Warren Buffett disciple Guy Spier reveals his biggest mistakes — and how he makes investing decisions now

Published Thu, Nov 18 20216:30 PM EST

Guy Spier's investment style may have been influenced by one of the most successful stock pickers of all time, but he admits that, like all investors, he's made some mistakes along the way. Spier is the CEO and founder of Aquamarine Capital, which mostly follows a value investing philosophy, inspired by Warren Buffett. During CNBC's latest Pro Talks with Tanvir Gill , Spier said that one of his biggest mistakes was not selling his investment in U.S. metals producer Horsehead Holdings. Spier suggested that he failed to pay close enough attention when Horsehead took on debt to build a new production plant. The cost of this plant, along with a fall in the price of zinc and then a default on some debt, led Horsehead to file for bankruptcy in 2016. Seeing the change in Horsehead's balance sheet should have acted as a signal to sell his shares, Spier admitted. This episode prompted him to add this to his investment checklist of questions: "Has the balance sheet changed? Have they changed their financial strategy? Are they funding themselves in the wrong way?" 'I missed it' Spier said he also regretted not investing in streaming giant Netflix , and not fully appreciating the "extraordinary personality" of its co-founder and CEO, Reed Hastings. Spier recalled sitting next to Hastings at a conference, admitting that he acted like a "snarky, not very nice person, sort of like a dissatisfied customer of Netflix." Despite this, Spier said "what was extraordinary was he [Hastings] gave me the time of day, and he gave me a sense of respect." Spier added: "And I just asked myself: If that's what he's doing for some snarky person who's sitting next to him at a conference, imagine what kind of loyalty he's building across his stakeholder group? And that should have been a signal and I missed it." Another mistake Spier mentioned was around the investment he held in the Federal Agricultural Mortgage Corporation, known as Farmer Mac , which is a publicly traded company set up by the U.S. government to act as a secondary market for agricultural loans. Spier, who used to have a long-position in Farmer Mac, decided to short the company following a meeting in which the company's management "behaved so badly" in response to questions from billionaire hedge fund manager Bill Ackman. Farmer Mac shares fell during that period and amid 2008 financial crisis, but have rebounded dramatically since. Spier admitted that his short was a gut reaction to "how awfully the meeting went for the management and how badly they answered the questions." "I think that it was a big mistake to short Farmer Mac, I should have just left it alone," he added, urging investors to "take a deep breath" rather than following their gut reaction about an investment. Stock picks In terms of investments he liked, Spier said he continued to back Mastercard . Despite the rise of challenger financial technology companies, Spier argued that it would be difficult to displace Mastercard, given the sheer size of its network of more than 15,000 banks. Instead, he believed it was more likely that these fintech firms would interconnect with Mastercard, which would make its network "even more central and even more valuable." Another stock Spier highlighted was the Indian Energy Exchange , suggesting that it was one way to gain exposure to the growth of India's economy. He said that the Indian Energy Exchange was "devoted to making sure that India has the power it needs to power its economy at the lowest possible cost, and then the most fair, transparent way for all suppliers, and producers." While he was unsure exactly how India's energy market would develop, Spier believed that the Indian Energy Exchange would be central to that story. At the COP26 climate summit earlier in November, Indian Prime Minister Narendra Modi unveiled a number of pledges , including the aim of having 50% of the country's energy needs met by renewable means by 2030. Spier also mentioned that he'd bought into Chinese technology giant Alibaba and Prosus , which is a Dutch investment company with exposure to Chinese tech firm Tencent .

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CNBC PRO Talks: Value investor Guy Spier shares his take on China, gold and bitcoin

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Guy Spier's investment style may have been influenced by one of the most successful stock pickers of all time, but he admits that, like all investors, he's made some mistakes along the way.