Letter #251: George Loening (2024)
Founder of Select Equity | Deerfield Academy Commencement Speech
Hi there! Welcome to A Letter a Day. If you want to know more about this newsletter, see "The Archive.” At a high level, you can expect to receive a memo/essay or speech/presentation transcript from an investor, founder, or entrepreneur (IFO) each edition. More here. If you find yourself interested in any of these IFOs and wanting to learn more, shoot me a DM or email and I’m happy to point you to more or similar resources.
If you like this piece, please consider tapping the ❤️ above or subscribing below! It helps me understand which types of letters you like best and helps me choose which ones to share in the future. Thank you!
George Loening is the Founder of Select Equity Group (SEG), which he started in 1990 when he was just 23 years old. While this may seem early, his career in finance actually began when he was just a sophomore in high school, starting and running an equity market newsletter that grew to over 100 paying subscribers. This newsletter was essentially rolled into SEG, with the firm selling their research in order to generate cash flow and support the business. Within 5 years of founding the firm, 20 of the industry’s 35 largest asset managers in the US were research clients. Another 5 years later, they shut down the research business as their revenues were no longer needed to support the asset management business. Today, SEG manages over $40bn in assets.
SEG’s research process has always been research-intensive, with “originality” being one of their core values: “We generate our own ideas and never deploy common practice without skepticism. We strive to avoid the herd. We do our own research and never exchange views with other managers. As a result, we tend to have differentiated portfolios.”
George is also a personal hero of mine—in fact, Speedwell Research’s creation, anchored by our independent, deep, fundamental research on companies, is greatly inspired by SEG. He’s traditionally kept a low profile, so seeing him give this speech was a real treat. Also, a fun fact: George’s friend, and SEG’s first employee, who stayed for 20 years and helped grow the firm from start to ~$4bn AUM, is one of my favorite novelists: Amor Towles.
Today’s letter is the transcript of George’s 2024 Deerfield Academy commencement speech. George starts his speech by sharing a poem addressed to the students’ (and his) parents thanking them, before moving on to address the students. In his speech, he asks the students to imagine their lives as a series of concentric circles with each student at the center bullseye, with family in the next circle, followed by friends, then community, then country, then world. He then tells the students that they cannot be an effective agent of positive change in any of the outer circles unless they first strengthen the core: themselves. He then shares five pieces of advice on how to do just that—strengthen yourself:
Set high standards for yourself, work hard to meet them, hold yourself accountable and every year raise them and do your best to ignore the measurements that have no meaning.
Doubt everything you read.
Find your calling.
Surround yourself with the best and smartest people you can find.
Hold close to your heart what you have today.
He shares personal anecdotes, data, and context for each of these lessons, before wrapping up the speech by reiterating each of these lessons and then thanking the students for listening.
I hope you enjoy this speech as much as I did! It’s a speech filled with wisdom and lessons that are clearly applicable to not just life, but business—these principles are clearly foundational to SEG, as evidenced by the history, process, and growth of the firm.
[You can watch the speech here or read the official transcript here.]
Related Resources
Research → Investing
Above the Crowd
Lux Research + Forbes/Wolfe Nanotech/Emerging Tech Report
Transcript
I always thought that Dr. Austin had extraordinarily good judgment up until the day he called and asked me to be your commencement speaker. Thank you, Leila and the Board of Trustees. Thank you, John, for your thoughtful leadership and for your insistence on doing what is right, not what is easy. And thank you to the faculty and staff of Deerfield. And thank you, Class of 2024, for giving me the opportunity to speak to you today.
Since my graduation from Deerfield in 1984, I have been extremely blessed: fortunate in my work, blessed by my wife and five children, and by my friendships. I have tried to be a good listener and a good learner. And, as I’ve gotten older, I have intentionally sought to expand my own horizons and to test my own beliefs. I will do my best to share with you some of the things that I have learned in the forty years since I sat in your seat.
But before I address you, the Class of 2024, I want to address your parents and guardians, many, if not most, of whom share some responsibility for your success. Kids generally do a poor job of telling their parents how grateful they are for their support. I know I did a poor job of thanking my own parents.
It reminds me of a wonderful poem written by Billy Collins called “The Lanyard,” which, if you remember, is a colorful but basically useless weave of plastic threads that ends up forgotten in a drawer. I won’t read Billy’s whole poem, but here’s an abridged version of it:
“I sat at a workbench at a camp
by a deep Adirondack lake
learning how to braid long thin plastic strips
into a lanyard, a gift for my mother.I had never seen anyone use a lanyard
or wear one, if that’s what you did with them,
but that did not keep me from crossing
strand over strand again and again
until I had made a boxy
red and white lanyard for my mother.She gave me life and milk from her breasts,
and I gave her a lanyard.
