John Harris - Resilience and Imagination

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts and you can access all our podcasts, including edited transcripts, show notes and other resources to keep learning at joincolossus.com.

**SPEAKER_2** (2:49)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (3:14)
My guest today is John Harris, managing partner of Ruane, Cunniff and Goldfarb where the flagship Sequoia Fund has an incredible 50-year track record running a highly concentrated portfolio of equities.
In our conversation, we cover John's approach to finding businesses that can be owned for the long term, what goes into their diligence process and the importance of resilience for investors. I think many of the stock pickers out there will enjoy many of the points on good management, good businesses and using imagination. I hope you enjoy my conversation with John Harris.
So John, I was toying with where to start our conversation, something your team sent over stood out in all the materials that I reviewed prepping for our chat today. And there are these three interesting things that you say markets tend to do. I'm going to list them and I'd love to spend some time on each of them because I think they're unique and interesting. First is undervalue, long duration growth potential. Second is underestimate how quality reduces investment risk. And I really like the third one, ignore how growth and quality reduce reinvestment risk. These are three views of fault lines in markets in terms of how they price things and could be a great jump off point for our discussion about all things business and investing. So we'll start with that first one. What do you mean by markets tend to undervalue long duration growth potential of companies?