We Study Billionaires - The Investor’s Podcast Network

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

Apr 26, 2024

François Rochon, founder and president of Giverny Capital, is a veteran investor renowned for his long-term strategies. He shares how patience, humility, and rationality have helped him achieve annual returns of 13.6% since 1993. The conversation touches on the impossibility of predicting stock markets and the psychological aspects that differentiate successful investors from the herd. Rochon also discusses evaluating brand strength with examples like McDonald's and Lululemon, emphasizing a thoughtful approach to navigating market declines and valuing companies.

01:10:51

Episode guests

François Rochon

AI Summary

Highlights

AI Chapters

Episode notes

Podcast summary created with Snipd AI

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.

Investing Philosophy and Value Approach Discussed

03:30

Different Strengths in Business Orientation

01:45

Superior Returns Through Being Contrarian

01:15

Finding the Right Balance in Investment Diversification

01:12

Intro

2min

Building Guverni Capital: Patience and Partnership

17min

Investing Insights: McDonald's Growth and Vacation Home Management

5min

The Psychology of Investment: Embracing Divergence

22min

Sponsorship Highlights and Financial Opportunities

2min

Evaluating Brand Strength and Growth Potential in Lululemon

5min

Valuing Masterpieces: Investment Insights

22min

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.
Enjoy ad-free episodes when you subscribe to our Premium Feed.

NEW TO THE SHOW?

Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok.
Check out our We Study Billionaires Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.

SPONSORS

Support our free podcast by supporting our sponsors:

HELP US OUT!

Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Learn more about your ad choices. Visit megaphone.fm/adchoices

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Get the Snipd
podcast app

Unlock the knowledge in podcasts with the podcast player of the future.

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode

Save any
moment

Hear something you like? Tap your headphones to save it with AI-generated key takeaways

Share
& Export

Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more