Low Rates High Returns: Recent Episodes
Pete Wargent and Stephen Moriarty
A podcast about managing your money, hosted by investor and financial coach Pete Wargent and private investor Stephen Moriarty.
In this mini-series Pete and Steve review a range of popular investment strategies to see what investors can learn, and how you can fashion an approach to suit your own circumstances, preferences, and personality. This week, a look at the 52-week formula, a systematic strategy for stock picking to overcome the tendency towards reactionary ‘System 1’ thinking.
Can a simple formula really beat the market? What quality filters need to be used to avoid picking duds?
Resources:
The 52 Week Low Formula: A Contrarian Strategy that Lowers Risk, Beats the Market, and Overcomes Human Emotions – Luke Wiley
Competition Demystified – Bruce Greenwald
Buffettology – Mary Buffett and David Clark
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this mini-series Pete and Steve review a range of popular investment strategies to see what investors can learn, and how you can fashion an approach to suit your own circumstances, preferences, and personality. This week, a look at the famous Dogs of the Dow strategy, coined by Michael O’Higgins.
A simple strategy for beating the market, can this strategy still be replicated today? And how about for Australian investors?
Resources:
O'Higgins Asset Management, Inc. (ohiggins.com) Dogs of the Dow website (dogsofthedow.com) – great resource and there is plenty of information regarding performance of the various strategies. Beating The Dow – Michael O’Higgins Revised edition 2000. The only book you really need. He did also write Beating the Dow with Bonds.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this mini-series Pete and Steve review a range of popular investment strategies to see what investors can learn, and how you can fashion an approach to suit your own circumstances, preferences, and personality. This week, a look at Harry Browne’s Permanent Portfolio: stocks, gold, bonds, and cash. How well has the simple strategy performed over the past few decades, and with what level of volatility?
Resources
Fail Safe Investing (Lifelong Financial Security in 30 minutes) – Harry Browne A quick little read where Harry discusses 17 rules of investing which is mainly index and get on with your life. The Permanent Portfolio (Harry Browne’s Long-term Investment Strategy) – Craig Rowland & J.M. Lawson
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this mini-series Pete and Steve review a range of popular investment strategies to see what investors can learn, and how you can fashion an approach to suit your own circumstances, preferences, and personality. This week, a look at David Dreman’s Contrarian Investment Strategies, buying stocks on low valuations to beat the market.
Resources: David Dreman – Contrarian Investment Strategies: The Next Generation David Dreman – Contrarian Investment Strategies: The Psychological Edge Validea – website with a range of screeners.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
This week Pete and Steve discuss 2021, the year in review.
They consider their 8 timeless investment principles, and how to apply these in 2022.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this 2-part episode Pete and Steve talk to Tim Staermose, the Global Value Hunter.
Tim grew up and has lived all over the world, and is a man who thinks differently from the herd.
Today he runs the African Lions Fund, investing in frontier markets, finding wonderful companies for a bargain price which will compound for the long term.
Learn how and why Tim invests for value, and how he applies the same principles across his whole life, to invest for time and money freedom.
For more information or to contact Tim, see:
globalvaluehunter.com/
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this 2-part episode Pete and Steve talk to Tim Staermose, the Global Value Hunter.
Tim grew up and has lived all over the world, and is a man who thinks differently from the herd.
Today he runs the African Lions Fund, investing in frontier markets, finding wonderful companies for a bargain price which will compound for the long term.
Learn how and why Tim invests for value, and how he applies the same principles across his whole life, to invest for time and money freedom.
For more information or to contact Tim, see:
https://globalvaluehunter.com/
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode Pete and Steve discuss their worst ever investments, and the decision processes that led to their downfall.
Perhaps unsurprisingly, the 8 timeless principles of investing were not followed when making these investments!
Tune in to hear the details of how both Pete and Steve lost thousands before adopting and fine-tuning a systematic approach to investment, based upon solid principles.
Book references: Memoirs of a Fruitcake, by Chris Evans
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this week's episode, Pete and Steve recap on some of the most valuable lessons learned so far from their recent interviews with investment experts, drawn from a range of different fields.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode Steve and Pete speak to Gareth Brown of Forager Funds.
They discuss:
-Gareth's background and how Gareth came to be in the funds management industry
-some of Gareth's best - and worst - investment decisions on his journey
-the problems with the traditional 'value investor' label
-investing in companies before they are profitable
-the investment style at Forager
-how to find discrepancies between price and value
-errors of omission versus errors of commission
Further information:
Forager Funds Management
www.foragerfunds.com
Twitter: @gareth_forager
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
This week Pete and Steve speak to Alan Edmunds, a Sydney-based expert in investing in Australia small caps.
