YouSaid · the spoken record

Robert Hagstrom

lines on the record: 116
first: 2025-08-17
most recent: 2025-08-17
sittings or episodes: 1
sources: podcast

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“Yeah, no, no, you count me in. It would be my honor and I would love to repay all the favor that you shown me over the years to count me in.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“But it's like we got new stuff to do tomorrow. We got a new puzzle tomorrow, right? We got new things to think about. And to me, that's glorious. And right back at you, I've learned so much from you and your writings. The fact that you do these podcasts, you come to the conference, you speak to the young people. I think we've got to keep it going. This year more than ever, you know, we've got to keep the momentum going because. There are not many of us out there left, you know”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“You know, he read the anna report, you know, and I tell you the story. I know we got to quit. Tony never liked the Warren Buffett Wood. He said in the annual meeting, he goes, I didn't think much of the book didn't do anything new. Really, if you think about the Warren Buffett, it wasn't new. I just rearranged it. And then I put the case studies in there to study if everything lines up. The reason why when he recommended the Warren Buster portfolio at the annual meeting and he put it in his book, his recommended reading, I said to a friend of mine, I said, why do you think Charlie liked Warren Buffett's portfolio so much more than Warren Buffett Way? And he goes, I'll tell you why. You barely mentioned.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“It's going to happen to us all once you cross 90, we can live to 90. I talk to more people who observe 90 is a tough one. 90 is a down shift. But if you kind of got it figured out and you've got too much pressure on you, I'm more worried about not working than I am about working. I don't know what I would do with myself if I wasn't working, writing, and investing. I just love it. And Warren, it's kind of a poster child, and Charlie is a poster child that, you know, they stayed in the crap well into their 90s. God bless them all. So when I look at them, I kind of go, yeah, I'll stick around. You did. I'll tick around. That's how I think about it.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Man, you know, he could have retired anytime he wanted to, but he loved it. He kept in the game. He was active. He was active for 30, 40 years after I wrote the book. And I'm going, well, that's a pretty, I could do that if I wanted to. So that's kind of fun.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And to me, that is the most uplifting of it all, which is I can say in this game, as long as it works between the ears, health-wise and all that other stuff, this could be a great ride for the next 30 years, and I'm looking forward to it. I think it's just, I can't imagine not, I'm a horrible golfer. I don't like to gamble. This is what I love to do. And I love writing and writing and investing work together. So you think I'm a better businessman because I'm an investor. I'm a better writer because I'm an investor and I'm a better investor because I'm a writer. So both of them work. And helping me move my craft forward. And I just love it. And when I look at Warren, I go,”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“So when I wrote the Warren Buck away, he was 64 years old. I'm just a little older than 64 years old. And I'm looking at a guy up until this last year, and he'll still be active in the market. For 30 years, he stayed in the game. To me, and Bill, he's not in the game like he used to be when he was with Opportunity Trust and Value Trust. But for me and Bill and even Charlie, you know, it's the idea that you can stay competitive, stay in the, I love this business, Bill. William, I love this business. I love solving puzzles. I love thinking about odds. I love the competition. I can't think of anything more fun to do over the next 20, 30 years than what I'm doing now, whether I do it in this capacity or another capacity. And I look at Warren and go, Robert, you're a puppy. This guy's been doing it 30 years longer than you. And there's no reason why you can't stay in the game in some form or fashion over the next 30 years.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Well, certainly, you know, handling periodic underperformance and tracking error and tough clients and stuff like that, you know, you can look back at some of these great investors and go, yeah, they probably went through the same thing. Bill Roune and all of them, right? So I'm in good company, right? I'm in good company. I think what I take away from Warren, and this was just a few years ago, Warren will be 95 in August, August 30th. When I wrote the Warren Buffett Way, so that came out in 80. I'm sorry, that came out in 94. So he would have been 64, right? Back then? If I got the math right? 94 years old.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And the way I've settled in life and my viewpoint is, I'll never be as good as Bill or Charlie or Warren. But by studying him, have I become better than I otherwise would, or better yet, am I better than the index that I'm competing against? No, I didn't generate the same returns, excess returns that they did over such a long period. But, you know, the 14 years we did with Bill, at one time the number one growth fund in the country, the last 11 years running the global leaders portfolio were ahead of index. You know, that to me ride has been worthwhile. Not that I will ever achieve their level, and I will never. But by studying them, did I get just a little bit better? Did I get just a little bit better that allowed me to be a little bit more than average? If you got that, then, you know, I'm okay. I'm okay with that.