In this engaging discussion, legendary investor Robert Hagstrom delves into the timeless principles of investing. He shares insights from his experience with Bill Miller and discusses the philosophical foundations behind Warren Buffett's strategies. Healing the misconceptions around tech stocks and value, Hagstrom warns about the pitfalls of private equity for retail investors. He emphasizes the emotional toll of concentrated portfolios and the importance of mastering reading techniques to deepen investment understanding. Expect a treasure trove of wisdom for both novice and experienced investors!
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insights INSIGHT
Flexible Value Investing Matters
Value investing is not about rigid metrics like low PE or high dividend yield only.
Focusing on absolutes like deep contrarian bets can cause you to miss years of returns.
question_answer ANECDOTE
Accidental Start Inspired by Berkshire
Robert Hagstrom started in finance by accident after failing in political journalism.
Reading the 1983 Berkshire Hathaway report inspired him to follow Buffett's investing approach.
volunteer_activism ADVICE
Avoid Investment Absolutes
Avoid clinging to absolute investment doctrines; adapt to market evolution.
Follow pragmatism: do what works and adjust as new evidence emerges.
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Mastering the Power of the Focus Investment Strategy
Robert G Hagstrom
This book introduces the concept of focus investing, a strategy that has historically outperformed the market. Hagstrom explains how to build and manage a concentrated portfolio, similar to Warren Buffett's approach. He demonstrates how to select a few outstanding companies with high probability of continued strong performance and how to allocate investment funds proportionately. The book also delves into the intellectual framework for managing such a portfolio, including understanding price volatility, market psychology, and the importance of intellectual fortitude. It serves as a companion to Hagstrom's earlier work, 'The Warren Buffett Way', by providing tools for organizing and managing a focus portfolio.
The intelligent investor
Jason Zweig
Benjamin Graham
Written by Benjamin Graham, 'The Intelligent Investor' is a seminal work on value investing that has inspired millions since its original publication in 1949. The book emphasizes the importance of distinguishing between investing and speculation, calculating the intrinsic value of companies, and maintaining a margin of safety. The revised edition includes updated commentary by Jason Zweig, who provides modern examples and insights to help readers apply Graham's principles in today's market. Warren Buffett, a disciple of Graham, has praised the book as 'the best book about investing ever written'.
Investing The Last Liberal Art
Robert G Hagstrom
In 'Investing: The Last Liberal Art', Robert G. Hagstrom delves into fundamental investing concepts by drawing from multiple fields outside of economics. Inspired by Charlie Munger's 'latticework of mental models', Hagstrom argues that good investment decisions cannot be made solely on finance theory. The book discusses how theories from physics, biology, sociology, psychology, philosophy, and literature can be applied to investing research. It also includes a new chapter on mathematics and updates reflecting the economic developments since 2008. The book emphasizes the importance of a broad education and critical thinking in investment performance[1][3][4].
How to Read a Book
The Classic Guide to Intelligent Reading
Edward Holland
Mortimer J. Adler
Charles Lincoln Van Doren
Originally published in 1940 and revised in 1972, this book is a classic guide to intelligent reading. It describes the art of reading as the process by which a mind elevates itself through its own operations on the symbols of readable matter. The authors emphasize active reading, highlighting the importance of keen observation, available memory, range of imagination, and an intellect trained in analysis and reflection. The book provides practical lessons on how to read books effectively, including inspectional reading, analytical reading, and syntopical reading, to achieve a deeper understanding of the material.
Matt Zeigler and Bogumil Baranowski join Robert Hagstrom for a very special hour-long discussion. The episode originally appeared on Excess Returns Podcast, and it is reposted here with permission from the podcast hosts. Enjoy!
Legendary investor and author Robert Hagstrom joins Excess Returns to explore timeless investing principles—and how they’ve evolved in today’s market. In this wide-ranging conversation, Robert shares stories from working with Bill Miller, insights on Warren Buffett’s approach, and the philosophical foundations of long-term investing. He also issues a stark warning about the rising popularity of private equity for retail investors. Whether you’re a Buffett disciple, a fan of focused investing, or just curious about how great investors think, this is a conversation packed with insight. 🔍 Topics Covered: • How Robert accidentally became a money manager • What Buffett’s 1983 letter taught him about investing • Lessons from 14 years working with Bill Miller • Why absolutes in investing can be dangerous • How Robert learned to truly read later in life • Buffett vs. Modern Portfolio Theory: The real debate • Why investors misjudge tech stocks and “value” • Hagstrom’s framework for judging long-term compounders • The real reason most active managers fail • Why private equity returns are misleading investors • The emotional difficulty of running a concentrated portfolio • What Buffett’s surprise CEO handoff really means ⏱️ Timestamps: 00:00 Intro: "Drawdowns don't matter" 01:35 Falling into money management by accident 04:55 The Berkshire letter that changed everything 07:00 Lessons from Bill Miller and pragmatic investing 09:50 Why rigid value investing missed a decade of returns 12:10 Learning how to read and consume information deeply 14:55 Charlie Munger's feedback on Robert’s books 18:00 Buffett’s surprise retirement as CEO 21:00 The legacy Warren still brings in a crisis 24:00 Why Buffett’s consistency stems from deep reading 25:25 Why focus investing works—but is hard to live through 27:45 Performance vs. volatility: Slugging % vs. batting average 33:45 Why active management fails—and how to fix it 36:50 The false promise of private equity for retail 44:55 Why public markets offer better opportunities 50:30 The hardest lesson Hagstrom had to learn 53:00 Why competitive advantage duration is mispriced 55:00 Why investing is Darwinian—and selection still matters
Podcast Program – Disclosure Statement
Blue Infinitas Capital, LLC is a registered investment adviser and the opinions expressed by the Firm’s employees and podcast guests on this show are their own and do not reflect the opinions of Blue Infinitas Capital, LLC. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice.
Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed.
Information expressed does not take into account your specific situation or objectives, and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.
Talking Billions with Bogumil Baranowski 
