Mailbag, incl: Berkshire Hathaway or an ETF? September 13, 2026

25:16It feels like it's inconsistent, but it's not. They can deliver incredible value, but the shareholders who bought in at elevated values might do tricky. And I just feel as though that's just something about being eyes wide open when you go into this kind of stuff. We always make the point, We always say two things. The market on average is a little bit about 10 % per year over the long term. Yep, that's pretty good. But actually, there's been very few years where it was exactly 10%. And within that very long run average, there are periods where the average was higher or lower. And so I'm not saying the share market is a bad investment.

25:50I'm not saying ETFs are a terrible investment. I am just saying, well, there's not an unreasonable case to be made that the the compounded returns over the next decade might be slightly lower than they were before. Does that mean you don't invest? No. And we always spend a great deal of time on Friday talking about how investing is a relative gain. And so maybe 6%, maybe I'm making up, and I'm not saying that's what it will be, but if that is the number, yeah, it feels pretty ordinary. But if property is like minus 12 % and bonds are negative, it's like all of a sudden that 6 % is really, really, really attractive.

26:25um so yeah i've got i've got a great deal of sympathy for for for howard's view and i think directionally he's probably right the the one caveat being exactly as you pointed out if if things grow faster the other thing i will make the mention of as well and this is beyond the scope of the question but you know i always get a bit frustrated when people say oh you invest in the market it's like well i guess technically i do because there's a there's a um there's a small allocation to ETFs as part of it. But actually I buy companies. I just happen to go to the market. That's where I buy the companies from.

26:59And if I ever need to sell them, that's where I go. In the same way, if I need prawns, I go to the fish market, right? I don't have any money invested in the fish market. I don't know those businesses. I don't own anything. I've got nothing to do with it. You just facilitate - And when you buy prawns, you don't care whether the price of whiting is up or down and whether that's impacting the average price of seafood. Yeah, yeah, yeah. Well, zero buy. I just know that there is someone with something that I want. I've got some money. They've got some goods. Let's meet together. And that's what the market is.

27:23And what I'm really getting at here is rather than sort of being a bit too anal retentive, it's just sort of saying that within that average, and Howard made this point as well, there will be companies in the next 10 years that go on to make SpaceX look like a diddle, you know, or, and there'll be other companies that will just make HIH look like a great investment, you know, or end on a great investment. All of these things are consistent. So another phrase I really hate, although I find myself using a lot, is that it's a stock picker's market in the sense of it pays to be fussy. It pays to be selective.

28:03You can absolutely do well in a very, very difficult environment. You can absolutely lose all your money in the most raging broad-based bull market that there ever existed. Sorry, mate, you were going to say something. No, sorry, I was going to jump in. So I want to let you finish. Sorry. Sorry. It's always a stock picker's market, but when the market is low, you can kind of buy most things and do okay. 100%. It's always a stock picker's market because you can always beat the average, no matter where the market is. So it's always a stock picker's market, to your point. But the higher share prices are, the greater the chance that the future returns are going to be as good, the more value you get from making sure you do look for those companies that are – again, you'll do better overall picking stocks the whole way through.

28:43If you can pick winning stocks, do it. But the higher the market is, the greater the benefit from being able to pick stocks rather than to buy the market as a whole. That's so much better said. That is so much better said. And it's just – was it Marx or someone who used that? I love the term nowcasting because he's not forecasting. He's just saying right now. And this is – it's not up for debate because facts matter, right? It's just the way it is right now when you look at all the data relative to earnings, prices are about as high as they've ever been. Now, there's nothing controversial or shouldn't be anything controversial about that statement because it's just looking at a bunch of metrics and comparing them to what happened beforehand.

29:28And that can be true, right? And that doesn't mean that you can't do well, but it does mean that you're sailing into the wind. So can you sail very quickly from, you know, Sydney to Hobart when you're going into the wind? Well, yeah, if you're good enough and you're clever enough and you know how to tic-tac and all that kind of stuff, you can. But it's just much better when the wind is at your back. It's just easier, right? And I feel as though investors need to sort of, alert not alarm is probably a good way of sort of putting it. And that's where I kind of sit today. I mean, anyone listening to this podcast for more than five minutes knows that I can be pretty cynical and bearish on things.

30:08And, you know, I'm fully invested. I'm 100 % invested. I've got no cash. Well, you know, whatever. Basically no cash on the side. And, again, I feel as though that's absolutely consistent. One, because it's a relative game. Two, because, you know, I am not buying the market per se, but I'm trying to find individual investments that I think have a good risk-reward sort of proposition. but I'm very mindful of it that it's not going to be like it was investing in 1997, where I could throw a dart at the board and make a gazillion dollars. And those days are gone. Those days are long gone. So, I mean, there's the funny thing we always say is that whatever the environment, whatever the question, we kind of talk, talk, talk, talk, talk.

30:52And then we just go, just get a good business at a good price. And it's sort of It's sort of like I want to give something more. I really do. And there's a lot to unpack when, what do you mean by a good business? I get all of that, but it really just comes back to that. Oh, inflation is high. Oh, there's fiscal dominance and there's all these, oh, what does that mean? They just buy a really good company at a good price. Pricing power, yeah. It comes back to that, which is sort of frustrating but beautiful at the same time. And one final thing, and I'll shut up, is that there have been the Dr. Dooms of the world, the perma bears, who are absolutely going to be right.

31:32Absolutely going to be right at some point in time, but probably still underperformed the market. Michael Burry is very interesting. Like he's just lionized these days of the guy who saw the big short, you know. But plenty of other people saw it. They just saw it a few years beforehand and on a total return basis actually underperformed the market. And Harry's been a whole lot of bets since and hasn't come up and dropped on any of them yet. I'm really not trying to throw a guy under the bus, but remember the very end of the movie, it's like, ooh, his next bet is water. How'd that work out, Michael?

