Ben Gilbert: evaluation

Transcript context

…He did. He had some real big years and some down years. Then in 1973 and 1974, Charlie's partnership fell 31.9% and then 31.5%. This is super scarring for Charlie. He feels like, if he can get almost like Warren, his sister, and the first stock he bought back in the day, he's like, if I can get the partnership level back to roughly what it was, I'm going to work like hell to do that but then I'm out. He did that in 1975. He returned 73.2% on the partnership in 1975, and then he winds it down, he's out. He says you know what, Warren's having a good time with this Berkshire model, I'm going to do the same thing here with Blue Chip. Yup. The difference being, Charlie was still running other people's money at that point. I think he was doing a more traditional model: management fees and effectively carried interest or some kind of promote that he was getting above some certain hurdle. In that business, when you're losing the money you feel it really hard because you're being judged on that performance. Whereas with Warren, the only other stakeholders that he had to think about were the other shareholders in those businesses, but Warren had made no promise to them of, I'm going to be effective with your capital. The structure was look, I'm invested in this company, this C-corp, you're invested in this company, this C-corp. You can get out anytime, I'm not managing your money for you. He just has all the weight off his shoulders. He can only lose his own money, there's no one else to be mad at him. If he does well, it's just for himself, but he's got a lot of money. He has the firepower of a lot of capital without it being other people's capital. Yup. If the stock goes down, great, he might just buy more of the stock. He doesn't need to feel terrible about it.…

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