It's OK to Be Wrong

Stansberry Investor Hour

Stansberry Research

America, How, To, Crash, Money, Learn, Stansberry, Income, Research, Debt, Stocks, Porter, Business, Realestate, Banking, Investment, American, Investing, Invest, Howtosave, Sjuggerud, Ferris, Eifrig, Jubilee, Buck, Sexton, Market, Bonds, Churchouse, Savings, Options, Lashmet

4.4 • 677 Ratings

🗓️ 25 July 2022

⏱️ 68 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

This week, Dan brings a fresh voice to the show: seasoned value investor Gary Mishuris.

Gary is currently the managing partner and chief investment officer of Silver Ring Value Partners, an investment firm that focuses on long-term intrinsic value investing. He has more than two decades of portfolio and asset-management experience plus degrees in computer science and economics from the Massachusetts Institute of Technology ("MIT")... which is where he received the advice that shaped his career.

Gary used to make rookie investor mistakes – like losing his shirt after putting all his money into a hot stock that tanked. But when Warren Buffett came to speak at Gary's alma mater, his words put the ambitious young man on a path to learn value investing instead of "gambling around with tech stocks."

Today, Gary has his own priceless advice to share with our listeners, such as keeping a well-diversified and allocated portfolio. He warns against blindly chasing the price action and stubbornly allocating half of one's portfolio to the biggest position...

I would say the goal there is to make sure that no one position can really sink the ship... It's good to have conviction, but you need to make sure that your process over time – which drives the outcome – is not in any one position.

But having conviction isn't entirely a terrible thing. As he explains, it's all about maintaining the "delicate balance"...

You have to be sufficiently flexible to adjust to the reality of the changes but have sufficient conviction... [so] you don't fall to the market's pressure.

During their conversation, Dan and Gary delve deep into the common psychological pitfalls that can come with investing. Gary also discusses the importance of exercising caution by playing "behavioral defense" amid a sea of folks who too often rely on "behavioral offense." He even shares his proprietary "thesis tracker" – a unique way to evaluate the performance of every investment in your portfolio.

Finally, Gary leaves us with the No. 1 trait he says every investor should have: humility...

You want to be humble in this business... Base your approach on humility and then work really hard from a position that you can be wrong a lot, and then build that being wrong into everything.

Transcript

Click on a timestamp to play from that location

0:00.0	Hello and welcome to the Stansberry Investor Hour. I'm your host, Dan Ferris. I'm also the editor of Extreme Value published by Stansberry Research.
0:15.7	Today we'll talk with Gary Mashuris. Gary is a value investor. I see him once a year. We have a great time
0:23.0	together. He's a very thoughtful investor. Can't wait for you to meet him. In the mailbag today,
0:28.6	gold, gold, and more gold. Plus, a longtime listener rants back. And remember, you can call our
0:36.2	listener feedback line, 800, 381, 237. Tell us what's on your mind and hear your voice on the show.
0:43.6	For my opening rant this week, investors are too comfortable. I know it sounds crazy, but we'll talk about that and more right now on the Stansbury Investor Hour.
1:03.3	So we're in a bare market, and Dan is saying that investors are too comfortable.
1:13.7	Like, how could that possibly be, right?
1:21.6	With stocks down, bonds down, inflation up, how could it be that investors are too comfortable, too complacent, not concerned enough?
1:25.4	That's usually the sort of thing you say, you know, at the top when
1:28.4	stocks are trading for, you know, exorbitant multiples and bonds are at, you know, 0.5%, you know,
1:37.2	in the 10-year bond. Here's why I say this. I found, I found an indicator, a statistic that it's an indicator that was created
1:49.8	in the 1990s by Jeremy Grantham and Ben Inker. Jeremy Grantham is one of the co-founders of a firm
1:56.7	called GMO. And you can go online at GMO and read their research. And you can read, they had a
2:02.7	little piece about this indicator. And it's called the comfort model. And it's just a way of looking
2:11.3	at price to earnings ratios of the overall stock market. And it tells you how comfortable investors are with current market
2:21.2	conditions. And then you can sort of extrapolate and say, well, should they be this comfortable
2:26.6	or shouldn't they? And if you read their little article on the comfort model, they sort of
2:33.8	explain it to you. They say, the model is article on the comfort model, they sort of explain it to you.
2:34.9	They say, the model is based on the simple premise that the conditions which make investors
2:40.3	comfortable are high profits, stable economic growth, and inflation of around 2%.
2:47.8	Right?
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Stansberry Research, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Stansberry Research and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.