32:01Terrible. Totally. Is he an idiot? No, he's far smarter than I am, you know. And he's made a lot of bad bets since. I guess what I'm trying to say is investing is hard. And too often people invest on these sort of like first level narratives that aren't unreasonable and it's worth taking note of. but you've just got to go a little bit deeper than that. And I think it just comes back to just, just, just be a little bit more careful. You have, you have to be a bit more careful than you would have been. And yes, my bet is just for fun. Cause that's what it's all about. Like at the end of the day, I wouldn't be surprised in the year 2036, we look back and we go, the total average return of the ASX over the preceding 10 years was, I would, I would say below what it has been.

32:48Sorry. I'd be surprised if it was 10%. Three fun things. Firstly, Professor Keith Browning from, where was he? He was a meteorologist, invented the term nowcasting in 1981. Oh, okay. According to the Royal Meteorological Society. So there you go. There you go. Second is if Marx is right, since the end of 2024, the S &P 500 is up 27%, which effectively means that if to be right from here, the market will have to be at the current level in eight years' time. So not only would it be no more than plus 2 % from here, if it was to max out at 2%, it would have to be exactly no return at all over that period.

33:28And by the way, assuming he's talking about total return rather than price, the actual value of the share prices would have to fall. That's what he said was excluding share dividends, by the way. So yeah, the index would have to fall between now and this point in eight years' time or eight and a half years' time to get to where that data would suggest it would be. Now, I'm not saying it won't happen, but I'm just saying, again, Mark's wasn't saying it would happen either. He was saying this historically been the reality. But yeah, it's fascinating. So whatever risk there was at the end of 2024, things have gone very well over the past couple of years.

34:00So that next date would be tough. Last thing I want to say, just only, not to argue my case necessarily, just to flesh out if it is going to be different to the past. I talk about the big companies and the growing faster and that kind of stuff. And that's the headline. I just want to kind of drill down very quickly into the why. And that is in the past, companies that have led to the market in size and weight and scale have been manufacturing businesses predominantly. And why that matters is because the speed of growth of a manufacturing business is limited by its ability to put capital to work.

34:31I've used the example of the steel mill before. If you opened a steel mill in 1950 and you got really good at what you did and lots of people wanted to use your steel, you go, this thing seems to work. Guys, should we build a second mill? and you kind of go, well, no, because maybe we might have one customer, but we need to have a thousand customers to make this thing work. And so I can't really justify if there's only one more customer coming. I've really got to make sure I can take so much business that the second mill is as profitable as the first one. So I've got to have scale of that second mill.

35:00And so you wait a couple of years, you go, all right, I think we've got it now. Okay, let's start building it. And you start building, it takes three years to build, and then it kind of fills up and two or three years after that, you finally hit capacity. You're like, oh, this is really good. Hey, what about we do one in America? Do you reckon there's a market there? Let's go for it. Okay, let's start three years time. We're going to start building. Okay, is it working? Yeah, I think it might be. All right, we've almost fooled. Should we do another one on the other side of the States? Yeah, okay, let's do it.

35:23You know, I'm laboring the point. It takes a very long time to grow a manufacturing business, a capital-intensive manufacturing business for all the reasons. And so it just does, right? The steel mini mills were a massive revolution because you have smaller mills, but it still took decades for them to take the share off the big guys because scale and capital expenditure and all the things, overhead recovery, fixed costs were huge. It is much simpler and easier for a non-capital unintensive, inintensive, a non-capital intensive business to grow much more quickly if it can find a market. And pick Google, pick, I'll nod to Ram just for the fun of it, Bitcoin.

36:04How has Bitcoin's sectors grown so quickly? Now, Andrew will say it's because of good idea whose time has come, But it's also possible. You didn't have to convince – I didn't have to say to the bloke down the road, I've got this new thing. Do you want to have a look at it? And he says to the other shopkeeper, do you want to have a look at this thing? And then he takes it overseas and says, I'm using this thing at home. Do you want to try using that thing? Oh, that sounds like – okay, let's try that. It was like it's here, and it's immediately scalable. So I'm not making – well, I do think, in my mind, it's probable that we do better than the plus and minus 2 % that traditionally has been the case.

36:37But maybe we don't. If we do, that'll be the reason. And that's the thing that's changed is the ability of big companies to grow quickly has never been greater. And so, now, valuations matter a lot, even despite any of what I just said. You have cheap steel mills and expensive tech companies, and the results are very different. But if it's a fundamental driven growth, which it needs to be, otherwise it's more of a valuation, that I suspect will be the reason why it's possible to have that sort of growth with that sort of PE and not underperform the market, as has been the case. as Mark said to every other single period in history where that's been the case.

37:10Yep, well said. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

37:20Let's go to Isabel. Isabel says, Dear Scott and Ram, I'm one of your female listeners. Wonderful, thank you, Isabel. And I just wanted to say thank you for your incredible work on the pod machine, which is engaging, funny and informative. She's obviously listening to the wrong podcast. Isabel, sorry to tell you. I started listening three or four years ago, she says, and I've been a dedicated follower ever since. Thank you. Although I'm a lawyer who lives in Sydney, I've always wanted to improve my understanding of economics, which you have certainly helped me to do. When I went on maternity leave with my first child, listening to the pod each week helped me to keep my mind engaged and feel connected with the world.

38:00I'm feeling more and more guilty, mate. If you're at home with a kid and you're only engaged with the rest of the world, at least you'll ask Jabberon. And I kind of feel like we've underserved Isabel quite significantly in that sense. Sorry about that. I appreciate the unbiased policy analysis, she says, and the rants and many jokes along the way. Since listening to the pod, my husband and I now invest in a number of broad-based ETFs, over-contribute to our super, and have just bought our first investment property, in brackets probably to your dismay. That's probably fair. My question is this.