Listen as Alan discusses:
-Why your own personal life situation impacts your ability to invest in small caps (e.g. do you have a mortgage? relationship status? family commitments?). Understand where you are in your own life first
-How to work out your own best method for investing to suit your own personality
-Which sectors he looks in for high growth opportunities, and how to get confident in a company through
-How Alan 'averages up' into a position when he finds a company with strong fundamentals
-Why if you want to achieve big outperformance you need to throw the rule book out the window, remove old assumptions, and find your own method
-How you need to think in probabilities, in investing and in life
-Why investing in small caps is very different from other forms of investing
-Specifically how to value and research small companies in detail
-How and why to trim gains when hitting 3-4x initial outlay
Recommended reading:
Phil Fisher: The Path to Wealth through Common Stocks
George Soros: The Alchemy of Finance
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
This week Pete and Steve meet self-managed superannuation expert Liam Shorte. They discuss with Liam:
-what is the purpose of superannuation in Australia? -is self-managing super for everyone? -how much do you need to self-manage your super? -what does it cost to set up a self-managed super fund? -how much is enough to retire? -should you invest in property, stocks, bonds, gold, art, or other asset classes? -how active do you need to be? -what are the biggest mistakes people make when self-managing? -how do you wind up a SMSF? -the endgame: how do you most efficiently pass on wealth to your kids?
You can get in contact with SMSF Coach Liam Shorte at the following places:
https://smsfcoach.com.au/ Twitter: @smsfcoach
In this episode Pete and Steve chat to Peter Simpson-Morgan, legendary Australian fund manager at Perpetual and 452 Capital.
Peter was known for his 'Peter Lynch' style of investing and in this extended episode generously shares his insight on how he manages his own money today, and much more .
Books referenced -
One up on Wall Street: How to use what you already know to make money in the market - Peter Lynch
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode we chat with Con Mickalakis, Chief Investment Officer of Statewide Super. We talk about our 8 timeless principles of investing with Con and if and how he thinks about them in his job. We also discuss the issues surrounding the management of large amounts of money and what he thinks about the economy and what we could potentially over the next 10 years in terms of asset returns.
You can contact Con further at:
Email: CMichalakis@statewidecom.au
Twitter: @MichalakisCon
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
Welcome to our new mini-series where we interview expert investors across different asset classes from around the traps.
In this episode, Pete and Steve discuss investing in gold with Jordan Eliseo from the Perth Mint.
Jordan works as the Manager – Listed Products and Investment Research for The Perth Mint, and has 25 years industry experience spanning funds management, superannuation and of course precious metals. He has also been an investor in gold since the early 2000s. He is an author of two books and publishes updates on financial markets and the gold market regularly.
If you'd like to get in contact with Jordan his details are below:
Jordan.Eliseo@perthmint.com Twitter: @jordaneliseo
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In the final episode of this mini-series, Pete and Steve discuss their final picks in their top 10 investment books of all time.
Steve chooses: Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World's Most Famous Investor by Mary Buffett and David Clarke
Pete chooses: The Intelligent Investor: The Definitive Book On Value Investing by Ben Graham (revised edition with foreword by Warren Buffett and commentary by Jason Zweig)
All of the books in this mini-series have been:
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Robert J. Shiller - Irrational Exuberance
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Robert G.Hagstrom - The Warren Buffett Portfolio: mastering the power of the focus investing strategy
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Maggie Mahar - Bull: a detailed exposition of the 1982-2003 bull market in the United States.
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Morgan Housel - The Psychology of Money: a broad ranging set of short essays on many of the aspects of money and wealth.
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Michael Mauboussin - The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing
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Pete Wargent and Steve Moriarty - Low Rates High Returns: Timeless Investment Principles the Low Risk Way
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William Poundstone - Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
-
Nassim Nicholas Taleb - Antifragile
-
Mary Buffett and David Clarke - Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World's Most Famous Investor
-
Ben Graham- The Intelligent Investor: The Definitive Book On Value Investing
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode Pete and Steve discuss their next two selections in their Top 10 Investment Books.
Steve chooses Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street by William Poundstone.
And Pete chooses Antifragile by Nassim Nicholas Taleb.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode Pete and Steve choose the next two books in their top 10 investment books.
This week their selections are:
-
Michael Mauboussin - The Success Equation - Untangling Skill and Luck in Business, Sports, and Investing
-
Pete Wargent and Steve Moriarty - Low Rates High Returns - Timeless Investment Principles the Low Risk Way
Other books referenced:
Bill Bryson - A Short History of Nearly Everything
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
Following on from last week, Pete and Steve chat about two books they think offer investors some insights into wealth building and investing in general. The books actually compliment each other even though they address different aspects of wealth building and investing. The books are:
-
"Bull" by Maggie Mahar - a detailed exposition of the 1982-2003 bull market in the United States.
-
The Psychology of Money by Morgan Housel - a broad ranging set of short essays on many of the aspects of money and wealth.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode Pete and Steve nominate two of their favourite ever books on investing.
Books referenced:
-
Robert J. Shiller - Irrational Exuberance
-
Robert G.Hagstrom - The Warren Buffett Portfolio: mastering the power of the focus investing strategy
-
Stephen Jay Gould: Full House: The Spread of Excellence from Plato to Darwin
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In our new series The Ten Best Books, over the coming weeks we are going to discuss those books which Steve and I believe can assist investors to make better investment decisions.
