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TIP653: Track Record and Risk w/ Guy Spier

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Aug 18, 2024

Guest

Guy Spier

Guy Spier, a renowned value investor and author of "The Education of a Value Investor," shares insights from his impressive 26-year track record that outperformed the S&P 500. He discusses the delicate balance between luck and skill in investing, urging the need for honesty in evaluating performance. Spier also emphasizes the importance of risk awareness and authenticity in investment strategies. With reflections on his famous lunch with Warren Buffett, he underscores the value of genuine relationships in investing and the benefits of embracing personal challenges.

02:22:43

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INSIGHT

Myths We Live By

Joseph Campbell's work reveals how myths shape our motivations and interpretations of the world.
Recognizing these "myths to live by" allows for more conscious, wiser decisions.

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ANECDOTE

Acknowledging Luck and Mistakes

Despite outperforming the S&P 500, Guy Spier acknowledges the role of luck and past mistakes.
He believes his performance falls in the middle of a thousand possible reruns, showing humility.

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ADVICE

Dollar-Weighted Returns

Use dollar-weighted returns to accurately assess investment performance.
Ignoring cash allocation and position sizing misrepresents real-world outcomes.

Get the Snipd Podcast app to discover more snips from this episode

Royalty and Business: Shaping Connections

01:50 • 14min

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Cultural Rules and Identity in Sports

16:07 • 11min

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Luck vs. Skill in Investing

26:41 • 13min

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Embracing Personal Challenges and Market Opportunities

39:22 • 4min

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Investing with Integrity

43:30 • 8min

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Navigating the Complexities of Investment Risk

51:21 • 26min

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Exploring Attractive Financial Opportunities and Business Solutions

01:17:43 • 4min

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Navigating Investment Complexities

01:21:30 • 7min

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The Birth of ValueX: Building Community in Investing

01:28:56 • 15min

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Balancing Fame and Authenticity

01:44:26 • 17min

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Navigating Meaningful Connections

02:01:01 • 26min

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The manual of ideas

John Mihaljevic

The Manual of Ideas provides a structured approach to value investing, detailing nine strategies including deep value, sum-of-the-parts analysis, and Greenblatt’s magic formula. The book offers practical advice and insights from over 100 successful fund managers, making it a valuable resource for both new and experienced investors. It emphasizes adopting an owner’s mindset and focusing on business fundamentals rather than market fluctuations.

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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.

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Think and Grow Rich

Napoleon Hill

Published in 1937, 'Think and Grow Rich' is a seminal work in the self-help genre. The book is the result of over twenty years of research by Napoleon Hill, who studied the habits and achievements of more than 500 successful individuals, including Andrew Carnegie, Thomas Edison, and Henry Ford. Hill distills their wisdom into thirteen principles that, when practiced with persistence and faith, can transform dreams into reality. These principles include the power of desire, faith, specialized knowledge, organized planning, and the role of the subconscious mind. The book emphasizes the importance of maintaining a positive mental attitude, setting clear and specific goals, and taking consistent action to achieve success. It also explores the concept of the 'Master Mind' alliance and the need to overcome fears and doubts to achieve one's objectives.

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The education of a value investor

Guy Spier

In this book, Guy Spier narrates his early career struggles in investment banking on Wall Street and his transformation into a value investor. The book covers his experiences working at D.H. Blair, his education at Oxford and Harvard Business School, and the significant influences of Warren Buffett and Charlie Munger on his investment philosophy. It also emphasizes the importance of authenticity, continuous learning, and ethical considerations in investing. The book has been translated into several languages and has sold over 175,000 copies in English.

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Give and Take

A Revolutionary Approach to Success

Adam Grant

In 'Give and Take', Adam Grant examines the surprising forces that shape success, highlighting the differences between givers, matchers, and takers. Givers contribute to others without expecting anything in return, matchers aim to trade evenly, and takers strive to get as much as possible from others. Grant uses cutting-edge evidence and captivating stories to show how these styles impact success across various industries. The book emphasizes the benefits and challenges of adopting a giver mentality and provides practical advice on how to build successful relationships and achieve extraordinary results.

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How will you measure your life?