She lifted spoons of medicine to my lips,
laid cold washcloths on my forehead,
and then led me out into the airy lightand taught me to walk and swim,
and I, in turn, presented her with a lanyard.
Here are thousands of meals, she said,
and here is clothing and a good education.
And here is your lanyard, I replied,
which I made with a little help from a counselor.And here, I wish to say to her now,
is a smaller gift—not the worn truththat you can never repay your mother,
but the rueful admission that when she took
the two-tone lanyard from my hand,
I was as sure as a boy could be
that this useless, worthless thing I wove
out of boredom would be enough to make us even.”
So, while we can never repay our parents, let’s give your folks a better-than-a-lanyard thank you.
And now Class of 2024: some lessons for you. And keep in mind that I may make some generalizations. As President Eisenhower said, “All generalizations are false—including this one.”
You are on the cusp of a great moment in your life. You have an important opportunity to create a better version of yourselves, and going to college is certainly a good moment for that. Make the most of it.
The world is also on the cusp of greater things, though it may not feel that way right now. It was just twenty years ago, according to Gallup Polls, that two-thirds of Americans were opposed to same-sex marriage. In 2015, the Supreme Court ruled it legal in all 50 states. And today, more than 70% of the population is in favor of same-sex marriage. I am optimistic that our world has an opportunity to continue to reinvent itself in a positive way. But I know that we won’t accomplish that without you.
I will not tell you that, no matter your circumstances before Deerfield Academy, you are privileged to have had this high school experience with devoted and selfless teachers and in this sublime venue—because I read your Deerfield Scroll articles, and I know that you already know that. And I will not tell you that by virtue of the tools that you have been given, you have a responsibility to effect positive change in the world—because you know that as well.
But I will ask you to imagine your life as a series of concentric circles with you at the center bullseye, your family in the next circle, your friends next, your community after that, followed by your country, and finally, the world. And I will tell you that you cannot be an effective agent of positive change in all those other circles unless you first strengthen the center core: yourself.
First, I want to talk to you about what determines the measure of a person. Every generation is different and, of course, often defined in reaction to the generation that preceded it. A young friend asked me what I was going to talk to you about today. And I said, well, in part, how yours is a very different generation from mine.
And he nodded and said, “I agree 1,000%”.
And I said, “What?”
He said, “1,000%. I agree with you.”
And I said: “But it only goes to 100%. You can’t agree with me 1,000%. What does that even mean?”
And he said, “It means I really strongly agree with you.”
And I said, yeah, well, if you really strongly agree, why didn’t you say a million percent? I mean, when you take away the scale, anything short of infinity percent isn’t fully agreeing, is it?
And that, right there, is the greatest challenge that your generation faces in a nutshell: inflation. When you take away the scale, things start to lose meaning.
When I was growing up, I don’t think we had exclamation points. If we did, I hardly ever saw one. Now, every text is a statement followed by a series of exclamation points: “It was so great to see you today!!” Wait, is two enough? No, you have to put three or four to show you really, really mean it. One thousand percent.
One characteristic of the generations that preceded you was anonymity. Most people only made it into the old media of newspapers when they married or died. Today, people are on social media for hours every day, reading and posting about themselves and trying to accumulate followers and likes and retweets.
In my generation, superlatives like “best” and “greatest” were as rare as the things that they described. Today, “best” and “greatest” are thrown around like emojis.
Somewhere along the way, people in my generation decided that either every kid should get a prize, or no kids should get any prizes. Every kid should get a good grade, or there shouldn’t be any grades at all. The average GPA at Harvard in my generation was 3.2, whereas now it’s 3.8.
The scale has changed and the traditional ways in which we measured success have changed. At the same time, new measures have emerged in the metaverse where total strangers curate content about themselves in order to gain the approval of other total strangers.
On behalf of my generation, I want to apologize to your generation for creating such a confusing mess and such an enormous waste of your time. We gave you a plane with defective cockpit instruments. Some of those instruments tell you—based on the views of random strangers in a fake world—that you are better or worse than you are based on some criteria that do not matter at all. And others give you inaccurate readings on how you are doing in the real world.
Neither is good. You do not need the validation of strangers. You are not the sum of the exclamation points in the texts you get, the number of followers you have on social media, or the number of likes you received for your latest post. What determines the value of a person is not these externalities. It comes from within. It is called character. Character is not a popularity contest or a show that you put on for others. Character is the height of the standards to which you hold yourself. Character is how you behave when nobody is looking. That is the best measure of your success, and you are the best one to judge it.
