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Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and Life
From a renowned financial journalist comes a fresh, “engaging” (The New York Times), and profound book that draws on hundreds of hours of exclusive interviews with many of the world’s super-investors to demonstrate that key insights for building wealth apply to life as well.
Billionaire investors. If we think of them, it’s with a mixture of awe and suspicion. Clearly, they possess a kind of genius—the proverbial Midas Touch. But are the skills they possess transferable? And do they have anything to teach us besides making money?
In Richer, Wiser, Happier, William Green draws on interviews that he’s conducted over twenty-five years with many of the world’s greatest investors. As he discovered, their talents extend well beyond the financial realm. The most successful investors are mavericks and iconoclasts who question conventional wisdom and profit vastly from their ability to think more rationally, rigorously, and objectively. They are master game players who consciously maximize their odds of long-term success in markets and life, while also minimizing any risk of catastrophe. They draw powerful insights from many different fields, are remarkably intuitive about trends, practice fanatical discipline, and have developed a high tolerance for pain. As Green explains, the best investors can teach us not only how to become rich, but how to improve the way we think, reach decisions, assess risk, avoid costly errors, build resilience, and turn uncertainty to our advantage.
Green ushers us into the lives of more than forty super-investors, visiting them in their offices, homes, and even their places of worship—all to share what they have to teach. From Sir John Templeton to Charlie Munger, Jack Bogle to Ed Thorp, Will Danoff to Mohnish Pabrai, Bill Miller to Laura Geritz, Joel Greenblatt to Howard Marks. In explaining how they think and why they win, this “unexpectedly illuminating” (Peter Diamandis) book provides “many nuggets of wisdom” (The Washington Post) that will enrich you both financially and personally.
Billionaire investors. If we think of them, it’s with a mixture of awe and suspicion. Clearly, they possess a kind of genius—the proverbial Midas Touch. But are the skills they possess transferable? And do they have anything to teach us besides making money?
In Richer, Wiser, Happier, William Green draws on interviews that he’s conducted over twenty-five years with many of the world’s greatest investors. As he discovered, their talents extend well beyond the financial realm. The most successful investors are mavericks and iconoclasts who question conventional wisdom and profit vastly from their ability to think more rationally, rigorously, and objectively. They are master game players who consciously maximize their odds of long-term success in markets and life, while also minimizing any risk of catastrophe. They draw powerful insights from many different fields, are remarkably intuitive about trends, practice fanatical discipline, and have developed a high tolerance for pain. As Green explains, the best investors can teach us not only how to become rich, but how to improve the way we think, reach decisions, assess risk, avoid costly errors, build resilience, and turn uncertainty to our advantage.
Green ushers us into the lives of more than forty super-investors, visiting them in their offices, homes, and even their places of worship—all to share what they have to teach. From Sir John Templeton to Charlie Munger, Jack Bogle to Ed Thorp, Will Danoff to Mohnish Pabrai, Bill Miller to Laura Geritz, Joel Greenblatt to Howard Marks. In explaining how they think and why they win, this “unexpectedly illuminating” (Peter Diamandis) book provides “many nuggets of wisdom” (The Washington Post) that will enrich you both financially and personally.
304 pages, Hardcover
First published January 1, 2021
About the author
William Green
3 books2 followersWilliam Green is the author of "Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and Life." The book is being translated into 23 languages. Green is also the host of the "Richer, Wiser, Happier" podcast. He has written for many publications, including Time, Fortune, Forbes, The New Yorker, and The Economist. He edited the Asian edition of Time while living in Hong Kong, then moved to London to edit the European, Middle Eastern, and African editions of Time. As an editor and ghostwriter, he has collaborated on several books, including two #1 NYT bestsellers. Born and raised in London, he studied English literature at Oxford and journalism at Columbia. He lives in New York with his wife, Lauren, and they have two adult children, Henry and Madeleine.
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Displaying 1 - 30 of 432 reviews
October 13, 2023
I like what Van Den Berg mentioned that Prosperity takes all of these into consideration:
HEALTH
WEALTH
HAPPINESS
PEACE OF MIND
That’s what a prosperity person is, not just a lot of money.
HEALTH
WEALTH
HAPPINESS
PEACE OF MIND
That’s what a prosperity person is, not just a lot of money.
May 4, 2021
This book was less useful than I had hoped in describing investment techniques, but also more useful in an unexpected way. There's a lot of helpful psychological discussion here about the mindset required to be a good investor and a happier person.
Author Green's writing style is a bit melodramatic and annoying at times, as when he constantly starts sentences with "Still", which he seems not to understand contradicts the previous sentence and clearly didn't intend to do.
As Green points out, most professional investors collect material fees but fail to outperform their indexes. Of the portfolio managers I met during my career, only a handful were so impressive that I'd have given them my own funds to invest. Many professional investors were so convinced of their own genius that they were incapable of listening, even to visiting company CEOs or analysts with whom they'd agreed to meet and who could have really helped them if the PM had shut up for five minutes and just listened. The best fund managers show humility and curiosity. They're independent and have their own approach, but are always open to new ideas.
Green parrots some of his interviewees in being completely dismissive of the brokerage industry, which, while it houses its share of prostitutes and parasites, also employs many smart people, some of whom have great investment insights and help their clients make money. He also talks breezily about Munger and Buffett buying overlooked, highly profitable, simple, predictable businesses at fair prices, but one wonders where in 2021's wildly overpriced stock market one finds such undiscovered unicorns. It's this crucial question Green leaves unanswered.
Green profiles a dozen or so famous investors, including Charlie Munger, Warren Buffett's longtime business partner, John Templeton, Bill Miller, Joel Greenblatt, Nick Sleep and several of the star Fidelity managers, including Jeff Vinik and Will Danoff. For some reason, the narrator of the audio book version I read chose to mimic John Templeton's southern accent, but not anyone else's way of speaking.
Though these investors have widely varied styles, they seem to share fierce independence, supreme confidence and a mastery of their own emotions. Some of them, like self described "Buffett cloner" Monish Pabrai , seem obnoxious to the point of sociopathy.
Knowing that, for example, Miller was a growth investor, while Greenblatt and others were various shades of Value, Deep Value and Growth at a Reasonable Price(GARP), I would have appreciated much more detail on the various guru's investment methods, but the book was entertaining and philosophically thought provoking. This would be a decent book for beginners looking to establish a useful mind set for investing.
For a meatier yet entertaining discussion of investment techniques, try Peter Lynch and Joel Greenblatt's books. Start with "One Up on Wall Street" and "The Little Book that Still Beats the Market". Jeremy Siegel's "Stocks for the Long Run" and Robin Speziale's "Market Masters" are also good.
Author Green's writing style is a bit melodramatic and annoying at times, as when he constantly starts sentences with "Still", which he seems not to understand contradicts the previous sentence and clearly didn't intend to do.
As Green points out, most professional investors collect material fees but fail to outperform their indexes. Of the portfolio managers I met during my career, only a handful were so impressive that I'd have given them my own funds to invest. Many professional investors were so convinced of their own genius that they were incapable of listening, even to visiting company CEOs or analysts with whom they'd agreed to meet and who could have really helped them if the PM had shut up for five minutes and just listened. The best fund managers show humility and curiosity. They're independent and have their own approach, but are always open to new ideas.
Green parrots some of his interviewees in being completely dismissive of the brokerage industry, which, while it houses its share of prostitutes and parasites, also employs many smart people, some of whom have great investment insights and help their clients make money. He also talks breezily about Munger and Buffett buying overlooked, highly profitable, simple, predictable businesses at fair prices, but one wonders where in 2021's wildly overpriced stock market one finds such undiscovered unicorns. It's this crucial question Green leaves unanswered.
Green profiles a dozen or so famous investors, including Charlie Munger, Warren Buffett's longtime business partner, John Templeton, Bill Miller, Joel Greenblatt, Nick Sleep and several of the star Fidelity managers, including Jeff Vinik and Will Danoff. For some reason, the narrator of the audio book version I read chose to mimic John Templeton's southern accent, but not anyone else's way of speaking.
Though these investors have widely varied styles, they seem to share fierce independence, supreme confidence and a mastery of their own emotions. Some of them, like self described "Buffett cloner" Monish Pabrai , seem obnoxious to the point of sociopathy.
Knowing that, for example, Miller was a growth investor, while Greenblatt and others were various shades of Value, Deep Value and Growth at a Reasonable Price(GARP), I would have appreciated much more detail on the various guru's investment methods, but the book was entertaining and philosophically thought provoking. This would be a decent book for beginners looking to establish a useful mind set for investing.
For a meatier yet entertaining discussion of investment techniques, try Peter Lynch and Joel Greenblatt's books. Start with "One Up on Wall Street" and "The Little Book that Still Beats the Market". Jeremy Siegel's "Stocks for the Long Run" and Robin Speziale's "Market Masters" are also good.
September 27, 2021
This book struggles to say something new, especially at the beginning. The first few chapters (or at least the chapters focused on the biggest investors) are summaries of other, more famous biographies.
But the chapters about the lesser known success stories like Nick Sleep and Thomas Gayner are incredible. Such terrific views on stoicism, building strong habits, living within your means both financially and mentally. I was really blown away by the final third of this book and will read it again
But the chapters about the lesser known success stories like Nick Sleep and Thomas Gayner are incredible. Such terrific views on stoicism, building strong habits, living within your means both financially and mentally. I was really blown away by the final third of this book and will read it again
November 4, 2021
Alas, now I don't feel so alone for driving a 20 year-old car and resisting upgrading to a luxury vehicle. I don't feel as silly for being attached to the home I grew up in. This was such a captivating read, I really couldn't put it down. I thought it would be full of cliche concepts that I already knew, but it was so interesting to hear the origin stories of different renowned investors. I also appreciated that he included one female investor. This book is also very recent and up to date with commentary on COVID-19 and the investing approach in relation to the pandemic. Very informative and inspirational book that I can definitely relate to. The author also mentions several other books within this book, which I now want to look up and read.
May 24, 2021
I loved this one, neck and neck with the The Psychology of Money for the best book on investing that I have read this year. The author distills the wisdom from dozens of great investors and presents their principles in an easy to read way. Personally, I love reading about how much these mega-investors love to learn and read themselves. Many of them spend five or six hours a day reading, often in diverse subjects. Besides reading, another common theme I enjoyed reading about is how many of them started off by learning how to gamble. Mohnish Pabrai is covered in the first chapter, and one of his life goals is to be banned by Las Vegas Casinos for counting cards too well.
My favorite chapters are the ones on Pabrai, Charlie Munger, Joel Greenblatt, and Nick Sleep. But, they are all really good and you will find some wonderful advice here. In a book dedicated to value investing, a process that involves finding things that offer incredible returns for the time and money invested, I can wholeheartedly recommend that buying and reading this book may be one of the best investments you can make.
My favorite chapters are the ones on Pabrai, Charlie Munger, Joel Greenblatt, and Nick Sleep. But, they are all really good and you will find some wonderful advice here. In a book dedicated to value investing, a process that involves finding things that offer incredible returns for the time and money invested, I can wholeheartedly recommend that buying and reading this book may be one of the best investments you can make.
April 15, 2022
William Green has taken a bunch of great investors and turned their lives into inspiring stories. The stories are not just about investing but also about how to live life according to your values. It was great to find some names that I've not heard before and I'm going to dig deep into these not very well-known but amazing investors. The book really lives up to its name - Richer, Wiser, Happier.
May 4, 2022
or how to think of living a good life.
This book is an introduction to the world of fund managers of many varieties. It was recommended by many value investors. I thought I would learn about investing. More than investing, I learnt lessons on how these investors like living their lives. It was instructive that most of them had a similar value set. The author explicitly stated that he chose the investors with his bias, but it was interesting nonetheless.
I enjoyed 3 parts of the book the most:
1. Tom Gayner
2. Charles Munger
3. The Epilogue
I resonated with Gayner. Munger gave great food for thought (I want to read more from him now). The epilogue was a philosophical outro that somehow tied into investing.
