RWH023: Defensive Investing In Dangerous Times W/ Guy Spier
We Study Billionaires - The Investor’s Podcast Network
Navigating Valuations and Investment Opportunities
This chapter examines the unpredictable nature of company valuations, focusing on the inverted U-shaped trends that show sharp increases followed by steep declines. It also introduces sponsored content featuring investment opportunities in commercial real estate and a financial newsletter.
William chats with renowned hedge fund manager Guy Spier. Since launching the Aquamarine Fund in 1997, Guy has beaten the S&P 500 by 200 percentage points & the MSCI World index by 364 percentage points. He’s also the author of “The Education of a Value Investor.” In this conversation, Guy speaks candidly about the challenges he’s facing, including his fear that Russia’s war in Ukraine could escalate, creating a systemic risk for investors. He explains how he’s positioning his portfolio to survive & prosper in these perilous times, & he shares practical advice on how to maintain equanimity amid all this uncertainty.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
03:56 - How living in a calm & predictable environment helps Guy Spier to invest better.
12:04 - How he resisted the temptation to buy overvalued tech stocks during the recent bubble.
26:11 - Why we must beware of the psychological effects of rapidly rising or falling stock prices.
30:04 - Why Guy refuses to invest in any business that can’t fund all of its growth internally.
44:18 - How going to Berkshire Hathaway’s annual meeting helps to reinforce rational behavior.
53:57 - What Warren Buffett told Guy Spier & Mohnish Pabrai about the perils of debt.
1:13:04 - Why Guy regards the war in Ukraine as a potentially systemic threat to investors.
1:11:56 - Where he’s investing in order to survive & prosper in these times of heightened risk and why he’s invested heavily in China, despite the political & economic dangers.
1:13:55 - Why he’s avoiding weaker countries, including Indonesia & the Philippines.
1:15:01 - How he wrestles with the tricky question of whether to trim or hold his winners.
1:18:17 - Why he’ll never short another stock.
1:19:31 - How he constructs a portfolio that helps him to maintain his emotional equilibrium.
1:43:35 - Why he diverged from Mohnish on the risks & rewards of investing in Turkey.
1:59:08 - What Guy & Mohnish have learned from the stunning success of their friend Li Lu.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
- Listen to William Green’s 2022 interview with Guy Spier on How to Build Enduring Wealth (RWH009) or watch the video.
- Listen to William’s 2022 interview with Guy on High-Performance Habits (RWH010) or watch the video.
- Listen to William’s interview with Ray Dalio on the “Richer, Wiser, Happier” podcast or watch the video.
- Guy Spier’s book, “The Education of a Value Investor” – Read reviews of the book.
- Guy Spier interviews William Green about his book, “Richer, Wiser, Happier.”
- Subscribe to Guy Spier’s Free Newsletter.
- Guy Spier’s podcast and website.
- William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book.
- William Green’s Twitter.
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