Value Investing in People

For better or worse, collaboration is an essential part of production. Whether you are an amateur or a professional, artist or entrepreneur, you will have to work with other people. But who will you choose? And by what criteria will you make your selection?

One answer may come from an unlikely source: Investing.

I encounter this situation most often in film work.  Unlike fiction writing, film requires other people.  While I may feel comfortable developing story, I have a hard time understanding the nuances of lighting,  sound design, or editing.  As much as I study these things, I will never have the expertise that will truly make a project great.  So what I am always looking for is someone with talent.

“But who isn’t?” you ask.  And more pointedly, “Why would anyone with talent what to work with an amateur filmmaker/teacher/writer?”

And to that I say “Good point!”  It’s true.  Straight-up professionals will rarely work with amateurs. Most people are looking ahead, not behind when it comes to making money and name.  So, no, I don’t expect that kind of collaboration. At least, not yet.

Yet, a lot of creative experts have not found the fame and fortune that once colored their dreams.  They may have approached expertise in a certain field, but for whatever reason, things didn’t pan out for them. Or maybe, life took them in a different direction and they found themselves acting on Plan B or Plan C in their life’s journey.

This isn’t failure, by the way.  It is simply an existential fact.  No, it is a mysteriously beautiful existential fact, as captured by Spanish poet Antonio Machado, who wrote:

Wanderer, your footsteps are the road, and nothing more; wanderer, there is no road, the road is made by walking. By walking one makes the road, and upon glancing behind one sees the path that never will be trod again. Wanderer, there is no road– Only wakes upon the sea.

These kind of people are the dusky jewels of collaboration.  More than profit, the thrill and nobility of artistic production motivates this kind of person.  Often enough, they have enough money to live comfortably or aren’t willing to trade one safe career for a riskier one.  Like me, they may love the work they do–in my case teaching–or like me, they might have families to care for.

But at the most extreme cases, these people see themselves as failures, unable to compete or cope with professional expectations.  Perhaps they feel they missed their prime. Have grown too old.  Didn’t go to the right college.  Or some other completely unproductive deduction. How terrible and unnecessary!

Art is a verb, not a noun.  Success is a verb, not a noun.

So what does this have to do with value investing?

Well it turns out that value investing–the selection of stocks trading below their intrinsic value–is the same principle as the one I am writing about.  Stocks may be undervalued for a number of reasons, but most often, it is because no one knows about them or they are too small to be of interest.  Perhaps they aren’t diversified enough or are too exposed to market shifts.

These too are completely unproductive deductions to a certain kind of investor. Investors who need to remain liquid or who are in a time sensitive stage of their life shouldn’t be looking for these kinds of concerns.  But there are investors who have the time, patience, interest, and financial grounding to see these companies through their unpopular phase.  They might even be able to help these companies see that deep value come to the surface.

Similarly, value investing in people is about seeing the untapped potential in a future collaborator and working with them to realize that value.  A value investor is a partner in the business and therefore succeeds or fails with the team.

If you can’t afford to collaborate with a sure thing, find the person whose value is unrealized. With greater risk comes greater reward and great fun.

Here’s Warren Buffet’s Take on Investing in People.  It;s a bit long but SO WORTH WATCHING!