The book is accessible to a large audience. It also provides a long list of book recommendations that I now want to read. I would only really recommend the book to people interested in value investing.
This book is an introduction to the world of fund managers of many varieties. It was recommended by many value investors. I thought I would learn about investing. More than investing, I learnt lessons on how these investors like living their lives. It was instructive that most of them had a similar value set. The author explicitly stated that he chose the investors with his bias, but it was interesting nonetheless.
I enjoyed 3 parts of the book the most:
1. Tom Gayner
2. Charles Munger
3. The Epilogue
I resonated with Gayner. Munger gave great food for thought (I want to read more from him now). The epilogue was a philosophical outro that somehow tied into investing.
The book is accessible to a large audience. It also provides a long list of book recommendations that I now want to read. I would only really recommend the book to people interested in value investing.
December 27, 2023
Interview w/ author 8 Apr 2021
http://www.investingbythebooks.com/co...
TIP podcast
https://www.theinvestorspodcast.com/e...
Conversion w/ Guy Spier
https://podcasts.apple.com/sg/podcast...
Meet my investment heroes:
1. @MohnishPabrai
http://www.chaiwithpabrai.com/blog
TIP interview Jun 2022
https://youtu.be/a8AwDBppM2o
2. Sir John Templeton, Master of Self-Discipline
3. Howard Marks
https://www.oaktreecapital.com/insigh...
TIP interview Mar 2022
https://podcasts.apple.com/sg/podcast...
4. Jean-Marie Eveillard & his disciple Matthew McLennan
https://www.feim.com/overview
5. Joel Greenblatt
https://www.magicformulainvesting.com...
6. Nick Sleep & Qais Zakaria
https://igyfoundation.org.uk/wp-conte...
Quality from 'Zen & the Art of Motorcycle Maintenance'
“You really want to do everything with quality as that is where the satisfaction and peace is.” -Nick Sleep
Scale economics shared
7. Tom Gaynor
TIP interview w/ Tom Gaynor of Markel
https://podcasts.apple.com/sg/podcast...
https://www.markel.com/
8. Charlie Munger
How not to be stupid:
i) invert: imagine the bad outcome & work backwards to avoid those misguided actions tt might leas you to tt sorry fate.
ii) collect case studies of inanities; study other people’s mistakes & learn fr them. Learn fr your own mistakes but better if you can learn vicariously fr others’ mistakes w/o having to commit your own.
iii) Do what works. Avoid that which doesn’t work. Don’t repeat the same mistakes.
iv) checklists & SOP
v) seek out disconfirming evidence tt might disprove your most cherished beliefs
vi) Devil’s advocate; understand the other side of the trade; premortem; why might I be wrong?
vii) HALT-PS watch out for emotions/situations tt hurt rational decision making: Hunger, Anger, Loneliness, Tiredness - Pain, Stress. Don’t make decisions under HALT-PS conditions
viii) meditate, exercise, sleep & nutrition + contemplation. Habits, hobbies, lifestyle & environment tt foster equanimity & calmness
Charlie Munger on the Psychology of Human Misjudgment
https://fs.blog/great-talks/psycholog...
Celebrating Charlie Munger -William Green
https://podcasts.apple.com/sg/podcast...
Other heroes:
Ed Thorpe - playing an unfair game; “May the odds be ever in your favour.”
Tim Ferriss interview 25 May 2022
https://podcasts.apple.com/sg/podcast...
A Man for All Markets
https://www.goodreads.com/review/show...
Laura Geritz, Rondure Global
https://www.rondureglobal.com/our-people
Arnold Van Den Berg
If you're life is >impt than your principles, you sacrifice your principles. But if your principles are >impt than your life, you sacrifice your life.
Ref: James Allen, 'From Poverty to Power'
https://www.goodreads.com/book/show/3...
Take responsibility for your own mental state. Become a lifelong explorer of wisdom.
+ve affirmations: "I'm a loving person"
"I'm the richest guy in the world because I'm content with what I have."
Most prized possession = collection of heartfelt letters from people I have helped.
"The pleasure you get out of knowing you've made a difference in peoples' lives - that's something that nobody can take away from you. I could lose all my $, & I could still go to these files & say, 'Well, it's not like I lived my life for nothing. Look at the people whose lives I've changed.' That's my bank a/c"
TIP podcast May 2022
https://podcasts.apple.com/sg/podcast...
Review by Washington Post
https://www.washingtonpost.com/outloo...
http://www.investingbythebooks.com/co...
TIP podcast
https://www.theinvestorspodcast.com/e...
Conversion w/ Guy Spier
https://podcasts.apple.com/sg/podcast...
Meet my investment heroes:
1. @MohnishPabrai
http://www.chaiwithpabrai.com/blog
TIP interview Jun 2022
https://youtu.be/a8AwDBppM2o
2. Sir John Templeton, Master of Self-Discipline
3. Howard Marks
https://www.oaktreecapital.com/insigh...
TIP interview Mar 2022
https://podcasts.apple.com/sg/podcast...
4. Jean-Marie Eveillard & his disciple Matthew McLennan
https://www.feim.com/overview
5. Joel Greenblatt
https://www.magicformulainvesting.com...
6. Nick Sleep & Qais Zakaria
https://igyfoundation.org.uk/wp-conte...
Quality from 'Zen & the Art of Motorcycle Maintenance'
“You really want to do everything with quality as that is where the satisfaction and peace is.” -Nick Sleep
Scale economics shared
7. Tom Gaynor
TIP interview w/ Tom Gaynor of Markel
https://podcasts.apple.com/sg/podcast...
https://www.markel.com/
8. Charlie Munger
How not to be stupid:
i) invert: imagine the bad outcome & work backwards to avoid those misguided actions tt might leas you to tt sorry fate.
ii) collect case studies of inanities; study other people’s mistakes & learn fr them. Learn fr your own mistakes but better if you can learn vicariously fr others’ mistakes w/o having to commit your own.
iii) Do what works. Avoid that which doesn’t work. Don’t repeat the same mistakes.
iv) checklists & SOP
v) seek out disconfirming evidence tt might disprove your most cherished beliefs
vi) Devil’s advocate; understand the other side of the trade; premortem; why might I be wrong?
vii) HALT-PS watch out for emotions/situations tt hurt rational decision making: Hunger, Anger, Loneliness, Tiredness - Pain, Stress. Don’t make decisions under HALT-PS conditions
viii) meditate, exercise, sleep & nutrition + contemplation. Habits, hobbies, lifestyle & environment tt foster equanimity & calmness
Charlie Munger on the Psychology of Human Misjudgment
https://fs.blog/great-talks/psycholog...
Celebrating Charlie Munger -William Green
https://podcasts.apple.com/sg/podcast...
Other heroes:
Ed Thorpe - playing an unfair game; “May the odds be ever in your favour.”
Tim Ferriss interview 25 May 2022
https://podcasts.apple.com/sg/podcast...
A Man for All Markets
https://www.goodreads.com/review/show...
Laura Geritz, Rondure Global
https://www.rondureglobal.com/our-people
Arnold Van Den Berg
If you're life is >impt than your principles, you sacrifice your principles. But if your principles are >impt than your life, you sacrifice your life.
Ref: James Allen, 'From Poverty to Power'
https://www.goodreads.com/book/show/3...
Take responsibility for your own mental state. Become a lifelong explorer of wisdom.
+ve affirmations: "I'm a loving person"
"I'm the richest guy in the world because I'm content with what I have."
Most prized possession = collection of heartfelt letters from people I have helped.
"The pleasure you get out of knowing you've made a difference in peoples' lives - that's something that nobody can take away from you. I could lose all my $, & I could still go to these files & say, 'Well, it's not like I lived my life for nothing. Look at the people whose lives I've changed.' That's my bank a/c"
TIP podcast May 2022
https://podcasts.apple.com/sg/podcast...
Review by Washington Post
https://www.washingtonpost.com/outloo...
May 16, 2021
Richer, Wiser, Happier is one of the more enjoyable books I've ever read. The author, William Green, profiles eight investors and provides timeless lessons on what made these individuals successful. While the investment philosophies of these great investors are explored, what I liked most about Richer, Wiser, Happier is how William Green dissected life lessons and decision patterns from these legends. Anyone interested in becoming a better investor and person who love this book - I enjoyed all of the chapters, but my favorite is Nick & Zak's excellent adventure. As it relates to the various interviews in this book, here are the key lessons I took away from each investor/chapter (many of these are quotes from the book):
1. Mohnish Pabrai: "Rule 1: Clone like crazy. Rule 2: Hang out with people who are better than you. Rule 3: Treat life as a game, not as a survival contest or a battle to the death. Rule 4: Be in alignment with who you are; don’t do what you don’t want to do or what’s not right for you. Rule 5: Live by an inner scorecard; don’t worry about what others think of you; don’t be defined by external validation."
2. John Templeton: "Templeton didn’t just master the markets. He mastered himself. He took responsibility for every aspect of his life, including his time, money, health, thoughts, and emotions. This required extraordinary self-discipline. We don’t often celebrate self-discipline. It’s such an old-fashioned and fusty virtue. But Templeton triumphed by taking self-discipline to an extreme."
3. Howard Marks: "The importance of admitting that we can’t predict or control the future. The benefits of studying the patterns of the past and using them as a rough guide to what could happen next. The inevitability that cycles will reverse and reckless excess will be punished. The possibility of turning cyclicality to our advantage by behaving countercyclically. The need for humility, skepticism, and prudence in order to achieve long-term financial success in an uncertain world."
4. Jean-Marie Eveillard/Matthew McLennan: "What remains after McLennan’s painstaking process of elimination? A “resilient core” of unusually persistent, conservatively managed, well-capitalized, undervalued businesses that are likely to thrive even in a Darwinian ecosystem where nothing lives forever."
5. Joel Greenblatt: "Your strategy should be so simple and logical that you understand it, believe in it to your core, and can stick with it even in the difficult times when it no longer seems to work. The strategy must also suit your tolerance for pain, volatility, and loss. It helps to write down the strategy, the principles upon which it stands, and why you expect it to work over time."
6. Nick Sleep and Zakaria: Look for information with a long shelf life, what is the intended destination for a business over the next 10 years and look for companies with scale economies shared (i.e. share scale advantage with customers over time).
7. Tom Gayner: "It’s the aggregation of marginal gains that’s so powerful. Moreover, the modest benefits generated by smart habits continue to compound over many years. In the short run, all those tiny, incremental advances seem insignificant. But time is the enemy of bad habits and the friend of good habits. When you pound away year after year, decade after decade, the cumulative effect is stunning. Indeed, what sets Gayner apart is one indispensable trait: he is the king of constancy."
8. Charlie Munger: "I tell Munger that I regard him as “the Grand Master of Stupidity Reduction,” and I ask him why he focuses so much attention on avoiding common errors and predictable patterns of irrationality. “Because it works,” he says. “It works. It’s counterintuitive that you go at the problem backward. If you try and be smart, it’s difficult. If you just go around and identify all of the disasters and say, ‘What caused that?’ and try to avoid it, it turns out to be a very simple way to find opportunities and avoid troubles.”
Additionally, throughout all of the chapters, William Green also sprinkles additional interviews with great such as Bill Miller and Will Danoff. Again, this is a fantastic read to learn the lessons/decisions that have made these investment greats.
1. Mohnish Pabrai: "Rule 1: Clone like crazy. Rule 2: Hang out with people who are better than you. Rule 3: Treat life as a game, not as a survival contest or a battle to the death. Rule 4: Be in alignment with who you are; don’t do what you don’t want to do or what’s not right for you. Rule 5: Live by an inner scorecard; don’t worry about what others think of you; don’t be defined by external validation."