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Well, yeah, I thought about it a lot, and I just finally came to the realization I will never be as smart as Bill Miller. I will never be as smart as Warren or Charlie, and I'll never have their X chromosome, whatever the case may be, that gets them to a level. But I have always argued in the books and stuff like that. You'll never get the, you know, there was a guy Alan Sloane wrote an article in Newsweek way back when called a pig in a poke. They said, well, Robert wrote this book. We don't know, you know, it's like a pig in a gunny snake. You don't know if it's a little bitty pig or it's going to be a big pig, right? And he argued that nobody, just because you wrote a book about Warren Buffett, no way you're going to be able to achieve the same returns as Warren Buffett. And my retort was, well, I agree with that. And I would argue that if I wrote a book about Mozart, I will never be able to compose or play the piano like Mozart. But maybe I get to be a little bit better piano player than I otherwise would have.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“N mutabont, and you'll be able to own them in Robin Hood and different places. And you'll be able to trade them through this tokenization process. But then how do you think about those? Are those different than stocks? Are you going to treat them the same way as stocks? They'll probably treat them the same way as stocks. But if we can find some way to connect people that that stock is a business, how do you determine what is a good business the same way that you determine it's a good stock? And if we can get them to figure that out, but we've been trying for 50 years and for 40 years they said, don't write any more about Warren Buffett giving away all the secrets that didn't seem to matter. It didn't seem to matter at all.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“These are businesses, but you ask people that own common stocks, how many of you own businesses, they cannot put that two and two together. They don't feel it. And Warren felt it because he did both simultaneously. He owned private businesses at the same time, he owned public companies. Now, what will be interesting to this, you know, now they want to do private and they're going to do tokenization on private. How are you going to determine what is the value of the tokenization? Well, at private equity, they should tell you what the revenues are. what the margin are we making progress economically speaking so there could be a way that you could pick up on the experience of owning a private company you could buy you know felon mutt rocket company i'm having a moment and all these different private yeah thank you all these private businesses you can now own”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And then I'd say, how many of you in the room on common stuff? The other 88 hands go up in the air. And I'd say, okay, you 88 people own common stocks. What do you think they are? And they have no answer. The things that you own are businesses, right? People do not think that the stock price, as you said, they have not yet made that connection that I bought Meta. It's a business. It's a publishing business, right? Amazon is an online retailing, advertising data center”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“My best investors in global leaders have always been business owners because we talk the same language. When I talk to a business owner, I say, what's most important to you? And he goes, cash. I got to pay the money. I need my money, right? I need money to come out. I need to pay my bills, whatever the case may be. I said, yeah, I get it. That's what I do. And we talked about, you know, if you borrowed money, you better earn more than what you borrowed, blah, blah, blah. And I said buy foreign business owners are my best clients because we're talking the same language. They get. They seem to say, yeah, it's a stock, but I get it. I own a business. You own a business. We talk a common language. Then I ask the people in the room, how many of your business owners? Maybe a dozen hands go up.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And modern Pork Blue Theory for 30 years until we had the 73-74 blow off. And then the value guys were gone. Warren was gone. He didn't come back to 84 when they did the security analysis 50th anniversary. There was nobody to pick up the pieces except these academicians who'd been sitting in the hallway waving their hand saying, hey, you want to try something new? How about broadly diversified low volatility portfolios with minimum drawdowns? And we'll try to give you a good return on your money. And everybody said, that sounds good. They didn't want to say that's a business. It was all about building a portfolio of stock prices that were non-correlative, that wouldn't bounce around a lot, and over time would give you a good return. They totally divorced investing from the business. And it became managing a portfolio prices, not managing portfolio businesses. So I'll give you the platform. I'm keeping an eye on the clock. I know we're running. When I do a seminar, I say to my people, you know, my best partner.