So set high standards for yourself, work hard to meet them, hold yourself accountable and every year raise them and do your best to ignore the measurements that have no meaning. That is my first piece of advice.
My second piece of advice is “Doubt everything you read.”
I want you to test every preconceived notion you may have. That is the nature of critical thinking. It is easy enough to have your instincts tell you what to think and to find supporting evidence for any argument. It is easy enough then to have conviction in your ideas after verifying your thoughts with a few Google searches. But it is a poor way to discover the truth.
To arrive at the truth, you need to start with questions, not answers. To arrive at the truth, you need to know the other side. As John Stuart Mill said, “He who knows only his own side of the case knows little of that.” This is especially important because the truth is going to be harder to come by.
Ask anyone who has been witness to something that is reported in the news, and you will realize that much of what you read doesn’t synch with what they saw or heard. And yet, we read these things and accept them as truth, and that becomes the public record. Napoleon said, “History is a set of lies agreed upon.” You also know that there are thousands of websites that purport to be sources of news but are instead sources of opinion, and, for most of those, facts only matter when they support that opinion. We know from an MIT study that false news stories on Twitter or X spread 20 times faster than facts. We also know that artificial intelligence is going to make your search for the truth much more difficult, not easier. Through malevolent users of AI, you are going to see and hear people who you recognize saying things in their own voices that are entirely fictional but appear real.
Descartes said the pathway to truth is through doubt. I want you to think actively, ask questions, and question the answers that you find.
My third piece of advice to you is: “Find your calling.”
Angela Duckworth, in her book Grit (which you all should read), tells the parable of the bricklayers:
You ask three bricklayers: What are you doing?
The first says: I am laying bricks.
The second says: I am building a church.
The third says: I am building the House of God.
For the first, it is a job.
For the second, it is a career.
And for the third, it is a calling.
Find your calling.
I had dinner with the head of a monastery and asked what inspired him to become a monk, where you begin every day at 4 am singing all 150 Psalms. And he said, “Well, I got the call.”
I said, “Forgive me, Father Joe, but I don’t know what that means.” And he said: “I was a priest in New Jersey, and I was driving back from vacation in South Carolina through the town where the Trappist monastery is, and I went to the chapel there to pray, and while I was praying, God spoke to me, and said ‘Joe, welcome home.’ So, I knew I had to stay.”
Most of us don’t get calls like Joe did. But whenever you do find your calling, you will absolutely know.
George McDonald got the call when he took the train to Grand Central Station every morning carrying sandwiches for homeless people before heading to his job. After a few mornings of encountering more and more homeless people, he realized that he could never make enough sandwiches to feed everyone. So, he quit his job and started The Doe Fund, which created a program called Ready, Willing, and Able for people without homes that provided room and board, a job, and job-skills training. Thirty years later, his program has helped 28,000 formerly homeless and incarcerated people transform their lives.
Bryan Stevenson found his calling when lawyers showed up in his town to enforce the desegregation of the local public schools. Before that time, there were no high schools in Bryan’s county for Black students. As a result of those lawyers, Bryan went to a desegregated high school, and he was the first in his family to attend college. Bryan devoted himself to studying the law and then to using the law to fight for equal justice.
Steve Ells was a chef in Denver whose goal was to open one small restaurant inspired by the taqueria shops he had frequented in San Francisco. His 850-square-foot shop sold good-quality food that was healthy, tasty, affordable, and made in front of you. He got the call, and his single shop, which he called Chipotle, ended up opening 3,200 restaurants serving fresh, affordable food across the country.
My eldest daughter went to New Orleans after college to do Teach for America for two years, followed by four years of teaching at charter schools while also teaching part-time at a juvenile jail on weekends. She got the call and moved to teaching full-time at the juvenile jail.
You will know when you get the call. And, indeed, it will be the greatest, best thing to ever happen to you. Because it will consume you with joy, challenge you, and teach you. Because it will expand your concentric circles outward. And because it will provide you with a purpose far beyond yourself.
If you are fortunate enough to know your calling now, you are extremely lucky. I found mine early and began writing an investment newsletter in my dorm room my sophomore year at Deerfield. If you do not know your calling yet, you must find it. After all, it is the way in which you will spend the majority of your waking hours.
Now, if you ever have a situation where you think you may have gotten the call, but you’re not sure, that was a butt dial or a wrong number. Because 1000% you will know when you get the call.
Do not be a passive observer of your life, someone to whom things happen. Engage with the world around you. Expose yourself to new places, new people, new classes in college, part-time jobs, the books you read, the organizations you volunteer for. There will be no downside, only upside.
And one last important note: the call is a metaphor—it will not come on your cell phone. In fact, your cell phone is a call-blocker. As Jonathan Haidt tells us, the average Gen Z spends 35 hours a week on social media. That’s nuts. So, get your head up out of your phone and face the real world, have real interactions with real people, and find your calling.