Out of all the books we have read, we believe these ten are special. Whether they focus on theory or practical aspects of investing, we think they can provide an investor with a core investment philosophy and importantly investment principles to live by.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
We hope you have enjoyed the 4 F's as a detour from our usual finance topics. But both Pete and Steve understand that while finance is critical, it is important to place it in context to our whole life. We believe wealth building is important but needs to be a part of a wider goal of living a rich life. In this final episode we apply the 8 characteristics to finance and discuss where it fits in with the other F's - fun, fitness and filosophy.
In the next series, Pete and Steve will be discussing their 10 favourite investment books and what lessons we can learn from them in order to make us better investors.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode Pete and Steve discuss the 3rd of the 4 F's - fun.
They discuss various aspects of fun like - Should it be planned? Can you have fun by yourself? What role does personality play in determining what fun is for you as an individual?
Join Pete and Steve as they discuss the 4 F's characteristics and what it means for fun.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode on Fitness, Pete and Steve discuss how each of the 4 F's characteristics can help you maintain a healthy physical and mental lifestyle. As Pete and Steve often discuss, when it comes to finance you don't want to overdo it and the same principle applies to fitness. You need to consider a health and eating plan based on your personality type and lifestyle and be prepared to adapt your program to your ever changing lifestyle.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode Pete and Steve discuss philosophy and why it is arguably the most important of the 4. They use the characteristics discussed in previous episodes to determine how philosophy has evolved since the earlier generations. With a focus on the 9 Types, Pete and Steve delve into just how you can use the characteristics to assist in developing your own philosophy to help you achieve greater wellbeing.
Books Mentioned:
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Bowling Alone: The Collapse and Revival of American Community - Robert D. Putnam
-
The Life-Changing Magic of Tidying - Marie Kondo
-
Ikigai: The Japanese Philosophy for a Happy and Meaningful Life, Shizuka Kobayashi
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode Pete and Steve discuss the final 4 characteristics that you should think about in developing your 4 F's model. They discuss, thinking, curiosity, perseverance and finally planning and how each of these can help you in achieving your goals and living a balanced life.
Books mentioned:
- The E-Myth by Michael E. Gerber
- Stephen Jay Gould
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode, Pete and Steve discuss 4 of the characteristics or principles that we each should consider when building your own 4 F's model.
We discuss the importance of balance and how it can impact your life. We talk about distributions like the normal distribution and relate it to finance.
How important it is to have a dynamic approach rather than a static outmoded view of the areas that impact our lives and finally, how discipline works in the model.
Books mentioned:
- Awaken the Giant Within - Anthony Robbins
- The Pyschology of Money - Morgan Housel
- The Complete Book of Running - Jim Fixx
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this new series Pete and Steve discuss their 4 F's mental model. The 4 F's stands for:
Fun Fitness Finance and Filosophy.
In this introductory episode Pete and Steve outline their thoughts around what makes a life successful. Being successful is about your whole life, not just the financial side and so it is important to pay attention to the other 3 - fun, fitness and filosophy.
So join Pete and Steve as they discuss some of their life experiences and share how you can build not only wealth but a successful life.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this, the final episode in the Buffett mini-series, Pete and Steve discuss what we can learn from Warren Buffett's journey as an investor. Are there any special characteristics that each of us can gain from Buffett in helping us be successful not just in investing but in life in general.
Recommended books for the series:
· The New Buffettology · The Warren Buffett Way · Buffett: Beyond Value · 7 Secrets to Investing Like Warren Buffett · Buffett: The Making of and American Capitalist · The Snowball · The Dao of Warren Buffett · The Warren Buffett Portfolio · Warren Buffett and The Interpretation of Financial Statements · Buffett: Ground Rules · Berkshire – Partnership Letters
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode, Pete and Steve discuss the Kelly Criterion and whether Warren Buffett could be considered a Kelly investor.
Buffett has never mentioned whether he is a Kelly investor, but by looking at the Kelly principles, Pete and Steve believe that Buffett is probably a Kelly investor given the way he invests and his philosophy which appears to be closely aligned with Kelly.
They also discuss what criteria make for a Kelly type investor and how it can lead to greater investment returns over the long run.
Books referred to:
The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy by Robvert G. Hagstrom
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode, Pete and Steve chat about how Buffett has been able to succeed by saying no to a majority of investing themes and remaining through thick and thin to his investment style.
Many investors especially when first starting out, say yes to everything and often come to the conclusion that saying no more often than yes leads to investment success. Again Pete and Steve demonstrate that simple principles and the avoidance of complexity in investing is the best approach.
They discuss a range of criteria that along with Buffett, you should say no to. And also ask a more philosophical question about what success actually is.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode, Pete and Steve discuss each of Warren Buffett's criteria of what constitutes a "simple" business.