2. John Templeton: "Templeton didn’t just master the markets. He mastered himself. He took responsibility for every aspect of his life, including his time, money, health, thoughts, and emotions. This required extraordinary self-discipline. We don’t often celebrate self-discipline. It’s such an old-fashioned and fusty virtue. But Templeton triumphed by taking self-discipline to an extreme."
3. Howard Marks: "The importance of admitting that we can’t predict or control the future. The benefits of studying the patterns of the past and using them as a rough guide to what could happen next. The inevitability that cycles will reverse and reckless excess will be punished. The possibility of turning cyclicality to our advantage by behaving countercyclically. The need for humility, skepticism, and prudence in order to achieve long-term financial success in an uncertain world."
4. Jean-Marie Eveillard/Matthew McLennan: "What remains after McLennan’s painstaking process of elimination? A “resilient core” of unusually persistent, conservatively managed, well-capitalized, undervalued businesses that are likely to thrive even in a Darwinian ecosystem where nothing lives forever."
5. Joel Greenblatt: "Your strategy should be so simple and logical that you understand it, believe in it to your core, and can stick with it even in the difficult times when it no longer seems to work. The strategy must also suit your tolerance for pain, volatility, and loss. It helps to write down the strategy, the principles upon which it stands, and why you expect it to work over time."
6. Nick Sleep and Zakaria: Look for information with a long shelf life, what is the intended destination for a business over the next 10 years and look for companies with scale economies shared (i.e. share scale advantage with customers over time).
7. Tom Gayner: "It’s the aggregation of marginal gains that’s so powerful. Moreover, the modest benefits generated by smart habits continue to compound over many years. In the short run, all those tiny, incremental advances seem insignificant. But time is the enemy of bad habits and the friend of good habits. When you pound away year after year, decade after decade, the cumulative effect is stunning. Indeed, what sets Gayner apart is one indispensable trait: he is the king of constancy."
8. Charlie Munger: "I tell Munger that I regard him as “the Grand Master of Stupidity Reduction,” and I ask him why he focuses so much attention on avoiding common errors and predictable patterns of irrationality. “Because it works,” he says. “It works. It’s counterintuitive that you go at the problem backward. If you try and be smart, it’s difficult. If you just go around and identify all of the disasters and say, ‘What caused that?’ and try to avoid it, it turns out to be a very simple way to find opportunities and avoid troubles.”
Additionally, throughout all of the chapters, William Green also sprinkles additional interviews with great such as Bill Miller and Will Danoff. Again, this is a fantastic read to learn the lessons/decisions that have made these investment greats.
Read
February 6, 2022As a journalist and for this book, William Green interacted with over forty marquee investors - from Warren Buffett and Charlie Munger to Jack Bogle, Sir John Templeton, Howard Marks, Nick Sleep & Qais Zakaria, and many others whom I encountered for the first time. With access to not just their behaviour and rituals, but even their homes, relationships and deepest philosophies, Green is able to glean not just insights but synthesise them into great lessons for investing, and to some extent, life.
There are fantastic stories - Mohnish Pabrai's relentless cloning, John Templeton's cold remorseless discipline (in evaluations of others and self), his willingness to be lonely, and that amazing 'short' during the dot-com boom and bust when he was in his late eighties(!), Howard Marks' lessons of humility from Japanese Buddhism, Eveillard's view on not depending on the kindness of strangers (amen), McLennan's appreciation for entropy being the ironclad rule of the universe, Greenblatt's preference of a sensible and good enough strategy over an optimal one, Tom Gayner's approach of small, incremental advances over long stretches of time, Geritz's 'price of a hotel room' heuristic in a country she's considering for investments, Kahn's prudent thoughts on preserving wealth, and Munger's principles for avoiding idiocy, and his seminal lesson to Buffett- 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.' And yes, omnipresent is the towering godfather whose influence is visible in many conversations - Benjamin Graham.
Their philosophical inspirations range from Vivekananda and Buddha to Marcus Aurelius and Epictetus to Robert M. Pirsig (Zen and the Art of Motorcycle Maintenance). The great truths, as Green mentions, are deceptively simple, but few have the wisdom, the focus, and the nerve to create and apply their philosophy, while subtracting everything else, over extended periods of time.
After I finished reading, I wondered whether there is an over-indexing on richer, then wiser, and only then happier. Why is this important? While money definitely is not a guarantor of happiness, and people can be wise and happy even while not being rich, both wisdom and happiness have its own mindset play and a line of thinking and doing, to achieve it. It isn't that it doesn't get a mention. Many investors do bring up their philosophical inspirations and the books they read, in addition to fitness, mental health, family and relationships, 'purpose', but the focus is clearly on investing. In my case, I have realised that I need to be financially secure for me to get (what I currently think is) my gateway to happiness - freedom, from the opinion of others, and time (which they use to read). This is interestingly a common point that I share with at least a couple of investors. That's encouraging!
Favourite quotes
'Hope is not a method' ~ Jeffrey Gundlach
'Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.' ~ Demosthenes
There are fantastic stories - Mohnish Pabrai's relentless cloning, John Templeton's cold remorseless discipline (in evaluations of others and self), his willingness to be lonely, and that amazing 'short' during the dot-com boom and bust when he was in his late eighties(!), Howard Marks' lessons of humility from Japanese Buddhism, Eveillard's view on not depending on the kindness of strangers (amen), McLennan's appreciation for entropy being the ironclad rule of the universe, Greenblatt's preference of a sensible and good enough strategy over an optimal one, Tom Gayner's approach of small, incremental advances over long stretches of time, Geritz's 'price of a hotel room' heuristic in a country she's considering for investments, Kahn's prudent thoughts on preserving wealth, and Munger's principles for avoiding idiocy, and his seminal lesson to Buffett- 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.' And yes, omnipresent is the towering godfather whose influence is visible in many conversations - Benjamin Graham.
Their philosophical inspirations range from Vivekananda and Buddha to Marcus Aurelius and Epictetus to Robert M. Pirsig (Zen and the Art of Motorcycle Maintenance). The great truths, as Green mentions, are deceptively simple, but few have the wisdom, the focus, and the nerve to create and apply their philosophy, while subtracting everything else, over extended periods of time.
After I finished reading, I wondered whether there is an over-indexing on richer, then wiser, and only then happier. Why is this important? While money definitely is not a guarantor of happiness, and people can be wise and happy even while not being rich, both wisdom and happiness have its own mindset play and a line of thinking and doing, to achieve it. It isn't that it doesn't get a mention. Many investors do bring up their philosophical inspirations and the books they read, in addition to fitness, mental health, family and relationships, 'purpose', but the focus is clearly on investing. In my case, I have realised that I need to be financially secure for me to get (what I currently think is) my gateway to happiness - freedom, from the opinion of others, and time (which they use to read). This is interestingly a common point that I share with at least a couple of investors. That's encouraging!
Favourite quotes
'Hope is not a method' ~ Jeffrey Gundlach
'Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.' ~ Demosthenes
September 23, 2021
Another interesting book about how great investors do in order to be richer, wiser, and happier. The book worth reading, strongly recommended.
February 5, 2022
This is one of the best books on investment that I have read. The book is packed with insight from some of the greatest investor of all time - Sir John Marks Templeton, Charlie Munger, Jack Bogle to Ed Thorp, Will Danoff to Mohnish Pabrai, Bill Miller to Laura Geritz, Joel Greenblatt to Howard Marks.
Some of the insights which can help build a solid portfolio and also good investment habit -
1. All the investor talked about in the book has one thing in common. Most of them are value investor and never gets excited by the high price of the stock.
2. Learn what is that you "need not do" in markets rather than what is that we should do. The concept of 'inversion'.
3. Frugality - all of the investor talked about in the books might be billionaire but they are extremely frugal when it comes to spending.
4. Philanthropy - Giving back to the society is important. You might have made billions but if you are not giving it back, its worthless.
5. Cloning - There is no shame in cloning what someone else is already doing to his best. Mohnish Pabrai for that matter claims that he is a shameless cloner.
6. Odds - Odds is all that matters whether its about investment or life. When the odds are in your favor, you should go all out.
A must read for every investor and one should read this one again and again !!
Some of the insights which can help build a solid portfolio and also good investment habit -
1. All the investor talked about in the book has one thing in common. Most of them are value investor and never gets excited by the high price of the stock.
2. Learn what is that you "need not do" in markets rather than what is that we should do. The concept of 'inversion'.
3. Frugality - all of the investor talked about in the books might be billionaire but they are extremely frugal when it comes to spending.
4. Philanthropy - Giving back to the society is important. You might have made billions but if you are not giving it back, its worthless.
5. Cloning - There is no shame in cloning what someone else is already doing to his best. Mohnish Pabrai for that matter claims that he is a shameless cloner.
6. Odds - Odds is all that matters whether its about investment or life. When the odds are in your favor, you should go all out.
A must read for every investor and one should read this one again and again !!
July 26, 2021
This book really speaks to me. It embodies many of the principles I've come to value immensely. The title is a bit silly and reeks of self-help clickbait. But if this is a self-help book, it's the best one I've ever read. Often, it's said that what distinguishes the greatest investors is their temperament. William Green essentially wrote a series of profiles on some of the world's greatest investors and focused on what defines their temperament. This is the only book I know of that focuses specifically on this subject. The book contains a collection of personal life philosophies practiced by some very unique individuals. Some of the key themes:
1. Investing is a game where we must conscientiously and consistently try to maximize our odds of success, or tilt the odds in our favor
2. “We jump to conclusions when we shouldn’t,” [Ed Thorp] observed. “And so withholding judgment is, I think, a key element of rational behavior.”
3. Find ways to quickly say no so you spend time on more promising opportunities - Pabrai glances at hundreds of stocks and rapidly rejects almost all of them, often in less than a minute. Buffett is a master of this practice of high-speed sifting. “What he’s looking for is a reason to say no, and as soon as he finds that, he’s done,” says Pabrai. Indeed, Buffett has said, “The difference between successful people and really successful people is that really successful people say no to almost everything.”
4. Don't be ashamed to copy what works from other people - I ask Pabrai why more people don’t clone in his systematic way. Between mouthfuls of a dish called “spicy beef danger,” he replies, “They’re not as shameless as me. They have more ego. To be a great cloner, you have to check your ego at the door.”
5. Get rich slowly, because being in a hurry increases the odds of ruin - “Whatever happened to Rick Guerin?” Buffett had mentioned Guerin’s superb investment record in “The Superinvestors of Graham-and-Doddsville.” But Buffett told Pabrai and Spier that Guerin used margin loans to leverage his investments because he was “in a hurry to get rich.” According to Buffett, Guerin was hit with margin calls after suffering disastrous losses in the crash of 1973–74. As a result, he was forced to sell shares (to Buffett) that were later worth an immense fortune.
By contrast, Buffett said that he and Munger were never in a hurry because they always knew they’d become enormously rich if they kept compounding over decades without too many catastrophic mistakes. Over his meal of steak, hash browns, and a Cherry Coke, Buffett said, “If you’re even a slightly above average investor who spends less than you earn, over a lifetime you cannot help but get very wealthy.”
6. The willingness to be lonely - “The easiest way not to be overly influenced by what other people think is not to be that aware of what they think. If you don’t really notice that and don’t really care about what other people think, that will make it easier to be a great investor.” It follows, says Davis, that “a prevalent characteristic in great investors would be low emotional intelligence.”
By contrast, says Davis, you tend to encounter an entirely different psychological profile among CEOs. They require the emotional intelligence to empathize with others, understand their thoughts, and influence them. But for a contrarian investor, it would be “catastrophic if you were constantly burdened by an awareness of what everybody else was thinking about your decision.” In their youth, he adds, many CEOs played team sports, captained a team, or led a fraternity. What about the best investors? “By and large,” says Davis, they favored individual sports such as “running, tennis, golf, or swimming. You won’t get a lot of football, lacrosse, that sort of thing.” (less)
7. Mental strength has to be practiced - In his daily life, he trained himself to focus on “productive thoughts” and “positive emotions” such as love, thanksgiving, service, and the contemplation of “the infinite good within ourselves and others.” Templeton was equally committed to banishing negative thoughts and emotions such as anger, doubt, worry, guilt, fear, hatred, and envy. One technique that he recommended was to replace any negative thought with the statement “I give thanks for the abundance of good in my life.”
