12+ acquisitions and turning $8M into $400M+

Today, we are discussing entrepreneurs who were inspired by READING a single article or blurb (You're going to learn a lot!).

One of my favorite genres of quotes is investors talking about how much they love reading.

The Investment Master Class website has a collection of them including these great ones:

• Warren Buffett: “The advice I would give is to read everything in sight. And to start very young. It’s a huge advantage in almost any field to start young. If that’s where your interest lies, and you start young, and you read a lot, you’re going to do well."

• Marc Andreessen: “I’ve really read all the time since I was a little kid, it's been a lifelong thing. It's basically trying to try to fill in all the puzzle pieces for the big discrepancies. A great term is ‘sense-making’. Essentially, ‘what the hell is happening and why?’ The world is an incredibly complex and erratic place and trying to figure that out ...is kind of a lifetime occupation.”

• Charlie Munger: “In my whole life, I have known no wise people - over a broad subject matter area - who didn’t read all the time. None. Zero. You’d be amazed at how much Warren reads and how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”

• Howard Marks: "I think its helps to read broadly, what good does it do to know everything about one little thing if you don't know how it fits into the world, and how the world is going to effect it."

• Seth Klarman: “Never stop reading. History doesn’t repeat but it does rhyme.”

• Sam Zell: "I've said it before and I'll underscore it here: I am a voracious consumer of information. I have honed my ability to digest a lot of information, sift out what's potentially relevant, retain it, and then recall it when it's useful. I read at least five newspapers every day, and five business magazines a week. I remember all of it, or at least everything relevant. I also like to read escapist fiction — mystery novels, spy thrillers — and I go through about one book a week. I usually remember nothing about them. Unless all of a sudden something becomes relevant."

“Read a lot" is reasonable advice but it is too general.

It is easy to see the benefits of reading for investors. Good investors combine unique insights with capital to unlock profitable trades. And you don't need many unique insights to have an incredible investing career.

In 2017, Charlie Munger gave a talk at the Daily Journal Annual Meeting and talked about how he had read the finance magazine Barron's for 50 years and only ever got one investment idea from the publication.

Stemming from a single article, the investment idea earned him $500m:

“I talked about patience. I read Barron’s for 50 years. In 50 years, I found one investment opportunity in Barron’s. I made ~$80m with almost no risk. I took the ~$80m and gave it to [Himalaya Capital’s] Li Lu, who turned it into $400-500 million. So I have made $400-500 million from reading Barron’s for 50 years and following one idea.”

The pipeline from reading-to-investing is easy to visualize.

You have to be like a sponge, constantly reading. Eventually, you might find that one deal/investment too.

What to read? Take the today's sponsor, CapialPad, gives you great access to SMB acquisitions for free.

(You never know when you’ll find your next great investment, right?)
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They’ve built a marketplace for acquisition entrepreneurs and the investors who back them.

They handle the messy part:

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In short, they professionalize investing in small businesses, you can simply READ and see all the deals.

So if you’re raising to buy a business - or you want exposure to acquisition deals, go to CapitalPad.com

But what about other ventures? Can a single insight from an article or book blurb change the trajectory of a business?

Yes, it can.

Since reading about the Munger / Barron’s story a few years ago, I tuned my information-gathering antennae to find stories of entrepreneurs who read a single article (or blurb) that unlocked something for their businesses or careers.

Here are a few that I have collected:

• Jeff Bezos decided to found Amazon after reading on a news website that the internet was growing at a rate of 2,300% per year.

• Morris Chang laid the seeds for Taiwan Semiconductor Manufacturing Company (TSMC) after discovering an insight in a graduate-level textbook called Introduction to VLSI Systems. The textbook excerpt explained why it made economic sense for the design and manufacturing of microchips to take place at different companies, instead of being totally integrated in one organization (e.g. Intel).

• Elon Musk’s first steps towards creating SpaceX began when he visited the NASA website and was surprised to find the agency had no schedule or plan to go to Mars.

• Airbnb co-founders Brian Chesky and Joe Gebbia got the idea for their platform because they wanted to attend a design conference in San Francisco. When they checked the conference’s website, they found that all the recommended hotels were sold out. So, they figured they could rent out the extra space in their apartment and use the funds to buy tickets to the conference.