38:29We are shortly packing up and moving to the Central Coast. Put on you. and we'll have a few more hours of commuting time each week. Can you both recommend any podcast that you love and regularly listen to? Ideally in economics, but any topic is fine. I'm looking for some other regular programming once I chew through two to three hours of my number one show, This One. Cheers and keep up the great work, Isabel. What do you got for us, Ram? I listen to a lot of podcasts. What a particular slant, I suspect. yeah um true uh it's just i think different you know some people are visual some people auditory some people need to sort of write it down i just find it a very for me the way my brain works it's just a very a very good way to assimilate information and and ponder it i do a lot of walking as well when you work at home you kind of you either got deep vein thrombosis or you've got to like do a lap of the block or something.

39:32Fair, fair. So it's a great way to kind of do that. So I love it. I love it. And I think, you know, it turns a commute into very productive, worthwhile sort of time. I'll give you, I actually tend to follow guests more than podcasts. There's a few people I like and, you know, like everyone does the podcast circuit on this and that. And you sort of find someone who's interesting and then I then open the podcast player and search their name and what else have they been on? What else have they said? I find that useful. There's one, I'll give you a bit of a bespoke one. There's one called the Library of Mistakes.

40:09It's an Edinburgh library run by a gentleman called Russell Napier. I think I've mentioned him on the pod before. He's an economic historian. He's not a Bitcoin hire. It's not an Austrian economics thing. It's very mainstream. Well, actually, mainstream sounds rightly critical. I think they bring a pretty fresh perspective. They've got a lot of interesting guests, ex-checkers, you know, and central bankers. It's a very wide cast, but sort of talking through the lens of what is going on and what has history sort of taught us on that. It's just really, really – it can be a little bit dense, a bit academic, but I really like that.

40:52I kind of like Lex Friedman's podcast which is a lot on AI and tech and other kinds of things it's a bit like I'll even say I'll even say Joe Rogan I'll put it out there not so much yeah I mean everything's political these days so you say something and all of a sudden I just got put into a bunch of pigeonholes from people but I hardly ever do it but then again you know where an interesting guest comes along yeah yeah hell yeah I will. I love the long form podcast. I love a six hour podcast, you know, where he's like, you've really got time to let's just get into this and unpack it. Really good one to listen to recently was DHH, the coder who wrote Ruby on Rails, for anyone who knows that programming language.

41:35Right. And just what he's doing with it. It was just like, it was five hours, but it was just like, I was riveted the whole time. I'm not, this is, I'm just rambling at this point. What are some good ones that are out there? That's not Bitcoin.

41:52yeah I'll stick with those I'll keep thinking mate but what would you suggest I it's hard I'm gonna say Isabel I've probably come out the other side of that kind of listening economic podcast listening honestly and not because I know all the things but because I don't know maybe I got bored with it I'm not sure um so I don't I used to do a heap more and I took a whole lot off my player because and probably like you mate I well actually not like you i subscribe to the pods and i tend to list to the the pods rather than follow the guests so very differently to you but kind of what that means is i tend to i like ideas i really like ideas i know that sounds obvious right and sounds like i'm being i'm being noting myself or whatever um investing wise think about the opposite of that i don't like ideas right but but it's kind of but i mean broadness economics right like i just i kind of i like listening to scientists and authors and just i just i you know broadening my horizons is something i'm trying to with my podcast maybe again sounds pretentious but that's that that's where i'm more likely to spend more of my listening time these days.

42:49Me too. Sorry to interrupt. I'm just going to double down on that point. I would say that that is valuable for an investor. Right. The worst podcasts are the finance podcasts, the traditional ones, because it's just a bunch of people inside baseball, echo chamber kind of stuff. And it's like there is, I mean, not that it's, I mean, a lot of it is good, but I mean, you want a variant perception, don't you, as an investor? You want a broader lens. You want more context. And it just doesn't come out of an economics department or some MBA dude on a podcast. Like you've got to go everything from philosophy to technology to economics to history to, you know, and I think it all, I think it is all very valuable as part of the investors' toolkit.

43:35Sorry, mate. Continue. No, I think it's right. I think that's, yes as an investor, just a yes in general. I mean, Shai Munga talking about the latest work of mental models and just kind of the idea of knowing how the world works. And I think it's useful. It's just interesting. And I think I will say at the Motley Fool, one of the things I like about our business is we've generally hired people who aren't the usual suspects out of central casting, right? And so in the US we've had science PhDs and we've had authors and we've had just a range of people who think well rather than having done the same course and the same time.

44:09It's like, you know, just find people who are, you know. so so yeah that's only as a setup so a couple things i will say um david gardner the motley full co-founder this is a plug for him because he deserves it he does rule breaker investing and he's no longer picking stocks daily for the for the motley full so maybe interestingly enough why i like him a lot is he does tackle this from a very different perspective yes about investing yes he talks stocks sometimes but he's talking to authors and thinkers and yeah i think that's a it's a great interviewer really thoughtful guy um does a great job his podcast so he's fantastic um a couple of frenemies in our space Owen Rask does a great job on his podcast recently, he does a good job with interesting guests from time to time, different thing, more personal finance related generally speaking but that can be useful if you're looking for more of that than we do here and Evan Lucas also does exchanges and he's a really thoughtful interviewer and I like Evan's style of asking people questions so they're probably three in the investing space I'd just give a bit of a shout out to us, they're kind of frenemies they're kind of competing for listeners to some degree but I think you'll like them.

45:10I think they're worth shouting out in the interest of, you know, better outcomes rather than just, you know, fighting our own corner. Don't just listen to us but add them to your list. Outside that, mate, in the kind of money space, I actually really like Planet Money. Oh, that's a good one. I haven't listened to that for ages. NPR, right? Yeah, really well done. A few different journos slash presenters. And they just kind of tackle an issue or a topic. It's an explainer podcast more than anything. and that can be really, really, really, really useful. Those are really cool things. They were fascinating.

