#243 William Green – Wisdom From The World’s Greatest Investors
Key Takeaways
“Some of these principles are so simple but when you combine a bunch of these different principles and you take a simple idea and take it seriously, the cumulative effect is actually kind of overwhelming and so what I’m trying to do with the book is synthesize for myself what these super principles are and share it with other people”
“I think one of the most valuable things you can do as an investor is really be honest about your own psychological makeup, your own strengths, whether you’re equipped to win this particular game”
-Build simplicity into your life and investing process
-Synthesize your process
–Be authentic and play by an inner scorecard
–Always have a margin of safety
0:26 Horse Racing to Investing
William says when he was 15 he became obsessed with betting on horse racing. A few years later William discovered the stock market, and he became obsessed with investing. Throughout his conversations with top investors, William wanted to uncover what the separating factor was that caused their large success.
This uncovering of practices, habits, and insights from top investors is the overarching foundation of his book, Richer, Wiser, Happier.
“Is it all just random or is there more meaning here and how do I actually build a happy, successful, and meaningful life”
“There’s a degree of angst that probably motivates my search for truth and then there’s also a degree of sheer joy of just figuring out stuff that seems true, and right, and beautiful”
8:23 Simplicity
In William’s book he has a chapter on simplicity and an insightful feature of legendary investor Joel Greenblatt. When asked about the essence of what he does, Joel replied:
“It all comes down to this: value and asset and buy it for less. Once you realize that’s the essence of investing everything else seems kind of silly and trite”
19:22 Synthesize Process
William says that despite his constant yearning for order, his synthesization process is quite disorderly. The way that William describes his thinking is in ‘buckets.’
“I think in terms of buckets, so I think well here’s a bucket for ideas that I’m exploring for another book and then I just keep dumping stuff in that bucket”
24:58 Post-It Notes
William’s study is full of Post-It notes on the wall and every few days William is adding another Post-It.
“Part of what I’ve done in terms of searching for wisdom is reading very widely and then as I learn stuff being like oh that’s something I need to remember and I literally post it on my walls so that I’ll see it”
35:18 Authenticity
William says that authenticity is ‘if not everything, a core central principle’. He explains how people either live by an internal scorecard or external scorecard, where they judge themselves or they care about others judging them. William tells a story of a Warren Buffet line,
“You can tell whether you live by an inner scorecard or an outer scorecard by asking yourself, would I rather be the best lover in the world but known publicly as the worst or the worst lover in the world but known publicly as the best”
William says that the best investors live by an inner scorecard.
41:58 Journalism and Investing
William studied English literature at University of Oxford with the intention of being a novelist or screenplay writer. After selling a piece of property in London, William then became obsessed with reading about the stock market funds in order to grow the money he earned from the property.
“I think my fascination was a personal one, where I was actually trying to figure out this game.”
“I saw that there was this beauty to the stories, I thought wow these are really interesting, colorful characters and I want to tell their story not so much as a practical how-to but to figure out what makes them interesting as characters. How do they view this world? How have they made sense of this puzzle? How have they cracked the code?”
47:47 Sir John Templeton
William says he still wrestles with his time with Sir John Templeton because of how ‘embarrassingly close minded’ William was during their conversations .
“There’s a part of me that thinks, what did Templeton figure out that I wasn’t ready to listen to?”
53:42 Ed Thorp
Ed Thorp is who William describes as the greatest game player in the history of investing.
Ed told William: “For most people, they’re just going to do way better to buy an index fund. The market tends to go up over the long term because you have this improvement in the economy, you have this improvement in productivity, and so gradually over time it’s just going to continue to go up”
William says that the great investors are constantly looking for asymmetrical bets where there’s very limited downside and very high upside.
“Some of these principles are so simple but when you combine a bunch of these different principles and you take a simple idea and take it seriously, the cumulative effect is actually kind of overwhelming and so what I’m trying to do with the book is synthesize for myself what these super principles are and share it with other people”
1:04:40 Margin of Safety
William says that once you really understand the way that the greatest investors are navigating the world, it becomes profoundly helpful in every area of your life.
“The greatest investors, they have money on the line and they have millions of people’s lives that are affected by the quality of their decisions and so I think there’s something about the stakes that are involved, the fact that there is skin in the game, that forces them to be better thinkers”
“I think one of the most valuable things you can do as an investor is really be honest about your own psychological makeup, your own strengths, whether you’re equipped to win this particular game”
1:13:04 Richer, Wiser, Happier
William’s book is called Richer, Wiser, Happier is a distillation of his conversations with the greatest investors over 25 years.
Some of the other books that William recommends for listeners are:
1:18:11 William’s Interview Choice
If William could sit down and interview anyone dead or alive, just not a family or friend, he would choose Rav Yehuda Ashlag.
Connect with William
Book: Richer, Wiser, Happier
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