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“100%. Go back when we were talking about Markowitz. I mean, here was this kid. He's a fine young man, that liberal arts major, never owned a business, never owned an individual stock, never invested in the market, just had this view about the economy and risk and return and stuff like that, and took it upon himself to define return as expected yield, which kind of buffets coupons. And he read John Burwilliams, got that. But he said, you know, there's not a really firm definition of risk. And so I think, you know, a suitable definition of risk is variants of return. And he put it into his dissertation, put it into the 1952 paper. Now, what I find interesting, I think we talked about this, which is, well, that's not what Graham said. Graham said risk gets margin to safety. And he wrote about that in 34, and he wrote it again in 49, 51 was the third edition. He wrote about it intelligent investor. And he said, no. Now, as we both know, nobody gave a crap about Merka.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Well, when I do a client event, someone would say to me, they'd say, oh, Jesus, you know, if the market goes down and we've got these wars in the Middle East and God, this is happening and the deficit does happen. I really feel like it's all coming to an end. And I said, well, you think this is it? And he goes, yeah, this is it. I said, well, how much bottled water do you have in the basement? And I said, canned soup, peach preserves, AK-47, anything in the basement? And he goes, no, I said, well, I guess you don't think the world's coming to an end because if you thought the world was coming to an end, you'd be batting down the hatches and getting ready. And I think Warren, here's what again Warren, you know, believing in the American tailwind and the love of this country, we've taken so many body blows that his viewpoint is we can take pretty much any body blow that comes. And the worst one...”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Of the economic returns of what we own, maybe they can glam on to that to say, okay, the price is doing this, but the economics are doing this. I think we'll just hang on. And maybe that would be the saving grace. I don't know.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“But in the last 10 years, they are really bad. If you look at what it's no longer the Swinson market in the 1990s when he was killing it, there was an illiquidity premium. You made huge money back then. If you look at the private equity, whether it's cigar butts, it's the growth companies, it's the venture capital, they're all underperforming. So what have they got left to sell? Once again, the only thing they're selling is no volatility. They've gone to the Achilles Heel of where the client is most at emotional risk and says, I'll solve that problem for you. And they're coming, you know. So my thesis for Guy this year is if you can't beat him, join them. And what we need to do with focus portfolios is treat them like private equity. And if you don't give them anything but price returns to judge their performance, then they're always going to judge you by your price return. But if you give them their price returns, which you're obligated to do, plus the economic returns of what we own and the production.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“He goes, I don't get it. I just don't get it. Why would you buy private equity? Not only are they illiquid, the menu set that you get to choose from in private equity is nowhere near as grand as the opportunity set of public stocks that you can look at. Economics of public stock in most cases are far superior to what you can get in private equity. And three, the market gives you these opportunities periodic to buy these things at huge discounts, which you no longer get in private equity because they're all long cash and short deals. And as Lauren says, I can't compete in this space anymore because private equity is purchased the prices. So private equity gives me ill liquidity. It gives me a menu set that is not as big as the public market. It gives me economic returns that an aggravate or lower than the market. And two, I can never buy them at a cheap price. Why would you sign up for that? And oh, by the way, the performance returns and private equity.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And he pulls out Rudrid Kepling and says, there's the temperament that you need when stocks go down 50%. So, you know, he's just saying. And he said it to him again. The light doesn't stop at yellow. It goes from red to green or green to red. It doesn't stop at yellow. And it's going to happen again in the next 50 years. And when it does, just think about Rudrit Kipling. So it is a temperament thing, it's self-confidence, but it may be, I'm thinking at this point, if we could run 5%, 10%, 5% of modern portfolio therapy money, and generally speaking and focused strategies, maybe those strategies would demonstrate over time their performance characteristics that people would look back and go, okay, they made more money than the S&P 500. Yes, they had a bumpy ride. Yes, there were drawdowns. But boy, this worked out fine. So why don't I make that my private equity? And so we've heard Warren talk about private...”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“That he wants no harm to come to them. He wants, you know, now harm to them and it's permanent capital loss, not short-term quotational loss. But even though he runs a closed-in fund, so to speak, he has an emotional, emotional dedication to his partners to do the right thing. Now, he did, I think, remember that when he did the annual report, it might have been 2017 when he did the Rudro Kipling poem of IP. And he went back from 7374 and there were four different periods of time where Berkshire Hathaway went down at least 50%, maybe one of those 39%, 73, 74, 87. It was 2000, 2000, it was actually 99 to 2000 during the tech thing. And then the financial crisis, where a brick and a hathaway went down 50%, 50%.