45:43Years ago now, three-part series on the recycling industry and how that all came to be and kind of what happens there. But just fascinating generally, so they're worth a listen. US-based, US-focused, so not always relevant to us, but always interesting. You'll learn something or at least feel like you're better informed as a result. I'll throw another two at you just that I like personally, Isabel, and you probably know this anyway. A couple of ABC podcasts, Conversations. with Richard Feidler and Sarah Konofsky is always great. They're just a fascinating guest. They do a good job of finding interesting people to listen to and just, you know, again, in terms of broadening horizons and hearing things, that's great.

46:17And the ABC Big Ideas podcast is one that I subscribe to. I probably only listen to about half of them because, you know, sometimes the topics don't interest me. But that's another one. You get a good range of thoughts. And it's just for fun. I've just pulled the app open. The last three they've done are kids' books too moralistic. The second one was Inside the Life of Elizabeth II. And Tech Activist says the internet's been, and shitified, excuse me for the language, I should have checked that before I started reading it. And kind of everything before that, Guy and Why Human Solidarity offers radical hope, great adaptations from stage to screen.

46:51Just fascinating, right? Just kind of like just interesting stuff I wouldn't come across otherwise. And what I love about these podcasts in particular, those last few, and it's one thing I think we really lose these days in social media world, which is we are so stuck in our own algorithm right now. that I get served things I do more of. So, you know, Ram's going to get served sound money and Bitcoin stuff. I'm going to get served Warren Buffett stuff. You know, we get what we look for and we look for what we get. And we get narrow. So easy to get narrow. The echo chamber gets narrower and smaller.

47:20And by the way, we don't notice it and we love it because like, oh, that, I like that thing too. Back in the day, kids, when you open the newspaper, you start at the front page and you couldn't just, you know, grab the newspaper and hit the search button and look for a story about the company you owned or the sports team you liked or whatever, you just flick the pages. And you stop when you found something interesting to read. And we don't do that as much anymore because you don't have to. Everything is, you scroll past stuff, you click on stuff, stuff gets emailed to you, fed to you in your socials.

47:49Too many people get the news from social media, which is just scary as hell. Not because newspapers are good or otherwise, just because you're getting what the algorithm thinks you want to see. So it's no wonder our politics is more polarized. So I love those podcasts, those particular last two, because they're just, I don't know what I'm going to get. And do I want to listen to a podcast about Elizabeth too? No. Will I? Probably not that one. Will I look at some other ones I should read out? Yeah, probably actually. Because I don't know, I might learn something. I might find out something. And I might turn off halfway through and go, that was a waste of time.

48:16Or I might go, that's amazing. But I think exposing yourself to new ideas in different areas of interest, I think is really, really important for, frankly, society. If that sounds moralistic and too heavy, then so be it. But I think as an individual, we owe it to ourselves and each other to learn more about more things and be better around to people. So that's my list. That's why I threw Rogan in. Yeah. Controversy. I mean, I probably listened to one in a hundred, but it's like it's on the feed because, you know, you'll get Sam Altman's been interviewed, Jensen Huang, you know, Mark Andreessen.

48:54They're just, they're some interesting guests. And like Rogan can annoy the hell out of me, and I think he's a bit of an idiot in about a thousand different ways. But just to your point of going outside of your echo chamber, I think it's useful and it is more about the guests. I just think any time when you have someone who is having an unfiltered conversation without a PR rep over their shoulder for hours upon end, you just get a level of authenticity that even if you're just angry afterwards because they're an idiot and you just disagree with everything they said, But I still find myself thinking of certain things, you know, that were encountered in that way.

49:34So go far and wide. Go far and wide. And there's just so much choice that is out there. And the good thing is these days as well, just back on AI for a second, I don't know if you're doing this. Increasingly I go, oh, that looks interesting. What's that about? What are the main talking points? It's shortcuts. Sometimes you have to listen to three hours of something. I'm not into it. You know, and this is like, oh, no, they're talking about that and it's not my thing, right? Whatever it happens to be.

50:04Yes. You said before, I opened up my feed to have a look. I didn't even think of that. That was a really obvious thing to do. And having done that since, I'll give you a couple more. We're talking about Howard Marks before. He's got a podcast called The Memo, which literally just him reading out his latest memos, which is if you prefer the audio format, that's well worth. That's not bad, actually. I listen. Have you heard the Joe Walker podcast? There used to be Jolly Swagman, a couple younger guys, now just Joe himself, really interesting. Like Ken Henry. Jolly Swagman. Okay, yeah. Yeah, yeah, yeah.

50:37That's an interesting, again, I feel like you say something and people sort of assume certain things, but there's some guests on there that'll drive you mad and there's others that are like super fascinating and interesting and some I hate and some I love. There's another one called Hidden Forces by Dimitri Kofinas. This is really, really good. if you like the big macro kind of stuff. That's really cool. And just for something completely different, Dan Carlin's Hardcore History, which doesn't mean any promotion as well, but it is like one of the most popular podcasts of all time. Like just so well done.

51:08So well done. So, yeah. I'm listening to more audio books and podcasts actually at the moment. Oh, yeah. So I've probably given this one a shout out for Gert. Have I mentioned Gert on here before? Ooh. So David Hunt is a historian, an author, a writer, and he's written a three-part history of Australia. It's the Gert trilogy, obviously Gert by season. So Gert, true Gert and Gert Nation. I think that's the right order. And it's fascinating. I love history. I really love history. And so it's not a particularly deep one. It's funny and it's engaging and it's interesting and it's kind of personality-led.

51:40So it's not a history textbook. Don't read it to get dates and whatevers. But he does a really, really, really lovely job of just kind of doing Australian history up to about, I think it finished about World War I, I think, roughly. that kind of era. But it's just fascinating. And, you know, it's not, again, not deep, but not whatever, but a really good listen, three audio books back to back. It's funny. So it's a really enjoyable listen, and you'll learn a heap. It's very cool. Yeah, nice. I've just finished it. I've listened to it before, but I listened again to the series only just recently, so that's what's on my mind.