What I realize now is that Templeton’s habits of positive thinking and prayer must have helped enormously in his battle to gain control over his thoughts and emotions. For an investor who specialized in taking unpopular positions, that mental strength was a powerful advantage. By contrast, my own mind was hopelessly undirected, and it was easy for me to get swamped by feelings such as fear, doubt, regret, greed, impatience, jealousy, and pessimism—all of which complicate the challenge of making rational investment decisions.
8. If you are not humble, the market will humble you - As the Athenian playwright Euripides warned nearly twenty-five hundred years ago, “How can you think yourself a great man when the first accident that comes along can wipe you out completely?”
“It’s frightening to think that you might not know something, but more frightening to think that, by and large, the world is run by people who have faith that they know exactly what’s going on.” - Kahneman
9. Change is inevitable but is not itself the problem; it's our yearning for things to stay the same - If the Buddha had been a hedge fund manager, he might have pointed out that change itself is not ultimately the problem. Rather, we doom ourselves to suffer—both in investing and life—when we expect or yearn for things to stay the same. The real problem is this habit of clinging to or relying on what cannot last. As Buddhism teaches, we need to acknowledge the transience of all worldly phenomena so we won’t be surprised or dismayed when change occurs. Shunryu Suzuki said, “If we cannot accept this teaching that everything changes, we cannot be in composure.”
10. Resilience and survival is more important to wealth creation than spectacular results - Instead of trying to predict the unpredictable, Marks suggests that we focus on building “unfragile portfolios and unfragile lives” that are unlikely to collapse even in dire conditions. What does that mean for regular investors? “Avoid a lot of debt and leverage,” and don’t let your dreams of a “bonanza” lead you to “expose yourself to the possibility of a catastrophe,” he says. “Not trying to maximize is an important component in preparing for what life may throw at you, and that’s true in investing and living. So the question is, do you push the limits?”
“You want to be structured to participate in the march of mankind, but to survive the dips along the way.”
The paradox is that Eveillard and McLennan hit the ball out of the park without ever swinging for the fences. McLennan attributes their success to a consistent focus on “risk mitigation,” “error elimination,” and “prudent acts of omission.” In essence, “it’s winning by not losing.”
Both professionally and personally, says McLennan, he has often found that “moments of extreme pain” were followed by “new beginnings” and “extremely propitious opportunities.” For example, the late nineties were a brutal time for value investors such as him and Eveillard, “but the early 2000s were a golden age. So, if you were able to endure it, the upside was enormous.” In markets, as in life, so much hinges on our ability to survive the dips.
“Make your mistakes nonfatal,” Gundlach tells me. “It’s so fundamental to longevity. And ultimately, that’s what success is in this business: longevity.”
“You’re going to screw up. The question is, Can you recover?” Graham’s concept of the margin of safety helps you to “contain” your mistakes “so they’re not too big. That’s how you recover.”
“If you’re going to be in this game for the long pull, which is the way to do it, you better be able to handle a fifty percent decline without fussing too much about it. And so my lesson to all of you is, conduct your life so that you can handle the fifty percent decline with aplomb and grace. Don’t try to avoid it. It will come. In fact, I would say if it doesn’t come, you’re not being aggressive enough.”
11. Investing as like gardening or farming rather than hunting - As McLennan describes the process of building a portfolio that can flourish over time, he’s reminded of watching his mother gardening while he was growing up in Australia. There was always a problem. Dry weather. Wilting vines. Bug infestations. He often wondered why she bothered to keep going. It would have been so much easier to let the forest grow or just settle for a lawn that needed mowing once a week. But her care yielded remarkable results over three decades. “What I saw play out over time was the gradual emergence of this beautiful, beautiful garden that took time. It took selectivity. And I think it’s a good metaphor for investing.”
“I call myself a farmer,” says Russo. “Wall Street is flooded with hunters—people who try to go out and find the big game. They fell it and bring it back, and there’s a huge feast and everything is fabulous, and then they look for the next big game. I plant seeds and then I spend all of my time cultivating them.”
12. In order to survive you need a strategy that you can stick to in tough times - The best investors have the discipline not to be swayed by such distractions. As Greenblatt says, “I have a simple way of looking at things that makes sense to me and that I’m going to stick with through thick and thin. That’s it.”
It’s not enough to find a smart strategy that stacks the odds in your favor over the long haul. You also need the discipline and tenacity to apply that strategy consistently, especially when it’s most uncomfortable.
“if you have simple principles that you can just stick to… simple principles that make sense, that are unshakable.” Why is this so critical? Because you need this clarity of thought to withstand all of the psychological pressures, setbacks, and temptations that can destabilize or derail you along the way. “It’s a hard business and the market is not always agreeing with you,” says Greenblatt. “It’s the nature of the beast that stock prices are emotional, and you’re going to be hit from every which way, and you’re going to be reading every expert saying you’re wrong.”
13. Incremental changes compound over long periods of time - Resounding victories tend to be the result of small, incremental advances and improvements sustained over long stretches of time. “If you want the secret to great success, it’s just to make each day a little bit better than the day before,” says Gayner. “There are different ways you can go about doing that, but that’s the story.… Just making progress over and over again is the critical part.”
“If you can continue to satisfy and be reasonable, there’s all kinds of people that are going to fall away along the path, and it’s amazing how high up in the percentile rankings you’ll become,” says Gayner. “I was never the number one at anything. I’ve always just been steady and competent and able. But as my father said, the best ability is dependability. So to do it over and over and over and over again, it keeps you in the game. And it’s amazing how you do sort of become number-oneish over time, just because the competitive field thins out so much.”
When I try to identify the many reasons why Gayner has achieved so much, I’m reminded of a concept that Nick Sleep mentioned to me: “the aggregation of marginal gains.” The phrase was coined by a legendary performance coach, Sir David Brailsford, who turned the British cycling team into an unstoppable force at the Beijing and London Olympics. Those triumphs stemmed not from one major innovation, but a multitude of minor improvements, which combined to create a crushing advantage.
Once again, it’s all about the cumulative effect of many minuscule advantages, which add up miraculously over years: the one extra company that Lynch bothered to visit; the one empty time slot that Danoff insisted on filling; the two or three extra hours of reading that Vinik pushed himself to complete after his kids went to bed. The best predictor of success is often nothing more mysterious than the unflagging fervency of a person’s desire.
14. Addition by subtraction (invert) - First, to be successful and fulfilled, we need to decide what we care about most and be honest with ourselves about what we do best. Second, we need to adopt daily habits that enable us to improve continuously where it truly counts—and to subtract habits that divert us. It’s worth writing down a list of beneficial habits that should be part of our daily routine. But it’s equally valuable to compile a Do Not Do list, reminding us of all the ingenious ways in which we habitually distract or undermine ourselves.
This, then, is the first mental trick we should learn from Munger as a safeguard against stupidity: imagine a dreadful outcome; work backward by asking yourself what misguided actions might lead you to that sorry fate; and then scrupulously avoid that self-destructive behavior.
Tillinghast also steers clear of businesses that are deeply cyclical, heavily indebted, or faddish. He views “promotional management” and “aggressive accounting” as “red flags.” He shuns areas where he has no special insight or skill because nothing is more critical than “staying away from your ignorance.” He also refrains from talking “too publicly or too frequently” about his holdings because that would make it harder to change his mind and admit when he was wrong. And he resists the urge to trade stocks actively, since that would generate onerous transaction costs and taxes, which would erode his returns.
15. Focus on mistakes, both after the fact and before - That willingness to welcome the discovery of our own errors is an inestimable advantage. Munger nurtures it by applauding himself whenever he succeeds in demolishing one of his entrenched beliefs, so that “ignorance removal” becomes a source of satisfaction, not shame. He once remarked, “If Berkshire has made modest progress, a good deal of it is because Warren and I are very good at destroying our own best-loved ideas. Any year that you don’t destroy one of your best-loved ideas is probably a wasted year.”
In 2016, I audited the Advanced Investment Research course at Columbia Business School, which was taught for a decade by Ken Shubin Stein, a friend who was then the chairman of an investment firm called Spencer Capital Holdings. Shubin Stein, who qualified as a doctor before becoming a hedge fund manager, instructed his MBA students to imagine themselves in three years’ time, when an investment of theirs has failed, and to write a newspaper article explaining the cause of death. Another eminent investor told the class that his family office writes a premortem memo as the final precaution before making any investment. The procedure exposes such serious concerns that he rejects one-third of the investments he would otherwise have made.
Devil’s advocate reviews. Premortems. Conversations with a skeptical discussion partner. A cognitive checklist that reminds us of our biggest biases and our past mistakes.
16. Know the impact your mental and physical states have on your decisions - The scientific literature shows that hunger, anger, loneliness, tiredness, pain, and stress are common “preconditions for poor decision making.” So Shubin Stein uses an acronym, HALT-PS, as a reminder to pause when those factors might be impairing his judgment and postpone important decisions until he’s in a state in which his brain is more likely to function well.IV This is our seventh technique for reducing avoidable stupidity.
For example, researchers who studied gambling decisions found that “sadness increased tendencies to favor high-risk, high-reward options, whereas anxiety increased tendencies to favor low-risk, low-reward options.” In other words, our emotional disposition and moods routinely distort what we see and how we relate to risk.
17. You can't control what happens to you, you can control how you react - Mohnish Pabrai remarks that all of the best investors share one indispensable trait: “the ability to take pain.”
As Marcus Aurelius saw it, “the greatest of all contests” is “the struggle not to be overwhelmed by anything that happens.”
Second, there’s great honor in the simple virtue of perseverance. Several years ago, I wrote to Pabrai during a painful period when he was beset with challenges on multiple fronts, including the bankruptcy of one of his largest investments, Horsehead Holdings. He replied, “Marcus Aurelius is my hero here. We cannot see it when it is happening, but facing adversity is a blessing. It eventually leads to higher highs.”
1. Investing is a game where we must conscientiously and consistently try to maximize our odds of success, or tilt the odds in our favor
2. “We jump to conclusions when we shouldn’t,” [Ed Thorp] observed. “And so withholding judgment is, I think, a key element of rational behavior.”
3. Find ways to quickly say no so you spend time on more promising opportunities - Pabrai glances at hundreds of stocks and rapidly rejects almost all of them, often in less than a minute. Buffett is a master of this practice of high-speed sifting. “What he’s looking for is a reason to say no, and as soon as he finds that, he’s done,” says Pabrai. Indeed, Buffett has said, “The difference between successful people and really successful people is that really successful people say no to almost everything.”
4. Don't be ashamed to copy what works from other people - I ask Pabrai why more people don’t clone in his systematic way. Between mouthfuls of a dish called “spicy beef danger,” he replies, “They’re not as shameless as me. They have more ego. To be a great cloner, you have to check your ego at the door.”
5. Get rich slowly, because being in a hurry increases the odds of ruin - “Whatever happened to Rick Guerin?” Buffett had mentioned Guerin’s superb investment record in “The Superinvestors of Graham-and-Doddsville.” But Buffett told Pabrai and Spier that Guerin used margin loans to leverage his investments because he was “in a hurry to get rich.” According to Buffett, Guerin was hit with margin calls after suffering disastrous losses in the crash of 1973–74. As a result, he was forced to sell shares (to Buffett) that were later worth an immense fortune.
By contrast, Buffett said that he and Munger were never in a hurry because they always knew they’d become enormously rich if they kept compounding over decades without too many catastrophic mistakes. Over his meal of steak, hash browns, and a Cherry Coke, Buffett said, “If you’re even a slightly above average investor who spends less than you earn, over a lifetime you cannot help but get very wealthy.”