(1) Large purchases and large companies, (2) Demonstrated consistent earning power, (3) Businesses earning good returns on equity while employing little or no debt, (4) Management in place (we can’t supply it), (5) Simple businesses (if there’s lots of technology, we won’t understand it), (6) An offering price.
We then summarise whether all of these have the same importance and which ones may be more important.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this episode, Pete and Steve discuss Buffett's quote "be fearful when others are greedy and greedy when others are fearful".
They discuss Buffett's musing about the value of the stock market overall; his understanding and the way he takes advantage of other investors emotions and how he uses logic as a central part of his steadfast conviction that price follows value; How CAPE can assist in considering when to enter and exit markets; and finally Buffett's favourite macro valuation metric and what you need to do to be able to be fearful when others are greedy and greedy when they are fearful.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
"Price is what you pay, and value is what you get". So says the master Warren Buffett.
In this episode Pete and Steve discuss what exactly Buffett thinks about price and value and what do they really mean for investors. We also discuss value in both the micro and macro sense and also a discussion on how Buffett thinks about value. And of course, we chat about our old favourite the CAPE ratio and how it ties to the idea of value.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this podcast series on Warren Buffett, Pete and Steve dissect some of Buffett's best known quotes to determine what Buffett means and how you can use Buffett's philosophy to improve your investment prowess.
In this opening episode, Pete and Steve discuss the meaning behind Buffett's best known quote "Rule No.1 - Don't Lose Money and Rule No. 2 is Don't Forget Rule No. 1".
Pete and Steve also get the chance to throw in a few more Buffettisms and what the quote has to do with risk and your stock or property portfolio. They also discuss how Buffett thinks about risk, patience and of course CAPE and why the earnings yield is so important for investment success.
And end this episode with some advice when thinking about investing.
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
Join Pete and Steve as they wrap up the Economics and the Market series with this episode where they discuss:
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What are our beliefs about the connections between economics and markets?
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Which way does the correlation go – do markets drive economics or the other way around. Because asset prices are such an important part of our wealth, they play a much greater role than they did for previous generations.
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What is the Low Rates High returns philosophy regarding markets and economics?
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And finally is there a holistic philosophy/model that we can apply when investing?
Thanks for listening!
Download a free copy of our latest book, Total Money Management – How to escape the rat race and unlock your financial independence. www.gonextlevelwealth.com.au/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
It's widely assumed that there is a close connection between the stock market and the broader economy.
It sort of makes sense, right? After all, both deal with money!
In this episode, Pete and Steve discuss whether there actually is a correlation between economic growth and stock market returns, and they question whether economic growth actually does assist investors in delivering superior investment returns.
Listen to this week's episode and understand why the CAPE and earnings yield remain the critical variables in delivering stock market returns, and the logic of why economic growth is not highly informative to your portfolio returns.
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ www.lowrateshighreturns.com/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
Is MMT good for the stock market? Why is it so controversial? In this episode Steve and Pete discuss the various aspects of MMT including whether it is good for markets and the impacts of the theory on your stock market portfolio.
Books - Stephanie Kelton, The Deficit Myth; L. Randell, Wray Modern Monetary Theory.
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ www.lowrateshighreturns.com/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
Economics has a long history but one that is littered with failures to predict large influential events that impact the global economy. The Queen of England famously asked why economists could not have seen the Global Financial Crisis before it happened.
Since the GFC, economics and alternative theories have been gaining wider publicity as a result of the consistent failures of the neo-classical theory to avert economic problems such as poverty, recessions and growing inequality.
In this episode, Pete and Steve discuss some of the latest developments in economic theory which focus on the behavioural aspects of people. And so we think psychology, behaviour and personality all play a distinct role in our economic decisions and this also influences how we see markets.
Reference Books 1. Robert Shiller - Narrative Economics 2. Rory Sutherland – Alchemy 3. Kahneman – Thinking Slow, Thinking Fast 4. Ergodicity Economics – Ole Peters
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ www.lowrateshighreturns.com/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this opening episode of Series 5, Steve and Pete discuss the history of economics and how the theory has evolved over time. This is the first in the series which seeks to gain a greater understanding how economics interacts and influenced the stock market.
Reference books: 1. John Kenneth Galbraith – Any of his books are great but 2 stand out – The History of Economics and The Great Crash 2. Robert Heilbroner – The Worldly Philosophers 3. Binyamin Appelbaum – The Economists’ Hour 4. Money and Government – Skidelsky 5. Quantum Economics – David Orrell
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ www.lowrateshighreturns.com/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
Participating in any market bubble can be lots of fun. Making money and watching your portfolio grow quickly is music to every investors ears. But what about when you recognise the market is getting or is in a bubble.
What should you do?
Should you join in? Sell out and wait in cash? Find alternative stocks? Ignore the bubble and forge on?
In this episode, Pete and Steve discuss how you should invest when markets are looking bubbly and what options are available to investors to profit and not get caught up and suffer investment losses.
All these questions are important for you to make successful investment decisions over the long term.
