Preparing for the unthinkable 90% declines

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Richard Oldfield, founder of Oldfield Partners and author of the investing classic Simple, but Not Easy, is a four-decade veteran of markets whose career arc from Warburg and Mercury Asset Management to running a family office gives him a rare dual vantage point as both portfolio manager and allocator of managers.

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3:00 — Richard shares his origin story: drew to markets at 15, first investment at 18 in Britannia Arrow at 6p. Core belief: “Value investors are born, not made.”

5:00 — Warburg founding story: Sigmund Warburg fled Germany in 1934 and built an institution with a lasting ethos. Richard recalls a personal hour-long meeting with him.

6:30 — The 1987 storm and Black Monday. Walking among fallen trees as the Dow dropped 500 points (25%), Richard saw it as a price movement, not reality — until he returned to the office and was “swallowed up in the gloom.” Lesson: avoid the cacophony.

9:00 — Isaac Newton and the South Sea Bubble: “I can understand the movement of the planets, but not the madness of men.” Don’t make wholesale asset allocation bets.

13:00 — Family office decade: empowerment, privacy, and bravery. The patriarch’s stamp: “Return to sender — you decide.” The freedom to be unconventional.

19:30 — The book’s central paradox: rudiments of equity investing are simple. Professionals obscure them with jargon and self-interest. But half will underperform by definition — fees and all.

22:40 — Patience comes from Latin with three meanings: waiting, suffering, and passion. You need all three.

28:30 — Track records mislead. Never judge a manager primarily by performance. The transaction record reveals conviction and patience. “My favorite holding period for a manager is forever.”

38:30 — The 90% decline must be thought about. Establish your cushion of comfort upfront. Diversify globally.

50:00 — Rip Van Winkle Asset Management: dead investors outperform living ones. Hyperactivity is the enemy; the average fund investor earns 3-4% vs. the fund’s 8%.

56:30 — Take your own medicine. 95% of Richard’s assets are in his own funds. A manager who won’t invest alongside clients is a red flag.

1:04:30 — Success redefined: resume virtues vs. funeral virtues. “You want to have the feeling that they loved and were loved.”

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.