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“I think it was very painful. Yeah, well, by that time, you know, they were doing the blue chips and the seeds candies. And I think the future was the closed-end fund Berkshire Hathaway. And a lot of people, I think, have it wrong. They say, well, you know, Warren's got it easy. He's got a closed-in fund. He doesn't have to worry about redemption. You underestimate how emotional Warren is about his partners.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Know you diversify by styles, you diversify by market caps, you diversify by US and international. I said, why don't you diversify by running a concentrated low turnover and the rest of it, you can run modern portfolio theory. And just let them run side by side for the next three to five years and let's see what happened. I'd love that bet. So it's about finding the right opportunity with the white people you can make this happen. But it's, as you point out, William, it's very hard for most people to get comfortable with a focused portfolio. It's just a fact.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Handle and I'll take that and then the red, you can farm out to somebody else and do something else. I'm beginning to think that maybe that's the only strategy I have left, which is you almost say, I don't want your money, so they give it to you, but take less than they would otherwise give you or take less than the amount of money that would cause them discomfort. It was JP Morgan. guy talked him on the street and said, God, I'm so worried about the market. And it's going to go down. I know it's going to be great, you know, and I can't sleep. What should I do? JP Morgan said, well, fell down until you can sleep. It's kind of like, you should fell down your portfolio and get to a focus portfolio to some level that you can sleep. And maybe the strategy.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“To convert them, thinking that you can bring them to salvation and doing this stuff. But I guarantee you, if you don't, your life will be miserable because you'll be spending half your time trying to convince people you've already convinced once stay in the game with you. And it's just a horrible thing. So make sure you pick the right part. And so my strategy now is that somebody calls and says, we're going to put a million in. I tell you, I tell you what, I'll make a deal. But $250,000 in, but don't bother me for three years. If that's a deal, I will take that deal, right? But I don't want a million. And all of a sudden, if AI is not working in the fourth quarter of this year because it didn't work in the first quarter of this year, everybody was going in a de-risking way. I don't want you calling and yelling at me about, you know, sell this. Let's get out of this. I don't do that. So give me 10% of your money. Give me 5%. But give me something that you can, you know.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“I said, absolutely, Mr. Lang. He goes, I'm going to give you some advice, but you're not going to take it. I said, no, I assure you, Mr. Wayne, any advice that you give me will be under careful consideration. I will certainly take it to heart. He said, no, you won't. And I finally said, look, just give me the advice and we'll go from there. And he said, well, you're going to start this, you know, portfolio. And you wrote a good book and everybody loves Warren Buffett. So I'm going to get a lot of people who say, yeah, I want to do this. And you'll get a lot of money. And about six months later, about half of them are going to start yelling and screaming at you because you're underperforming or you don't own oil stocks and oil stocks are going up or you don't own this and that and they're all going to be complaining at you. And I want you to fire every single one of them. I said, okay, I'll fire every single, he goes, no, you won't. I said, you're a young man. You've got a family. You've got a mortgage. You're saving for your kids. You're not going to sell those assets. He said, you know, you're going to.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Now, this is my solution to how to deal with the fact that people can't embrace focus investing. So it was right to warm up the way it was published. And on those days, when you might remember the meetings were on Monday because there weren't that many people, I think there were 3,000 people that went to the Holiday Inn Convention Center. And the baseball game was on Saturday, and Warren would go out in the Omaha Royals get up and, you know, he would throw out the first pitch. And we were watching the game along the first baseline. Here walks up Billy Wayne, who I never met, but I certainly recognized him. And I said, Mr. Wayne, I said, you know, I'm Robert Hagstrom. I wanted to introduce myself. I just wanted to, you know, congratulate you on everything that Sequoia Fun had accomplished, the very first focus fund, whatever. They said, Robbie, you're very kind on, you know, congratulations on your book. And I said, well, thank you. And he said, I guess you're going to try to manage money. I said, well, yeah, I guess I'm going to try to manage money and do this one thing. And he said, well, listen, can I give you some advice?”