6. The willingness to be lonely - “The easiest way not to be overly influenced by what other people think is not to be that aware of what they think. If you don’t really notice that and don’t really care about what other people think, that will make it easier to be a great investor.” It follows, says Davis, that “a prevalent characteristic in great investors would be low emotional intelligence.”
By contrast, says Davis, you tend to encounter an entirely different psychological profile among CEOs. They require the emotional intelligence to empathize with others, understand their thoughts, and influence them. But for a contrarian investor, it would be “catastrophic if you were constantly burdened by an awareness of what everybody else was thinking about your decision.” In their youth, he adds, many CEOs played team sports, captained a team, or led a fraternity. What about the best investors? “By and large,” says Davis, they favored individual sports such as “running, tennis, golf, or swimming. You won’t get a lot of football, lacrosse, that sort of thing.” (less)
7. Mental strength has to be practiced - In his daily life, he trained himself to focus on “productive thoughts” and “positive emotions” such as love, thanksgiving, service, and the contemplation of “the infinite good within ourselves and others.” Templeton was equally committed to banishing negative thoughts and emotions such as anger, doubt, worry, guilt, fear, hatred, and envy. One technique that he recommended was to replace any negative thought with the statement “I give thanks for the abundance of good in my life.”
What I realize now is that Templeton’s habits of positive thinking and prayer must have helped enormously in his battle to gain control over his thoughts and emotions. For an investor who specialized in taking unpopular positions, that mental strength was a powerful advantage. By contrast, my own mind was hopelessly undirected, and it was easy for me to get swamped by feelings such as fear, doubt, regret, greed, impatience, jealousy, and pessimism—all of which complicate the challenge of making rational investment decisions.
8. If you are not humble, the market will humble you - As the Athenian playwright Euripides warned nearly twenty-five hundred years ago, “How can you think yourself a great man when the first accident that comes along can wipe you out completely?”
“It’s frightening to think that you might not know something, but more frightening to think that, by and large, the world is run by people who have faith that they know exactly what’s going on.” - Kahneman
9. Change is inevitable but is not itself the problem; it's our yearning for things to stay the same - If the Buddha had been a hedge fund manager, he might have pointed out that change itself is not ultimately the problem. Rather, we doom ourselves to suffer—both in investing and life—when we expect or yearn for things to stay the same. The real problem is this habit of clinging to or relying on what cannot last. As Buddhism teaches, we need to acknowledge the transience of all worldly phenomena so we won’t be surprised or dismayed when change occurs. Shunryu Suzuki said, “If we cannot accept this teaching that everything changes, we cannot be in composure.”
10. Resilience and survival is more important to wealth creation than spectacular results - Instead of trying to predict the unpredictable, Marks suggests that we focus on building “unfragile portfolios and unfragile lives” that are unlikely to collapse even in dire conditions. What does that mean for regular investors? “Avoid a lot of debt and leverage,” and don’t let your dreams of a “bonanza” lead you to “expose yourself to the possibility of a catastrophe,” he says. “Not trying to maximize is an important component in preparing for what life may throw at you, and that’s true in investing and living. So the question is, do you push the limits?”
“You want to be structured to participate in the march of mankind, but to survive the dips along the way.”
The paradox is that Eveillard and McLennan hit the ball out of the park without ever swinging for the fences. McLennan attributes their success to a consistent focus on “risk mitigation,” “error elimination,” and “prudent acts of omission.” In essence, “it’s winning by not losing.”
Both professionally and personally, says McLennan, he has often found that “moments of extreme pain” were followed by “new beginnings” and “extremely propitious opportunities.” For example, the late nineties were a brutal time for value investors such as him and Eveillard, “but the early 2000s were a golden age. So, if you were able to endure it, the upside was enormous.” In markets, as in life, so much hinges on our ability to survive the dips.
“Make your mistakes nonfatal,” Gundlach tells me. “It’s so fundamental to longevity. And ultimately, that’s what success is in this business: longevity.”
“You’re going to screw up. The question is, Can you recover?” Graham’s concept of the margin of safety helps you to “contain” your mistakes “so they’re not too big. That’s how you recover.”
“If you’re going to be in this game for the long pull, which is the way to do it, you better be able to handle a fifty percent decline without fussing too much about it. And so my lesson to all of you is, conduct your life so that you can handle the fifty percent decline with aplomb and grace. Don’t try to avoid it. It will come. In fact, I would say if it doesn’t come, you’re not being aggressive enough.”
11. Investing as like gardening or farming rather than hunting - As McLennan describes the process of building a portfolio that can flourish over time, he’s reminded of watching his mother gardening while he was growing up in Australia. There was always a problem. Dry weather. Wilting vines. Bug infestations. He often wondered why she bothered to keep going. It would have been so much easier to let the forest grow or just settle for a lawn that needed mowing once a week. But her care yielded remarkable results over three decades. “What I saw play out over time was the gradual emergence of this beautiful, beautiful garden that took time. It took selectivity. And I think it’s a good metaphor for investing.”
“I call myself a farmer,” says Russo. “Wall Street is flooded with hunters—people who try to go out and find the big game. They fell it and bring it back, and there’s a huge feast and everything is fabulous, and then they look for the next big game. I plant seeds and then I spend all of my time cultivating them.”
12. In order to survive you need a strategy that you can stick to in tough times - The best investors have the discipline not to be swayed by such distractions. As Greenblatt says, “I have a simple way of looking at things that makes sense to me and that I’m going to stick with through thick and thin. That’s it.”
It’s not enough to find a smart strategy that stacks the odds in your favor over the long haul. You also need the discipline and tenacity to apply that strategy consistently, especially when it’s most uncomfortable.
“if you have simple principles that you can just stick to… simple principles that make sense, that are unshakable.” Why is this so critical? Because you need this clarity of thought to withstand all of the psychological pressures, setbacks, and temptations that can destabilize or derail you along the way. “It’s a hard business and the market is not always agreeing with you,” says Greenblatt. “It’s the nature of the beast that stock prices are emotional, and you’re going to be hit from every which way, and you’re going to be reading every expert saying you’re wrong.”
13. Incremental changes compound over long periods of time - Resounding victories tend to be the result of small, incremental advances and improvements sustained over long stretches of time. “If you want the secret to great success, it’s just to make each day a little bit better than the day before,” says Gayner. “There are different ways you can go about doing that, but that’s the story.… Just making progress over and over again is the critical part.”
“If you can continue to satisfy and be reasonable, there’s all kinds of people that are going to fall away along the path, and it’s amazing how high up in the percentile rankings you’ll become,” says Gayner. “I was never the number one at anything. I’ve always just been steady and competent and able. But as my father said, the best ability is dependability. So to do it over and over and over and over again, it keeps you in the game. And it’s amazing how you do sort of become number-oneish over time, just because the competitive field thins out so much.”
When I try to identify the many reasons why Gayner has achieved so much, I’m reminded of a concept that Nick Sleep mentioned to me: “the aggregation of marginal gains.” The phrase was coined by a legendary performance coach, Sir David Brailsford, who turned the British cycling team into an unstoppable force at the Beijing and London Olympics. Those triumphs stemmed not from one major innovation, but a multitude of minor improvements, which combined to create a crushing advantage.
Once again, it’s all about the cumulative effect of many minuscule advantages, which add up miraculously over years: the one extra company that Lynch bothered to visit; the one empty time slot that Danoff insisted on filling; the two or three extra hours of reading that Vinik pushed himself to complete after his kids went to bed. The best predictor of success is often nothing more mysterious than the unflagging fervency of a person’s desire.
14. Addition by subtraction (invert) - First, to be successful and fulfilled, we need to decide what we care about most and be honest with ourselves about what we do best. Second, we need to adopt daily habits that enable us to improve continuously where it truly counts—and to subtract habits that divert us. It’s worth writing down a list of beneficial habits that should be part of our daily routine. But it’s equally valuable to compile a Do Not Do list, reminding us of all the ingenious ways in which we habitually distract or undermine ourselves.
This, then, is the first mental trick we should learn from Munger as a safeguard against stupidity: imagine a dreadful outcome; work backward by asking yourself what misguided actions might lead you to that sorry fate; and then scrupulously avoid that self-destructive behavior.
Tillinghast also steers clear of businesses that are deeply cyclical, heavily indebted, or faddish. He views “promotional management” and “aggressive accounting” as “red flags.” He shuns areas where he has no special insight or skill because nothing is more critical than “staying away from your ignorance.” He also refrains from talking “too publicly or too frequently” about his holdings because that would make it harder to change his mind and admit when he was wrong. And he resists the urge to trade stocks actively, since that would generate onerous transaction costs and taxes, which would erode his returns.
15. Focus on mistakes, both after the fact and before - That willingness to welcome the discovery of our own errors is an inestimable advantage. Munger nurtures it by applauding himself whenever he succeeds in demolishing one of his entrenched beliefs, so that “ignorance removal” becomes a source of satisfaction, not shame. He once remarked, “If Berkshire has made modest progress, a good deal of it is because Warren and I are very good at destroying our own best-loved ideas. Any year that you don’t destroy one of your best-loved ideas is probably a wasted year.”
In 2016, I audited the Advanced Investment Research course at Columbia Business School, which was taught for a decade by Ken Shubin Stein, a friend who was then the chairman of an investment firm called Spencer Capital Holdings. Shubin Stein, who qualified as a doctor before becoming a hedge fund manager, instructed his MBA students to imagine themselves in three years’ time, when an investment of theirs has failed, and to write a newspaper article explaining the cause of death. Another eminent investor told the class that his family office writes a premortem memo as the final precaution before making any investment. The procedure exposes such serious concerns that he rejects one-third of the investments he would otherwise have made.
Devil’s advocate reviews. Premortems. Conversations with a skeptical discussion partner. A cognitive checklist that reminds us of our biggest biases and our past mistakes.
16. Know the impact your mental and physical states have on your decisions - The scientific literature shows that hunger, anger, loneliness, tiredness, pain, and stress are common “preconditions for poor decision making.” So Shubin Stein uses an acronym, HALT-PS, as a reminder to pause when those factors might be impairing his judgment and postpone important decisions until he’s in a state in which his brain is more likely to function well.IV This is our seventh technique for reducing avoidable stupidity.
For example, researchers who studied gambling decisions found that “sadness increased tendencies to favor high-risk, high-reward options, whereas anxiety increased tendencies to favor low-risk, low-reward options.” In other words, our emotional disposition and moods routinely distort what we see and how we relate to risk.
17. You can't control what happens to you, you can control how you react - Mohnish Pabrai remarks that all of the best investors share one indispensable trait: “the ability to take pain.”
As Marcus Aurelius saw it, “the greatest of all contests” is “the struggle not to be overwhelmed by anything that happens.”
Second, there’s great honor in the simple virtue of perseverance. Several years ago, I wrote to Pabrai during a painful period when he was beset with challenges on multiple fronts, including the bankruptcy of one of his largest investments, Horsehead Holdings. He replied, “Marcus Aurelius is my hero here. We cannot see it when it is happening, but facing adversity is a blessing. It eventually leads to higher highs.”
This entire review has been hidden because of spoilers.
June 16, 2021
I recently heard the author William Green on "The Investor's Podcast" discussing this book, so I decided to give it a read, and I am sure glad I did. Green's book distills timeless lessons from some of the greatest investors over the past century, that he has learned over many years of interviews with the likes of Sir John Templeton, Charlie Munger, Joel Greenblatt, Howard Marks, Mohnish Pobrai, and many others. This should be required reading for anyone interested in investing, behavioral economics, or someone just generally interested in how to live a fulfilling and happy life. I will share some of my main takeaways.
Mohnish Pobrai - Inactivity is OK and you must be patient for the right opportunity, or else when it arises, you may not have the cash to capitalize on it. Say no to almost everything and try to keep your investments within your circle of competence. Surround yourself with people you want to emulate and remember that if you achieve slightly above average returns while living below your means, it is difficult not to get wealthy.
