00:18my fascination with investing began when
00:21i was in my 20s my brother andrew and i
00:24had sold an apartment that we owned in
00:26london and i had to figure out what to
00:28do with this relatively modest windfall
00:31i started studying the stock market and
00:33i quickly became obsessed
00:36i wanted to become financially
00:39but i didn't much fancy the idea of
00:42spending my life in an office taking
00:44orders from an annoying boss
00:46and when i discovered the stock market i
00:48thought this is spectacular i can get
00:51rich without getting my hands dirty
00:54there was something almost magical about
00:56the idea that you could make money just
01:01there was only one problem i had no idea
01:05i knew nothing about business or
01:07economics i have no mathematical skills
01:10at all if i'm lucky i can count to about
01:16but i had one tremendous advantage which
01:18is that i was a journalist writing for
01:20magazines like forbes and fortune which
01:22meant that i could actually interview
01:24all of these legendary investors who did
01:27know what they were doing
01:28over the last 25 years i've spent
01:31hundreds of hours interviewing more than
01:3350 of the world's greatest investors
01:36including many billionaires
01:39i got to do things like travel to the
01:41bahamas to spend a day with sir john
01:43templeton an 86 year old billionaire who
01:46was probably the greatest international
01:48stock picker of the 20th century
01:51in the days after 9 11 when the world
01:53seemed to be falling apart i got to
01:54spend several days with bill miller who
01:57was the most famous mutual fund manager
02:01the stock market was crashing but miller
02:04was relaxed and cheerful
02:06i stood beside him watching while he bet
02:08hundreds of millions of dollars on
02:10beaten down stocks that everybody else
02:12was desperate to sell
02:14i remember saying to him you've got to
02:16be so ballsy to do what you do and i
02:18said yeah but i've also got to be right
02:22so i became captivated by this tiny
02:25elite of great investors who defied
02:27gravity by beating the market over many
02:31i wanted to understand what insights
02:34principles character traits and habits
02:38and could i become more like them
02:41the greatest investors have taught me
02:43not only to invest better but to think
02:46better and possibly even to live better
02:49they taught me that it's all about
02:51simplicity subtraction and not being a
02:54fool let me tell you
03:00one of the most famous investors i've
03:01interviewed is called joel greenblatt
03:04his investment returns are the stuff of
03:07his hedge fund returned about 40 a year
03:09over 20 years at that rate one million
03:12dollars turns into 836 million dollars i
03:16think you'll agree it's a pretty nifty
03:18a few years ago i'm sitting on
03:20greenbat's patio in the shade in the
03:22hamptons and we're sipping iced tea and
03:24i'm gazing out at his magnificent view
03:26of the atlantic ocean
03:29greenblatt is looking sun-tanned and
03:31relaxed he's wearing jeans and loafers
03:35and i say to him what's the secret of
03:37investing and he says william it's
03:40incredibly simple and it all comes down
03:44figure out what a business is worth
03:46and then buy it for much less that's it
03:51i'm looking at him and i'm thinking this
03:53is so cool here's this guy who's cracked
03:56the code of how to beat the market
03:58he's distilled all of the complexity of
04:01investing into one simple principle
04:05i don't need to waste my time trying to
04:07figure out whether stock market is going
04:09to rise or fall i just need to value a
04:11business and then buy it stock for much
04:13less than it's worth
04:16but then i started to worry the fact
04:18that this is simple doesn't mean that
04:20it's easy and when i started to think
04:23about this honestly i had a really
04:25unsettling realization
04:27i thought well i don't actually know how
04:29to value a business i'm not even that
04:32interested in valuing businesses
04:34so i shouldn't be buying individual
04:36company stocks because this is not a
04:38game that i'm equipped to win and if
04:41there's one thing i've learned from the
04:42greatest investors it's that you don't
04:44want to play games that you're not
04:48the more i started thinking about
04:50simplicity the more i realized that it's
04:52a huge advantage to have a few simple
04:56deeply held beliefs a simple set of
05:02why because we live in an extremely
05:04confusing world and these simple
05:06principles can help us to they can guide
05:09us through the fog so we don't get too
05:13i began to realize that the ability to
05:15keep things simple is actually a
05:17superpower it's one of the secrets of
05:20success both in investing and life
05:24then i started to get excited because i
05:26realized everywhere i looked i found
05:28more examples of simplicity going back
05:33for example i remember studying the old
05:36learning that it contains
05:38613 commandments and i thought who can
05:41remember so many rules let alone obey
05:45that's when i realized well this is why
05:47we needed a top 10 list the 10
05:51but if you actually try to list the ten
05:53commandments how many of them would you
06:00thou shalt not steal
06:02thou shalt not covet thy neighbor's wife
06:05the last time i tried this i got three
06:07out of ten right but i graded myself
