Investing by the Books

#79 Ryan Bunn on The Art of Speculation

Jan 13, 2026
Guest
Ryan Bunn
Ryan Bunn, a seasoned portfolio manager and founder of Reference Equity, dives into the timeless wisdom of Philip Carret's classic, 'The Art of Speculation'. He highlights Carret’s influential ideas on investing, emphasizing his principles of diversification and the importance of understanding market cycles. Bunn also reflects on the evolution of speculation and investing, sharing his top three commandments for modern investors. With insights that still resonate today, Bunn connects Carret's philosophy to the investment strategies of legends like Warren Buffett.
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INSIGHT

Compounders And Three-Part Business Framework

  • Philip Carret framed stocks as owners benefiting from compound interest long before the term "compounder" was popularized.
  • He distilled business quality into Men, Materials, and Money as a first-principles framework for owners.
ANECDOTE

Carret's Long Track Record And Influence

  • Philip Carret founded the Pioneer Fund in the 1920s and ran it for decades, compounding roughly 12–13% annually.
  • Warren Buffett referenced Carret and read his earlier work, which highlights Carret's long-term influence.
INSIGHT

Speculation Is Widespread In Markets

  • Carret treated most equities as speculation in his era and reminded readers that public markets still contain many speculative, short-lived businesses.
  • Ryan uses that to warn that index averages hide risky pockets, especially in small caps.
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