John Harris presents at Sohn 2025

Everybody, thanks for having me. My name is John Harris. I'm the managing partner at Ruane, Cunniff & Goldfarb. We manage $15 billion across a few different strategies, and our oldest goes back almost 55 years now.

What I'm going to talk about today is going to sound like a dodge, but it's not a dodge. It's more of an acknowledgment of the fact that you are hearing today from some of the most talented investors in the world. And yet, we are all going to be doing well if one more than half of the stocks that are pitched today actually work out.

So, I could pitch you another one, but instead of giving you a fish that may or may not be so fresh, I'm going to try to do one better and give you the proverbial rod that will hopefully help you fish well in all weather. Sometimes the conditions are great and every cast gets a bite, and then sometimes it's just really tough out there on the water.

As you can see, I don't have a ticker up here. I have a picture of someone I'm guessing many people in the audience knew and admired. It's my partner and my friend, Chase Sheridan. One of the many reasons it's appropriate for me to talk about him today rather than a stock is that, like Ira Sohn, he died earlier this year after a long and very courageous fight with cancer.

1. Investing Runs On Emotion

Let me start by making an observation that isn't going to be news to the older folks in the room. Investing mostly happens in the heart, not the head. There are 100 times, probably 1,000 times, as many smart people in markets as there are successful investors. That tells you that while deep research and thoughtful analysis are really important to what we do, those are just the table stakes.

Everyone is smart. Everyone knows their companies. Everyone does their homework. Where you really make the money in this business is in managing your emotions over the course of a career spent operating in markets that are capricious and humbling, and where so much of what happens is out of your control. You do this long enough and your emotions will get tested to the absolute extreme. You will look terribly wrong, and sometimes you will be terribly wrong.

2. The Right Partners Matter

Which is why who you do this with is every bit as important as how you do it. I am a very lucky guy in that I have had the privilege of navigating markets for over 20 years now with a group of very special people, none more so than this guy up here.

He was brilliant and insightful and all of those things, but the best way to explain why he was so special is that I can't tell you how many times he told me I was a complete and total idiot in the nicest and most respectful way. He never pointed a finger at me. He never raised a voice at me. He never made me feel like an idiot. He always told me I was an idiot in a way where afterward I thought to myself, “Gosh, what an idiot I am.”

In those times when I really did feel like an idiot, he was always the guy to pick me up off the field, help me wipe the dirt off my jersey, pat me on the back, tell me to stop whining, and go get back in the game. You need partners like that, and you need clients like that.

Now, “need” is probably too strong a word. You can get by without them, and some people do. But if you are going to succeed without the support of great partners, you are going to have to get yourself very lucky. I don't know about you, but I don't think luck is a particularly great strategy.

3. Choose Your Partners Carefully

So, here's a friendly suggestion for the younger people in the room today: Go back to your office and look around at your colleagues and your clients. If they don't look like what I just described, either go somewhere else or fix it, because this is a very hard game, likely harder than you realize, and your odds of succeeding at it are not what they should be.

A big part of playing this game well over decades is just staying in the game, which again is harder than a lot of the young people in the room probably realize. Staying in the game is just a lot easier if you are playing it with people who are not just your colleagues, but also your friends.

I really hope everyone in this room gets to work with someone like Chase, and I'm very glad to be here to support this cause so that hopefully there are fewer stories like Chase's and Ira's to tell in the future, because I have to tell you, I miss this guy a lot.

4. Chase Was A Lightning Bolt

It's fitting that I'm here to talk about him and remember him in a, quote-unquote, lightning round, because that's how I like to describe him. He was this beautiful bolt of lightning that lit up our firm and made us all better in every way you can be better.

Whatever investing success I've had, I owe a healthy portion of it to him—to his wisdom and his insight, but much more importantly, to his friendship and support through a journey that, like I said, is much more emotional than intellectual.

Nate and Grace, if you ever see the video of this, you should know that among many things, your dad was a partner in every sense of that very, very important word in our business, and frankly, in anything you do in life. If you want to build something lasting and special, you have to build it with special people like him. Thank you.

Thank you, John. That was very meaningful. I think here at Sohn, we spend most of our time focusing on companies, margins, product-market fit, and growth. But at the end of the day, I think we all agree that what guides those companies is people, at least for now, for the next few years.

And so I wanted to give a quick thanks to Evan. You mentioned Ira. I know Evan's dad isn't feeling great, so he can't be here today. I wanted to send him a message that this is amazing—everything they have built.

The other person who deserves thanks is Graham Duncan. He's the chair of the committee, and he's one of the people who understands people the most. I think a lot of you are here because of him and what he's built, and he has an incredible podcast, Invest Like the Best, about people that I recommend.

But then, going back to more on investing and making money, we were in the green room before, and we were also talking about, “Okay, well, what about if a partner isn't carrying their weight? He's losing money. Let's talk about those dark times.”

5. Slow Feedback Complicates Management

Yeah, you know, that's one of the hardest things about managing a firm like ours, because across most of our strategies, we typically own 15 or 20 stocks, and we will often own them for 10, 15, and even 20 years. So the feedback loops are slow, and the data set is sparse.

There's a little bit of an element of “you know it when you see it.” You just know when someone is contributing, even if the P&L doesn't show it. But it's also just about striking the right balance.

6. Accountability Defines The Firm

I've never found the right word for it, but I used to describe our firm as a family. I studiously don't do that anymore, because in a family there's no accountability. Your brother can kill someone and they're still your brother. In our business, you need to make money at the end of the day.

So we're something more than a team, but we're something different from a family, and I've never figured out what that is. Striking that balance is one of the secret sauces to managing a firm that does what ours does. It's not easy, and there is no perfect answer. Thank you.