The Long View
The Long View
May 22, 2019
Morgan Housel: No One Hires a Luck Manager
47 min

Our guest for this week's installment of The Long View podcast is Morgan Housel. Morgan is a partner at the Collaborative Fund, a venture capital firm that makes investments in firms that in its words are "at the intersection of for-profit and for-good." A former columnist at The Motley Fool and The Wall Street Journal, Morgan has become one of the most prolific and insightful writers on the investment decision-making process, as evidenced by his impressive body of work on the Collaborative Fund website's blog.

Morgan joined us in this live recording of The Long View from the 31st annual Morningstar Investment Conference in Chicago. Our interview covered a lot of ground, from how Morgan found his way into the finance world, to the role he plays at Collaborative Fund, to a host of other personal and behavioral finance topics that draw on his work.

Show Notes
The accidental writer: Morgan's background and how he came to write about financial topics (0:55-3:04)

"The ability to write a check is no longer a competitive advantage": What Collaborative Fund does, why Morgan was drawn to it, and the role content plays in its strategy (3:05-5:05)

Authorial license: "It's really important to write what … you yourself would find interesting" (5:06-5:58)

Transparency and impact: "We're looking for companies whose ability to do good is their competitive economic advantage" (5:59-8:21)

Public vs. private investing: "If I made a Venn diagram of public and privates, the overlap is much greater than I ever thought it would be" (8:22-9:19)

Theory vs. practice: How private-market "lock-ups" can make sense for individual investors but are still inappropriate for the vast majority (9:20-10:24)

The future of public-private investing: "There's some liquidity in private markets but it’s not very efficient" (10:25-11:16)

Be honest with yourself: Don't try to fight behavioral biases which can't be eliminated anyway; work around them (11:17-13:13)

"That's what works for me": How Morgan reckons with his own behavioral biases (13:14-13:44)

Financial advisors' job one? Don't allow events or emotions to interrupt compounding (13:45-15:52)

History and psychology: "The most important intersection in investing" (15:53-18:24)

Scarred, not complacent: Investors are still licking their wounds from the global financial crisis (18:25-20:12)

You can't shake investors out of their experiences; it takes a new generation to come along (20-13-21:17)

"There’s no other industry in the world where the rewards are as big as in finance": How big paydays can distract focus from everyday work (21:18-23:42)

How fee arrangements can impact portfolio managers' risk and reward calculations (23:43-24:26)

Avoiding confirmation bias and bringing in diverse perspectives: "Find someone who you admire their thought process in one aspect of thinking … but you disagree with them about something else" (24:27-26:10)

A crank whose views Morgan respects--"Jake" on financial Twitter (@econompic) (26:11-26:45)

"No one hires a luck manager": Morgan explains how investors tend to account for risk, but not luck, in their decisions (26:46-29:17)

"Investing isn't the study of finance. Investing is the study of how people behave with money." Morgan explains why he doesn't read investing books (29:18-30:03)

How people deal with uncertainty and opportunity: The importance of content aggregators and of ditching bad books (30:04-31:14)

Perishable: Morgan's favorite non-investing book of the last few years is about how much things can change, on average, in everyday life (31:15-33:03)

"You're not proven until you've survived a calamity": Why it’s so hard to distinguish skill from luck (33:04-35:16)

Good advice (that Morgan doesn't follow himself): Carry a little bit of debt to hone your focus (35:17-36:56)

"You have to pay the fee": How thinking of volatility as an ongoing price for the opportunity to grow capital can help investors put risk in the right context (36:57-38:56)

Are investors giving up on investment skill? Yes, but that’s probably OK (38:57-40:41)

The importance of financial planning: Telling clients the truth (i.e., that they're not on a path to a secure, comfortable retirement, not matter how much they want to believe otherwise) (40:42-43:09)

On Jack Bogle: "The biggest undercover philanthropist of all time." (43:10-44:48)

What matters is how well you behave: The psychology of investing (44:49-45:41)

References
The Collaborative Fund blog
Morgan Housel’s collected works
Morgan Housel, bio
“You Played Yourself” by Morgan Housel (Apr. 24, 2019) 
“You Have to Live it to Believe It” by Morgan Housel (Apr. 9, 2019)
“Useful and Overlooked Skills” by Morgan Housel (May 1, 2019)
Jake (@econompic) and Econompic
Patrick O’Shaughnessy, “The Investor’s Field Guide”
Abnormal Returns
“The Big Change: America Transforms Itself 1900-1950” by Frederick Lewis Allen
Books recommended by Charlie Munger
“Origins of Greed and Fear” by Morgan Housel (Jan. 31, 2019)
George Soros
“A Man in the Mirror” by William H. Gross (April 2013)
10-year Treasury Rate
“Counterintuitive Competitive Advantages” by Morgan Housel (Mar. 13, 2019)
“Fees vs. Fines” by Morgan Housel (Apr. 2, 2019)
“Statement of Principles” by Jason Zweig
“When You’ll Believe Anything” by Morgan Housel (Apr. 15, 2019)
Jack Bogle
Morgan Housel’s tweet about Jack Bogle

About the Podcast: The Long View is a podcast from Morningstar. Each week, hosts Christine Benz and Jeff Ptak conduct an in-depth discussion with a thought leader from the world of investing or personal finance. The podcast is produced by George Castady and Scott Halver.