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Maybe why, you know, I don't know. I feel, you know, I don't know what I'm going to say this year when we go see Guy. I kind of feel, William, and that's me on the couch talking to my therapist. I'm getting tired of swinging at the windmills. I mean, you go at the windmill so many times of all the facts and the fence and the obvious things that you convey. And basically, you know, people are just saying, no, I can't do it. I just cannot do it. So, you know, then the argument, it is, well, there's your excess return. But you got to find, you've got to find those people. I didn't tell you, but Bill Ruaine story yet, did I?”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And he writes about that he was never bothered by drawdowns. He said, you know, I was raised by a family who had to deal with bumps. We dealt with bumps in life. That's who we were. And I was trying to think his dad was an attorney, right? And his grandfather was a judge. Trying to think, well, what bumps in life did you have that? Prepared you for the psychology of having bumped in the stock market. But that was Charlie. Charlie said, you know, and he said something like if you can't handle the idea, you know, going down 50% somewhere in your career as an investor, then you deserve the mediocre results that you're going to get for trying to avoid it.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Prospect theory. I mean, it is a fact of life that people wait a unit of loss twice as grievous as they do one unit of gain. And I don't know, I think at the end of the day, this is our kryptonite. We just can't get over this. And I don't know, you know, I don't know what happens from here.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And secondly, he both owned private companies and public companies at the same time. And he chose to treat his public company in the same way he chose to treat his private company. Analysis and performance evaluation and management. The lessons learned in private companies were the same lessons learned in as public companies. And he treated them both the same. Nobody else has had that, you know, kind of experience. And Warren says, I think we'll just do it this way. And Charlie said, I think we'll just do it this way. But there are other people that are very, very smart that basically say, yeah, that makes all the sense in the world. But when the price shows up, they just go weak meat.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“To well, okay, volatility has been emphasised. Maybe private equity is going to take over the whole world because they don't have volatility. They're going to be able to sell it to anybody, right? But Warren, what was so brilliant about Warren? And I said this in the book, is that I think two things happen to bless Warren of many things that have blessed him over life. One, is that he was never raised on modern portfolio theory, so he didn't have to unlearn it. Same with me. I wasn't raised on finance in accounting. I never had to I never had to unlearn modern portfolio theory.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And the focus investing can beat the market, but it has the baggage of eye tracking error and standard deviation and periodic underperformance. Why wouldn't you just a rational person say, let's do the focus investing and put the rest of it in an index fund? And as simple-minded as that, you would be shocked at still how many thoughtful consultants still can't wrap their hands around it. And when I talk to people, and I'll leave them out of the conversation, when I talk to people that actually recommend it, they want to recommend focus portfolios. They want to recommend concentrated low turnover bets, but the client understands the mathematics of doing so, but they still freak out on drawdowns. They still freak out on standard deviation. They still freak out on volatility. And, you know, it is that the kryptonite, you know, the kryptonite of our industry, which is people cannot handle volatility. So, you know, then we get back.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Active manager. It's atrocious. I mean, it's just absolutely atrocious. We all knew it intuitively. Long-only managers. It doesn't matter if you're big cap, mid, small, value growth core. It doesn't matter internet is domestic. It's atrocious. Atrocious, horrible. So you say to yourself, okay, if modern workflow theory, broadly diversified portfolios, low tracking error, low correlation, but they can't beat the market.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Also, found You also increase the probab That's it, right? So you've got to be a half decent stock picker. So if you just kind of say, okay, if you can give us that, we can do an average job of picking half decent stock. What Charlie said, I think it was back in 1997, and I wrote it down again. He said right in the end of a meeting, he's talking about the Berkshire system of managing concentrated low turnover portfolios. He said, if we are so right in the Berkshire system, why are so many imminent places so wrong? Well, then that opened it up, right? All right. So let's get to the heart of the matter. And that's when I drove down into modern portfolio theory, which basically hoodwinked everybody into thinking we've got the perfect strategy for you to get through a bumpy ride, non-correlative, broadly diversified. You won't have to worry about drawdowns. And we're going to give you good performance. But then when you look at the performance and you go through the SPIVA data, the S&P versus.