06:09dishonestly and gave myself six out of
06:12and i was wondering does that actually
06:13violate one of the ten commandments and
06:16then i thought i don't know i can't
06:20but then i realized i remembered that
06:23there was a great sage 2000 years ago
06:25who taught the most simple and timeless
06:27thing of all the sage's name was hillel
06:29and he said he was asked to teach the
06:31entire old testament in the time that he
06:33was standing on one leg
06:36do not do to your neighbor what is
06:38hateful to you all the rest is
06:42and you know what the the old testament
06:44actually sums this idea up in just three
06:50which translates as and you shall love
06:52your neighbor as yourself
06:57over the years i saw that many of the
06:59greatest investors have this ability to
07:02simplify the game of investing but what
07:06is that they lead surprisingly simple
07:09i remember spending a couple of days
07:11with a famous investor named tom gainer
07:13at his office in virginia and
07:16it felt really like being in a extremely
07:21at one point dana said to me how many
07:23times have you heard my phone ring
07:25and i thought actually i haven't heard
07:28the phone ring more than once in the
07:33gainer had actually consciously removed
07:35all of these distractions that could
07:37break his focus another time i i was
07:40with an investor named laura garrett's
07:43and she's one of america's leading
07:45investors in foreign markets and i said
07:47to her how do you structure your time
07:49we're sitting there eating sushi in a
07:51restaurant in new york and she says well
07:54every friday is a creative day and i
07:56don't schedule anything at all on
07:58fridays and she basically she just goes
08:00to sit by a stream near her home in utah
08:03and she reads a book she writes in her
08:06journal as a way of synthesizing her
08:09and gareth has traveled to about 75
08:12countries but she told me one of her
08:13favorite places on earth is a tiny tiny
08:16island just off the coast of australia
08:19where there are only eight houses
08:22and she often retreats there with a
08:24stack of books and she said you actually
08:26have to get your groceries taken over
08:28there with you on a boat at the start of
08:30this trip and she said to me there's no
08:33internet access her telephone her cell
08:36phone rarely works when she's there
08:38but she said that's just fine because
08:41her disconnection from the noise and the
08:43hubbub and the mayhem and the frenetic
08:45pace of modern life is actually part of
08:48her competitive advantage
08:50it frees her up so that she can think so
08:52that she can concentrate on the simple
08:55essence of her work which is to analyze
08:58companies and to think about countries
09:00and stocks and what the future holds
09:02what i started to realize
09:04is that all of the greatest investors
09:06have this obsession with with reducing
09:09mental clutter so that they can focus on
09:12what's most important to them and
09:14what they're best at
09:15and one way that you could describe this
09:18is actually the art of subtraction
09:20and this idea of the art of subtraction
09:23has had a profound impact on my own life
09:26like all of us i'm constantly bombarded
09:29by emails and phone calls and twitter
09:32notifications and zoom meetings and all
09:35these other guilt-inducing reminders
09:37that i should constantly be doing more
09:40and whenever i'm feeling scattered or
09:42stressed or overwhelmed i remind myself
09:45of what i've learned from gainer and
09:48i don't need to do more i actually need
09:53i try to unclotted my schedule
09:56i think about the few simple priorities
09:58that really will make a difference in my
10:04spending time with my family exercise
10:07that's it pretty much everything else is
10:11i'm always thinking i'm always asking
10:13how can i reduce complexity how can i
10:16simplify my life what can i subtract
10:20there's one other very simple idea
10:23that's changed the way i think and live
10:25and it comes from charlie munger
10:28who has been warren buffett's partner
10:32manga is one half of the most successful
10:35investment team that ever lived and i
10:37was so excited to meet him that i
10:38actually traveled 3 000 miles to los
10:41angeles for a 10 minute interview
10:44mungo was 93 years old and
10:47he looked frail in this dark baggy suit
10:51his mind was as beautiful as ever
10:55i'm sitting there almost knee-to-knee
10:57with this legendary icon and he's
10:59peering at me through these spectacles
11:02and he explains in this deep croaky
11:04voice that what you really want to do in
11:06life is focus on one thing focus
11:09relentlessly on this one thing
11:15manga is one of the smartest people on
11:17earth but he told me that he spent an
11:19inordinate amount of time focusing on
11:22actually reducing what he calls standard
11:25stupidities and idiotic behavior
11:29what do you explain to me is that it's
11:31very difficult to be smart but it's
11:33actually surprisingly easy to be
11:39and it gives you a tremendous advantage
11:41if you work systematically and
11:43consistently to reduce your own
11:45stupidity over the course of your
11:51manga tends to collect many examples of
11:54disasters and then he asked himself
11:57what idiotic actions caused this
12:01once he's identified these idiotic
