Understanding Risk and Certainty in Investment Philosophy

Kyle Grieve chats with Robert Hagstrom about reflections from Warren Buffett’s early investing mistakes, why GEICO’s insurance float has been setup so perfectly for use by Warren Buffett, why low turnover portfolio’s outperform other options, why looking at stocks as abstractions is such a powerful mental model, how Warren Buffett has made thinking long-term into his own competitive advantage, a detailed history on modern portfolio theory, and why it’s so pervasive today, why investors should focus on certainties in their investing strategy, and a whole lot more!

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

05:30 - Details on Warren's mistakes on Berkshire Hathaway (textile mill) and subsequent mistakes with the Dexter Shoe acquisition.

08:44 - Why low turnover portfolios tend to outperform.

16:20 - Why you can outperform the market over the long term while underperforming the market 50% of the time.

18:29 - The importance of thinking of stocks as abstractions.

27:55 - How Warren Buffett has evolved his investing methods while staying true to his deeply held principles.

43:07 - Benjamin Graham's two most influential concepts Warren still abides by today.

43:07 - The history of modern portfolio theory and why it's so pervasive today.

54:28 - The single most important characteristic that has produced so much of Warren Buffett's success.

59:36 - The characteristics required to outperform the market.

01:08:09 - Why we should spend our investing time thinking about business rather than macroeconomics.

And so much more!

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, Kyle, and the other community members.
• Buy The Warren Buffett Way here.
• Read more of Robert Hagstrom’s articles here.
• Related Episode: TIP360: Inside The Money Mind Of Warren Buffett w/ Robert Hagstrom | YouTube video.
• Related Episode: MI307: Unpacking The Money Mind w/ Robert Hagstrom | YouTube video.
• Related Episode: MI222: How To Invest Like Warren Buffett w/ Robert Hagstrom | YouTube video.
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