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Heard the odds that you would outperform, it also increases the odds that you would underperform so stockpicking becomes critical. And so it started to all add up that, you know, the optimal strategy is to own fewer stocks than own more stocks. And right then, so that was kind of 1998 going into 1999, we came out with that and said, you know, this is the way based upon these facts, very simplistic facts. This is the way you ought to do it. I think where it then jumped a big notch in my mind, William, is that when Kramer's Martin Kramerson had a Justa wrote Baha'i active shear papers in 2009, so 10 years after we wrote Warren Book of the Portfolio, they come out with high active sheer. And they do an academic rigorous study of a gazillion mutual funds and break it down and say, sure enough, fewer stocks you have in the portfolio, the higher likelihood that you're going to outperform. A couple years later, they do high active share and low turnover.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Plain spoken about it and simply, you know, he said wrong, we're just focused investors. We just focus on a few companies. And so he didn't give me the answers. He just said, this is what we do. And go for you. So the thing that we did was we started looking at those people that were doing it. And you go back to John Maynard Keynes at the chess fund and you had Charlie's track record. You had Sequoia Fund track record. You had Lou Simpson's track record. And you put it all together. All of them fantastic long-term track records. All of them except Buffett had periodic underperformance and, you know, frequency magnitude issues and stuff like that. But clearly, it was an optimal strategy. Then we did 3,000 portfolios for 250 stocks, 3,000 for 150, 3,000 for 50 and 3,000 for 15 and ran it through the computer through the, you know, I think it was 2,000 stocks. And sure enough, to the degree that you reduced the number of stocks in your portfolio, it increased the likelihood.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“As I said, when I wrote the warm buffer away, I don't think I even mentioned portfolio management. I think I said something like Warren buys and holds for a long period of time and he never sell. After we wrote the Warren by the way, which was all about stock selection, I remember watching the days when I was probably watching more financial news networks than I ever do today. You have these people come on and say, well, I really like to buy companies with favorable long-term prospects. Simple and understandable. You know, we like cash earnings and good returns on capital. We want management that looks after our interest and we're all buying them for less than the work. And I go, that's great. That's a warm by the way. They got it. This is perfect. And then you look at the portfolio and it's 100 stocks and 100% turnover ratio. And you go, wait a minute, this isn't right. You're talking the talk, but you're not walking the walk. And so when I told Warren we were going to do the book, you know, he was one of my first interviews and he was very.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“AI can't write this book yet But this is where I think the secret, and Moisin's competitive advantage period and Porter's five forces, but AI can't get there yet.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“figure that out maybe there'll be a model that tells you you know how to do that and I actually wanted to show you that because when you say Bruce Greenmall I'm reading this for about the 10th time competition demystified”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Struggling to get there. And so it's a harder puzzle today than it was 10 years ago when we were buying this stock. Today it's a little bit trickier than how to think about it. But it's all about right sizing the bet. I very rarely go from zero to four or four to zero. I mean, I work it up and then I work it down looking for disconfirming evidence along the way. And we're always looking for disconfirming evidence. Who else has an idea that you can go on Bloomberg and get all the analysts? And these are short-term type things. But I'm looking for the outlier. Who thinks this is going to the moon and what's your thesis? And who thinks this is going down 50% from here and what's your thesis? And then we try to block those off and then start working into the middle to try to figure things out. So, you know, Bill says it's art and science, there's a little bit of the art side to it, and will AI.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Overbet. So I get that. I mean, that makes pretty sense. So it's still down there. We saw Paul Johnson out at Guy's conference as well, and he did a presentation on Apple. And he's working on a book, I believe. He'll be out soon, I hope, on how to value growth. So when we bought Apple 2014, and I guess that was about the same time that I think Ted Wexler bought it 2016, but you could have bought Apple and it was discounting zero growth. It said basically the handset business is flat. But you looked at the service business that was growing at 30%, 40% per year with returns on capital that were 100%. And that was 20% of revenues. And you can say to yourself, well, GF, just the app store works out and the handsets don't move. We still can make money here. And that's the way we thought about it. What's gotten to be trickier, though, is now that the price of Apple is really about 15% growth. And, you know, it's.