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Morgan Housel

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159
first
2022-03-02
most recent
2022-03-02
sittings or episodes
1
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podcast

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  1. “I think it's easy to overlook is that Brookser is now a $600 or $700 billion company, something like that. So the odds that they are going to achieve market beating returns in any significant way, I think round to zero. And it's a casualty of its own success that when Berkshire was a tiny company in the 70s and 80s, they could go out and buy small cap companies and do things that now, you know, Berkshire's largest investment now is Apple. And I think there's two reasons for that. One is because it's a great company. And it's, of course, it's a great company. Two is that the number of publicly traded companies that can actually move the needle in Berkshire's portfolio is probably like 10. There's probably like 10 companies that are actually investable that you can actually, he could actually look at and say, we can put some money to work there. And Apple just happens to be one of them. So I think the odds that Berkshire will outperform over the long term are very slim. And if it does outperform, it's going to be minuscule. That's okay. There's nothing wrong with that. But I think a lot of people have been disappointed because Buffett became famous in the mid-”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT

  2. “Warren Buffett. Like it sounds so simple when you're like, oh, be greedy when others are fearful. It's so simple. And then you go out and try to do it. And October 2008 rolls around and you're like, oh, this is actually way harder than I thought. So I think it's very easy to oversimplify what he's done. And that's why there are hundreds of books titled, you know, some version of how to invest like Warren.”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT

  3. “I think one of the things that's easy to minimize is that Buffett is a very good communicator. He's a very good writer. He's a very good speaker. That's a big part of why he became a household name when he writes his annual letters, when he goes on CNBC. It's easy to understand anyone can understand it. And that has created the impression that what he does is really simple. And I think it's led a lot of people to be like, oh, I can go out and pick a good business and read a balance sheet and I can do all this too because it sounds so easy when Warren does it. And it's not. There's so much nuance and I think gut feelings that have just accumulated over 80 years of doing this that has made, particularly in the early and mid-2000s, value investing was very popular. It's not in this era, but in the last era it was. And there were a lot of people, a lot of fund managers, a lot of investors who would read a couple warm buffet annual letters and be like, I could do this. I could totally do this. And they go out and try to do it. And there's a reason why quoting Warren Buffett is easier than the next.”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT

  4. “The compounding took his net worth to become worth $20 billion, $50 billion, $100 billion where he is right now. It's just the amount of time he's been doing it for.”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT

  5. “Answer the question How has he done it? And we go into all this detail about how he thinks about moats and business models and market cycles and valuations, which are all important topics. But we know that literally the 99% of the answer to the question, how has he accumulated this much wealth is just that he's been a good investor for 80 years. It's just the time. And if Buffett had retired at age 60, like a normal person might, no one would have ever heard of him. He would have been like one of hundreds of people who retired with a couple hundred million bucks and like moved to Florida to play golf. He never would have been a household name. He would have been a great investor, of course, but there's a lot of great investors out there. The only reason he became a household name is just his endurance and his longevity. That's it. And that's why if you go back to like even the late 1990s, not that long ago, Warren Buffett was known within circles, like within investing circles. People knew who he was, but he didn't become a household name until the early and mid-2000s, which is that's when.”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT

  6. “The math behind it is 99% of his wealth was accumulated after his 50th birthday and 97 came after his 65th birthday, which is a really obvious thing if you think about how compounding works. Like it's always in the extreme later end of years that the numbers just start getting ridiculous. Compounding is just like, you know, it starts slow and then it's boring. And for 10 years, it's boring. For 20 years, it starts to get pretty cool. And then 30 years, you're like, wow. And then 40, 50 years, it's like, holy, like it just explodes into something incredible. There's a friend of mine named Michael Batnick who once explained compound growth. And I think the most easy way to comprehend, which is if I ask you, what is 8 plus 8 plus 8 plus 8, you can figure that out in your head in three seconds. Like anyone can do that. That's no problem. But if I say what is eight times eight times eight times eight times eight, like your head's going to explode trying to think about it. All compounding is never intuitive. And that's why if we look at someone like Buffett, we in the financial industry have spent so much time trying to”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT

  7. “10% annual returns for 50 years. Yeah, you can totally do that and generate an enormous sum of wealth. All compounding is returns to the power of time. Time is the exponent. And so that's to me what you want to maximize. And that's why Warren Buffett is, in my mind, and it seems like an easy answer, the greatest investor of all time, even though his returns are probably not even in the top 20% of annualized returns among professional investors.”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT

  8. “Born Buffett has been investing for 80 years. And so even though he's not the greatest investor of all time in annual returns, he has so much endurance in terms of what he's done that by a mile, he's the wealthiest, which to me that gets into a really interesting point, which is how do you become a great investor? And most people, when they hear that, what they think of is like, how can I earn the highest returns? What are the highest returns that I can earn this year and over the next five years, over the next 10 years? And that's not bad. That can be a great thing to do. But to me, if the goal is to maximize the dollars that you have, what's a way that I can maximize the amount of dollars I accumulate over the course of my life, then the answer to that question, the huge majority of the time is not earning the highest returns. It's what are the best returns that you can earn for the longest period of time, which usually aren't the highest returns that are out there because maybe you can earn like maybe you can double your money this year, but can you do that for 50 years in a row? Like, probably not. But could you earn?”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT

  9. “Well, Tim, it starts with a question, which seems like a really straightforward question of just asking who's the greatest investor of all time? It doesn't seem like a hard question to answer. It should be an analytic answer. It's just like a number who's had the best performance. But then you can split this different ways. So who is the wealthiest investor of all time? That answer is Warren Buffett. Who's the greatest investor of all time in terms of like long-term average annual returns? It's Jim Simons by a mile. And it's not even close. Warren Buffett's long-term average annual return.”

    2022-03-02 · The Tim Ferriss Show · #576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor · IDENTIFIED FROM THE TRANSCRIPT