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ www.lowrateshighreturns.com/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
Market bubbles are generally thought of as overall negative events because when they burst they leave behind a lot of sad investors who are nursing heavy losses.
Once the bubble bursts, investor get a change to survey the damage. But most clouds have a silver lining if you look hard enough.
In this episode. Pete and Steve discuss what happens after the bubble bursts and whether there is any good to come from them.
And what lessons can investors, both new and old learn from market bubbles.
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ www.lowrateshighreturns.com/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In today's episode we discussed some of the characteristics of a bubble, and how they can be identified.
We discussed several warning signs, including the following: -Valuation metrics become redundant -No price too high! -Technical analysis starts at high valuations -Investor profile: a surfeit of new young men coming into the market -A sharp rise in the use of leverage
We also discussed why it's difficult to pick the top.
Books/articles referenced
David Einhorn Buchanan Capital cycle theory Buffett at Sun Valley article
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ www.lowrateshighreturns.com/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
The excessive bubbles of history took a great economic situation and extrapolated it into the future, based on an assumption that today’s perfect conditions will continue.
We find there are bubbles in all asset classes – property, stocks, art, basically any area where people trade.
Jeremy Grantham recently said - “We are in a bubble,” “but it is unlike any other.”
Everything is overpriced, he said, but there is no way to say when they will peak.
To call that peak, it is useful to look for signs of “crazy” behaviour. In this episode, we ask what is a bubble? Is there any agreement on what constitutes a bubble?
Are there any similar characteristics?
We also discuss bubbles across countries, industry sectors and of course individual companies.
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ www.lowrateshighreturns.com/podcast
Pete Wargent www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty twitter.com/SGM63
In this week’s episode we discuss:
-The ‘risk hierarchy’ of investing and why individual companies can carry the greatest risk -Why systematic structural advantages can lead to investment success -Porter’s 5 forces versus Greenwald: which model is better -Monopolies and oligopolies – supply versus demand -industry specific models -other simple models for finding value
Other simple models - EV/EBIT (Carlisle), 52 Week Low (Wiley), Low P/E (Dreman/Neff) Net Nets (Graham), - discuss benefits of each. Bottom 3 ETFs is a pretty simple and effective model
Books mentioned: Jonathan Tepper – The Myth of Capitalism Bruce Greenwald and Judd Kahn – Competition Demystified Tobias E. Carlisle – The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this week’s episode we discuss:
-industry cycles and why they repeat -industry CAPE ratios -why supply matters as well as demand -focussing on statistics over stories -a very simple method for investing in sector ETFs!
Books mentioned: Geoffrey West – Scale Jonathan Tepper – The Myth of Capitalism James O’Shaughnessy – What Works on Wall Street Edward Chancellor – Capital Returns: Investing Through the Capital Cycle Jeremy Siegel – The Future for Investors: Why the Tried and the True Triumph over the Bold and the New
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this week’s episode we discuss:
-which model is best for the stock market? Which model reflects the true reality? -what is capital growth theory? -why it’s best to think dynamically and to take an active approach -why EMH is best for financial advisors, but not for you -our 8 timeless principles and how they work as a model -are markets random? How best to cope with randomness -how to adjust your approach as the environment changes
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this week’s episode we discuss:
-Why every investor has a favourite model for achieving superior returns -Characteristics of the different ways to invest: fundamental, technical, or quant -Why simple models outperform the complex -Correlation and complexity: why it’s so hard to weight variables to stock market returns -Investing over different timeframes -Which model is best for you and your personality types -The greatest investors and their commonalities
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this week’s episode we discuss systematic simplicity, and how more moving parts can mean that there are more things to go wrong.
Here’s what we cover and discuss: • Why discounted cashflow calculations are difficult • What’s the best way to value a company? • How the great investors can end up with simple systems and variables • Do computers add any value for investors? • Why simple doesn’t mean thoughtless • Some simple models for investing • Calm and circumspect: how systems can reduce emotional reactions • Repeating behavioural investing • Good decades and not-so-good decades • Why are investors drawn to complexity? • Our 8 timeless principles for investing
Books referred to: Ben Graham - Security Analysis Ben Carlson – A Wealth of Common Sense Ben Graham – The Intelligent Investor James Montier – Value Investing
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent: www.petewargent.com/ www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty: twitter.com/SGM63
In this week’s episode we discuss:
-our earliest experiences in stocks: stock tips and speculation! -how to formulate a systematic approach -the historical composition of returns from stocks: dividends and capital growth -are dividends better than capital gains? -Australia and franking credits -US stocks and share buybacks etc -worrying less about capital gains tax -capital growth theory and the Kelly Criterion
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this week’s episode we discuss:
-our personal journeys: Steve and Pete -the 9 different personality types and your underlying money motivations -typical spending patterns in middle age -how your spending patterns might change in retirement -our ‘3 Wells of Wealth’ model -Well 1 (living) – because expenses compound negatively -Well 2 (lifestyle) – medium-term liquid investments in stocks, bonds, and cash -Well 3 (legacy – compounding long term) -the 4Fs model: finding your route to happiness in retirement -designing your ideal day and lifestyle -our parents’ generation: the pension, annuities etc. -changing life expectancy -the kids and leaving a legacy
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this week’s episode we discuss:
-Bogleheads, and why is market timing such a contentious issue? -how to work the numbers: follow trends not stories -alternatives to slippery P/E ratios -why investing is not a get rich quick scheme -why you should always buy low -why stock traders get sucked in every cycle by the lure of quick profits -never accept unsolicited financial advice! -the CAPE ratio -the buy and hold view -why even rebalancing and dollar cost averaging is a form of timing the market -changing allocation with age is also a form of timing the market – even if automatic it’s still timing the market
Books mentioned: Ben Stein and Phil DeMuth – Yes, You Can Time the Market! John Bogle – The Little Book of Commonsense Investing
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63\
In this week’s episode we discuss:
-our personal stories, and working with pre-retirees in 2006 -our personal journeys with superannuation and then SMSFs -our 3 Cs model: cost, choice, and control -how much is enough? when is it cost effective to self-manage your super? -getting educated and learning the skills -being in charge of your own destiny -what type of investments go in SMSF for long term -how to invest: at ages 30, 40, 50, and 60 -what about property in SMSFs? The pitfalls, and is it ever a good idea?