52:11As an addition to the podcast, if you want to grab some audio books to sort of stick between it, go with those. Yeah, that's a good call too. Yeah. All right, question, very long question from Russell. So I'll do my best. I try not to. I may have to. I may have to summarize. We'll see. Highscott and Ram. The sentinels of sound investing and the scourge of those charlatans pitching dog shit fights. You didn't skip this part, I noticed. Sorry in advance for waffling, please for free to ignore most or all. I'll do my best. As a long-term listener and occasional correspondent, I am aware that occasionally you get a little whimsical and off track.

52:45So when you are feeling more lighthearted, a thought. I often consider the gambler, Kenny Rogers, as a good investing guide with a few subtle changes. As I look at my portfolio, I think you've got no one to hold them, no one to fold them. My version of song at the end of Let Up may be best saved for a few beers. We'll come back to that. Of course, my investing career is more like Paul Kelly's dumb things. Though I have done okay, which is either luck or, as I like to think, in spite of doing some dumb things in the long term, if you do enough basics, you cannot help but get ahead. The question then is, by the way, I've used – one of the great things about my job, and the Motley Fool will not take itself too seriously, I have used both The Gambler in an email to our members just because I could and I wanted to, and also, you know, The Joker.

53:34Some people call me the space cowboy. Some people call me the gangster of love. I've used that one as well, so it's kind of fun. Anyway, Russell says, the question then is, Are there any common investing phrases or mantras that regularly pop into your head when researching or reviewing? Buffett, Munger and Lynch spring to mind as their truisms often are referenced in the show. Oh, all the time. I mean, all the time. What I love about, I really, they stick, I'm going to, now that I'm saying this, I'm drawing a massive blank. I'm not going to give you a single example here. um but what i love about all of those sort of quotes and that is that they they it's like a it's like a zip file like you just compress so much wisdom into that like it yes it's a pithy line kind of sounds wise and it's kind of cool but it's sort of you could spend hours unpacking what that means and it's kind of like it's a shorthand to remind once you've gropped the lesson.

54:39Once you've internalized whatever the saying was that the famous person has uttered before and what it means, it's a really good touchstone just to come back to. So it's often going through my head when I'm thinking about investing is just sort of like, again, I'm drawing a blank, but whatever it happens, whatever thousands of examples that there are is because it's, it's rather than having to sort of think through it and articulate it in its full detail. I can just say that one little buffettism and go, yeah, that's, that's really true. I should think more about that. Or am I forgetting this thing here, you know, or, or whatever.

55:19So, um, I actually, I actually, before I realized or remembered that there is a thing called the internet and now AI, and I don't need to do this. I did have a, I did have a Google doc where I just like kept just a record of all of them, right? Because there was so many good ones that are out there. And I find that it's just a great jumping off point. It's sort of like you can throw it out there, you can convey a bunch of wisdom very quickly, and then you can riff on it for a long, long time, which is good if you're in the content creation game like we are. Because it's a nicer way to sort of say it.

55:57It's a jumping off point, yeah. But so often it's sort of the repetition and God knows I'm the king of repetition, but it is there to sort of really hammer it home and to internalise it and, you know, greedy when others are fearful is just an easier and quicker shorthand to say than, you know, all the other things that are associated with that. Totally, 100%. Yeah, it's a good question to ask other quotes. I mean, if they were as relevant and useful, we'd probably use them more. So maybe the point, it's a great question by the Russell, but to some degree the question you're asking is, you know, So other than the really good stuff, is there any other good stuff?

56:32Which is perfectly good. It's a great question, but there's probably some reason why. So much out there. I cheated in a chat here. We said it while you were chatting, mate, trying to pick some eyes out of this stuff. The first dozen are Buffett and Munger, which we've done a million times. But I'll throw you a couple as we roll through. Munger's the big money is in the buying, not in the buying and selling, but in the waiting. Oh, I think about that one a lot. That's a nice touchstone. That's really important. You mentioned Leitch. That's the other one I'm far fond of, which is not from Munger, but it's the overnight success 10 years in the making.

57:02Exactly. Exactly. One of my favorite, John Templeton, the four most dangerous words in investing at this time, it's different. Oh, great one. That's useful. Great one. From ETF investor, John Bogle's, don't look for the needle in the haystack, buy the haystack. It's a lovely pithy quote for ETF investors, like just explains it beautifully. What else? What else? What else? I'm just trying to scroll. I mean, million Buffett mongers here. So kind of, I love this from Munga just because it's, it's a reminder for me that I don't have to be the smartest guy in the room. And Munga says, it is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid.

57:42Yeah. Right? So it's not being brilliant. Inversion, man. That's his whole shit. It's a mental level IQs, but it's like, no, we're just not going to do stupid things. And that's, you know, that's useful. Tell me where I'm going to die so I don't go there. Munga's got about 12 different ways of saying that same thing. And they're all great. They're all great. Yeah. Yeah. You'll like this one, Ram. It's a Howard Marks quote. The most important thing is not what you buy but what you pay, which I kind of don't actually agree with. But that's it. Well, it's both right. But anyway, it's different. It's almost the opposite of Buffett's fair business is a wonderful price or wonderful business is a fair price.

58:16But there's something there. Oh, I strongly agree with him. I mean, so the previous listener was talking about property. Well, we might have a little go at that. I think it sort of, I just know firsthand from being misunderstood for so long that people just think I have this intrinsic dislike of property as an asset. I actually think land and property is one of the best assets on the planet. Like, I think it's fantastic. I just don't want to pay$10 million for a quarter acre block, right? And I think what Marx is really getting at, I shouldn't, this is one of the point of this sort of question and segment, but just to unpack that a little bit there, it's like, you know, it's just like, would, is my house worth more than a dollar?

59:00Yes, it is. You know, would I pay$3? Yeah. I mean, just because of the rent alone. I mean, are the returns being, Marx really hits on a very deep truth here. I think that too many of us, and I have forgotten to my own cost, where I will look at a particular kind of company, oh, I don't invest in mining companies, or I don't invest in that, where it's like, well, hang on, just take a moment to think about what's – I was always – it still sticks with me. You ought to know if you remember, you bought some Fortescue shares a bunch a while ago. I'm like, what? You don't do that. Yeah, but it's just stupidly cheap.

