TIP351: THE PSYCHOLOGY OF MONEY

W/ MORGAN HOUSEL

29 May 2021

In today’s episode, Trey Lockerbie sits down with Morgan Housel, who is a partner at Venture Capital and PE firm Collaborative Fund. He’s a former columnist at The Motley Fool and Wall Street Journal, and also the author of the international best-selling book, The Psychology of Money.

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IN THIS EPISODE, YOU’LL LEARN:

  • How time is the biggest factor in Warren Buffett’s success
  • How Ben Graham wouldn’t read his own book today
  • How success is a lousy teacher
  • How Risk and Luck go hand in hand
  • And how to win in investing requires playing a different game than everyone else

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

Trey Lockerbie (00:00:02):
On today’s episode, I sit down with Morgan Housel who is a partner of venture capital and private equity firm, Collaborative Fund. He’s a former columnist at the Motley Fool and the Wall Street Journal and also, the author of the international best-selling book, The Psychology of Money, which I got to tell you, is probably the best book on behavioral finance today. In this episode, we cover how time is the biggest factor in Warren Buffett’s success, how Ben Graham wouldn’t read his own book today, how success is a lousy teacher, how risk and luck go hand in hand, and how to win in investing, requires playing a different game than everybody else. Morgan is a storyteller. You can’t help but be captivated when he speaks. I had so much fun in this interview and I know you will too. With that, please enjoy my discussion with Morgan Housel.

Intro (00:00:53):
You are listening to the Investor’s Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected.

Trey Lockerbie (00:01:18):
All right, everybody, welcome to the Investor’s Podcast, I’m your host Trey Lockerbie and today, I’m so excited to have with me, Morgan Housel. Thanks for coming on the show, Morgan.

Morgan Housel (00:01:27):
Thanks for having me Trey, happy to be here.

Trey Lockerbie (00:01:29):
I just read your book, The Psychology of Money and I got to say, there’s no wonder it’s an international bestseller. I mean, this is today’s best book on behavioral finance and it was a page-turner which is very impressive for a nonfiction, finance-oriented book. I read it in probably four or five hours. I mean, it was just … devoured it. So, I really appreciate you writing the book, and one word that kept coming to mind for me when I was reading it was perspective. You’ve just given excellent perspective, this ability to zoom way out and see the big picture for each of these topics in your book was really fascinating and one perspective that was especially enlightening, I would say, was your detailing of Warren Buffett’s success. I want to start there. Talk to us about the long tales of Buffett’s success and what investors should truly take away from his career.

Morgan Housel (00:02:27):
Thanks, and it’s awesome to be here. I’m happy to do this. What’s interesting about Buffett is everyone knows, A, he’s a very good investor and he’s very wealthy. That’s what everyone knows about Warren Buffett and if you dig into some of the numbers, that’s all true but it’s a little bit more nuanced. Really what it is, is Buffett is a good investor, yes but the secret is that he’s been a good investor for 80 years. The time that he’s been investing for, the fact that he’s 90 years old today and he’s been investing full time since he was 10, is really what makes all the difference in the world. So, I point out in the book that 99% of Warren Buffett’s net worth comes after his 50th birthday, was accumulated after his 50th birthday and 97% comes after his 65th birthday when he qualified for social security and could have retired.

Morgan Housel (00:03:11):
Now, this is so important because if Buffett was like a normal person who retired at age 60, you have never heard of him. He never would have become a household name. He would have retired to some beach in Florida, at a place to play golf with a couple of hundred million bucks, as there are like hundreds of bills, people in Florida. You never would have heard of him. The reason he is so successful is because even after his, quote, unquote, elderly years, that he was wealthy beyond imagination, he kept going and going and going and it’s just the amount of time he’s been investing for. This is so important for investors because so many of us focus and spend so much time and energy trying to answer the question, how did he do it and lots of other investors, how did they do it? How do they invest? How do they think? What are their skills?

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BOOKS AND RESOURCES:

  • Morgan Housel’s Blog
  • The Psychology of Money Book
  • What Happened in 1971?

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