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this week’s episode we discuss:
-real estate: more millionaires, tax breaks, and a stable long-term investment, but… -the great debate! Property, shares, or both? -our personal experiences in property: Steve and Pete -base rates and regression to the mean, long term returns vs. inflation -why interest rates are like gravity for real estate investments -personal goals and ‘Well’ 3 investments -leverage, concentration, and illiquidity, real estate’s greatest strengths can also be its weaknesses -leverage: the good and the bad -financial freedom: No debt, ‘rent to own’ -investing in REITS -putting property into your personal context and holistic NLW plan
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
One thing all successful investors have in common is that they develop their own systematic approach.
If you don’t have a systematic approach to investing, you will surely fail. Some of the points we cover in this episode:
-Staying in your lane -You either invest using gut feelings, or have a process -Focussing on process over outcomes: is both difficult and easy -Why developing the systematic approach is the hard part -Why you must develop your own written plan -People are patterns – the 8 timeless principles of investing -Nothing makes u question your system like a bad run -Don’t be influenced by your social circle...or social media! -Read widely, talk to experienced investors, developing a system takes time
Books mentioned The Road to Wigan Pier, George Orwell
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
To become a better investor you need to have a rigorous process of analysing your decisions, and objectively determining whether results have been due to skill or luck. Here we discuss distinguishing between processes versus outcomes.
Some of the points we cover in this episode: -The importance of practice and repetition -Why great investors analyse their mistakes rigorously -How to become less emotional as an investor over time -The predictive ability (or otherwise) of experts -One hit wonders! -What are base rates and why are they useful?
Books mentioned: Thinking Fast and Slow, Daniel Kahneman Success Equation: Untangling Skill and Luck in Business, Sports, and Investing, Michael J. Mauboussin
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
We discuss the Kelly Criterion and the psychology of maximising your long-term wealth…and how to approach your wealth goal safely.
Some of the points we cover in this episode include: -The prince and the pauper: diminishing marginal utility -Why we should become more risk averse as we approach our wealth goal -Arithmetic versus logarithmic returns -Compounded returns: Buffett versus the S&P 500 1965-2019 -Exponential returns and why the rich get richer -Objective versus subjective approaches to Kelly investing -Betting what you’re emotionally comfortable with
Books and research mentioned Daniel Bernoulli – expected utility hypothesis (diminishing marginal utility)
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
We discuss social physics and the potential perils of groupthink. Some of the points we cover in this episode include: -What is groupthink and why does it exist? -Why we like to run with the bulls -Why we like to think we’re all different (but we really aren’t) -The critical role of leverage in market cycles -PLUs: people like us
Books mentioned The Art of Contrary Thinking, Humphrey Neill Critical Mass, Philip Ball Forecast: What Physics, Meteorology, and Natural Sciences can teach us about Economics, Mark Buchanan
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
If you want to manage your own money, you need to be able to think independently rather than being influenced by too many sources. We discuss what influences our decision-making, and the two different ways of making a decision. That is, individually, or as part of a group. Some of the points we cover in this episode include: -How we are influenced by the media and our social circle -How to disseminate information more carefully -Being wary of narrative economics -The Myers-Briggs test versus the Enneagram Assessment -How the brain creates emotions -Influence fads -Social physics: why we don’t always act as individuals in our own self-interest -Why this cycle has echoes of the dotcom bubble? Books referenced Irrational Exuberance, Robert Shiller How Emotions are Made, Lisa Feldman Barrett Devil Take the Hindmost, Edward Chancellor Extraordinary Popular Delusions and the Madness of Crowds, Charles Mackay Mastering the Market Cycle: Howard Marks Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
If you want to be a successful investor, then naturally you need to take a position on future events.
