Best Legendary Investor Advice Throughout The Last Year

TLDR 

Through dozens of interviews with well-known investors throughout 2022, the Investor's Podcast Network has compiled a summary of key lessons all investors could learn. The speakers highlighted lessons learned from various mistakes, the importance of understanding economic cycles, embracing contrarian thinking, and the importance of humility.

Key Speakers

• Joel Greenblatt

• Howard Marks

• Francois Rochon

• Bill Miller

William Green is the host of the "Richer, Wiser, Happier Podcast" and discussed investing advice he was given by several legendary investors. The speakers he interviewed were Joel Greenblatt, Howard Marks, Francois Rochon, and Bill Miller. 

Green's main point highlighted the insights gained from these interviews on how to invest successfully and truly resiliently in an uncertain, risky, and unpredictable world. He emphasized that investors must position themselves to survive mistakes and misfortune while being positive about the future. He noted that great investors take advantage of uncertainties and times when other people are fearful, and it's not about avoiding risk but taking intelligent and considered risks. 

Joel Greenblatt

During this interview, Greenblatt, an American investor, author, and academic known for his investment philosophy and book "The Little Book That Beats the Market," shares the lessons he learned from some mistakes made early in his career. He stressed the importance of dealing with them by learning the lesson, internalizing it, and moving forward without becoming paralyzed by it. Green emphasizes the importance of focusing on what one can control, such as diversification, living within one's means, setting aside a cushion, and not overreaching. He also mentioned the importance of learning the rules of the game of investing to know what one is doing, if the investor does this they will be able to come back from any mistakes. Both of the speakers discussed how to deal with the emotional intensity of investing in tumultuous times, and the importance of being emotionally resilient. The conversation continuously emphasized the importance of taking risks intelligently, learning from each mistake without becoming debilitated by them, and focusing on what one can control while accepting the inherent uncertainties of investing.

Howard Marks

Howard Marks, the co-founder of Oaktree Capital Management, has a very different approach to investing than Joel Greenblatt, as he is more focused on macroeconomic trends and market cycles. Marks' advice is to think about the world as it is, not as you would like it to be. He argued that the most significant risk in investing is the risk of losing money, and one should focus on avoiding permanent loss of capital rather than maximizing gains. Marks highlighted the importance of understanding cycles in the market and how to position oneself in different parts of the cycle. He advised against trying to time the market but instead to be aware of where you are in the cycle and adjust your portfolio accordingly. Marks also talked about the importance of humility, admitting that you don't know everything, and being willing to learn from your mistakes. He stressed the need for investors to be open-minded, flexible, and willing to change their minds when the facts change.

Francois Rochon

William Green then highlighted a clip where he spoke with Francois Rochon, the founder of the investment management firm Giverny Capital. Rochon is a disciple of Warren Buffett and Charlie Munger and focuses on long-term investing in high-quality businesses. He emphasized the importance of finding businesses with strong competitive advantages, high returns on invested capital, and great management teams. Rochon believes that one should invest as if they are buying the entire business, not just a stock, and that the price you pay for a business absolutely matters. He advised investors to have a concentrated portfolio of 10 to 15 high-quality businesses that they understand well and to hold them for the long term. Rochon stressed the need for patience and discipline in investing, as well as the importance of not being swayed by short-term market fluctuations.

Bill Miller

After that, Green brought up an interview he had with Bill Miller, the former chairman and chief investment officer of Legg Mason Capital Management. Miller is known for beating the S&P 500 Index for 15 consecutive years and making a fortune in investments like Amazon and Bitcoin. He advised investors to be contrarian and not follow the herd, to look for undervalued stocks, and to focus on long-term investing. Miller emphasized the importance of deeply understanding the businesses you invest in and being willing to hold them for a while. He also talked about the importance of having a diverse portfolio of investments, including real estate, commodities, and cryptocurrencies, so that investors can hedge against inflation and diversify their risk. Miller also stressed the need for emotional discipline in investing, avoiding greed and fear, and not getting caught up in short-term market fluctuations.

Conclusion

Overall, the conversation between William Green and these legendary investors emphasizes the importance of resilience, patience, and emotional discipline in investing. They highlight the importance of understanding the rules of the game, having a disciplined and logical approach to valuing businesses, and being willing to learn from mistakes. The investors stress the need for humility, open-mindedness, and flexibility in the face of an uncertain and unpredictable world. They advised investors to be contrarian, think long-term, and focus on quality businesses with strong competitive advantages and excellent management teams. Finally, they highlighted the importance of diversification, having a deep understanding of the businesses you invest in, and not getting caught up in short-term market fluctuations. Utilizing the lessons given through these interviews will help any investor throughout their journey, no matter if they are a veteran or just starting out.

The full transcript can be found here.