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RWH021: Investing Amid Uncertainty w/ Joel Greenblatt, Bill Miller, Howard Marks, & François Rochon

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Feb 5, 2023

Joel Greenblatt, famed for his investment genius, shares lessons on learning from mistakes and adapting in turbulent markets. Howard Marks emphasizes the need for caution to avoid ruin, while Bill Miller offers strategies for weathering brutal losses. François Rochon highlights the importance of emotional resilience and independent thinking in investing. Together, they explore how to navigate uncertainty, improve decision-making, and capitalize on the emotional swings of the market for successful investing.

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ANECDOTE

Sinkhole Investment

Joel Greenblatt invested in Florida Cypress Gardens, expecting a risk-free return.
The gardens fell into a sinkhole, teaching him about unforeseen risks.

ANECDOTE

Bonnie and Clyde Bankruptcy

Peter Lynch invested in a fashion retailer that had a record year.
The movie Bonnie and Clyde changed fashion trends, causing the retailer to go bankrupt.

ADVICE

Diversification is Key

Diversify investments to mitigate unforeseen risks.
Avoid putting all your eggs in one basket.

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Richer, Wiser, Happier

How the World's Greatest Investors Win in Markets and Life

William Green

In Richer, Wiser, Happier, William Green draws on interviews conducted over twenty-five years with many of the world’s greatest investors. The book highlights that the most successful investors are mavericks and iconoclasts who question conventional wisdom and think rationally, rigorously, and objectively. They maximize their odds of long-term success in markets and life by drawing insights from diverse fields such as neuroscience, economic history, psychology, philosophy, and more. Green explains how these investors can teach us not only how to become rich but also how to improve our thinking, decision-making, risk assessment, and resilience, and how to turn uncertainty to our advantage.

A Tale of Two Cities

Julius Julius Seybt

Francisco Manuel GRANADO CASTRO

Marion Leighton

federico alonso

Aedi Abraham

maxi sanchez

jaime arbe

Fred BARNARD

Laura Santamaria

Juan Ramon Torregrosa

monica alonso

Charles Dickens

Alejo García Moreno

Miguel Muñoz

leonardo pablo federico sanchez alonso

J. J. Bernier

Salustiano Masó Simón

Victor G Ambrus

Jose perez

Hablot K. BROWNE

Published in 1859, 'A Tale of Two Cities' by Charles Dickens is a historical novel that contrasts the lives in London and Paris during the late 18th century. The story revolves around characters such as Charles Darnay, Sydney Carton, and Lucie Manette, each dealing with love, sacrifice, and the profound societal changes brought about by the French Revolution. The novel critiques both the conditions leading up to the Revolution and the Revolution itself, highlighting themes of resurrection, sacrifice, and the potential for positive change. Dickens's vivid portrayal of the social disparities and political unrest of the era, along with his iconic opening lines, 'It was the best of times, it was the worst of times,' make the novel a compelling exploration of human resilience and societal issues[3][4][5].

Essays

None

Michel de Montaigne

Montaigne's *Essays* are a seminal work that introduced the essay as a literary form. The book is a personal and introspective exploration of various subjects, including the human condition, skepticism, and the importance of concrete experience over abstract learning. Montaigne's skepticism is reflected in the title *Essais*, meaning 'Attempts' or 'Tests', indicating a project of trial and error and tentative exploration. The essays cover topics such as the education of children, the role of the body, illness, aging, and death. Montaigne's writing style is characterized by multiple digressions, anecdotes from ancient and contemporary sources, and quotations that reinforce his critical analysis of reality[2][5][4].

The education of a value investor

Guy Spier

In this book, Guy Spier narrates his early career struggles in investment banking on Wall Street and his transformation into a value investor. The book covers his experiences working at D.H. Blair, his education at Oxford and Harvard Business School, and the significant influences of Warren Buffett and Charlie Munger on his investment philosophy. It also emphasizes the importance of authenticity, continuous learning, and ethical considerations in investing. The book has been translated into several languages and has sold over 175,000 copies in English.

William Green showcases some of the most valuable insights from four investing superstars who have recently appeared on the Richer, Wiser, Happier podcast: Joel Greenblatt, Bill Miller, Howard Marks, & François Rochon. Here, these famed investors share practical lessons on how to deal with uncertainty & handle the emotional challenges of investing in turbulent times. William adds his own observations, drawing on his conversations with these great investors & with legends like Sir John Templeton, Peter Lynch, & Charlie Munger.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

03:34 - How a disastrous investment taught Joel Greenblatt that anything can happen.

10:34 - What Fidelity legend Peter Lynch learned from a shocking setback early in his career.

12:06 - How to protect ourselves from uncertainty, bad luck, & our own analytical mistakes.

12:49 - Why Howard Marks warns that you shouldn’t push the limits if you want to avoid ruin.

14:48 - How Joel Greenblatt deals with mistakes by learning from them, then moving forward.

28:08 - How Joel handles the “kick in the stomach” when an investment goes wrong.

35:02 - How to succeed by taking advantage of the wild emotional mood swings of the crowd.

38:30 - Why stock pickers must learn to value businesses, buy at a discount, & then wait.

40:17 - How Bill Miller handles the discomfort of brutal losses during the most turbulent times.

43:00 - What Bill advises regular investors to do so they can endure the pain of market mayhem.

44:33 - Why Howard Marks says we need to be honest about our tolerance for risk & loss.

46:06 - How the best investors diversify or concentrate in ways that suit their temperament.

50:07 - Why Howard believes that “emotion is the greatest enemy of superior investing.”

52:35 - How Sir John Templeton thrived by hunting for bargains in the most-hated markets.

1:00:41 - Why Howard Marks thinks he was wrong to be a “knee-jerk skeptic” about Bitcoin.

1:03:30 - How to safeguard against our own biases, hubris, & overconfidence.

1:08:58 - Why François Rochon is convinced that it’s rational to be optimistic about the future.

1:10:51 - What history shows about mankind’s extraordinary ability to find solutions to its problems.

1:21:31 - Why Warren Buffett says that bad news is an investor’s best friend.

1:23:23 - Why Buffett regards babies being born in America today as “the luckiest crop in history.”

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's interview with Ray Dalio, The Changing World Order - TIP410, or watch the video.
Listen to William’s interview with Joel Greenblatt, How to Win the Investing Game - RWH003, or watch the video.
Listen to William’s interview with Bill Miller, Investing Legend Bill Miller on Amazon, Bitcoin, & Buffett - RWH007, or watch the video.
Listen to William’s interview with Howard Marks, Investing Wisely In An Uncertain World - RWH002, or watch the video.
Listen to William’s interview with François Rochon, The Best of the Best - RWH016, or watch the video.
Berkshire Hathaway’s 2015 annual report, featuring Buffett’s optimistic view of the future.
William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book.
Follow William Green on Twitter.

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