TIP626: INTELLIGENT & RATIONAL LONG-TERM INVESTING

W/ FRANÇOIS ROCHON

25 April 2024

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.

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IN THIS EPISODE, YOU’LL LEARN:

  • What led François to hiring Jean-Philippe Bouchard.
  • The foundational investment principles of Giverny’s approach.
  • How François realized so early in his career that you can’t predict the stock market.
  • The tribal gene that sets 5% of investors apart from the rest.
  • How we can be prepared for declines in the stock market.
  • Why his biggest investment mistakes are mistakes of omission.
  • How François views Berkshire Hathaway’s role in his portfolio.
  • How François assesses the strength of a brand.
  • His view on the valuation of today’s market.
  • Why François is so passionate about investing.

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Clay Finck: On today’s episode, I’m joined by Francois 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 percent versus just 9. 2 percent for the benchmark.

[00:00:20] Clay Finck: Francois investment approach is firmly rooted in three principles, patience, humility, and rationality, all of which are discussed in depth during this conversation. During this chat, Francois and I also cover what led him to work with John Philip Bouchard in the early days of Giverny Capital, the foundational investment principles at Giverny, how he realized so early in his career that you can’t predict the stock market, the tribal gene that sets 5 percent of investors apart from the rest.

[00:00:50] Clay Finck: How we can be mentally prepared for declines in the stock market. His biggest investment mistakes. How Francois views Berkshire Hathaway’s role in his portfolio given Berkshire’s massive size. How Francois assesses the strength of a brand. His view on the valuation of today’s market. What lights his passion for investing?

[00:01:08] Clay Finck: his favorite investment books, and so much more. This is a very rare conversation with a phenomenal investor, so I really think you’re going to enjoy this one. With that, let’s dive right into today’s episode with Francois Rochon.

[00:01:25] Intro: Celebrating 10 years and more than 150 million downloads. You are listening to The Investor’s Podcast Network. Since 2014, we studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Clay Finck.

[00:01:51] Clay Finck: Welcome to The Investor’s Podcast. I’m your host, Clay Finck. And today it’s such an honor to be joined by Francois Rochon, who’s the founder and president of Giverny Capital. Francois. It’s such a pleasure to be joined by you today. Thank you for joining us. Thank you for inviting me. So over the past couple of weeks, I had the great pleasure of reviewing your 2023 annual letter and many of your other previous letters, and I highly recommend them to everyone tuning in.

[00:02:17] Clay Finck: I wanted to highlight Francois’s returns here at the start. He started Giverny Capital in 1998 and he’s had a very successful track record since he started his Rochon Global Portfolio in 1993. His annual returns net of fees have been 13. 6 percent versus just 9. 2 percent for his benchmark. But Francois, it wasn’t until 2002 you hired your first employee.

[00:02:42] Clay Finck: Jean Philippe Beauchard. You might have to correct me on the pronunciation there, but I was curious if we could start by telling you the story of how you met him and the qualities you saw in him that made you want to make him the first hire for Giverny Capital.

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