Number four: “Surround yourself with the best and smartest people you can find.”
Seek out those who you believe are world-changers and spend as much time as you can with them. For me, these have been political scientists, writers, architects, poets like Billy Collins, great thinkers like Jonathan Haidt, lawyers and social justice reformers like Bryan Stevenson, educators like our own John Austin, the reverend at my church, heads of great NGOs, soldiers, artists, astronauts, doctors, athletes, CEOs, and entrepreneurs.
Learn from them. They will make you better. They have grit—what Angela Duckworth calls the ability to be satisfied in being unsatisfied. Never complacent, always striving to be better. They have spent their lives seeking excellence and truth in what they do and effecting change above and beyond themselves.
From these world-changers, you will learn that humility beats arrogance every day. You will learn the importance of having trust in other people. You will learn from them that building things is hard, and that is why it is so gratifying. You will learn the importance of committing Intentional Acts of Kindness and, as Bryan Stevenson says, of gaining proximity to those who did not have the good fortune of sitting in your seat.
You will learn that acts of kindness are not done to show the world how good you are. They are done because they are right to do. And they will inspire you when you are faced with difficult decisions in your life that will require you to do what is right—not what is easy—not what is expedient—not what is popular—but what is right.
And finally, number five: “Hold close to your heart what you have today.”
This is an extraordinary moment in your lives, a moment that signifies achievement and that deserves celebration. It is a moment when you are surrounded by friendships forged in classrooms, and on playing fields, and at sit down meals, and in dormitories in a way that you will unlikely ever experience again. It is also a moment from which you will depart and disperse and move on to other, very different things.
But I can tell you that the friendships you have made here will last you a lifetime and will help to forge your viewpoints in ways that you cannot imagine. Shortly after graduating from DA 40 years ago, led by my friend Will Mathis, a half dozen of our classmates got together for a long weekend and committed to doing so every year. We have done so now every year for the last 35 years without fail, the same six DA grads every January, every year: four days, no excuses. One of the six, John Wyatt, wrote a wonderful piece about this bond this spring in the Deerfield Magazine.
The six of us live in five different states in every corner of the country. We chose different careers, and perhaps most importantly, to this story, we are rarely in agreement politically. In the 2016 presidential primaries, we did not agree on a single candidate among the six of us. We represent the political spectrum from the far left to the far right. For many people today, that would be the end. For us, it was always the beginning. It is the conversation before, during, and after meals that would start with: “Are you kidding me? You gotta be nuts! Why do you think that?” It is a conversation rooted deeply in respect, friendship, and trust that allows us to learn from each other. As the author Jonathan Rauch said, “Acquiring knowledge is a conversation, not a destination. It is a process, a journey—a journey we take together, not alone.”
If there is anything that I want you to take away from this speech today it is that you have with you, at this very moment, the greatest gift that you will ever have, friendships rooted deeply in shared experiences that you should continue to cultivate and nurture and rely upon in the future. Put together a small group of your classmates and commit to spending one weekend a year with them for the rest of your lives. Real friendships are not forged or maintained on social media; they are not measured in “likes” or retweets. Real friendships are worth the effort and time that they deserve.
So remember: The best measure of your character is you. The road to truth is through doubt. Find your calling. Surround yourself with the best and smartest people you can find. And cherish and maintain the friendships you have built here.
Class of 2024, congratulations, and thank you for listening.
If you got this far and you liked this piece, please consider tapping the ❤️ above or sharing this letter! It helps me understand which types of letters you like best and helps me choose which ones to share in the future. Thank you!
Wrap-up
If you’ve got any thoughts, questions, or feedback, please drop me a line - I would love to chat! You can find me on twitter at @kevg1412 or my email at kevin@12mv2.com.
If you're a fan of business or technology in general, please check out some of my other projects!
Speedwell Research — Comprehensive research on great public companies including CSU, META, CPRT, CSGP, AXON, ABNB, and interesting new frameworks like the Consumer’s Hierarchy of Preferences and the Piton Network.
Cloud Valley — Beautifully written, in-depth biographies that explore the defining moments, investments, and life decisions of investing, business, and tech legends like Dan Loeb, Bob Iger, Steve Jurvetson, and Cyan Banister.
DJY Research — Comprehensive research on publicly-traded Asian companies like Alibaba, Tencent, Nintendo, Coupang, Sea Limited (no paywall), and more.
Compilations — “An international treasure”
Memos — A selection of some of my favorite investor memos
Bookshelves — Collection of recommended booklists.
where can i find amor's writing from his select equity days?