Warren Buffett's Wealth-Building Secrets REVEALED! w/ Robert Hagstrom (TIP635)

Kyle Grieve and Robert Hagstrom discuss Warren Buffett's early investing mistakes, the advantages of GEICO's insurance float for Buffett, the outperformance of low turnover portfolios, the mental model of looking at stocks as abstractions, Warren Buffett's competitive advantage of thinking long-term, modern portfolio theory's history and influence today, the importance of focusing on certainties in investing strategy, and more!

Robert Hagstrom is the Chief Investment Officer at EquityCompass and the Senior Portfolio Manager of the Global Leaders Portfolio. He previously worked at Legg Mason Capital Management. He is the author of 10 books, including "The Warren Buffett Way," which has sold a million copies and is published in 18 different languages.

IN THIS EPISODE YOU’LL LEARN:
00:00:00 - Intro
00:00:51 - Details on Warren's mistakes on Berkshire Hathaway (textile mill) and subsequent mistakes with the Dexter Shoe acquisition
00:07:14 - Why low turnover portfolios tend to outperform
00:12:23 - Why you can outperform the market over the long term while underperforming the market 50% of the time
00:15:21 - The characteristics required to outperform the market
00:17:48 - Benjamin Graham's two most influential concepts Warren still abides by today
00:22:33 - How Warren Buffett has evolved his investing methods while staying true to his deeply held principles
00:34:39 - The importance of thinking of stocks as abstractions
00:45:28 - The history of modern portfolio theory and why it's so pervasive today
00:57:02 - Why we should spend our investing time thinking about business rather than macroeconomics
01:11:27 - The single most important characteristic that has produced so much of Warren Buffett's success

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On We Study Billionaires, we interview and study famous financial billionaires including Warren Buffett, Bill Gates, and Ray Dalio. We teach you what we learn and how you can apply their investment strategies in the stock market.

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[timlangford]

What a great interview. Well prepared host meets successful investor and market historian. I learned so much.

[elderdragon]

i love that quote -- "easier than you think, harder than it looks"

[sagaryk]

Love it closing statement. So so so hard to practice. Thank you 🙏

[HaruSakamoto]

I really enjoyed reading his new phenomenal book!!!

[Brandon.T]

Thank you TIP!!!! Love Kyle as a host.

[_tyler-_-]

I'm inconsistent with the commenting, but the content you guys are putting lately is top notch. Loving it 👌

[gregorypek]

I am a Malaysian, i want take this opportunity to say big thank you to Mr Hagstrom, i have less budget in 2017, so i bought your book/ a second hand one online. .
i learned at least two concepts from your book which improving my value investing skills -1) focus investing 2) kelly criterion ..
then it took me another 6-7 year to adjust my portfolio from 30-40 stocks to 5 stocks which weighting 70% of entire portfolio.
i found this focus investing/buy and hold is very suit my style, easier and can solve SELL problem(buy is easier than sell)
thank you Sir😊

[phantomcreamer]

I hope it doesn't go away while I'm investing. My strategy has been to short modern portfolio theory through options, and I've been turning about 20% YoY returns.

[Soupy]

Coca-Cola hit its hit in July 1998 $2.63 and it wouldn't hit that high again until Nov 2018. That's 20 years before it recovered. Berkshire Hathaway also trailed the S&P 500 for 20 years up until recently while owning Apple. My point is the market ebbs and flows. Entry point is important and so is duration. As Warren Buffett advises most of us should just by the index.

[fplbrunoo]

Actually Buffett during the Partnership days didn't really run a concentrated portfolio. He was diversified then while managing other people's money. It's only with Berkshire that he implemented concentrated positions. I'd say it's because he was buying businesses rather than running a portfolio at Berkshire.

[tarheel]

Another element often forgotten is how Buffett was set up to avoid distractions. His wife cooked for him, kids were told not to interrupt him during work, he wasn't living on the UES talking to other residents about their portfolio. A single maniacal focus!

[kylejaros]

Dude, please stop nodding your head every two seconds. It’s so distracting to the viewer. I’m not even sure I can finish this episode.