The following conversation with François Badelon of Amiral Gestion was recorded in 2014 and is sourced from the MOI Global archives. We are pleased to provide below the video and an edited transcript.
The following transcript has been edited for space and clarity.
MOI Global: We’re at the offices of Amiral Gestion in Barcelona, Spain, and I’m delighted to introduce François Badelon, the chairman of Amiral. The topic of today’s conversation is role models and what investors can learn from some of the people you have come to admire, not just as an investor but as a human being. Hopefully, it will also provide a bit of a perspective on business people in Europe, France in particular, who have caught your attention because of the principles they stand for. It started with some people everybody will know that you were interested in studying, and you think there’s a misconception among the general public about what they stand for. Tell us a bit about how you got interested in all of this.
François Badelon: Let me start with the idea of long term. In value investing and investing in general, everybody says, “Yes, I have a long-term view. I am a long-term investor.” It doesn’t make any sense if everybody has a long-term view. If you have it, it doesn’t mean you’re better than the other guy. I always think about this because I went to Omaha to hear Warren Buffett speak. When you listen to his stories, you really understand what long-term is and realize it’s extremely hard. For instance, he has this story about his insurance companies where he accepted no business for ten years because the prices were too low. It’s quite amazing to hear about him go through two, three, four, or ten years of doing nearly zero business and keeping the people coming to the office every day, maintaining the relationship with them. In the 11th year, there is a disaster, so the price skyrockets. He’s the only one able to get the policies, and he’s making a fortune. I’m always impressed by that because, as an investor, I know it is exceptionally difficult to say “no” to the market and to many opportunities, to say, “ I want to take my time. I want to be very careful. I don’t care if the other guy is making money and I’m not.”
In my library, I have several books about Charles De Gaulle – a person I admire a lot, as many French people do. Some Americans and Britons don’t think too well of De Gaulle because, for instance, he went to Canada and said, “Vive le Québec libre!” Maybe it was not such a good idea to say this, so he is not perfect, but he was a kind of a savior for France in the Second World War and later in the 1960s. The misconception people have about De Gaulle is that he was a very successful person and politician. As always, I like to have a contrarian view, and I say, “No, De Gaulle was a failure, especially as a politician.”
Why? Because that guy was a genius. He produced a lot of amazingly well-written book. He was also a genius in warfare strategy, writing some incredible books about strategies the French generals didn’t like but the German did. In fact, one of the reasons the Germans won the Battle of France in 1940 was that they read De Gaulle’s books and used all his strategies with the tanks. This guy was top of his class, quite well-known after the First World War and very successful. However, he realized very early that the ideas of the French army top brass were from the 19th century and opposed them. He was a favorite of Marshal Philippe Petain, the hero of the First World War, but De Gaulle said no to him. He said, “Sorry, Mr. Petain, you are wrong. Your strategy is bullshit,” so he was put aside for 20 years.
De Gaulle wrote those amazing books, but he was nearly a nobody compared to what he could have been. If he had wanted to be a well-known politician or general, he could have done it. He said, “No, I’ll keep my ideas. I don’t want to be a friend of Marshal Petain.” He said that in the 1920s, not during the Second World War. In a way, he was a political failure for 20 years, and then the Second World War arrived, and people said he was their hero. He was not a hero. In his famous speech on June 18, 1940 – what we call “L’appel du 18 juin” – he said the French people had to resist Germany, and Petain’s government did not represent France, but nobody listened to him. Maybe a few hundred French people listened to the radio that day. De Gaulle was condemned to death – this guy was alone in London, condemned to death by his own government. For me, this is failure, not success.
France was a defeated country, but thanks to De Gaulle, it became part of the Big Five powers of the day. Right after the war, he didn’t do anything. He was not in government, he lost to the communists and socialists, and for another 20 years, he was on the sidelines. For me, this is again a big failure. He was very well-known, but he had no power. It was only in 1958 that he came back as the savior of France. The political situation was horrible at that time because we had the war in Algeria. When he saved France, we had ten years of very good government with Charles de Gaulle. However, he was nearly 70 when he came to power, less than a decade before his death. Before that, he had a rather difficult life, probably boring sometimes because he was an extremely clever guy but had zero power.
I’m very impressed by this, and it shows me that in the end, if you have really good ideas and believe in them, maybe you have to wait 10, 20, or 30 years. The difference between politics and the stock market is that it’s very dangerous to say no in politics. You can die – people can shoot you, and it takes a lot of time to show you are right. With the stock market, it’s usually much faster, but it’s also difficult to resist. When everybody is telling you you’re wrong, it’s hard to wait and, by the way, sometimes you are wrong. Having a long-term view is a real fight every day.
MOI: It sounds as if whenever you encounter difficult situations with your investments, you retreat to your library and pick up one of these books about or by Charles de Gaulle to gain perspective…
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