R. Grace & Co. as a junior financial analyst and then helped start the private equity firm, Quad-C Management, where you were a partner for ten years. Then, in 1999, he went out on his own — founding Peninsula Capital Advisors, which was a hedge fund that you launched in 2000 above a bookstore in a Charlottesville mall. And, before that shuttered in 2011 when you joined Berkshire Hathaway, your $2 billion fund returned 1,236% for investors. Ted and his wife Sheila live in Charlottesville with your two daughters.

How old are your daughters?

Ted Weschler: One will turn 21 in just a few weeks and the other is 23.

NFM: Okay, close to mine — so I know that life. Except I have boys.

TW: They should meet. (Laughs)

NFM: This particular time of year, going into the Berkshire Hathaway meeting — with it actually being live and not virtual¹ — it’s just a super exciting time and high energy for us and for the tens of thousands of people that come through.

What’s it like for you, being on the inside of Berkshire Hathaway? Is it exciting?

TW: It’s terrific because it’s something that we all draw energy from. And, the closer we get, the more energy we get. The last two years, they were fine. We did the remote thing. But there’s something about bringing tens of thousands of people together.

I describe it as a big wedding because you’ve got this common link of — one way or another — you’re connected to Berkshire Hathaway. So anybody that you meet during that weekend that’s wearing the credentials, whether it’s up here at the [Nebraska Furniture] Mart or anywhere in town, you’ve got something to talk about.

It’s just like at a wedding where you know that you’re somehow connected to the bride or groom. [Here], you’re somehow connected to Berkshire — so it’s always fun to meet those people.

Then, just the energy that builds at the office. I’m always amazed at the amount of paper and phone calls and emails and all the rest that [go into it]. We’ve got a very small staff, but it just flies out of there in a really, really efficient way.

And it’s fun. Warren gets progressively [more] excited as well because he both adds energy to it and he draws energy from it. That’s something that’s just contagious for everybody.

NFM: We feel the same way. For us, we have to bring a level of energy — but you definitely come out of it feeling energized and excited.

TW: Yeah.

NFM: I got my credentials this weekend and I’m so excited.

TW: It’s real! Yeah. I was going to wear mine here, too. (Laughs)

NFM: I’m going to start with one of my favorite stories — how you had your first lunch meeting with Warren Buffett. You were already running a super-successful firm, so when you went into that meeting… It ended up being life-changing. It was life-changing for your career —

TW: I didn’t plan on that, but yeah. (Laughs)

NFM: Well, that was my question. Was [working at Berkshire Hathaway] your goal? Did you enter [the meal] thinking I’m going to make this happen? Or did it end up going a whole different direction than you thought?

TW: It’s kind of an involved thing because, first, I went to college in Philadelphia². In 1979, when I started, there was a good friend of mine who — we were both in the business school there — and he said, “If you’re really interested in business, there’s this guy Warren Buffett who you just should read anything that he writes.”

I had never heard of Warren Buffett in 1979, but I respected this guy and I started reading this stuff. I was like, Wow, there’s tremendous clarity to what he says and it makes sense. Between taking other corporate finance classes and accounting and all that, you had this kind of practical applied experience [in Buffett’s letters]. Here’s a guy who really was a hero of mine from an investing standpoint.

NFM: Back when you were in college?

TW: Yeah, from 1979 [as] I’m reading all this stuff.

I experienced some decent success in investing and my fund had a good track record. I knew that Warren did this auction and it benefits GLIDE Foundation in San Francisco — a wonderful charity. I happened to be the chair of a trust that met twice a year — once in San Francisco and once in Shanghai — every year. It gave me a good reason to travel the world and I got to know some folks.

But I wanted to understand more about GLIDE before I bid anything that was a big ticket that I was going to write if I was going to do something like this. So I was out at a trust meeting and my assistant had reminded me that I wanted to visit the people at GLIDE and understand the thing. She set the thing up, I finished my trust work, and I spent half the day with the folks at GLIDE — and it just happened to be the last day of the auction that year. It was going on while I was there.

They invited me down to the closing thing — they didn’t know I was registered to bid on it — and I actually ended up winning the thing. It was like, Wow, this is something!

And, after I had spent half the day with the folks at GLIDE, it’s just a great, great operation there, so that was terrific.

NFM: What is the organization?

TW: GLIDE. They give hope to the otherwise hopeless. It’s a wonderful organization, hundreds of volunteers that run both a soup kitchen and a healthcare clinic in the toughest part of San Francisco. It’s known to everybody in the city, very efficiently run, and it touches a lot of lives. Warren’s wife Susie had been very active in the thing, so that was where the interest came from.

But I ended up winning this thing³ — and I wasn’t sure what was going to happen.

I’m back at my office and I get this phone call on a Tuesday morning. I pick up my phone and it’s Warren on the other end. It’s like, Oh, jeez, this is really something! This is my hero! He was terrific.

I had said, the one thing that I wanted was I wanted it to be anonymous. I didn’t want my name attached to it. I also wanted to do it in Omaha instead of New York. It was set up to be a New York lunch⁴ at Smith & Wollensky, a great steakhouse in New York.

NFM: But very public.

TW: Yeah. He said, “That’s fine,” and then he said, “When would you like to do it?”

I said, “Your schedule will dictate, Mr. Buffett.”

He really was unbelievable because then he said, “Well, I can do tomorrow night, I can do Wednesday, I can do Thursday…” He rattled off four days in a row.

I think I picked the day two days later.

NFM: That’s fast.

TW: I flew out to Omaha and met him in his office and it clicked. It really clicked.

It’s kind of interesting because there are bookends to my career. My first job at W.R. Grace, I was an analyst and then I happened to have a job as the aide to the CEO there, who was a guy by the name of Peter Grace. Peter and I had a great relationship, but I viewed him more as a monarch than a CEO. He had all the trappings of being the high-and-mighty CEO of a Fortune 50 company. You had to go through six doors to get to his office. Everything was maximum intimidation and all the rest of that.

And then Warren’s just like, I show up at headquarters and he bounces out in the hallway and says, “Great to meet you, Ted! Come on in. Grab a seat on the couch.” And [he] immediately put me at ease. It was just great — we visited at the office for maybe 45 minutes or an hour.

There were a number of connections. He had actually met Peter Grace a couple of times, so we had some Peter Grace stories that we connected over. And, then, we ended up having like a three-hour dinner at Piccolo’s⁵ — and it really, really clicked⁶.

Then, I actually bid on it the following year — and won it again for $1 more⁷. This time, I had a little bit more time to think about questions.

NFM: The first time, you only had a few days and you didn’t expect to win. How do you plan questions for Warren Buffett?

TW: Yeah, my mind was kind of racing. But, again, he’s got this wonderful way of putting you at ease. It was just conversational.

I had a lot of questions about investing, lessons learned, philanthropic dispositions, that kind of thing. [There were] a lot of natural topics that came out. I wish I would have had more time to buff and polish, but that’s okay.

NFM: It still worked out. (Laughs)

TW: Yeah. But, another year later, I’ve got it again — and, that one, I did have a few weeks to think about. I put together a legal pad of dozens and dozens of things that I wanted to hit on. We did the same deal, we went to Piccolo’s, and it was terrific⁸. But I had probably three pages of questions.

Toward the end of the dinner, I said, “I think I’ve hit everything just naturally off of my checklist, but I just want to look at my notes. Do you mind? And you can ask me anything, if you want, Warren.”

And, as I’m looking down at my notes, checking stuff off, he says, “I think you’d be a pretty good fit out here. Do you have any interest in working at Berkshire?”⁹

I just absolutely panicked. This was absolutely not what I was thinking.