About the Hosts: Christine Benz and Jeff Ptak have been analysts and commentators on investments and the investment industry for many years. Christine is Morningstar's director of personal finance and senior columnist for Morningstar.com. Jeff is head of global manager research in Morningstar Research Services, overseeing Morningstar's team of 120 manager research analysts in the U.S. and overseas.

To Share Feedback or a Guest Idea: Write us at TheLongView@morningstar.com

Bogleheads On Investing Podcast
Bogleheads On Investing Podcast
bogleheads
Episode 028: Roger Lowenstein, host Rick Ferri
Roger Lowenstein reported for The Wall Street Journal for more than a decade and is also an award-winning book author. His work has appeared in Bloomberg, The New York Review of Books, Fortune, The New York Times Magazine, and other publications. His best-selling books include Buffett, When Genius Failed, Origins of the Crash, While America Aged, and The End of Wall Street. In this episode, we discuss Roger's books and lessons he learned writing them. This podcast is hosted by Rick Ferri, CFA, a long-time Boglehead and investment adviser. The Bogleheads are a group of like-minded individual investors who follow the general investment and business beliefs of John C. Bogle, founder and former CEO of the Vanguard Group. It is a conflict-free community where individual investors reach out and provide education, assistance, and relevant information to other investors of all experience levels at no cost. The organization's free website is Bogleheads.org, and the wiki site is Bogleheads® wiki. Since 2000, the Bogleheads' have held national conferences in major cities around the country. There are also many Local Chapters in the US and even a few Foreign Chapters that meet regularly. New Chapters are being added on a regular basis. All Bogleheads activities are coordinated by volunteers who contribute their time and talent. This podcast is supported by the John C. Bogle Center for Financial Literacy, a non-profit organization approved by the IRS as a 501(c)(3) public charity on February 6, 2012. Your tax-deductible donation to the Bogle Center is appreciated.
44 min
WEALTHTRACK
WEALTHTRACK
Consuelo Mack
Medicare & Lockdown: Better than Ever? (U.S.)
According to Medicare benefits expert, Dr. Katy Votava COVID-19 has altered several aspects of Medicare coverage and procedures. She will tell us what’s different and how to take advantage of the changes. She will also help us meet the deadline for Medicare’s annual enrollment period which ends on December 7th and allows medicare beneficiaries to evaluate their Medicare Advantage Plans and part D, prescription drug plans, and shift to different providers if it makes sense.  Votava is a Medicare expert who advises individuals, small businesses, and financial planners from her healthcare consulting business, GOODCARE.com. She is also the author of Making The Most Of Medicare: A Guide For Baby Boomers, now in its 7th edition and an Amazon bestseller. It is a straightforward, easy to navigate guide to Medicare which is a very complex multi-part system that frequently does warrant annual updating by its beneficiaries. An estimated 90 percent of Americans pay too much for their Medicare coverage.  WEALTHTRACK # 1722 published on November 27, 2020 More info: https://wealthtrack.com/how-covid-19-has-changed-medicare-coverage-and-procedures-with-benefits-expert-katy-votava/ Medicare.gov – The official U.S. Government site for Medicare 1-800-MEDICARE Shiptacenter.org – The State Health Insurance Assistance Program (SHIP) site that directs consumers to free Medicare counseling and assistance Eldercare.acl.gov - Eldercare locator, a public service of the U.S. Administration of Aging, connecting you to services for older adults and their families. 1-800-677-1116    Making The Most Of Medicare: A Guide For Baby Boomers: https://amzn.to/33mW4Rs --- Support this podcast: https://anchor.fm/wealthtrack/support
19 min
Sound Investing
Sound Investing
Paul Merriman
Supercharge Your Retirement and Make Millions More
In this insightful interview by Doc G of Earn & Invest, authors Rich Buck and Paul Merriman talk about their new book, We’re Talking Millions: 12 Ways To Supercharge Your Retirement. They cover topics such as their long-time professional collaboration, simplicity in investing, risk, beating the market, portfolio recommendations and the magic of compound interest over time. Buy We’re Talking Millions: 12 Ways To Supercharge Your Retirement in Kindle or Amazon Print editions. (Soon to be available at other outlets and on Audible). Watch Paul’s video about the book. Visit the book’s website. Doc G was an internal medicine physician when he discovered the personal finance community through Dr. Jim Dahle’s “The White Coat Investor.” He left clinical practice to pursue his passion for deep conversations about money and life and has found the meaning of “enough” through the FIRE movement (Financial Independence Retire Early). This podcast is part of the educational offerings from The Merriman Financial Education Foundation, a registered 501(c)3.  If you found value in this podcast, here are four ways to support the podcast and our foundation: 1)    Leave a podcast review on your player of choice. 2)    Sign up for our biweekly newsletter at PaulMerriman.com 3)    Use our M1 Finance affiliate link if you are interested in setting up a brokerage account, using our portfolio suggestions. The Foundation will receive a one-time small fee at no cost to you. 4)    Consider making a tax-deductible donation to the Foundation to support our mission to provide financial education to investors.  Thank you!
57 min
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