Sir John Templeton - Inner conviction is critical and you must be willing to take a position that others don't think is too bright (willingness to be lonely). 6 Principles: beware of emotion, beware of your own ignorance and know what you're buying (due diligence), diversify broadly to protect from own fallibility, successful investing requires patience, the best way to find bargains is to study assets that have performed the worst over the last 5 years then assess whether this is temporary or permanent, don't chase fads.
Howard Marks - Change is inevitable, the only constant is impermanence and we must acclimate to our environment. Know what you don't know. Be humble.
Jean-Marie Eveillard - Respect uncertainty. Reduce or eliminate debt and beware of excessive expenses. Instead of fixating on short-term gains or beating benchmarks, we should place greater emphasis on becoming shock resistant and avoiding ruin to stay in the game. Beware of overconfidence and complacency, and be keenly aware of our exposure to risk and require margin of safety.
Joel Greenblatt - In the short term the market is irrational but it eventually gets it right within 2-3 years - buy stocks at a discount. Look for opportunities with asymmetric returns. Sizing of positions - Large positions shouldn't be the ones you can make the most money on but the one's you CAN'T lose money on. Buy good businesses at bargain prices. The Magic Formula = high earnings yield and high return on capital. Persistence - the impact of small marginal gains that compound over time.
Charlie Munger - Safeguard against stupidity: imagine a dreadful outcome then work backwards by asking yourself what misguided actions might lead you to that sorry fate and then scrupulously avoid that self-destructive behavior. The reluctance to re-examine our views and change our minds is one of the greatest impediments to rational thinking. Instead of keeping an open mind, we tend to consciously and unconsciously prioritize information that reinforces what we believe.
Facing adversity is a blessing. It eventually leads to higher highs. To endure misfortune and prevail, is great good fortune.
I would highly recommend this book to anyone who wants to better understand basic principles for investing and life that will help you achieve better returns on your capital, your time, and your relationships.
Mohnish Pobrai - Inactivity is OK and you must be patient for the right opportunity, or else when it arises, you may not have the cash to capitalize on it. Say no to almost everything and try to keep your investments within your circle of competence. Surround yourself with people you want to emulate and remember that if you achieve slightly above average returns while living below your means, it is difficult not to get wealthy.
Sir John Templeton - Inner conviction is critical and you must be willing to take a position that others don't think is too bright (willingness to be lonely). 6 Principles: beware of emotion, beware of your own ignorance and know what you're buying (due diligence), diversify broadly to protect from own fallibility, successful investing requires patience, the best way to find bargains is to study assets that have performed the worst over the last 5 years then assess whether this is temporary or permanent, don't chase fads.
Howard Marks - Change is inevitable, the only constant is impermanence and we must acclimate to our environment. Know what you don't know. Be humble.
Jean-Marie Eveillard - Respect uncertainty. Reduce or eliminate debt and beware of excessive expenses. Instead of fixating on short-term gains or beating benchmarks, we should place greater emphasis on becoming shock resistant and avoiding ruin to stay in the game. Beware of overconfidence and complacency, and be keenly aware of our exposure to risk and require margin of safety.
Joel Greenblatt - In the short term the market is irrational but it eventually gets it right within 2-3 years - buy stocks at a discount. Look for opportunities with asymmetric returns. Sizing of positions - Large positions shouldn't be the ones you can make the most money on but the one's you CAN'T lose money on. Buy good businesses at bargain prices. The Magic Formula = high earnings yield and high return on capital. Persistence - the impact of small marginal gains that compound over time.
Charlie Munger - Safeguard against stupidity: imagine a dreadful outcome then work backwards by asking yourself what misguided actions might lead you to that sorry fate and then scrupulously avoid that self-destructive behavior. The reluctance to re-examine our views and change our minds is one of the greatest impediments to rational thinking. Instead of keeping an open mind, we tend to consciously and unconsciously prioritize information that reinforces what we believe.
Facing adversity is a blessing. It eventually leads to higher highs. To endure misfortune and prevail, is great good fortune.
I would highly recommend this book to anyone who wants to better understand basic principles for investing and life that will help you achieve better returns on your capital, your time, and your relationships.
September 25, 2021
This is a solid value investing piece but I feel it's been heavily overrated by a large number of amateur value investing YouTubers. The book drives home the same well-known points over and over again (buy good businesses on the cheap, hold for a long time, tune out the noise), but does not justify the repetition. Green's exploration of individual investors is mostly surface level, not deep enough to be very practical. The book is smoothly written and easy to get through. It certainly got me pumped about the value investing style. However, there are many awkwardly written details that left me scratching my head. I'm not sure if he was attempting humor? For example, I could have done without Mohnish Pabrai's description of buying stocks as "orgasmic." Gross. Could have edited that one out dude.
A solid value investing piece but there are far better.
A solid value investing piece but there are far better.
August 26, 2022
Hero worship, winner's bias, and superficial journalist book all rolled into one.
Got this book from the y-combinator startups book list, and I'm judging every founder in y-combinator for it.
There was some useful advice, but had to wade through a sea of inspirational get-rich tiktok quotes to get there.
2.5 stars.
85th book of 2022
Got this book from the y-combinator startups book list, and I'm judging every founder in y-combinator for it.
There was some useful advice, but had to wade through a sea of inspirational get-rich tiktok quotes to get there.
2.5 stars.
85th book of 2022
February 6, 2022
A book that i will definitely end up reading multiple times. Wisdom from some of the greatest investors distilled to it's very essence and served in a very readable form.
June 1, 2023
Food for thought...
October 7, 2022
It's difficult to utilize the principles and recommendations from the most successful investors through history as the "average" person is in very different circumstances. Also many of the principles came together after a long journeys and it's not something you can appreciate or internalize without at least partially walking this journey yourself. Thus it is mostly a principles/philosophies book and less about practical knowledge. Most of the investors covered in the book were value investors and many of those people were also led by Stoic principles (Marcus Aurelius was mentioned many times; “the greatest of all contests” is “the struggle not to be overwhelmed by anything that happens”) and ofcourse Kahneman and Man's Search for Meaning were mentioned.
I mostly enjoyed the chapter on Charlie Munger ("don't be stupid"), having already read about several others from different books. The book also places a lot of focus on philanthropy and creating a general positive impact in the world which comes after maximizing returns is no longer the main focus. Definitely important factor today is antifragility (several references to Taleb), you must aim to be resilient to black swans like the recent pandemic. Through some examples the importance of copying is also covered (doing it in a smart way, but not trying to only invent the wheel yourself).
Find ways to quickly say no so you spend time on more promising opportunities - Pabrai glances at hundreds of stocks and rapidly rejects almost all of them, often in less than a minute. Buffett is a master of this practice of high-speed sifting. “What he’s looking for is a reason to say no, and as soon as he finds that, he’s done,” says Pabrai. Indeed, Buffett has said, “The difference between successful people and really successful people is that really successful people say no to almost everything.”
By contrast, says Davis, you tend to encounter an entirely different psychological profile among CEOs. They require the emotional intelligence to empathize with others, understand their thoughts, and influence them. But for a contrarian investor, it would be “catastrophic if you were constantly burdened by an awareness of what everybody else was thinking about your decision.” In their youth, he adds, many CEOs played team sports, captained a team, or led a fraternity. What about the best investors? “By and large,” says Davis, they favored individual sports such as “running, tennis, golf, or swimming. You won’t get a lot of football, lacrosse, that sort of thing.”
“I call myself a farmer,” says Russo. “Wall Street is flooded with hunters—people who try to go out and find the big game. They fell it and bring it back, and there’s a huge feast and everything is fabulous, and then they look for the next big game. I plant seeds and then I spend all of my time cultivating them.”
Investing as like gardening or farming rather than hunting - As McLennan describes the process of building a portfolio that can flourish over time, he’s reminded of watching his mother gardening while he was growing up in Australia. There was always a problem. Dry weather. Wilting vines. Bug infestations. He often wondered why she bothered to keep going. It would have been so much easier to let the forest grow or just settle for a lawn that needed mowing once a week. But her care yielded remarkable results over three decades. “What I saw play out over time was the gradual emergence of this beautiful, beautiful garden that took time. It took selectivity. And I think it’s a good metaphor for investing.”
Addition by subtraction (invert) - First, to be successful and fulfilled, we need to decide what we care about most and be honest with ourselves about what we do best. Second, we need to adopt daily habits that enable us to improve continuously where it truly counts—and to subtract habits that divert us. It’s worth writing down a list of beneficial habits that should be part of our daily routine. But it’s equally valuable to compile a Do Not Do list, reminding us of all the ingenious ways in which we habitually distract or undermine ourselves.
Focus on mistakes, both after the fact and before - That willingness to welcome the discovery of our own errors is an inestimable advantage. Munger nurtures it by applauding himself whenever he succeeds in demolishing one of his entrenched beliefs, so that “ignorance removal” becomes a source of satisfaction, not shame. He once remarked, “If Berkshire has made modest progress, a good deal of it is because Warren and I are very good at destroying our own best-loved ideas. Any year that you don’t destroy one of your best-loved ideas is probably a wasted year.”
“If you’re going to be in this game for the long pull, which is the way to do it, you better be able to handle a fifty percent decline without fussing too much about it. And so my lesson to all of you is, conduct your life so that you can handle the fifty percent decline with aplomb and grace. Don’t try to avoid it. It will come. In fact, I would say if it doesn’t come, you’re not being aggressive enough.”
“You get a lot of A’s and B’s in school. In the stock market, you get a lot of F’s. And if you’re right six or seven times out of ten, you’re very good.”
“I think that people underestimate—until they get older—they underestimate just how important habits are, and how difficult they are to change when you’re forty-five or fifty, and how important it is that you form the right ones when you’re young." —Warren Buffett
“It’s frightening to think that you might not know something, but more frightening to think that, by and large, the world is run by people who have faith that they know exactly what’s going on.” - Kahneman
“As the Prussian military strategist General Carl von Clausewitz said, “The greatest enemy of a good plan is the dream of a perfect plan.”
I mostly enjoyed the chapter on Charlie Munger ("don't be stupid"), having already read about several others from different books. The book also places a lot of focus on philanthropy and creating a general positive impact in the world which comes after maximizing returns is no longer the main focus. Definitely important factor today is antifragility (several references to Taleb), you must aim to be resilient to black swans like the recent pandemic. Through some examples the importance of copying is also covered (doing it in a smart way, but not trying to only invent the wheel yourself).
Find ways to quickly say no so you spend time on more promising opportunities - Pabrai glances at hundreds of stocks and rapidly rejects almost all of them, often in less than a minute. Buffett is a master of this practice of high-speed sifting. “What he’s looking for is a reason to say no, and as soon as he finds that, he’s done,” says Pabrai. Indeed, Buffett has said, “The difference between successful people and really successful people is that really successful people say no to almost everything.”
By contrast, says Davis, you tend to encounter an entirely different psychological profile among CEOs. They require the emotional intelligence to empathize with others, understand their thoughts, and influence them. But for a contrarian investor, it would be “catastrophic if you were constantly burdened by an awareness of what everybody else was thinking about your decision.” In their youth, he adds, many CEOs played team sports, captained a team, or led a fraternity. What about the best investors? “By and large,” says Davis, they favored individual sports such as “running, tennis, golf, or swimming. You won’t get a lot of football, lacrosse, that sort of thing.”
“I call myself a farmer,” says Russo. “Wall Street is flooded with hunters—people who try to go out and find the big game. They fell it and bring it back, and there’s a huge feast and everything is fabulous, and then they look for the next big game. I plant seeds and then I spend all of my time cultivating them.”
