MI307: Unpacking The Money Mind w/ Robert Hagstrom
The Intrinsic Value Podcast - The Investor’s Podcast Network
The Investor's Podcast Network
4.6 • 593 Ratings
🗓️ 21 November 2023
⏱️ 67 minutes
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| 0:00.0 | You're listening to TIP. |
| 0:02.7 | Today, around 2003, 2004, two professors from Yale University, Martin Krimmers and Petajusto, |
| 0:09.9 | anti-Petegisto, brought out a paper called High Active Share. |
| 0:13.3 | High Active Share is now the academic word for focus investing. |
| 0:16.9 | You can measure your high active share to the degree that you're different than your |
| 0:20.6 | underlying index. If you own everything in the index, your active share is zero degree that you're different than your underlying index. |
| 0:21.7 | If you own everything in the index, your active share is zero. |
| 0:24.8 | You're no different than market. |
| 0:26.2 | If you own 15 companies, 16 companies of different ways, you could have an active share because of your differences in the market of 85, 90, 95% active share. |
| 0:36.0 | They then concluded they did the research on all actively traded |
| 0:40.1 | portfolios and found out those with high active shares, the most concentrated were the ones |
| 0:44.6 | that outperform the market. You had low active share, which is kind of closet indexing. You couldn't |
| 0:50.2 | be the market. And then they followed up this study with turnover ratios and found out within the high active share quadrant. |
| 0:57.2 | Those that had low turnover strategies actually had the single best performance, just exactly the same portfolio that Warren Buffett does. |
| 1:04.5 | So concentrated low turnover portfolios is absolutely 100%, academically settled, no more debate, |
| 1:10.6 | the optimal way in which to manage portfolios to generate a return better in the market. is absolutely 100% academically settled, no more to make, |
| 1:14.6 | the optimal way in which to manage portfolios to generate a return better in the market. |
| 1:21.9 | In this episode, I chat with Robert Hags from about the benefits of reading fiction for improving your investing process, |
| 1:24.1 | the best mental models Robert learned from his time working with Bill Miller, |
| 1:28.4 | the importance of understanding complex adaptive systems for understanding the market, how to use the discounted |
| 1:32.9 | cash flow model according to Buffett and Munger, strategies for using multiple mental models |
| 1:37.5 | in your day-to-day life to think better, and a whole lot more. |
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