Yet making predictions is difficult, especially when they are about the future!
Some of the points we cover in this episode include: -The history of some very wrong predictions -The problem with ‘expert predictions’ on the economy and markets -Prediction biases: recency bias and priming -How can you be a better predictor? -Can the crowd ever be wise? -The Superinvestors of Graham and Doddsville
Books mentioned: The Wisdom of Crowds, James Surowiecki Superforecasting: The Art of Science of Prediction, Philip Tetlock Thinking Fast and Slow, Daniel Kahneman The Base Rate Book: Integrating the Past to Better Anticipate the Future, Michael Mauboussin The Black Swan, Nassim Nicholas Taleb The Superinvestors or Graham and Doddsville, Warren Buffett, Hermes Magazine, Columbia Business School
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this episode, we discuss how we use the Kelly criterion in our own investing strategy.
Investing is not a one-time event, and markets are not always efficient, as claimed by Harry Markowitz and his followers.
Investing is instead a series of repeated similar bets, and markets are frequently inefficient.
We can regularly find stock markets and sectors which have become cheaper than their long-run mean valuations.
Given the above, why wouldn’t you look to place bets on high-probability events rather than risk losing your capital in expensive markets?
Kelly developed a formula that showed how to invest fractionally and understand your edge.
Kelly investing should lead you to the question: ‘What is your informational edge?’
In this episode Stephen tells us about one informational edge he uses - the CAPE ratio - and how it can be yours too, given its high correlation with expected returns.
We discuss why understanding the Kelly criterion, capital growth theory, and position sizing are crucial to maximising your long term wealth.
There will always be great opportunities in the future, so you must make sure you are around to capitalise on them by waiting for the fat pitch.
Some of the key points we discuss in this episode include: -What is the Kelly Criterion? -A proven system for maximising your long-term wealth -THIS is what your information edge can be -It’s a big world out there, and there are many markets to choose from. Why limit yourself? -When the odds are in your favour, bet more (and when they’re not, bet less...or not at all).
Download a free chapter of our book: https://www.lowrateshighreturns.com/podcast
These are the books we mentioned in the episode. Check them out!
Fooled by Randomness by Nassim Taleb: https://www.goodreads.com/book/show/38315.Fooled_by_Randomness
The Warren Buffett Way by Robert G. Hagstrom https://www.goodreads.com/book/show/18613679-the-warren-buffett-way-workbook
This episode does exactly what is says on the tin!
We tell you how and where we’re investing our money today...and why!
We discuss the benefits of holding some cash, why patience is critical, and how to maximise your long-term wealth while thinking across different timeframes.
Some of the key points we discuss in this episode include:
- Why everyone’s portfolio is (and should be) different
- How we’re investing our money today
- What are we investing in today?
- THIS is why we think about money and investing in 3 different timeframes
- Total money management: our unique approach to managing money for total financial independence
Thanks for listening!
Download a free chapter from our book’ Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
The Kelly Criterion holds that we should look to buy companies when they are cheap or undervalued, to maximize our geometric returns.
But remember the risk hierarchy: investing in individual companies can entail a risk of permanent loss of capital.
Instead of looking for the next big thing, when investing in companies we look instead for market mispricing: finding opportunities to buy a dollar for 50 cents.
The Lindy Principle tells us that when some companies and brands have been around for a very long time, then we should expect them to remain around for a very long time into the future - a key quality to look out for in potential company investments.
We discuss how to find established, profitable, systemic companies, which will throw off powerful dividend or income streams for decades to come.
OK, everybody look away now: Steve also tells us why tobacco has been one of the best performing sectors over the decades.
We touch on the pros and cons of ethical investing (ESG) from a returns perspective, and how fund managers are now shifting their thinking towards investing in sustainable companies.
Some of the key points we covered in this episode include:
- What type of companies should you invest in?
- How to avoid losing money in individual stocks
- Looking for established, systemic companies
- Which sectors to look for and which to avoid
- The importance of the dividend component of your returns
Thanks for listening!
Download a free chapter from our book ’ Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
Rebalancing is a magical tool, and a critical part of managing your portfolio.
As we talked about in Episode 1, investing is not a one-time event, but rather a series of repeated similar bets.
Regular rebalancing is a tool used by investment professionals to manage risk, and is proven to help you generate higher returns over time.
Using realistic numbers and even some personal examples, we shed some light on the concepts of rebalancing your portfolio.
Rebalancing effectively forces you to take money off at the highs and feed it back in at the lows.
In summary, the key points covered in this episode are:
- What is rebalancing?
- Why do the professionals rebalance?
- Forcing yourself to take money off at the highs… and feed it back in at the lows
- How rebalancing manages your risk more effectively
- THIS is why rebalancing improves your returns.
Thanks for listening!
Download a free chapter from our book’ Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
We’ve all heard the phrase ‘don’t put all of your eggs in one basket’.
In this episode we discuss several of the ways in which you can diversify to minimize risk, without adversely affecting your returns.
