TIP635: Deep Diving Into The Warren Buffett Way w/ Robert Hagstrom

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 2 June 2024

⏱️ 78 minutes

🔗️ Recording | iTunes | RSS

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Summary

Kyle Grieve chats with Robert Hagstrom about reflections from Warren Buffett’s early investing mistakes, why GEICO’s insurance float has been setup so perfectly for use by Warren Buffett, why low turnover portfolio’s outperform other options, why looking at stocks as abstractions is such a powerful mental model, how Warren Buffett has made thinking long-term into his own competitive advantage, a detailed history on modern portfolio theory, and why it’s so pervasive today, why investors should focus on certainties in their investing strategy, and a whole lot more! IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 05:30 - Details on Warren's mistakes on Berkshire Hathaway (textile mill) and subsequent mistakes with the Dexter Shoe acquisition. 08:44 - Why low turnover portfolios tend to outperform. 16:20 - Why you can outperform the market over the long term while underperforming the market 50% of the time. 18:29 - The importance of thinking of stocks as abstractions. 27:55 - How Warren Buffett has evolved his investing methods while staying true to his deeply held principles. 43:07 - Benjamin Graham's two most influential concepts Warren still abides by today. 43:07 - The history of modern portfolio theory and why it's so pervasive today. 54:28 - The single most important characteristic that has produced so much of Warren Buffett's success. 59:36 - The characteristics required to outperform the market. 01:08:09 - Why we should spend our investing time thinking about business rather than macroeconomics. And so much more! Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members. Buy The Warren Buffett Way here. Read more of Robert Hagstrom’s articles here. Related Episode: TIP360: Inside The Money Mind Of Warren Buffett w/ Robert Hagstrom | YouTube video. Related Episode: MI307: Unpacking The Money Mind w/ Robert Hagstrom | YouTube video. Related Episode: MI222: How To Invest Like Warren Buffett w/ Robert Hagstrom | YouTube video. Follow Kyle on Twitter and LinkedIn. Check out all the books mentioned and discussed in our podcast episodes here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: River Toyota Sun Life AFR The Bitcoin Way AT&T Sound Advisory Industrious Range Rover iFlex Stretch Studios Meyka Yahoo! Finance Vacasa Briggs & Riley Public American Express USPS Shopify HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:03.0	Robert Hagstrom is one of the most knowledgeable people on Warren Buffett that I had the pleasure of chatting with.
0:08.0	While all of his books on Warren Buffett are must reads, it's hard to top his most iconic book on the Oracle of Omaha, The War in Buffett Way.
0:15.0	Robert recently released the fourth edition of the book and he added many great insights into the latest edition.
0:20.0	I wanted to break down some of the book's most valuable and essential concepts for
0:24.2	listeners of the show so we dove deep into Warren Buffett's first error as an
0:28.0	investor and how that has affected him today. We looked at how Warren repeated a
0:31.9	mistake on the decks of shoe acquisition and the consequences of that mistake.
0:35.2	Since Robert has so much knowledge of Berkshire stock, I wanted to find out why other insurance businesses don't leverage their float like Berkshire has.
0:42.8	We also touched on some of the outstanding research on outperformance, especially as it relates
0:46.8	to portfolio turnover and concentration.
0:49.3	Robert brought up one profound point about Warren Buffett. Warren looks at stocks as abstractions.
0:55.6	And Robert went into some excellent details
0:57.5	about why this is such a decisive advantage
0:59.4	that Warren is deployed over the years.
1:01.4	Another aspect of investing that has always fascinated me is how
1:04.3	investors can have so much success beating the market while also failing to beat the
1:08.5	market 50% of the time. Robert has done some outstanding research into this area using some of the greatest investors from history
1:14.8	and we got into some details about why short-term underperformance can be so powerful as long as we look many years into the future.
1:21.8	Another theme of this conversation is how Warren
1:24.2	has upended the status quo in the investment industry to his advantage. The
1:28.2	industry at large pays so much attention to things like interest rates,
	...

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