François Rochon: The Beauty Element
These past couple of years I have been reading as much as I can of as many disciplines as possible. With regards to investing, there is something I couldn’t help but notice. Most financial reads, ranging from articles to books and shareholder letters, have an educational intent, in the very traditional sense of the word. Most material is written as a formula to be reproduced or as a definition to be memorized.
However, there are outliers. I didn’t immediately notice this, but when I started reading Buffett letters, I had an atypical sensation. After a while, I realized this was due to the fact that I didn’t feel I was reading an investor, but rather a thinker, a philosopher. More importantly, I was reading a person that transmitted authentic joy.
As I read more and more of this spectacular class of people, the “outperformers”, the feeling was a recurrent theme. They are not here for the money. It is the intellectual challenge what they are after and the pursuit of knowledge what motivates them. While reading François, I noticed something of this as well. In this article, I’ll try to explore the deviations that helped me arrive to this realization.
Art
The relation between art and investing has been, understandably, exhaustively covered in the past couple of decades. But here’s the first element from which Rochon’s uniqueness emerges. What sets François apart from most investors in this line is that he seriously appreciates artistic manifestations, especially paintings.
From 2004 onwards, Rochon opens all of his letters with a piece of art he finds relevant. Further, he reveals what motivates the inclusion of each depiction. Even more interestingly, most, if not all, of the paintings included throughout the years are from Giverny’s collection.
“We have illustrated the cover of our letter with a copy of an artwork from our corporate collection since 2004. We chose the work of a Quebec artist, Barry Allikas, entitled “Fly-over”. This work seemed fitting of the year 2010—a year when the companies in our portfolio continued to fly over much of the ambient doom and gloom and, as a group, generated record profits.”
Paying careful attention to the surface, the firm’s name is Giverny Capital. Coincidentally (?), Claude Monet was a French artist who lived in the eighteen hundreds and the first quarter of last century. In 1874, Monet, alongside Edgar Degas and Camille Pissarro organized an exhibition in Paris that essentially gave birth to the movement called impressionism. The latter’s name is derived from one of Claude’s paintings: Impression Sunrise. Two decades and a half later, he painted The Artist’s Garden at Giverny, which is where I believe Rochon got the firm’s name from.
Conclusion
Occasionally, Francois finishes his letters with a “conclusion” that finds its way to annual reports through analogical paths, or even not at all. These are the fragments I enjoy the most from these types of reads. They show passion for learning not only about investing, but in general, which has the indirect consequence of improving mental capabilities and hence fueling investing skills. Below, I will try to vividly reproduce what I perceive as authentic love for the game.
“Our attitude is that of a museum director: We only want to own masterpieces.” 2004 Letter
The Art of Investing
Francois concludes Giverny’s 2001 Annual Report by exploring the intersection between business and art. First and foremost, he believes similar traits are required to successfully exercise any of both. Among them, some are:
Contrarianism. Artists manifest themselves against conventionalism. If you follow the latter, you do not produce. The sole act of production, creation, implies seeing what others can’t.
Creativity. In investing, if you lack creativity, you lack the vision of potential avenues you could take. Without those, there is no escape from conventionalism. Likewise, artists create things. By definition, creativity is a requirement.
Lots of patience. The difficulty, I believe, comes in the form of waiting for the right moment and realizing it is such. Artists seem to paint without knowing when the artwork will be finished. But when it is, they notice and stop.
Investing demands people to act in the fine line between order and chaos. Great doses of humility and self-confidence are needed. The latter to be willing to walk the path you think will lead you to the desired objective, and the former to recognize your complete ignorance as to which is the optimal method to employ in such endeavor. Furthermore, it is love what keeps an investor on a road that leads seemingly nowhere, even though signs point to heaven.
“What can be said about the art of love is true in the art of investing. In fact, genuine love - in a more personal way – is an essential part of any human creation. Woody Allen once said: “In order to be a jazz musician, you have to listen to a lot of jazz. And that’s an act of love. You don’t think, I’m listening to study it. You just listen because you love it…and gradually you learn. You really learn everything valuable through osmosis. It’s the same with play-writing or movie-directing or acting. You love either reading or watching films or plays or listening to music. And in some way, over the years, without making any attempt, it gets into your blood, into the fiber of your body”.
The art of investing is made out of the same framework.”
Finally, the most terrifying precondition: solitude. “Like art, portfolio management can rarely be done in teams”. One’s inner self does not emerge unless there’s no other soul around. The only way to counteract our mastery at imitation is to not have anyone to copy. The best elements an investor can possess are a mirror and a journal.
If you would like to read Francois’ complete writing on the matter:
Personal Commentary
I felt I needed to leave the article there. Honestly, my first intention was to reproduce all of the conclusion parts of his letters (10 approximately). I will do that on another occasion, as I believe you will enjoy each of those as much as I did. However, I need to rest and don’t want to take my chances of damaging the concept of beauty.
I admire how you extrapolate conclusions from Francois's annual letters. Investing, as a nuanced pursuit, sure is a derivative of art and philosophy.