Clayton M. Christensen

In 'How Will You Measure Your Life? ', Clayton M. Christensen, along with co-authors James Allworth and Karen Dillon, explores how business principles can be applied to personal life to achieve happiness and fulfillment. The book addresses three key questions: how to ensure happiness in one's career, how to build enduring relationships with family and friends, and how to maintain integrity. Christensen emphasizes the importance of allocating time and energy wisely, avoiding the trap of short-term gains, and focusing on long-term personal and relational investments. He also discusses the 'jobs to be done' concept, encouraging readers to understand and fulfill the emotional needs of those in their lives.

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The Parasitic Mind

How Infectious Ideas Are Killing Common Sense

\"Gad Saad\"

In 'The Parasitic Mind,' Dr. Gad Saad exposes the harmful effects of 'idea pathogens'—irrational and logically flawed ideas that are spreading through universities and enforced by the tyranny of political correctness. These ideas, Saad argues, are endangering fundamental freedoms such as freedom of thought and speech. The book is a call to action, encouraging readers to use critical thinking and courage to defend reason and intellectual freedom. Saad discusses various topics including university 'safe spaces,' gender ideology, postmodernism, and the decline of intellectual diversity in academia, all while advocating for the importance of questioning and challenging prevailing dogma.

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Sapiens: A Brief History of Humankind

A Brief History of Humankind

Yuval Noah Harari

In 'Sapiens: A Brief History of Humankind,' Yuval Noah Harari provides a sweeping narrative that covers 13. 5 billion years of pre-history and history. The book begins about 70,000 years ago with the appearance of modern cognition and explores the Cognitive, Agricultural, and Scientific Revolutions that have shaped human history. Harari examines the role of evolving humans in the global ecosystem, the rise of empires, and the impact of human activities on the planet. He also looks ahead to the future, discussing how humans are now bending the laws of natural selection and acquiring the ability to design not only the world around them but also themselves. The book is known for its original approach, integrating history and science to reconsider accepted narratives and connect past developments with contemporary concerns.

#12960

• Mentioned in 4 episodes

Myths to Live By

Joseph Campbell

Myths to Live By is a collection of essays based on lectures delivered by Joseph Campbell between 1958 and 1971. The book analyzes the effect of myth-making and belief on humanity's spiritual life, differentiating between Western and Eastern myths while tracing their fundamental universal properties. Campbell discusses the archetype of the 'hero' and how myths adapt to local requirements. He also explores the usefulness of past mythologies in contemporary life, arguing that even obsolete religions reveal fundamental features of human nature. The work speculates on the future of human relations and the role of myths in uniting humanity despite modern anxieties and the influence of science.

In this episode, Stig Brodersen talks with Guy Spier about how he has achieved his impressive track record and whether you can adjust a track record for luck. Since 1997, Guy Spier’s fund has performed 9.3% vs. 8.7% annually for the S&P500.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

02:05 - What we can learn from royal families about moats in business.

26:43 - How Guy Spier’s track record would look if we adjusted to luck.

40:20 - If Guy would ever stop managing money.

49:49 - How to think about risk in your portfolio.

52:31 - Why it’s risky not to take risks.

56:40 - Why Guy wants to be truthful and honest and not present himself in the best possible light.

1:14:31 - How to think about position sizing.

1:21:53 - What is VALUEx?

1:37:23 - How Guy feels about being famous in the value investing community.

1:55:46 - How to live a life with givers, matchers, and takers.

Disclaimer: Slight discrepancies in the timestamps 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, Kyle, and the other community members.
Stig’s interview with Guy Spier about investing and life | YouTube Video.
Stig and Preston’s interview with Guy Spier on his book, The Education of a Value Investor | YouTube Video.
Stig and Preston’s interview with Guy Spier about his lunch with Warren Buffett | YouTube Video.
Guy Spier’s book, The Education of a Value Investor – read reviews of the book.
Subscribe to Guy Spier’s Free Newsletter.
Guy Spier’s podcast and website.
Adam Grant’s book, Giver and Take – read reviews of this book.
Learn more about ValueX in Dubai November 7-9.
Check out all the books mentioned and discussed in our podcast episodes here.
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