59:36Yeah. It's like, yeah. And that's another, so it's a good example of that saying, just reminding you of that wisdom that is there. And do you still have them? Yeah, I have. You know how - So the thesis played out, you picked it like a dirty nose and then forgot about it. No, it's even worse than that. So you know how the plumbers always got the leaky tap, right? Yeah. I got to a point where I was like, you know what, I'm going to sell my Fortescue chair, so I did. But I forgot I had Fortescue in my Superfund, so I sold my personal shit. I had them in both. I honestly had forgotten they were in the super funds I didn't get around selling them and it was only about a month ago I looked at them oh I still own those so actually I have to apologise I think I may have said subsequent that I'd sold them which was true because I'd sold some of them but I actually still held the other ones so I've completely butchered that one up so yes I should have some sort of consolidated number but I did I thought I I thought it was whatever price I can't remember what I sold them for I thought I'll get rid of those sell them so I did and then yeah I still have some of my super funds which I am going to sell at some point but yes So I will sell.

1:00:39Well, it does remind me, it's a bit adjacent to another quote, which I really like. So it's probably in the top 10, which is the Lynch, know what you own and why you own it kind of thing. And we, particularly when quoting the likes of Buffett, you know, where he's very long-term, very slow to sell kind of investor. And it's great. It's a really good strategy. But it's actually a terrible strategy for certain investments. You know, it's about having the right tool, the right framework for the right job. There is an absolutely, you can do, I know several investors who do rather well buying really crappy companies, but just sort of the cigar bar, pick it up, take a puff, move on type thing.

1:01:19And I'm just not, I don't have a natural affinity with that kind of stuff, but it's just sort of, where I have made the mistake in the past is I will go, I know this is not a great company, but it's so cheap. and I buy it and then 10 years later I'm still holding. It's like, why? Why am I holding this for? This is not my investment. This is not a bottom drawer kind of stock. This was a pretty ordinary business. It happened to be super cheap. The thesis played out. Well done, you. Move on. And you didn't sell. You didn't sell because you mixed your metaphors. You mixed your nuggets of wisdom. You took a Howard Marxism and then you bolted it onto a Buffettism.

1:01:57and it's like they don't, those particular perspectives don't align in that way. And that's very much a, no, sell it, trade it. You're like, oh, that trading is a dirty word. Well, not in that case, not if that's what you're doing, right? And this is where I think, it's a good point actually. This is the danger in these pithy little comments because they get misused all the time, right? Right. You never go broke. Taking a profit is a good one. Or you don't lose money unless you sell, which people take, again, a whole bunch of wisdom packed into that and use it as a rationalization to hold an absolute dog of a stock as it goes to zero.

1:02:40It's like, well, Buffett says, yeah, but not about that company, bro. Not about that. He said a lot of other things as well. And this is the danger of that. It's just like you take one narrow, absolutely great, wise thing, but you applied it in the wrong way and you forgot everything else that he said as well. Correct, correct. And so they're the downside. I reckon, in fact, it'd be a fun exercise to do if I could ever be bothered, is just to use the great sayings from the world's greatest investors to rationalize the most dumb investment ever. And I reckon I could do it. I reckon I could do it because it's just sort of like I can be cynically selective of the quotes and reply them in a certain way.

1:03:24And I just, which would be a fun exercise, but too often investors do it unintentionally, just fooling themselves. That's right. That's right. You know? I will say I've done that myself, mate. I am a terrible seller. And I have in the past, to your point, I have bought stuff where it's like I want the thesis to play out. And then it plays out like, I wonder if we'll keep going from here. You're mixing strategies. 100%. And I do it all the time. I don't do it all the time. Me too. I do it semi-regular. No, I do it rarely, but often enough that it drives me nuts. I do it more than those justifiables.

1:03:52Right, exactly. Yes, exactly. And I've made that mistake. I really shouldn't try and find cigar butt stocks. It's just not my thing. I really got to stick with quality stuff. Every time I try and buy a... We recommended Elders for our members, and it was a turnaround story because this is a rural products company. It had a terrible time, a terrible climate weather. everything had gone badly and I was like hey you know what this thing might turn around and I did so we got the thesis right and then and then I went well now it's turned around maybe it's a maybe it's a better quality business now now it may well have been I'm not it wasn't that I it wasn't that I got that answer wrong necessarily it was more just when easily you kind of go okay well if it's done that then maybe maybe we should keep it because now we owned it and there's a down effect in there all over the joint and there's a strong workout do I do I really know what this is worth or am I just holding it because it's done well and it maybe keeps going well maybe it doesn't And the conviction, and this is straw man's whole resin detro, as you like to say, the conviction idea of what is the thesis and what's the new thesis is so easy to blame.

1:04:51Sometimes you shouldn't necessarily avoid that either. If it is genuinely true that it goes from one state to another and the second state is actually worth holding, the biomans do it. But it's a different thesis. You've got to rewrite the thesis. It doesn't matter why you bought it. It doesn't matter what your profit was. Why are you holding it? It's not the same reason that you bought it. and you have to also realize that rewriting the thesis requires as much conviction as the first one did. And this is the important thing, mate, because I think in my case, I mentally rewrite the thesis, but it's a justification thesis where I go, well, it might do this, so maybe I'll hang on in case that happens or it probably happened.

1:05:28And that's different from if I didn't own it, would I buy it using that thesis? And that feels like the same thing. I just want to say, just to drag it out for the listeners a little bit, just because I say, well it's gone from it's gone from a turnaround to hopefully a better quality business so now my thesis is going to be a good quality business and it's going to keep growing so therefore i'm going to hold it right easy to say but without the would i had i never owned it decided to buy it or so so the thesis i did rewrite the thesis i absolutely did but i didn't require of myself the same level of conviction and the same confidence in the upside because i already owned it and that's the bit i'm i suck at selling with is that idea of like you know i can i can tell myself why it might keep going well and that kind of then you know become seeps in as a well i guess we should just you know see what happens it might be okay it might be good now and rather than if i if i sold it what i buy it back at today's price was sufficient conviction and and that for me is where i can fall down yep which is why you need you really just have to have that fairly comprehensive toolkit of all of the ideas and just be honest with yourself it's like okay I mean, Lynch used to talk about different, but I think, did he have like seven categories or something?

