We Study Billionaires - The Investor’s Podcast Network RWH014: The Resilient Investor w/ Matthew McLennan
Matthew McLennan, an investment professional with a rich background at Goldman Sachs and First Eagle Investments, shares insights on resilient wealth creation. He reflects on his off-the-grid upbringing and how it shaped his perspective. The conversation includes the importance of patience in investing, likening it to gardening, and the value of established businesses. McLennan also discusses why gold may be a better hedge than Bitcoin and emphasizes the need for global diversification in an unpredictable market.
01:54:29
US Dollar Risks
- The US dollar's strength may be temporary, with long-term risks due to trade deficits and global economic shifts.
- Consider diversifying into other currencies.
Global Diversification
- Diversify your investments globally, considering valuations and potential opportunities in different markets.
- Explore markets beyond the US for better risk-reward opportunities.
Recency Bias
- Recency bias can hinder investors from recognizing value in underperforming markets.
- Have faith in long-term arithmetic and be patient with investments in foreign markets.
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Intro
00:00 • 2min
Adventures from PNG to Australia
01:51 • 5min
Navigating Truth and Investment Wisdom
06:53 • 26min
Navigating Risk: The Case for Established Businesses in Investing
32:40 • 5min
Building Resilient Portfolios
38:03 • 11min
Resilient Investments in Uncertain Times
49:33 • 23min
Exploring Investment Dynamics: Bitcoin Versus Gold
01:12:58 • 3min
Navigating Global Currency and Investment Strategies
01:15:41 • 20min
Navigating Complexity: Insights on Learning and Investing
01:36:08 • 18min
Reflections on Investing and Personal Growth
01:54:36 • 2min
#885
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A New Kind Of Science
Stephen Wolfram
In 'A New Kind of Science,' Stephen Wolfram presents a comprehensive study of computational systems, particularly cellular automata, and argues that the study of simple programs can revolutionize various fields of science.
The book, which took over a decade to complete, introduces the Principle of Computational Equivalence and the concept of computational irreducibility.
Wolfram demonstrates how simple rules can generate complex behavior, similar to patterns observed in nature, and discusses the implications of these findings for fields such as physics, biology, and mathematics.
The book is known for its extensive use of computer graphics and its attempt to establish a new foundational science based on computational principles.
#4394
• Mentioned in 11 episodes
Where Are the Customers' Yachts?
or A Good Hard Look at Wall Street
Fred Schwed Jr.
In 'Where Are the Customers' Yachts?
', Fred Schwed Jr. delivers a witty and incisive critique of the financial industry, exposing the myths and misconceptions that pervade Wall Street.
The book humorously explores how financial professionals often prioritize their own wealth over clients' financial well-being, and it offers insights into human psychology and investment behaviors.
First published in 1940, the book remains relevant today, cautioning investors to approach financial advice with skepticism.
#456
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Why Nations Fail
The Origins of Power, Prosperity and Poverty
James A. Robinson
Daron Acemoglu
Daron Acemoglu and James Robinson argue that the success or failure of nations is determined by their political and economic institutions.
They present a comprehensive theory based on 15 years of research, using historical examples from the Roman Empire, the Mayan city-states, the Soviet Union, and various other regions to demonstrate how inclusive institutions foster economic growth and prosperity, while extractive institutions lead to poverty and stagnation.
The authors discuss critical questions such as China's economic growth, the future of the United States, and the most effective ways to help countries move from poverty to prosperity.
#125
• Mentioned in 152 episodes
Thinking in bets
Making Smarter Decisions When You Don't Have All the Facts
Annie Duke
In this book, Annie Duke teaches readers how to make better decisions by treating them as 'bets' on uncertain outcomes.
She emphasizes the importance of distinguishing between the quality of a decision and its outcome, acknowledging the role of luck, and avoiding biases such as 'resulting' and hindsight bias.
Duke draws on her experiences as a professional poker player and combines these with insights from cognitive psychology and other fields to provide tools for making more objective and thoughtful decisions.
The book encourages readers to get comfortable with uncertainty, seek truth through diverse opinions, and learn from outcomes to improve future decision-making.
#199
• Mentioned in 114 episodes
Richer, Wiser, Happier
How the World's Greatest Investors Win in Markets and Life
William Green
In Richer, Wiser, Happier, William Green draws on interviews conducted over twenty-five years with many of the world’s greatest investors.
The book highlights that the most successful investors are mavericks and iconoclasts who question conventional wisdom and think rationally, rigorously, and objectively.
They maximize their odds of long-term success in markets and life by drawing insights from diverse fields such as neuroscience, economic history, psychology, philosophy, and more.
Green explains how these investors can teach us not only how to become rich but also how to improve our thinking, decision-making, risk assessment, and resilience, and how to turn uncertainty to our advantage.
#807
• Mentioned in 43 episodes
History of the Peloponnesian War
Thucydides
Written by Thucydides, this work is a detailed and insightful historical account of the Peloponnesian War. It chronicles the conflict between the Peloponnesian League, led by Sparta, and the Athenian Empire, emphasizing the significant impact of this war on Greek society.
Thucydides outlines the historical context leading up to the war, tracing the evolution of Greek society and detailing the tensions and incidents that led to the conflict.
The narrative examines key events, alliances, and the complex interplay of human ambition and political motivations during the war.
William chats with Matthew McLennan about how to achieve resilient wealth creation, which is a central focus of William's book “Richer, Wiser, Happier." This interview was recorded on August 30, 2022.
IN THIS EPISODE, YOU'LL LEARN:
- 02:36 - How Matthew McLennan grew up off the grid without electricity or hot running water.
- 12:56 - What he learned as a money manager at Goldman Sachs during the dotcom bubble.
- 15:57 - Why investors should try to emulate the patient, selective mindset of gardeners.
- 27:01 - How the most resilient businesses remind Matt of great wines and enduring artworks.
- 35:01 - Why investors need to respect the phenomenon of entropy as an ironclad law of life.
- 44:18 - Why investors should be wary of hot growth stocks, which are liable to fade.
- 46:27 - Why there’s surprising beauty in mundane businesses like bicycle brakes & elevators.
- 57:14 - How to ask the right “splitting” questions as a way to rule out what you shouldn’t own.
- 1:07:07 - Why gold might be more attractive than Bitcoin as a potential hedge against chaos.
- 1:18:25 - Why it’s wise to diversify overseas, where many stocks are much cheaper than in the US.
- 1:23:33 - Why the high-flying US dollar is at risk of weakening in the years to come.
- 1:32:59 - Why Matt is wary of Chinese stocks & thinks China’s ascendancy is not inevitable.
- 1:37:17 - What history can teach us about the growing risk of war between the US & China.
- 1:38:52 - Why it’s critical to set aside time to read, reflect, & distill what you’re learning.
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
- Website for First Eagle Investments.
- Fred Schwed’s classic book, Where Are the Customers’ Yachts?
- History of the Peloponnesian War by Thucydides.
- Hendrik Bessembinder’s study of wealth creation in US stocks from 1926-2019.
- William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book.
- Follow William Green on Twitter.
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