Investing as like gardening or farming rather than hunting - As McLennan describes the process of building a portfolio that can flourish over time, he’s reminded of watching his mother gardening while he was growing up in Australia. There was always a problem. Dry weather. Wilting vines. Bug infestations. He often wondered why she bothered to keep going. It would have been so much easier to let the forest grow or just settle for a lawn that needed mowing once a week. But her care yielded remarkable results over three decades. “What I saw play out over time was the gradual emergence of this beautiful, beautiful garden that took time. It took selectivity. And I think it’s a good metaphor for investing.”
Addition by subtraction (invert) - First, to be successful and fulfilled, we need to decide what we care about most and be honest with ourselves about what we do best. Second, we need to adopt daily habits that enable us to improve continuously where it truly counts—and to subtract habits that divert us. It’s worth writing down a list of beneficial habits that should be part of our daily routine. But it’s equally valuable to compile a Do Not Do list, reminding us of all the ingenious ways in which we habitually distract or undermine ourselves.
Focus on mistakes, both after the fact and before - That willingness to welcome the discovery of our own errors is an inestimable advantage. Munger nurtures it by applauding himself whenever he succeeds in demolishing one of his entrenched beliefs, so that “ignorance removal” becomes a source of satisfaction, not shame. He once remarked, “If Berkshire has made modest progress, a good deal of it is because Warren and I are very good at destroying our own best-loved ideas. Any year that you don’t destroy one of your best-loved ideas is probably a wasted year.”
“If you’re going to be in this game for the long pull, which is the way to do it, you better be able to handle a fifty percent decline without fussing too much about it. And so my lesson to all of you is, conduct your life so that you can handle the fifty percent decline with aplomb and grace. Don’t try to avoid it. It will come. In fact, I would say if it doesn’t come, you’re not being aggressive enough.”
“You get a lot of A’s and B’s in school. In the stock market, you get a lot of F’s. And if you’re right six or seven times out of ten, you’re very good.”
“I think that people underestimate—until they get older—they underestimate just how important habits are, and how difficult they are to change when you’re forty-five or fifty, and how important it is that you form the right ones when you’re young." —Warren Buffett
“It’s frightening to think that you might not know something, but more frightening to think that, by and large, the world is run by people who have faith that they know exactly what’s going on.” - Kahneman
“As the Prussian military strategist General Carl von Clausewitz said, “The greatest enemy of a good plan is the dream of a perfect plan.”
May 13, 2021
Ive seen many review that have downrated this book due to it not being very informative for investing.
I think they have misread the title misunderstood the point of the book, and thus felt it failed to delivered on that.
The main point of this book is to understand the ways in which some of the best investors think, act and make decisions not only in their careers but also in their life, and how we can copy and apply these in our own life to be richer, happier and wiser. And that i do believe it does accomplish well.
I think they have misread the title misunderstood the point of the book, and thus felt it failed to delivered on that.
The main point of this book is to understand the ways in which some of the best investors think, act and make decisions not only in their careers but also in their life, and how we can copy and apply these in our own life to be richer, happier and wiser. And that i do believe it does accomplish well.
May 14, 2021
The book is filled with interesting stories and biographies of well-known and less well-known investors. The chapters do get somewhat repetitive as the diversity of the types of investors is limited. Most "value investors" share the same philosophy and thus similar "wisdoms" are re-packaged and repeated from chapter to chapter. The book would have been much improved if investors who specialized in growth, macro, commodities, quant and others were included.
May 16, 2023
90% winning in markets - 10% winning in life.
To be one of the most successful investors off all time, you simply need to lack emotional intelligence, buy only when you see a large gap in price and value, be divorced, and live a very very long life.
I was close to giving this 3 stars, but thankfully the entire epilogue is dedicated to winning at life. This part was sorely lacking in my opinion. After 2 or 3 stories, all successful investment styles seemed the same.
To be one of the most successful investors off all time, you simply need to lack emotional intelligence, buy only when you see a large gap in price and value, be divorced, and live a very very long life.
I was close to giving this 3 stars, but thankfully the entire epilogue is dedicated to winning at life. This part was sorely lacking in my opinion. After 2 or 3 stories, all successful investment styles seemed the same.
August 5, 2021
I expected to learn something about the investing methods from some of the 'masters', however it is more a nice writing about these investor, how they are or where and how they became great investors.
January 31, 2022
Time well spent - a Book that is not just about investing and great investors, I consider it a manual for life! totally looked forward to reading each chapter and ended up making so many notes ! loved it . Thank you @william green
September 11, 2021
This book has good stories and quotes. However, if you are looking for investment insights, this is not the right book because most of the stories are hindsights.
August 31, 2021
Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life by William Green
Summary
The best investors are worth studying as they are practical philosophers, those seeking worldly wisdom. Their influence and practices can help us become better thinkers and decision makers. The purpose of this book is to share ideas worth cloning
Key Takeaways
Studying investing is not only about learning how to make money, but learning how to think and make decisions
Learning how to think by probability will do you more good than any book on investing. A dispassionate analysis of the facts and probabilities is one of the best mental habits you could build. They key lies in understanding how to optimize the odds for success
Game selection is key. If you don’t have an edge, don’t play. There are many ways to make money, but they all require an edge
Pabrai – clone the best ideas and habits of the giants
People have a bug in their DNA where they feel shameful stealing the best ideas of others. DON’T!
Clone the best ideas but be open to personalizing it to your personality and context
Whenever you come across a principle that is correct but that most of humanity doesn’t understand or isn’t willing to follow, make the most of it! It’s an enormous competitive advantage
Templeton – to get different results, you must act differently than the crowd
You have to have the inner calm, willingness, and disregard of what other people think. You have to be ok with being lonely, different, and misunderstood for long periods of time. These investors favor winning and being right than sticking with the crowd
Beware your own emotions and aim to take advantage of others’
Beware your own ignorance, diversify broadly, have great patience, study the abysmally performing companies and industries, don’t chase fads, focus on value and not outlook
Mastering yourself is of supreme importance
Howard Marks
The future is ever changing and it is your job as an investor to prepare as well as you can, knowing what you and do not know, making the best decision possible. Be humble and know that you are never immune from forces greater than you
Marks is a master in risk, cyclicality, probabilities, playing the odds, seeking ideas in unloved areas
Understand how big of a role luck plays in your success
The question to ask is “how cheap is this asset given what I think it’s value is?” Don’t worry if it’s sexy or not, just look at value
Everything that is important about investing is counterintuitive and everything that is obvious is wrong
Beware the pendulum of history. Know your history but don’t expect it to exactly repeat. Never rely on things that cannot last. Be ready for change, for it will come
Structure your life, portfolio, and relationships to be robust. Don’t maximize. Be ready for change. Adapt and evolve
See reality as it is and adapt to it. Don’t fight it. If things are frothy, pare back. When there is opportunity, seize it
Jean Marie Eveillard
Eveillard was equipped to outperform over the long haul, avoiding all tech stocks in the late ‘90s. He underperformed for years, lost most of his investors, but didn’t budge. He was eventually proved right, seen as a sage, and funds rushed back. This takes great fortitude and the right temperament to go against the crowd. However, he was structurally fragile. Investors redeemed at horrible times, forcing him to sell when he least wanted to. He was also pressured by internal stakeholders at his mutual fund
Don’t be in a rush to get rich. The key is safety, capping your losses. The gains will take care of themselves. This is resilient wealth creation
It is all about surviving the dips. That’s the first step, even better is the ability to take advantage of them
Joel Greenblatt – simplicity is the master key
Figure out what it is worth, and pay less for it
Stocks follow earnings (eventually)
Take a simple idea and take it seriously
Seek to reduce the complex to its essence. Only true understanding allows for this to happen
Don’t make your biggest investments in the companies that can make the most, but in those you are most confident to not lose
Cheap + good business is the holy grail
For most people, the ideal strategy is not the one day of the highest returns, but the one you are most likely to stick with in bad times
Nick Sleep and Qais Zakaria
These two ran Nomad for 13 years and had wildly successful returns in a very concentrated portfolio
They used what they call destination analysis, aiming to understand where a company is, where it can go in 10 years, and what would help it get there or veer it off course. This type of inversion or reverse engineering is wildly helpful in all areas of life. Where do you want to be at the end of your life and what can you do today to help you get there?
They also took a simple idea seriously. They intensively researched companies they thought would do well over 5-10 years and spent all their time reading annual reports and talking to companies
They came up with the model of “scale economics shared.” Amazon and Costco perfectly follow this playbook. As they get bigger, they use their scale to get lower prices and pass those savings onto consumers, fueling the cycle even further.
Make quality the pursuit – in your investing, decision making, and life. Nomad wasn’t about raking in money, but a metaphysical experiment to see if pursuing quality would work. It did.
Focus on the things with the longest shelf life, not the ephemeral
Must look long term and have the capacity to suffer. This is another principle that applies far beyond investing. Sacrifice today so that you can have more tomorrow
Tom Gaynor – The best investors build habits that compound over time
Seek small marginal gains that are relentlessly followed. Time is the enemy of bad habits, the friend of the good
Don’t let perfect be the enemy of the good. A good enough habit you follow is far superior than the perfect habit you don’t
Directionally correct, moderate efforts demonstrably work
Find good things that last and stay the course. Don’t be caught up in the frenzy and fads
The name of the game is longevity, not perfect maximization
You don’t have to be extreme to get extreme results
Gaynor considers himself a node in a massive neural network. He cultivated relationships and has many people helping him and rooting for him to succeed – the compounding of goodwill
Forget about perfection, instead focus on continuous improvement that can compound over time. This is the aggregation of marginal gains
Write down good habits as well as a list of things to not do
Charlie Munger – aim to be consistently not stupid
Inversion is a really powerful thinking habit. Before trying to help, first ask how you might harm. Must have great clarity on what not to do
Collect stupidities and learn vicariously through the mistakes of others
Rub your nose in your mistakes and learn from them
Rely on first principles, don’t try to be perfect, be patient, adopt some guidelines and restraints to handicap massive mistakes
Gain self awareness and beware psychological biases, hubris, the desire to get rich quick
Learn to destroy your best loved ideas
Pre-mortems and devils advocate reviews are excellent ways to mitigate your biases
Be aware of your emotions and physical state before making a decision. A question as simple as “are you hungry or tired?” Can help your decision making
Expect your portfolio to hit 50% drawdowns at some point. The point is to be ready and to be able to act rationally on the hard times. You have to instill good habits before you need them
Be proud not only of your results, but also how you’ve attained them
Life is a series of opportunities to learn how to behave well in difficult circumstances
Nothing is more essential than simply surviving
Build up wealth to be independent, to live the life you want without having to compromise or answer to others
Arnold Van Den Berg – survived the holocaust as a child and this had a tremendous impact on his view on life
Being rich consists of money, happiness, and peace of mind. Use your wealth to help and serve others
What I got out of it
Really enjoyable book with some tangible takeaways for your life, investing, and relationships. Love his approach of highlighting eminent investors he admires and helping the reader understand how it can apply outside of the field of finance
Summary
The best investors are worth studying as they are practical philosophers, those seeking worldly wisdom. Their influence and practices can help us become better thinkers and decision makers. The purpose of this book is to share ideas worth cloning
Key Takeaways
Studying investing is not only about learning how to make money, but learning how to think and make decisions
Learning how to think by probability will do you more good than any book on investing. A dispassionate analysis of the facts and probabilities is one of the best mental habits you could build. They key lies in understanding how to optimize the odds for success
Game selection is key. If you don’t have an edge, don’t play. There are many ways to make money, but they all require an edge
Pabrai – clone the best ideas and habits of the giants
People have a bug in their DNA where they feel shameful stealing the best ideas of others. DON’T!
