TIP678: Mastering Focus Investing: Lessons From The Legends w/ Kyle Grieve

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 24 November 2024

⏱️ 63 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Kyle Grieve discusses major takeaways from the book The Warren Buffett Portfolio, including why concentrated portfolios offer the highest probabilities of outperforming, how focus investors think about risk, Warren Buffett’s four-step framework for identifying great investments, the importance of patience, discipline, and self-awareness to investing success, how to widen your circle of competence, why thinking in probabilities is intertwined with outperfrmance and risk reduction, and a whole lot more! IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 02:53 - The reasons that focus investors are concentrated and the pros and cons of having a concentrated portfolio. 07:12 - Buffett's views on risk and what risk means to him. 08:42 - Warren Buffett's 4-step framework to determine whether an investment is rational. 13:16 - The shared characteristics of these five investors, which helped them overperform. 14:51 - Exciting research on the effects of concentrating your portfolio on long-term performance. 22:35 - How to measure your performance using fundamentals instead of stock prices. 30:15 - Simple ways to widen your circle of competence. 39:01 - Why you should think in probabilities when thinking about investing and practical ways of applying it to your investing. 50:20 - The primary principles Warren Buffett learned from Benjamin Graham and Charlie Munger to best understand human psychology in markets. 55:26 - The roles of overconfidence, overreaction, loss aversion, and mental accounting have on investor psychology. 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 Portfolio here. 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 7-Eleven Toyota Daloopa TastyTrade The Bitcoin Way Connect Invest Fundrise American Express Miro Onramp Public Facet SimpleMining Bluehost ReMarkable Vanta Shopify HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! 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! Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm 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	If an algorithm out there could outperform the market, would you be interested in learning
0:07.0	more about what that algorithm consists of?
0:09.0	Now, I'm not talking about algorithmic trading or anything like that.
0:13.0	I'm talking about tried and trude fundamental characteristics and strategies that people like
0:17.0	Buffett and many other investing legends such as John Maynard Keynes, Charlie Munger,
0:21.2	Lou Simpson, and Bill Rueyne have utilized to outperform the market by a very wide margin
0:25.4	over long periods of time. Well, today, I will be sharing a number of traits that are necessary
0:30.3	to be considered a focus investor, which is the prototype of Warren Buffett. We'll be looking
0:35.3	at these issues from the book, The Warren Buffett Portfolio by
0:37.9	Robert Hagstrom. We'll go over some very interesting research that the book's author,
0:41.8	Robert Hagsrom covered, to better help investors understand the details of concentration and
0:46.7	diversification, especially in relation to returns. You probably won't be surprised to learn
0:52.1	that concentrated portfolios will give you the highest probability of outperforming the market.
0:56.8	But on the flip side, there is a potential downward risk of concentrated portfolios that you should definitely be aware of.
1:03.7	And we're going to cover that in quite a bit of detail.
1:06.1	Another attribute of focus investing is the emphasis on psychology.
1:09.4	I'll cover a few of Warren Buffett's biggest
1:11.1	influences on his own psychology and what he learned from them. I'll go over four psychological
1:16.3	shortcomings that we pretty much all exhibit to some degree and that can wreak havoc on our
1:20.6	investing returns and on our ability to sleep while at night. We'll also cover why folks investors
1:25.8	spend a lot of time thinking about their own psychological misjudgments and some strategies to use investor psychology to our own advantage.
1:32.7	We'll also cover the role of patience in successful investing. Mainly there's two distinct areas.
	...

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