RWH021: INVESTING AMID UNCERTAINTY

W/ JOEL GREENBLATT, BILL MILLER, HOWARD MARKS, FRANÇOIS ROCHON

03 February 2023

William 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.

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IN THIS EPISODE, YOU’LL LEARN:

  • How a disastrous investment taught Joel Greenblatt that anything can happen.
  • What Fidelity legend Peter Lynch learned from a shocking setback early in his career.
  • How to protect ourselves from uncertainty, bad luck, & our own analytical mistakes.
  • Why Howard Marks warns that you shouldn’t push the limits if you want to avoid ruin.
  • How Joel Greenblatt deals with mistakes by learning from them, then moving forward.
  • How Joel handles the “kick in the stomach” when an investment goes wrong.
  • How to succeed by taking advantage of the wild emotional mood swings of the crowd.
  • Why stockpickers must learn to value businesses, buy at a discount, & then wait.
  • How Bill Miller handles the discomfort of brutal losses during the most turbulent times.
  • What Bill advises regular investors to do so they can endure the pain of market mayhem.
  • Why Howard Marks says we need to be honest about our tolerance for risk & loss.
  • How the best investors diversify or concentrate in ways that suit their temperament.
  • Why Howard believes that “emotion is the greatest enemy of superior investing.”
  • How Sir John Templeton thrived by hunting for bargains in the most-hated markets.
  • Why Howard Marks thinks he was wrong to be a “knee-jerk skeptic” about Bitcoin.
  • How to safeguard against our own biases, hubris, & overconfidence.
  • Why François Rochon is convinced that it’s rational to be optimistic about the future.
  • What history shows about mankind’s extraordinary ability to find solutions to its problems.
  • Why Warren Buffett says that bad news is an investor’s best friend.
  • Why Buffett regards babies being born in America today as “the luckiest crop in history.”

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] William Green: Hi folks, It’s lovely to be here with you again. Today’s episode of the podcast is a little different from my usual episodes. As you know, I typically like to do long in-depth interviews with great investors, but today I want to look back at several of the most important interviews I’ve done over the last year so that I can highlight a handful of lessons that I think are particularly valuable.

[00:00:23] William Green: Why do this? I don’t know about you, but I tend to feel overwhelmed by the amount of information I consume these days from books and newspapers and magazines, podcasts, TV, blogs, social media. I personally subscribe to the New York Times and the Wall Street Journal and the Financial Times and Bloomberg News and Barron’s and the New Yorker and the Economist and I’m also an obsessive reader of books and listener to podcasts. So I’m just bombarded with information and at a certain point I find that there’s just too much noise and it’s easy to lose sight of what actually matters. So today I want to stop and take stock.

[00:01:05] William Green: I want to look back and focus on a few really key insights. That have stood out from my conversations with lots of great investors over the last year of this podcast. In particular, I’m going to focus on insights from four great investors, Howard Marks, Bill Miller, Francois Rochon, and Joel Greenblatt. I want to talk about why I think these [00:01:30] insights matter, why they’re so important that I personally need to internalize them and never forget them, and obviously I hope you’ll find them equally helpful in your own investing and life.

[00:01:42] William Green: The overarching topic that we are going to explore together is this, how can you and I invest in a successful and truly resilient way? In such an uncertain, risky, and unpredictable world. For me, this question of how to deal with uncertainty and make good decisions when the future is unknowable is one of the great questions, not only in investing but in life.

[00:02:09] William Green: And it feels particularly timely right now at a time when so many of us have been rattled by economic and political turmoil and geopolitical turmoil with the war in Ukraine and the energy crisis and climate change, extreme weather events, and also obviously lots of market volatility over the last year.

[00:02:30] William Green: We’re also going to talk about the related question of how to handle the emotional intensity of investing, because really as you and I both know that so much of the game of investing is about managing our emotions, whether it’s fear and greed, or jealousy or anxiety. And we’ll also talk about why it’s actually rational to be optimistic about the future, despite all of these storms and stresses [00:03:00] along the way.

[00:03:01] William Green: So over the next hour or so, I’m going to play you six clips from conversations that I’ve had over the last year with these four legendary investors. And along the way I’m going to add some comments of my own and we’ll try to explain what it is that I find so valuable about the lessons they’re sharing with us.

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