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I will say this over and over again, sports in today's world have just become all about money. People may criticize me and say that I'm only saying this because I'm not a top athlete in the world. What happened to the days where people played the sport because they loved it, now it's all about money. They're college athletes, they go to college. In the real world after you graduate from college, you get a job. Playing a professional sport is a job, in college you're a student.

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In 2015, Witherspoon made her second appearance on the Time 100 list, with her featured article written by Mindy Kaling.[225] That year, she was awarded, by the committee's unanimous vote, the American Cinematheque for being "a perfect example of an actress flourishing in today's world" and "an active and successful movie producer who is moving her career forward both behind and in front of the camera".[226][227][228] In 2017, Forbes reported her career earnings were in excess of $198 million, making her the highest-paid primetime Emmy nominee in 2017.[229] In 2019, Forbes listed her among the World's 100 Most Powerful Women.[230]

Bob Casey: Thanks for joining us today. I'm Bob Casey, the CFO of Tegus, and I have the pleasure of being here with Reece Duca, the founder of the Investment Group of Santa Barbara. Prior to joining Tegus, I had the pleasure of working, everyday, with Reece at the Investment Group of Santa Barbara. He's been an incredibly private person, has not spoken much publicly about the history of a firm that's now in its 54th year. I'm really excited to have Reece joining us and to hear from him as he shares a bit about the evolution of the Investment group of Santa Barbara. Reece, thanks for joining us.

Reece Duca: IGSB, we're an investment firm in the investment business. We started, as you said, 54 years ago. The original money was what I had when I finished the Stanford Business School, I had $75,000. We've never had any additional assets. We've never managed anyone else's assets other than our own assets. My 50 odd year partner, Tim Bliss, joined in the fifth year, he came as an intern. I put them on an agricultural project. By the end of the summer, I said, This guy's really talented. And he went back, finished his last year at Harvard, joined me, and he and I essentially built IGSB together.

Reece Duca: There's a half a dozen key things, but really, the most important ones are: We don't manage outside money, we have always had concentrated investments--and when I say concentrated investments, I'm talking about having maybe 70 or 80% of our assets in two, three, or four companies. We may own five or six companies, but 70%+ of our assets, it can be two or three or four--we talk about clarity of purpose and simplicity and focus. And we think that the most important thing in the investment business is to keep everything absolutely as simple as you possibly can. We think complexity is the biggest barrier to high performance in the investment business. And so we design around complexity. And we also think that it is extremely hard to find exceptional companies. And that most companies aren't exceptional. And so whatever your strategy is, it has to be designed to--how do you distinguish between what is exceptional and what isn't exceptional? Those are some of the kind of core themes.

When I finished high school, I had $2,000. I had saved this money, I had worked in a butcher shop, and I'd done a teeny bit of investing. And so I arrived at UCSB with $2,000. I spent the three and a half years with Herb Kay, I leave UCSB, I have $7,000. So after UCSB, I applied to business school, I applied to a couple business schools, got into all the business schools, and decided to go to Stanford.

The $7,000 I started with became $75,000 when I graduated. And essentially, that is the seed corn for IGSB. We've never had one additional cent of money other than that original $75,000. But that was the genesis of IGSB.

Reece Duca: Let me kind of just mention a couple of words about the last couple of months at Stanford. My faculty advisor was Professor [Coleman], was just a wonderful gentleman. And he--one day, I was going down to the cafeteria and he tapped me on the shoulder and said, Meet me in the offices. I've reviewed your job offers, and I want to give you my thoughts and help you kind of sort through it toward the end. And I thanked him profusely for doing that. And I said, Can I ask you one question? I said, What do you think about the idea of me just continuing to do what I'm doing, just to invest my own money? And he kind of halted and he looked at me. He didn't say it, but it was it was obvious. He thought that was the craziest idea he had ever heard, from a second year GSB student. And he explained why. He knew I was an investor, he didn't know how well I did or how poorly, kind of process I used or, but he said, Nah. Five years, you might want to do it, or maybe 10 years, probably more likely. And he said, But to do it now, I think that's a big mistake. So, again I thanked him, and I kind of headed out the door.

And I reflected on it and I also thought about who else would have given me advice. My dad had died when I was 14 and I know my dad would said, What do you Professor Coleman say? And I would have told him what Professor Coleman said, and my dad, who would go extremely rational, would have said, That sounds like pretty solid advice. And so, I got in my car, and I was driving back to my apartment I had in Mountain View. And so I get to Mountain View, and I say, I'm gonna take the $75,000, and I'm gonna manage my own money.

But let me give you some context about the next 14 years from when I left Stanford to go... and look back here, today, in our country, and in the world, and here we are, 2023, and I look back, 14 years, we're 2008, 2009. And we have seen the S&P up about three fold, we've seen the NASDAQ up about six fold. And so anybody, like I was at that time, a young student, if you're in that 14 year period, you had a tremendous wind at your back. What I didn't realize in [1968 - Reece mispoke and said 2008] that I was starting my career with my $75,000, and over the next 14 years, in 1982, the indexes were going to be identical to what they were in 68. And during that 14 year period, you are going to have two market declines, peak to trough, index declines of 50%, individual stocks were down 60, 70, 80%, including excellent companies, and you're going to have T-bills at 15%. Toward the end of the 14 year period, you're going to have unemployment above 10%, you are going to impeach a president, and you are going to have the most chaotic world possible, to survive. Now, had I known that, I might have taken one of the jobs, but I didn't. And so here I was-- that was the ocean I was swimming in. And now--that was the chaos and the turbulence of the market during that period. So I had my modified S-1 strategy.

And we think one of the things that investors do, is they create complexity that's hard to deal with. If you have a portfolio of 20 companies, you're not going to be an expert in 20 companies. And so what we realized early on, and again, it was a little bit of an extension of what we saw Herb Kay doing, but we got to see it up and close as we were managing our own money, is that our biggest position, and our second biggest position, invariably, were the ones we knew the best. And when we on five or six or seven or eight, we didn't know number seven and eight very well. And then I could also see my business school buddies and their portfolios. And then they had, in their portfolios, 15 and 20 and 25 companies. That became obvious that they did not know company 15 and 20 anywhere near the way we knew our companies. And so it became obvious to us that concentration was really key to returns.

Reece Duca: I don't know whether we were leaving something. All of our friends said, You're leaving something on the table. By the fifth year, we had a lot of people asking us to invest their money. But there's a difference between being an investor and being in the investment business. The investment business is a business where you're managing other people's money, you get paid a fee, in some cases you get paid a carry, and you're considering different things. You're interested in how much assets you had under management and your quarterly report and all the ways in which you reduce the--losing your clients, your limited partners, your investors.

And what we realized when not having outside investors, yes we didn't have the scale, and there were some disadvantages of it, and we were paying our own expenses out of our [investment] money, we were paying our own salaries out of our investment money, we were paying taxes out of investment money, which most people in investing businesses don't do it. I mean, they basically--their business pays them compensation and covers expenses, anything we were doing. But what we realized was that we could sculpt our strategy. We could invest in public and private companies, we could have concentrated positions. If we had outside investors, and even today, there are not too many investors who have models that would have concentrated investments in public and private and doing the things that we do as part of our everyday model. And as you could imagine, in the 70s and 80s, if we had outside investors and we tell them we're going to have 70% of our money in two, three companies, that didn't interest them. I mean, some of them think you're crazy. And some of them would say That doesn't interest me. It has too much risk. 17dc91bb1f