She’s one of the only female investors featured in this book. Kind of like not buying chips at the grocery store (if you’re trying to go on a diet) because when you have it at home the temptation would be too much- humans innately have self-destructive behaviour. One of his tips is the safeguard yourself against stupidity. Warren Buffett says that his right hand man, Charlie Munger, has the “best thirty-second mind in the world…He sees the essence of everything before you can even finish the sentence” His wisdom on human psychology and behaviour is very clear in Poor Charlie’s Almanack. If you are interested here is a summary of some of Nick Sleep’s letters to Nomad Investment shareholders as reviewed by OMD Ventures. Holding Amazon for 16 years from $30 to $3000.
This is a prime example of deferred gratification and the ultimate Marshmallow Test.
They also were highly concentrated in their portfolios and focused on quality like Amazon, Berkshire Hathaway, and Costco. Over 13 years, they returned 921% compared to 116.9% for the MSCI World Index. Him and Qais Zakaria created a fund called the Nomad Investment Partnership in 2001. He was inspired with the book Zen and the Art of Motorcycle Maintenance which sounds kind of like the sparking joy and valuing quality and and beauty in the most mundane tasks. His plan was to become a landscape architect, then he got laid off. We’ve heard of his name but reading the chapter on him made him even more fascinating. What goes unsaid is that any valuation methodology is only as good as the many, many assumptions that go into it, and therein lies the art.
Green nods to the difficulty when he asks the reader, “Do you know how to value a business?” His answer is a discussion of Greenblatt’s various techniques, such as an analytical exercise called a discounted cash flow analysis - which can sound like science. He founded Gotham Capital and says: “the entire secret of successful stock picking comes down to this: “Figure out what something is worth and pay a lot less.” Well, yes, but that’s way easier said than done. CEOs are more involved in team sports when they are younger but the best investors favour individual sports. He touts successful investing to involve the willingness to be lonely. He created the Templeton Growth Fund which had an annual return of 14.5% return over 38 years. Six decades later, in 1999, he shorted a basket of dot-com stocks that were adored by the crowd, and when the bubble popped in March 2000, he earned a profit of more than $90 million. As war raged, the Dow fell to a generational low of 92, and stocks became so synonymous with risk that New York state insurance regulators banned them from the portfolios of insurance companies. In 1939, as the world was going to war, the man who would become Sir John Templeton opened the Wall Street Journal, picked 104 American companies whose stocks were selling for $1 or less, and invested $100 in each of them. He didn’t even bat an eye when he was down 67% in 2008/2009, it didn’t bother him and in fact he found the cheap prices “orgasmic.” Sir John Templeton He has extreme concentration in his portfolio and in 2015, half of his funds’ assets were in Fiat Chrysler and General Motors. His philosophy is that life is a game, and the stock market is a game. we found the ‘curse words’ quoted refreshing, we didn’t know that Mohnish Prabai used the the F word so liberally. We have read The Dhandho Investor and really liked it. The book starts off with Mohnish Pabrai and this chapter is a real page turner. Other Investors that are getting discussed in the book are Sir John Templeton, Charlie Munger, Jack Bogle, Ed Thorp, Guy Spier, Bill Miller, Laura Geritz, Joel Greenblatt, Howard Marks and last but not least Nick Sleep. Sometimes William Green mixes in some other Investors but in general each chapter discusses one Investor and what made the person successful. William Green also wrote the book The Great Minds of Investing.Įach chapter of the book discusses one investor. He helped with Guy Spier’s The Education of a Value Investor.
William Green is a financial journalist who has written for The New Yorker, Forbes, and Time.