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TIP626: Intelligent & Rational Long-Term Investing w/ François Rochon

Apr 26, 2024

01:10:51

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Successful investor François Rochon discusses his investment principles of patience, humility, and rationality. Topics include market unpredictability, mental preparedness, contrarian investing, brand strength assessment, and long-term investment strategies with a focus on Berkshire Hathaway's role in the portfolio.

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Quick takeaways

Success in investing requires patience, humility, and rationality as emphasized by François Rochon.

Avoiding attempts to predict the stock market and focusing on understanding businesses are essential for long-term success in investing.

Staying calm during market downturns, learning from past mistakes, and optimizing portfolio balance are crucial for successful investing.

Deep dives

The Importance of Patience, Humility, and Rationality in Investment Approach

Fran Schwa-Roshan's investment approach is rooted in patience, humility, and rationality, which have been critical to his success. He emphasizes the significance of patience in the investment business, highlighting how humility plays a crucial role in recognizing the unpredictability of the stock market and the economy. Rationality is key to focusing on productive investment activities, such as finding companies within one's circle of competence and acquiring them at attractive levels.

Superior Returns through Non-conformity

01:20

Different Strengths in Business Orientation

01:45

Performance Reflects Ownership

01:46

Finding the Right Balance in Investment Diversification

01:12

Introduction

2min

Building Giverney Capital: Emphasizing Patience and Rationality in Investing

17min

McDonald's Growth and Investing Against the Crowd

8min

Contrarian Investing and Managing Portfolios During Financial Turbulence

14min

Long-Term Investment Strategy and Brand Strength in Investing

11min

Navigating Market Valuations and Long-Term Investing Strategies

20min

The Origin of Giverney Capital and the Guest's Artistic Inspiration

3min

On today’s episode, Clay is joined by François Rochon to discuss how he’s managed to vastly outperform the market over the past 30 years. Since he started the Rochon Global Portfolio in 1993, his annual returns net of fees have been 13.6%, versus 9.2% for the benchmark.

François’s investment approach is firmly rooted in three principles — patience, humility, and rationality — which are discussed in depth during this conversation.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

02:17 - What led François to hiring Jean-Philippe Bouchard.

06:19 - The foundational investment principles of Giverny’s approach.

10:23 - How François realized so early in his career that you can’t predict the stock market.

19:53 - The tribal gene that sets 5% of investors apart from the rest.

29:29 - How we can be prepared for declines in the stock market.

35:37 - Why his biggest investment mistakes are mistakes of omission.

40:54 - How François views Berkshire Hathaway’s role in his portfolio.

45:27 - How François assesses the strength of a brand.

56:02 - His view on the valuation of today’s market.

68:15 - Why François is so passionate about investing.

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.
Giverny Capital’s Letters.
Learn more about the Giverny Capital.
Books Mentioned: How to be Rich, Money Masters of our Time, The Craft of Investing.
Related Episode: RWH016: The Best of the Best w/ François Rochon | YouTube Video.
Follow François on LinkedIn.
Follow Clay on Twitter.
Check out all the books mentioned and discussed in our podcast episodes here.
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