My guest this week is Joe Mansueto, the founder, longtime CEO, and current executive chairman of Morningstar, Inc. Joe is an entrepreneur at heart. He has the gene for spotting good business ideas and building them out with the customer in mind, so it is no surprise that the story behind Morningstar’s birth and growth is both entertaining and enlightening. While there are many business lessons in this episode, there is just as much to be learned from the way Joe conducts himself. He was kind, welcoming, and humble—you’ll see what I mean. There is something timeless and classic about his journey—I hope you enjoy hearing about it as much as I did.
Books Referenced
Presentation on Moats and Floats
Shoe Dog: A Memoir by the Creator of Nike
The Warburgs: The Twentieth-Century Odyssey of a Remarkable Jewish Family
Titan: The Life of John D. Rockefeller, Sr.
The Everything Store: Jeff Bezos and the Age of Amazon
Let My People Go Surfing: The Education of a Reluctant Businessman, Completely Revised and Updated
The Systems Bible: The Beginner’s Guide to Systems Large and Small
Links Referenced
Moats and Floats by Sanjay Bakshi
Show Notes
2:25 – (first question) – Joe is asked how the book Walden was the inspiration for the name of the company, Morningstar.
2:51 – Walden
4:23 – Looking back at whether Joe returns to Thoreau and ‘Walden’, which has led him to simplify things in his life.
5:36 – If he had to, Joe said he would give every 22-year-old ‘Walden’ to read.
6:37 – Walking
6:45 – Exploring the early parts of Joe’s life, and first business ventures that eventually led him to launch Morningstar
8:52 – When Joe first got interested in investing and how that sparked the idea of compiling investment information
9:09 – The Money Masters
10:47 – Went to get some more real world experience
12:56 – Patrick pushes Joe on his soda selling business that he started in college
14:18 – How a focus on reducing transaction costs can lead to great business ideas and the first product launched by Morningstar
17:17 – The power of floats in launching businesses
17:21 – Presentation on Moats and Floats
19:29 – The Financier
20:55 – Is the ability to identify arbitrage innate or can it be learned
22:40 – What were the principles that were used to maintain the Morningstar brand in the beginning and over the years.
26:17 – What did Joe think about when he was hiring those first few fund managers for Morningstar
28:06 – Exploring Joe’s thoughts on some of the trends in investing, from active to passive management, or from boutique investors to larger mutual fund type companies.
31:06 – The origin of the Morningstar style box
33:55 – A look at Joe’s personal investing styles
35:17 – What is the importance of confidence when it comes to investing in a company and does Joe’s role with Morningstar provide him with added confidence
36:59 – A history of Joe’s roles and views as a capital allocator
40:45 – The benefits of repurchasing stocks
42:27 – Why do companies still favor dividends
43:56 – Exploring Joe’s management style and what has changed over the last 30 years
46:52 – Are there common traits to look for when hiring people
50:14 – Are there any negative screens that Joe wants to avoid when hiring people
51:02 – Favorite recent books/topics that Joe has explored
51:15 - Shoe Dog: A Memoir by the Creator of Nike
51:46 – The Warburgs: The Twentieth-Century Odyssey of a Remarkable Jewish Family
51:50 – Titan: The Life of John D. Rockefeller, Sr.
51:59 - Alexander Hamilton
52:56 – The Everything Store: Jeff Bezos and the Age of Amazon
53:01 – Let My People Go Surfing: The Education of a Reluctant Businessman, Completely Revised and Updated
53:07 – Exploring the darkest moments for Morningstar
55:18 – How does Morningstar foster innovation and not get too comfortable with their success
59:20 – Looking at Joe’s most memorable day at the company
1:02:14 – In what ways has Joe simplified his life through his daily routine
1:04:35 – Joe explains how he became a member of Warren Buffett’s Giving Pledge.
1:06:12 – The importance of being able to say ‘no’.
1:08:22 - The Systems Bible: The Beginner’s Guide to Systems Large and Small
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
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Great interview, Patrick. I just discovered your podcast and have listened to a couple of the episodes now. You do a great job preparing for and conducting your interviews. Your questions are thoughtful and you add to the conversation without putting the focus on you.
Especially enjoyed this conversation with Morningstar’s founder. Lots of great insights. Keep up the great work.