[2025–2026] Week 11: John Train's The New Money Masters

Reading assignment and questions for week 11 of the Value Investing Seminar

(Note: If you are just joining the seminar, please start by reading the Introduction)

One of the most important factors in Warren Buffett’s success is his ability to evolve. Had he stayed a pure disciple of Benjamin Graham, it is likely that his returns would have been a pale shadow of his actual record.

Why?

Two reasons. First of all, the markets changed over time, and with them the opportunities available to investors. The net-nets that Graham is so famous for largely disappeared, and if an investor insisted on largely restricting themselves to them they would not do nearly as well as they might have in Graham’s days.

The second reason is that even though Graham was an amazing investor, he did not possess all the investing wisdom out there. Buffett recognized that, in part through experience and in part through the influence of Charlie Munger and Philip Fisher.

As much as Buffett successfully evolved, it is important to note the ways in which he hasn’t changed. Despite the crowds of people running around paying very fancy prices for good businesses, he has resisted that temptation. He still insists on both high business/management quality and a good margin of safety in terms of the gap between price and his conservative estimate of intrinsic value.

This is all the more ironic since his most-misused quote, the one about “buying great companies at a fair price rather than fair companies at a great price,” has led many others to deviate from what Buffett actually does and to frequently overpay.

In that regard, as in many others, one of Buffett’s greatest assets and a big reason for his success is near-infinite patience. He is much more comfortable doing nothing for uncomfortably long periods of time than most investors. That temperament is as big an explanation for his amazing results as his actual process, intelligence or experience.

Perhaps that’s why, for all the multitudes quoting and trying to copy Buffett, there hasn’t been anyone who has come even close?

Regarding Question 1 James wrote: “The similarities were that the approach of a margin of safety, and not paying too much. Looking out for value and special opportunities with convertible shares, and underpriced bonds continued to feature in the new vehicle.

The differences were in the long term approach for shareholdings, buying things “forever” and assessing their potential on that basis. The increasing preference for buying whole businesses, both for tax efficiency, and management control. The expansion of insurance as a way of gathering funds for further investment at a very low cost of capital. This is by its nature a very long term game, but the cashflow profile is the best in any industry anywhere.

Purchases are seen for their “lookthrough value” meaning the share of underlying earnings being bought by an investment, regardless of whether it was being paid out as a dividend, used for stock purchases or held for further internal investment. He concentrated on growing this value at least 15%, with the view that the stock market would eventually reward him by valuing these earnings on a decent multiple, and not caring very much as a low stock price enabled him to buy more earnings power for a lower cost. His line is that only “Disinvestors” benefit from high prices, as they are the ones who want to sell. Everyone else should be happy. In the partnership years he would be selling when the price reached his target to reward his Partners.”

Regarding Question 2 Navin wrote: “Similarities : Buffett always sought a margin of safety and mispriced opportunities; the underlying discipline of buying below intrinsic value persisted even as the type of business he bought changed. Concentration and long term mindset etc.

Differences : In the later days, he favored durable competitive advantages and predictable cash flows , probably a shift strongly influenced by Charlie Munger’s emphasis on quality over bargain price

In the 1980 shareholder letter Buffett explained that when he found attractive opportunities he would borrow at high rates (around 12%) to increase purchasing power accepting the interest cost because the expected return on the investments justified it.”

Regarding Question 3 James wrote: “Despite my comments below he was remarkably good at finding exceptional businesses with exceptional management and retaining both for decades of strong performance.

GEICO: Happily it was his very first investment as a sign of things to come. It was a remarkable investment because it both generated massive funds as float, and was so competitive that it also generated a very good profit as well. This kind of double return was one of his most effective ploys, and is very hard to find in the world. Only one other comes to mind: It was one of the reasons that being a Name at Lloyds of London was so lucrative for so long, your investments earned money as investments, and collected underwriting profits from their collateral role as well. Many of the names collected their two checks for one set of capital every year between the mid 1960’s and the mid 1980’s without ever being called on to payout on a claim during the whole 20 years. Alas the late 80’s saw huge claims, followed by the collapse of the system. It failed to work very well when the money was actually needed, and the Corporation itself had to rescue the worse hit syndicates and names.”

Regarding Question 4 J. Rupert wrote: “- Dexter Shoe: Banked on the longevity of producing a single product that could be produced by cheaper labor offshore. I still wonder if this was lack of attention to changing global landscape and its effects.

- General Reinsurance: Although it resolved, this was a time eater, complicated and messy. Not sure he would have bought it if he had been more aware of the complicated derivatives.”

Note: With the holidays coming up, the next assignment will not be due in a week, but rather in 3 weeks, on Thursday, January 8^th. I will plan to post assignment 12 on Friday, January 9^th, but if you want to get a head start on the reading it will be based on ‘Adam Smith’s’ The Money Game.

Week 11 assignment is to read John Train’s The New Money Masters and answer the following questions:

Question 1: For each investor, map them on as many dimensions of an investment style as you can.

Question 2: Who is your favorite investor, and why?

Question 3: Least favorite, and why?

Question 4: Come up with an AI prompt based on any of the investors that you have read about in the book.

Happy Holidays to you and your families!

Now it’s your turn:

1. Submit your answers in the comments below this article with all your answers in a single comment. I will engage with some of the answers each week and highlight some of the ones I find most insightful in next week’s seminar assignment article.

2. Engage with the answers of some of your fellow seminar members in the comments below. Remember – the goal is to learn together. Be kind, be respectful and try to add to our learning as a community.

3. Feel free to ask any questions about the reading in your comment.

Until next year,

Gary

About the author

Gary Mishuris, CFA is the Managing Partner and Chief Investment Officer of Silver Ring Value Partners, an investment firm that seeks to apply its intrinsic value approach to safely compound capital over the long-term. He also teaches the Value Investing Seminar at the F.W. Olin Graduate School of Business.