We talk about the difference between investing in individual companies and ETFs, how to screen for opportunities, and we dive deeper into the key elements of investing in countries, sectors, and styles.
Some of the key points covered in this episode are:
- Rule #1: Don’t Lose Money!
- Black swan events and why you mustn’t have all of your eggs in one basket
- Diversifying across positions.
- Diversified products (ETFs and index funds)
- Diversifying across countries, sectors, and styles
- Diversifying over time: averaging down into value investments
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
We think about money across 3 timeframes, and in this episode we show you how you can too.
If you want to be truly financially independent, of course you need to grow and compound your net worth.
But also need to have liquid assets and cashflow to pay for your living and lifestyle costs.
Some of the key points we covered in this episode include:
- Why we think about money and investing across 3 timeframes
- Well 1: Living Costs (0-12 months) - how you can manage your short-term money profitably for cashflow
- Well 2: Lifestyle (2-5 years) - our proven ETF strategy using capital growth theory
- Well 3: Long term and legacy (lifetime investments) -potentially including real estate, and large, systemic companies for long term dividend income and compound growth
Thanks for listening!
Download a free chapter from our book ’ Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
We already know we aren’t all rational when it comes to money and investing.
Moreover, we all have different underlying motivations, goals, strengths, and weaknesses when it comes to how we think and make decisions about money.
How can we improve our results?
By knowing thyself, and by developing a systematic approach which plays to your strengths and negates your weaknesses!
Some of the key points we cover in this episode include:
- What are the 9 Personality Types?
- How we use the Enneagram Assessment to benefit you
- Understanding your unique strengths and weaknesses to make better decisions
- How your personality type impacts your decision making
- How to get your own Free Investment Map
Thanks for listening!
Download a free chapter from our book ’ Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
You don’t have to be heavily invested in the market at all times, whatever the finance industry might tell you (or sell you!).
In fact, it makes logical sense to manage your exposure through the cycle.
To maximise your geometric returns, it’s critical to avoid large drawdown in your wealth.
Some of the key points we cover in this episode include: - What is asset allocation and how should we approach it? - Why is asset allocation key to your success? - How to address your macro allocation - THIS is when you should increase/decrease your exposure to stocks - How to manage your micro allocation
Thanks for listening!
Download a free chapter from our book ’ Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
If Rule #1 of investing is ‘don’t lose money’ then it makes sense to understand which investments entail a risk of the permanent loss of capital.
Some of the key points we cover in this episode include:
-An explanation of our ‘Risk Hierarchy’ principle’? -The capitalist distribution: why most companies fail to deliver the goods -Why it’s so hard to pick stocks consistently well -How and why you can use index funds and ETFs -If you must invest in companies...do THIS!
Thanks for listening!
Download a free chapter from our book ’Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
In this episode we discuss the problems and challenges with the ‘buy & hold’ approach to investing.
Put simply, it doesn’t work all the time.
Markets aren’t always efficient, and we can instead use valuation tools to manage exposure, and position ourselves to outperform through full market cycles.
We get stuck into some practical information on how to use the CAPE (cyclically adjusted price-to-earnings) ratio as one way to guide your path.
We present analogies, statistics, and personal experiences of investing through various market cycles.
In summary, the key points we covered in this episode are:
- Stocks don’t always go up!
- The problem with buy and hold: it doesn’t work all the time
- The problem with ‘average’ returns
- This is why the geometric return is the key to maximizing your long-term wealth
- Why you must buy low and sell high to optimise your actual wealth
Books mentioned:
Mastering the Market Cycle by Howard Marks https://www.goodreads.com/book/show/37570460-mastering-the-market-cycle
Probable Outcomes by Ed Easterling https://www.goodreads.com/en/book/show/10314811-probable-outcomes
Thanks for listening!
Download a free chapter from our book ’ Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Find out more about our coaching program: https://gonextlevelwealth.com.au/
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63
If you can learn the skills to manage your own money, you have more choice, and more freedom to choose your own financial journey.
What used to involve endless number-crunching can potentially be achieved in moments with the click of a button these days.
It’s never been easier to control your asset allocation, where you’re investing, what you’re investing in, and how much of your money is on the table.
You don’t have to be Warren Buffett to manage your own money - it’s not that hard, honestly!
In this episode we explain some of the simple but often misunderstood aspects of stock market results, including the geometric return, and how and why this can so often confuse investors.
Some of the key points we cover in this episode include:
- Our 3 Cs Model: Cost, Choice and Control
- The fees problem
- The long-term cost of advisory and fund management fees
- The industry problem with misaligned goals
- Choice: It’s a big world out there! Why restrict yourself?
- Why you should consider taking charge of your own money
Thanks for listening!
Download a free chapter from our book’ Low Rates, High Returns’ https://www.lowrateshighreturns.com/podcast
Find our more about our coaching program https://gonextlevelwealth.com.au/
Pete Wargent https://www.petewargent.com/ https://www.linkedin.com/in/pete-wargent-37228322/
Stephen Moriarty https://twitter.com/SGM63