1:06:37Yeah, I don't know how many it is, but yes, yeah. Something like that. And they're all stocks, they're all companies. Yeah. But there was the turnaround. There was the young hyper growth company. I forget all the categories, but it was just, the point was, is that these are entirely different investments and you should approach them in entirely different ways. and that, yes, you're buying stocks and you're building a portfolio, but that stock and that stock are completely different propositions from an investment standpoint. And if you apply that thinking to that position, you're going to do very, very, very badly.

1:07:11So it's something that is absolutely sensible and wise and you should absolutely remember and repeat, repeat, repeat. Just make sure you apply it in the same way. So that's the other thing. When you start looking at a lot of these quotes, you find that, well, you seemingly find contradictions. Wait a second, is that true or is that true? I mean, they both can't be true. Yes. You know, but it's just like, well, they actually both can be true in different contexts. Your job is to figure out the proper context to apply that in. But more to the point, it's just, I think you just, you can't help but sort of pick these things up because as you read more and you think about it more and, you know, just again it's a little tool you just add that in the belt put that in the quiver i'll think about that i'll come back to it and next time you're in that scenario the pattern matching part of your brain goes oh wait a second this feels like this is appropriate here well hang on there was also that time that chan os said this and that was actually a good point too you know it's just it's it's it's a um what's the term i'm looking for it's like a it's like a mental hook like so when your internal search engine goes looking for something, you know, it's sort of like, it doesn't retrieve everything.

1:08:24It just that one little thing that just sort of sticks up as a flag as a like, oh, this is a, I think you're searching for this. Is this the search term that's relating to the broader corpus of knowledge that you're trying to access? Oh yes, it is. And, and, and it just, it helps you file, I think all of this information and wisdom a lot better. It's just, it's as much easier to have a little stable of pithy quotes to refer on and to leverage. As long as they serve that purpose, it's not that that's where the thinking begins and ends. It's more just that reminder of the deeper wisdom and the more thorough thinking that's underneath all of that stuff.

1:09:05But there's a reason that people like us talk about these quotes all the time because there is a lot of stuff to unpack there as well. They're just, it's just the start. Well, it's the start and the end of the journey. It's the start because like, what does that mean? And then it's the end because it's like, oh, here's the shortcut that I used to grow this entire way of thinking. Yeah, for sure. Mate, let's finish up with an email from Paul who makes sure he gets his question answered by giving us both a compliment. Hi, Scott and Ram. Long time listener here. Thank you, Paul. First, can I just say that the two of you have somehow managed to achieve the impossible.

1:09:44You've made macroeconomics entertaining. Scott's ability to turn a complex investing concept into plain English, combined with Andrew's encyclopedic knowledge of financial history, is a combination that deserves its own ASX listing. If there were an ETF tracking wisdom, humour, and investing temperament, I'd happily put my super into it. Oh, that's nice. We can set one of those up quickly if we can make some money out of it. Let's do that. Sure. Clip the ticket. By the way, I'm a nerd and a pedant, Paul. I love that you're spelling cyclopedic with an A-E, which is, of course, the appropriate and proper spelling.

1:10:16So well done. He says, listening to your recent discussion on perpetual money printing. Is the discussion singular? Discussions probably should be plural, I suspect, Paul. It struck me you're both absolutely right. Andrew's obsession. Ram, history is overwhelmingly on your side. Time and again, when economies become sufficiently indebted or face significant economic stress, policymakers eventually find their way back to the monetary printing press. Different countries, different eras, different justifications, but remarkably similar outcomes. History doesn't repeat perfectly. Sorry, man? Every single time.

1:10:51Every single time. History doesn't repeat perfectly, he says, but it certainly rhymes loudly enough to make ignoring it a costly mistake. Scott, you're equally right that the unanswered question is when. And when isn't a trivial detail. It's everything. But perhaps that's exactly where investing lives. None of us possesses a crystal ball, and trying to predict the exact moment the monetary taps reopen is probably a fool's errand, no pun intended. Our edge isn't timing the inevitable. It's recognising the economic backdrop we're operating in and having the discipline to act when markets offer value, regardless of whether the printer starts tomorrow, next year, or five years from now.

1:11:33Oh, that is so well said. Isn't it? Sorry, guys, more. Oh, God, I'm so really impressed. Keep going, please. This is echoing Friday's conversation, and obviously it's been long before that, but he's done it better than we did. As investors, says Paul, uncertainty isn't the obstacle. It's the environment we operate in every single day. The goal isn't to eliminate uncertainty. It's to make sensible decisions despite it. Thanks again for producing one of the few investing podcasts that manages to be insightful, educational, and genuinely enjoyable. The banter is worth tuning in for by itself, and the investing lessons are a pretty nice bonus.

1:12:07The wisdom you share have turned into profits for many. Trust me. If only politicians are listening, our kids may just stand a chance. G'day, Albo. G'day, Angus. Keep up the fantastic work. Cheers, Paul. That's awesome. Very kind, Paul. And we kind of, we touched on this, did a little bit on this actually late on Friday's episode, but Paul's pretty much nailed exactly what we said in a much better way than we said it. Actually, that's so literally without fail. And this will happen in the next, where are we at now, in the podcast. Within the next 20 minutes, I'll say my goodbyes to you. I'll go have a bite to eat and I'll take the dog for a walk.