• Dietrich Mateschitz tried an energy drink in Thailand and realized that it was a huge business opportunity after reading that the country’s top corporate tax payer sold the drink. His idea: add carbonated water and sell the drink in Europe. We know it as Red Bull.

• Bill Gates saw a Popular Mechanics magazine issue about the ALTAIR 8800 in 1975 that he said “stopped me in my tracks”. It convinced him and and Paul Allen to write a version of BASIC for the machine, which laid the foundation for the PC revolution.

• Phil Knight found crucial financing for Nike - as well as a manufacturing partner - after reading an article about Japanese trading companies that “do just about everything - import, export, and extend easy credit to all kinds of companies.”

Wide and random reading on its own is beneficial. The practice nurtures the mind and is a good antidote for digital dopamine distractions. When you combine that with hard-earned expertise and skills, the results - as shown above - are next level.

Reading an hour a day for leisure probably puts you in the upper echelon of the skill.

It is obviously good to curate your reading diet but that step follows just reading more, period.

“It almost doesn’t matter what you read,” says investor Naval Ravikant. “Eventually, you will read enough things (and your interests will lead you there) that it will dramatically improve your life. Just like the best workout for you is one you’re excited enough to do every day, I would say for books, blogs, tweets, or whatever - anything with ideas and information and learning - the best ones to read are the ones you’re excited about reading all the time.”

Going back to Munger's story about Barron's magazine, the insight he found was for an auto-parts manufacturer called Tenneco. After making $80m - likely a 10x return - he gave the money to investor Li Lu. For the uninitiated, Lu was one of the leaders of the student protests during the Tiananmen Square crisis in 1989. He fled to America and then attended Columbia University (BA, MBA, JD) before launching his own hedge fund in 1997.

Lu was able to turn Munger’s $80m into $500m based on only a few bets, including a big one into Chinese electric-vehicle maker BYD (UPDATE: September 22nd, 2025: According to CNBC, Berkshire has completely exited its BYD position, which went from $230m in 2008 to ~$9B in 2025, a gain of 39x).

During a lecture at the Columbia Business School in 2006, Lu shared thoughts on lifelong reading and learning that are relevant to this article (Lu was talking about his own portfolio, not anything specific to what he did with Munger):

“You go through your life and you may not have more than five or ten insights which you develop over many, many years of study. Fifteen years ago I studied an American company and now I find the Asian counterpart and I find the valuation that I like. I can bet on it now but I studied that business for 15 years in between. I know everything about that industry and what really makes that business tick. An opportunity like that doesn’t come very often, so when it comes you have to seize it.

You need to have that kind of insight in order to really swing with conviction and if you cannot do that either psychologically or because you’re ill-prepared, you just will never really make any real amount of money [in investing].

How do you really build that insight? There is no other way than continuous curiosity, intense curiosity, continuous studying for your whole life.

The thing about this approach is you progressively get better and better and better, to the point that you read a page and it only takes you a couple minutes to tell right away whether something jumps out. You can smell it when you see something.”

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This week I read this post from Mr. Family Office about the behaviours of various investors around the world.

Can we say that first-gen with founder control behaves very differently than say a 4th-gen investment committee?

I strongly believe so…

I recently saw firsthand how quickly the strategy can change.

A European single family office.

For health reasons, a father stepped down, and his son took over the managing role of a firm (ca $300-350 million in assets).

When the old man was running it, they were doing 1-2 investments in 4-5 years, mostly in large commercial real estate projects.

When the 32 year old son took over, within the next 24 months, I saw him make 5-6 minority growth equity investments in very traditional industries:

• solar panels,

• manufacturing of machinery,

• rental and leasing of sports goods.

Oh, and very recently, padel courts as well. This, they own 100%.

He definitely wants more action; I can see him having a totally different strategy from his old man.

Could it be true that there are many such cases, as younger folks want to get their hands dirty?

- - - -

This week’s podcast is with Nick, who is now building a regional platform of generator dealers and service businesses.

We discuss his journey:

• to independent sponsorship

• lessons from 12+ acquisitions

• what makes a good business model

• partnering with operators

• and buying seller-dependent companies.

I hope you enjoy!

Here are the links to Spotify, Apple Podcasts and YouTube.

That’s all for today.

Thanks a lot for reading and I’ll talk to you again next week.

Take care,

PrivateEquityGuy / Mikk Markus