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“You know what I will do, and I'm not saying any of these guys are wrong. They're much smarter than I am, but I would say I go through this iteration. The first thing, so you were saying, you know, let's just make it easier, a 25-stock portfolio, 4% of the average bet, 2% is the entry bet that goes to four. Four, four is going to two to zero. And then you have your over bet. So today, you know, NVIDIA is an over bet, Amazon's an over bet and stuff like that. But if we apple was an overvet for me, you know, end of last year, the beginning of this year. And so it was seven, eight percent. Now it's a three. And I wasn't telling it just because Warren, you know, we were selling it because we were concerned about the app store and what was the revenue growth of the app store. We knew AI was an issue and stuff like that. So there was a point in Apple that you basically felt that it wasn't an 8%.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Because they'd be the underperformed for a while or there's been a big drawdown or something. And, you know, here's my important theory and variance and launch aversion, condom and diversity, all this stuff all the way down the line. Once again, Simpson was right. I don't think the difficulty lies in making these individual bets as much as it is hanging on to them when the road gets bumpy. And that's, and here's Bill, right? How many bumps did he? He go through a lot of bumps in Bitcoin. He goes through a lot of bumps in Amazon. He goes through a lot of bumps and we can go down the list. What was it about him that he said, say, the courts?”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“The market wealth capitalization underperform monthly 50% of the time. Quarterly, tip this off to the side, 60% of the time, yearly, 63% of the time. Drawdown. The drawdown, well, actually they had 102 different periods of 20% drawdowns over the time period on average. Then we looked at the worst percentage draw bounds from trading high to trading low, averaged 41%. So here you have a portfolio that's going to kill the market. You basically are only going to win 50% to 60% of the time monthly and quarterly. And along the way, you're going to have 40% drawdown. Who holds that football? Who holds those individual stocks? And that, to me, is a missing piece of our puzzle to figure out, which is there's some good businesses out there, but I think we cut them loose too fast.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Underperformers out of the 35 and 17 outperformers, the one oddball is General Electric that separated itself. So we took that. So we took the 17 outperformers. We said, okay, if you had no premonition that these would be the biggest contributors to the stock market capitalization, these were good businesses, leaders in their industry and stuff like that. And you decided that you were going to buy all 17 equally weighted over the 10 years, what would have been the right, you know, what would have been like. And of course, it crushed the market. I mean, the market was up 200%. These guys were up 800%. You took out NVIDIA, which was amazing up. 28,000%. I think the portfolio was up 600%. So clearly home run territory. Then we looked at it, you know, as I was saying earlier. We said, all right, with the frequency of the outperformance on a monthly basis, these 17 biggest contributors”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“Since the Great Depression or something, he looked at all the stocks and figured out that, you know, two-thirds of them don't even beat the treasury bills over time and only a small one percent actually add most of the value of what stock market capitalization is. And he updated the paper 1990 through 2020. So it was a 30-year lookback. And he took out the 50 best contributors to the total market capitalization over the period. 35 of them were U.S. stocks. 15 were not. So I looked at the 35 U.S. stocks. And then I said, okay, in the last 10 years of these 35 stocks, what's been the performance? And there have been...”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“And that's where I've been spending a lot of time with, which is, you know, once again, is it going to last a decade? Let's get that park right, right? Can this last a decade and we can make money for a decade? That's a total different set of thinking models. But then the question that I'm spending time on, and I'm talking to Michael about this and other ones, is what is the ride like when you said, okay, I got T1 to T100. I made 100 times my money. What was the ride like along the way? And what kind of character temperament, belief, confidence did you needed to have to keep the bet on, right? That to me is a fascinating thing. So, you know, Hendrik, bet reminder, the professor from Arizona State University, so I've been going through his research and stuff like that. And he's glad it's one, I think he did, it's the same thing that he does, which is, I think.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT
“But he would right size the bet. I mean, I bet if you and I went back and looked at Amazon, I don't think Amazon in 2001, 2002, I don't know, I'm just speculating. I don't think Amazon was 50% of its net worth in 2002. It wasn't. But I mean, it could have been a 5% bet. But when you buy it at nine. I think he had $9 Amazon on Lake Mathan Opportunity Trust, $9 Amazon. You know, you can buy a few hundred thousand shares and it's not going to be your entire net worth. You can buy a few million shares and it may not be a big part of your net worth. But once again, here's the Lou Simpson, right? One of my favorite lines from Lou Simpson is that it's not difficult to identify, you know, he would say, not identify good businesses. The hard part is holding on to them for a decade.”
2025-08-17 · We Study Billionaires · RWH060: What Buffett, Munger & Bill Miller Taught Me w/ Robert Hagstrom · IDENTIFIED FROM THE TRANSCRIPT