Thinking in terms of opportunity cost

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Focusing on the concept of opportunity cost, it is emphasized that human tendency tends to overlook the mistakes of omission, i.e., things not done but should have been done, which often have greater consequences than the mistakes of commission. The speakers highlight the importance of considering opportunity cost in decision making, stressing that humans generally do not naturally think in terms of opportunity cost, thereby failing to assess the trade-offs involved in their choices.

Tom Gayner, CEO of Markel Group, reveals the lessons he’s learned from Charlie Munger and Berkshire Hathaway, how he invests, and the specific way he thinks about opportunity cost.

Gayner shares the difference between good debt and bad debt, where he disagrees with Munger, and why he focuses on the basics.

This intimate conversation offers a level of insight and honesty that Tom hasn’t offered anywhere else.

Gayner is currently the CEO of Markel Group and the Director of The Coca‑Cola Company. He also serves as chairman of the Davis Series Mutual Funds board and on the boards of Graham Holdings and Markel.

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