Clone the best ideas but be open to personalizing it to your personality and context
Whenever you come across a principle that is correct but that most of humanity doesn’t understand or isn’t willing to follow, make the most of it! It’s an enormous competitive advantage
Templeton – to get different results, you must act differently than the crowd
You have to have the inner calm, willingness, and disregard of what other people think. You have to be ok with being lonely, different, and misunderstood for long periods of time. These investors favor winning and being right than sticking with the crowd
Beware your own emotions and aim to take advantage of others’
Beware your own ignorance, diversify broadly, have great patience, study the abysmally performing companies and industries, don’t chase fads, focus on value and not outlook
Mastering yourself is of supreme importance
Howard Marks
The future is ever changing and it is your job as an investor to prepare as well as you can, knowing what you and do not know, making the best decision possible. Be humble and know that you are never immune from forces greater than you
Marks is a master in risk, cyclicality, probabilities, playing the odds, seeking ideas in unloved areas
Understand how big of a role luck plays in your success
The question to ask is “how cheap is this asset given what I think it’s value is?” Don’t worry if it’s sexy or not, just look at value
Everything that is important about investing is counterintuitive and everything that is obvious is wrong
Beware the pendulum of history. Know your history but don’t expect it to exactly repeat. Never rely on things that cannot last. Be ready for change, for it will come
Structure your life, portfolio, and relationships to be robust. Don’t maximize. Be ready for change. Adapt and evolve
See reality as it is and adapt to it. Don’t fight it. If things are frothy, pare back. When there is opportunity, seize it
Jean Marie Eveillard
Eveillard was equipped to outperform over the long haul, avoiding all tech stocks in the late ‘90s. He underperformed for years, lost most of his investors, but didn’t budge. He was eventually proved right, seen as a sage, and funds rushed back. This takes great fortitude and the right temperament to go against the crowd. However, he was structurally fragile. Investors redeemed at horrible times, forcing him to sell when he least wanted to. He was also pressured by internal stakeholders at his mutual fund
Don’t be in a rush to get rich. The key is safety, capping your losses. The gains will take care of themselves. This is resilient wealth creation
It is all about surviving the dips. That’s the first step, even better is the ability to take advantage of them
Joel Greenblatt – simplicity is the master key
Figure out what it is worth, and pay less for it
Stocks follow earnings (eventually)
Take a simple idea and take it seriously
Seek to reduce the complex to its essence. Only true understanding allows for this to happen
Don’t make your biggest investments in the companies that can make the most, but in those you are most confident to not lose
Cheap + good business is the holy grail
For most people, the ideal strategy is not the one day of the highest returns, but the one you are most likely to stick with in bad times
Nick Sleep and Qais Zakaria
These two ran Nomad for 13 years and had wildly successful returns in a very concentrated portfolio
They used what they call destination analysis, aiming to understand where a company is, where it can go in 10 years, and what would help it get there or veer it off course. This type of inversion or reverse engineering is wildly helpful in all areas of life. Where do you want to be at the end of your life and what can you do today to help you get there?
They also took a simple idea seriously. They intensively researched companies they thought would do well over 5-10 years and spent all their time reading annual reports and talking to companies
They came up with the model of “scale economics shared.” Amazon and Costco perfectly follow this playbook. As they get bigger, they use their scale to get lower prices and pass those savings onto consumers, fueling the cycle even further.
Make quality the pursuit – in your investing, decision making, and life. Nomad wasn’t about raking in money, but a metaphysical experiment to see if pursuing quality would work. It did.
Focus on the things with the longest shelf life, not the ephemeral
Must look long term and have the capacity to suffer. This is another principle that applies far beyond investing. Sacrifice today so that you can have more tomorrow
Tom Gaynor – The best investors build habits that compound over time
Seek small marginal gains that are relentlessly followed. Time is the enemy of bad habits, the friend of the good
Don’t let perfect be the enemy of the good. A good enough habit you follow is far superior than the perfect habit you don’t
Directionally correct, moderate efforts demonstrably work
Find good things that last and stay the course. Don’t be caught up in the frenzy and fads
The name of the game is longevity, not perfect maximization
You don’t have to be extreme to get extreme results
Gaynor considers himself a node in a massive neural network. He cultivated relationships and has many people helping him and rooting for him to succeed – the compounding of goodwill
Forget about perfection, instead focus on continuous improvement that can compound over time. This is the aggregation of marginal gains
Write down good habits as well as a list of things to not do
Charlie Munger – aim to be consistently not stupid
Inversion is a really powerful thinking habit. Before trying to help, first ask how you might harm. Must have great clarity on what not to do
Collect stupidities and learn vicariously through the mistakes of others
Rub your nose in your mistakes and learn from them
Rely on first principles, don’t try to be perfect, be patient, adopt some guidelines and restraints to handicap massive mistakes
Gain self awareness and beware psychological biases, hubris, the desire to get rich quick
Learn to destroy your best loved ideas
Pre-mortems and devils advocate reviews are excellent ways to mitigate your biases
Be aware of your emotions and physical state before making a decision. A question as simple as “are you hungry or tired?” Can help your decision making
Expect your portfolio to hit 50% drawdowns at some point. The point is to be ready and to be able to act rationally on the hard times. You have to instill good habits before you need them
Be proud not only of your results, but also how you’ve attained them
Life is a series of opportunities to learn how to behave well in difficult circumstances
Nothing is more essential than simply surviving
Build up wealth to be independent, to live the life you want without having to compromise or answer to others
Arnold Van Den Berg – survived the holocaust as a child and this had a tremendous impact on his view on life
Being rich consists of money, happiness, and peace of mind. Use your wealth to help and serve others
What I got out of it
Really enjoyable book with some tangible takeaways for your life, investing, and relationships. Love his approach of highlighting eminent investors he admires and helping the reader understand how it can apply outside of the field of finance
October 9, 2021
Nice compilation work.
The chapter on Templeton and Nick Sleep were remarkable. The latter had this useful quote:
But Zakaria’s eye for discarded jewels was precisely what made him valuable to Marathon. Hosking told him, “When you can’t sell a stock to anyone else, call us.”
The point of view of Markel's Tom Gayner on Marginal Gains philosophy and being a radical moderate was good. E.g.
Determined to drift no more, he proclaimed to friends and colleagues that he’d lose one pound per year for the next ten years. That may sound absurdly unambitious, but some studies suggest that the average American male gains one to two pounds per year between early adulthood and middle age.
Howard Marks quote :
“You want to be structured to participate in the march of mankind, but to survive the dips along the way.” That’s a useful maxim for investing and life.
Seneca: “If one does not know to which port one is sailing, no wind is favorable.”
Some worthwhile referrals in the book
Van Den Berg favourite book from poverty to power
Investing the Templeton way book
Robert Pirsig’s Zen and the Art of Motorcycle Maintenance: An Inquiry into Values.
Grit
François-Marie Wojcik, the doubt-filled French investor I mentioned earlier, showed me an 1891 novel by Émile Zola, L’Argent (Money), which depicts a speculative frenzy on the Paris stock exchange in the 1860s.
Templeton :
I give thanks to the abundance and good in my life
This comes to bless me
Pabrai :
Power vs. Force: The Hidden Determinants of Human Behavior by David Hawkins
The chapter on Templeton and Nick Sleep were remarkable. The latter had this useful quote:
But Zakaria’s eye for discarded jewels was precisely what made him valuable to Marathon. Hosking told him, “When you can’t sell a stock to anyone else, call us.”
The point of view of Markel's Tom Gayner on Marginal Gains philosophy and being a radical moderate was good. E.g.
Determined to drift no more, he proclaimed to friends and colleagues that he’d lose one pound per year for the next ten years. That may sound absurdly unambitious, but some studies suggest that the average American male gains one to two pounds per year between early adulthood and middle age.
Howard Marks quote :
“You want to be structured to participate in the march of mankind, but to survive the dips along the way.” That’s a useful maxim for investing and life.
Seneca: “If one does not know to which port one is sailing, no wind is favorable.”
Some worthwhile referrals in the book
Van Den Berg favourite book from poverty to power
Investing the Templeton way book
Robert Pirsig’s Zen and the Art of Motorcycle Maintenance: An Inquiry into Values.
Grit
François-Marie Wojcik, the doubt-filled French investor I mentioned earlier, showed me an 1891 novel by Émile Zola, L’Argent (Money), which depicts a speculative frenzy on the Paris stock exchange in the 1860s.
Templeton :
I give thanks to the abundance and good in my life
This comes to bless me
Pabrai :
Power vs. Force: The Hidden Determinants of Human Behavior by David Hawkins
September 17, 2022
I absolutely loved the book! I decided to listen to this one for a change and what a great decision that was.
Raphael Corkhill does a phenomenal job of reading the book. Each story is very well put together and seamlessly intertwines with the rest for an overall smooth experience.
It's not a "how to step by step" guide on investing. But you get the core principles you need and mindset to build wealth and a strong trading phycology.
I would say this is a necessary read for anyone interested in investing/trading professionally. If you read/listen close enough there are so may great tips and thoughts. I found myself regularly taking notes and further thinking on some of the principals.
You might not find anything new here, but I think that's the point. Investing has core simple principals that if you follow you will most probably success. Of course, you need to do your research and learn a lot about what you will be investing in, and it's definitely not for everyone.
I'm definitely adding it to my bookshelf of books I will most likely reread for the rest of my life.
Raphael Corkhill does a phenomenal job of reading the book. Each story is very well put together and seamlessly intertwines with the rest for an overall smooth experience.
It's not a "how to step by step" guide on investing. But you get the core principles you need and mindset to build wealth and a strong trading phycology.
I would say this is a necessary read for anyone interested in investing/trading professionally. If you read/listen close enough there are so may great tips and thoughts. I found myself regularly taking notes and further thinking on some of the principals.
You might not find anything new here, but I think that's the point. Investing has core simple principals that if you follow you will most probably success. Of course, you need to do your research and learn a lot about what you will be investing in, and it's definitely not for everyone.
I'm definitely adding it to my bookshelf of books I will most likely reread for the rest of my life.
August 23, 2021
Excelente libro para aquellas personas que deseen entender cómo viven las personas más "ricas" de este mundo. No solo hablo de riqueza financiera, que sí, sino cuáles son las costumbres, hábitos, mindsets de las personas que han construido verdaderos imperios.
Tony Robbins explica que clonar/copiar es de las estrategias más exitosas del mundo y este libro lo reafirma. No aprenderás exactamente cuántas acciones de Tesla o Apple debes comprar, pero sí cómo construir una estructura financiera, de relaciones personales, salud, que te puede acercar a la "libertad" que todos los reseñados en el libro lograron alcanzar.
Dos constantes de todos los libros de finanzas/inversión que he leído:
1) No necesitas ser un genio para ser financieramente libre, solo debes tener constancia y empezar.
2) Invertir es un juego a largo plazo. No hay atajos, no hay dinero fácil. Quien aguanta es libre.
Tony Robbins explica que clonar/copiar es de las estrategias más exitosas del mundo y este libro lo reafirma. No aprenderás exactamente cuántas acciones de Tesla o Apple debes comprar, pero sí cómo construir una estructura financiera, de relaciones personales, salud, que te puede acercar a la "libertad" que todos los reseñados en el libro lograron alcanzar.
Dos constantes de todos los libros de finanzas/inversión que he leído:
1) No necesitas ser un genio para ser financieramente libre, solo debes tener constancia y empezar.
2) Invertir es un juego a largo plazo. No hay atajos, no hay dinero fácil. Quien aguanta es libre.
January 26, 2022
A remarkable book about some of the most remarkable investors of our time. Green spent decades interviewing these investors and wrote a brilliant book that summarizes their lives' philosophies. Despite the significant differences in their investment approaches, most of these investors share similar insights on life and how think. They all have some simple principles that they stick to and never go astray of, until they achieve their goals.
I found these insights in agreement of with what Ray Dalio, another extremely successful investor who wasn't interviewed in this book, shared in his book 'Principles'. Don't read this book expecting specific financial advice or investment methods, but rather life advice to be richer, wiser, and, most importantly, happier.
I found these insights in agreement of with what Ray Dalio, another extremely successful investor who wasn't interviewed in this book, shared in his book 'Principles'. Don't read this book expecting specific financial advice or investment methods, but rather life advice to be richer, wiser, and, most importantly, happier.
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