12:03actions these foolish actions he says
12:05well let me not do that
12:10this habit of of thinking first about
12:13what not to do turns out to be an
12:15incredibly helpful strategy when it
12:17comes to investing if you want to be a
12:19successful investor the first thing you
12:20want to do is say well how could i be a
12:26thanks to manga this is a method that
12:28i've used really consistently over
12:30several years for example we recently
12:33had a family dinner and my daughter
12:36dad shouldn't you be buying bitcoin
12:39and there's a part of me that's thinking
12:41yeah everyone's getting rich overnight
12:44and cryptocurrencies are surging and i
12:46want a piece of the action but then i
12:49well one thing that terrible investors
12:53is they buy overheated assets that they
12:56don't actually understand just because
12:58they can't bear to miss out on the
13:02will bitcoin continue to surge is it a
13:05fad i don't know i have no idea but i do
13:10betting gambling wildly and without any
13:13knowledge on whatever's hottest today
13:16tends to be a standard stupidity it's a
13:18fantastic way of getting yourself in
13:20trouble and knowing that i have a simple
13:23rule i'm not going to do it
13:27once you actually focus on
13:29systematically reducing standard
13:31stupidities in this way it's an
13:32incredibly helpful way of just keeping
13:35yourself out of trouble
13:37but it turns out that this is a
13:38wonderful strategy not only investing
13:41but actually in life
13:43manga told me that if you want to have a
13:45happy life you should start by looking
13:47at all of the idiotic behavior that is
13:51likely to guarantee that you'll have a
13:52miserable life and then
13:58to give you an example manga has this
14:00list of standard stupidities of idiotic
14:03behavior that gets in trouble where he
14:05says okay so don't become addicted to
14:08drugs and alcohol you should be more
14:10reliable if you want to if you want to
14:11have a terrible life be unreliable
14:13harbor grudges harbor resentment seek
14:17and then he said also indulge in envy
14:19which he describes as the dumbest of the
14:21seven deadly sins because it's not even
14:29and i started to realize that actually
14:31this is an incredibly helpful strategy
14:33in my own life and i really wanted to
14:34adopt it and so recently i was having
14:37dinner in new york city with a great
14:39investor named matthew mclennan and we
14:42drank two bottles of superb wine and i
14:44live about 45 minutes outside new york
14:46city so i take the train home and my car
14:48is sitting there waiting for me at the
14:51and it's about a seven minute drive back
14:54to my house and it's almost midnight i'm
14:56tired and i want to go to bed
15:01i'm thinking well i don't think i'm
15:03drunk i don't feel drunk but
15:06what's the downside if i'm wrong what
15:08happens if i'm stopped and i lose my
15:10driver's license what happens if i hurt
15:13then i ask myself what would munga do
15:16and the answer is pretty obvious
15:19this is an idiotic bet the downside is
15:22just catastrophic so it's something i
15:24just shouldn't do i shouldn't drive so i
15:26call my son henry and he comes to pick
15:28me up and i leave my train my car at the
15:31train station what i've learned from the
15:33greatest investors is that nothing is
15:35more important than simply avoiding
15:37catastrophe because if you want to
15:40both in markets and in life the first
15:42rule is that you have to survive you
15:44have to stay in the game
15:47over the last 25 years
15:50i've spent an inordinate amount of time
15:51interviewing the greatest investors and
15:54when i started out i thought well
15:57i had this fantasy that i was going to
15:58become fabulously rich but after
16:00interviewing all of these super rich
16:02investors the truth is that i gradually
16:05realized well the money is not that
16:10these are people who've hit the jackpot
16:12financially they're billionaires who own
16:14private planes and palatial homes and
16:18whatever other toys and baubles you can
16:20imagine and the truth is those toys and
16:22baubles do give them some pleasure but
16:25probably not as much as you would expect
16:28sure the money gives them financial
16:30independence which is very valuable and
16:33they don't have to worry about paying
16:34their bills which is also wonderful
16:37but what gradually dawned on me through
16:39all these interviews over all of these
16:41years is that what really matters most
16:43in terms of their day-to-day happiness
16:46is the most obvious thing of all it's
16:48the quality of their relationships
16:51i remember interviewing a legendary
16:53investor named ed thorpe and i asked him
16:56what makes for a truly abundant life
16:59and thought told me who you spend your
17:01time with is probably the single most
17:04important thing in life
17:06and i have to tell you there's something
17:08wonderfully reassuring about this for me
17:12what i realized is i don't need to
17:13fantasize about becoming fantastically
17:15rich i don't need to dream that the
17:17money is somehow going to make me happy
17:20i have to focus on building joyful
17:23relationships with my family and friends
17:26trying to spend more time with them and
17:28trying despite all of my flaws to become
17:31more loving and kinder
17:34i'm pretty convinced that's the greatest