1:12:46And then I'll just slap myself in the face. Like, idiot, like, did you say that? Oh, no, that didn't come out right. It's just so cringy. I can't even. And, but, but I think my hope is always that because I butcher everything, but my hope is that at the very, I'll put it, I'll invert it. I really hope that no one listens to either of us and then takes that as gospel and then runs with it. I think that is, that is very dangerous, not just with us, but with anyone. And what Paul sort of said there is sort of inferred or indicated is that it's sort of like, oh, that's really interesting. I'll go and look at that myself.

1:13:26That is, that makes me very happy. That fills me with joy. I think, I know my own journey has been very much influenced by that. You just listen to someone who just almost mentions something offhand. You go, wait, what? What? I don't, that's not right, is it? And you go and you look, it just, it's the catalyst that sort of sparks the internal ponderance of, hmm, maybe that can't, surely. and then you look into it, it pushes you down a path where you hopefully get exposed to an idea that you haven't heard before. And just to avoidance of all doubt here, like nothing said in this podcast is original.

1:14:06This is all like blatantly copied from much smarter people who have come before us and said all of those. No, I have never had an original thought in my entire life. But these thoughts I have accidentally and you have accidentally encountered. And if us just mangling that discussion back and forth between ourselves has encouraged someone to look into it, even if they come to a completely different conclusion, I would still take that as mission accomplished. And I'll just double down on that. Like anything that we say, particularly what I say is like, I really, I always do. I mean, my whole, my whole investing career and process and business, in fact, is built on the whole premise of like, tell me if I'm wrong.

1:14:53I really want to know if I'm wrong. I can tell, I don't really care that much about the ego. Just, just tell me if I, if I'm wrong. And so hopefully we can sort of stimulate that thinking and go off and then you can come back and tell us what we're missing because that would actually be really valuable. And if not, and if maybe that's something that you can't do, then that's interesting too, isn't it? Isn't it giving you a new way to look at the world that you haven't been able to invalidate is probably something to at least not dismiss out of hand, right? Yes, exactly. Because the history of investing and those have done very well, it's always those with the variant perception.

1:15:31It's the non-consensus thinkers. They've got to be careful not to go too far with that because sometimes people go, oh, I'm a contrarian. I'm not, they take that to me. I just do the opposite of what everyone else is doing. Everyone reckons that if I jump off this bridge, I'll break my legs. Well, therefore I must jump off this bridge and break my legs. No, some things are like really locked in at this point. You know, we're pretty convinced of gravity. You know, we don't need you to be a non-contrarian thinker on that kind of stuff. But in the world of investing, dude, I was thinking about this the other day.

1:16:04Sorry, this is well off, whatever. we started talking about. Think about our lifetime, right? And when you were in your twenties and we started working and what the older guys, and I say guys very deliberately, because if there was a female around, it was, it was very unusual, which was, which was one of the, one of the many, many problems of the, of, of the industry. And thankfully it's, it's changing. But back in the day, this, this, this terrible sausage factory of, of this inner click of, of useless rent seeking people. People think I'm nasty about real estate agents. So it's, it's look in your own house.

1:16:39Oh, you know, it's about a lot of people. Let's be, let's be honest. They shouldn't feel special. I can remember, I can remember so vividly on so many different things, having discussions with the elder statesman of the, of the enterprise, telling me how the internet is no more than a fax machine. You know, telling me that the cloud is just a boondock, you know, the thousand and one, mobile phones and no one will ever use that for business. You know, the things that are laughable now, and I'm not, by the way, let me very quickly add in this. I don't want anyone to think that I, well, I clearly saw it and that's why I've got 12 trillion dollars.

1:17:13No. In fact, I missed most of those, or at least I missed them more than I should have. But my point is, is that the big ideas, the really valuable ideas, the ones that will change the trajectory of your investing career are always the crazy ideas. They always are. They always are. And then that doesn't, again, it doesn't mean you just lean into anything that's got a smell of crazy about it, but it means, I love, we're talking about quotes before. I love this one from Mungo. Another top 10 for me is like, take a wild idea and take it seriously. And if it really is a dumb idea, you'll kill it pretty quickly.

1:17:55But if you can't kill it, this is the whole Bitcoin journey, right? If you can't kill it, like then maybe it's not wrong. Maybe people will carry this piece of glass in their pocket and increasingly use it for business. Maybe, I don't know, there's a thousand different examples. Maybe people will like electric cars. I don't know. They don't seem that bad. I and you're always going to sort of be laughed at. So hopefully what we can do is bring a little bit of context. And I think not that we'll always be right. We'll often be more often than not be wrong. But if we can prompt you to think something that no one is, or very few other people are talking about, and for you to take it a bit more seriously, and then even if you come out the other side and not convinced, I think you can't help but improve as an investor, right?

1:18:50Even just being aware, I know a lot of Keynesian economics. I think it's all rubbish. I never used to. But I did, and I think it's valuable to know, right, because that is how the world thinks. I think you probably think of an example of things that you know are stupid, but you're glad that you know anyway because it helps you. Like when was the last time you did a discounted cash flow, mate? Not the AI. Months. Yeah, right? Months, yeah. But are you glad that you know how that works? Yeah, we're talking about it. It's fundamental to your understanding of value. And, you know, Munger said about Buffett, he's never seen him do a DCF, right?

1:19:37Because he doesn't need to. I mean, I'm no Buffett. The point is when you've done it enough times, you don't have to keep doing it because you understand the inputs and it's kind of, you know. It's not even the maths. It's what it's saying. What is it really about? What does it mean, you know? and I'm so far away from the original point. I can't even remember where I started, but thank you, Paul, for the very kind words. Well done, Paul. Thank you. Really appreciate it. Very kind of you to say, mate, I reckon we're probably done on this particular podcast episode as long as you promise to come back on Friday.

1:20:07I tell you what, we get some more questions like we had this week and you'll have to drag me away. Plus we've got some things to rant about. We're busy, busy people, but we always find time for the Motley Fool Money podcast because frankly, our wives are sick of listening to us. Until we speak again, and enjoy your week. Have an enjoyable end of your weekend and full on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener.

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