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We Study Billionaires - The Investor’s Podcast Network

RWH023: Defensive Investing In Dangerous Times W/ Guy Spier

Mar 19, 2023
In this engaging discussion, Guy Spier, a renowned hedge fund manager and author of 'The Education of a Value Investor,' shares insights from his successful investment journey. He addresses the systemic risks posed by geopolitical tensions like the war in Ukraine and explains how emotional equilibrium aids his investment decisions. Spier elaborates on the importance of internally funded growth and the dangers of relying on external capital, while emphasizing the psychological effects of market volatility and the need for a disciplined approach to investing.
02:14:05

Episode guests

Guy Spier

Podcast summary created with Snipd AI

Quick takeaways

  • Investors should consider whether a company can fund its growth internally to avoid investing in companies with unsustainable business models.
  • Being part of a supportive and intellectually stimulating ecosystem, attending events like the Berkshire Hathaway meetings, can help resist the temptations and dangers of speculative investing.

Deep dives

The Danger of VC-Style Funding in Public Companies

One of the main ideas discussed in the podcast is the danger of companies in the public markets relying on venture capital-style funding. This refers to companies that take money from the capital markets and invest it in operating losses, banking on the idea of grabbing market share and believing in a winner-takes-all scenario. The key insight is that investors should consider whether a company can fund its growth and investment from its internally generated resources rather than relying on external funding. This checklist item aims to protect against investing in companies that may be overvalued due to their reliance on continuous funding. By ensuring that a company can fund its growth internally, investors can avoid being caught in the frenzy of market manias and mitigate the risk of investing in companies with unsustainable business models.

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