Richer, Wiser, Happier
Contains the best published account of Nick Sleep's Costco thesis.
Summary
Green, a financial journalist, interviewed a set of investors with long records and organised the material by theme rather than by person. The subjects include Sir John Templeton, Howard Marks, Joel Greenblatt, Bill Miller, Charlie Munger, Jack Bogle, Nick Sleep and Qais Zakaria, Tom Gayner, Mohnish Pabrai, Ed Thorp, Jeffrey Gundlach, Francois Rochon and others.
The organising claim is that the practices which make these people successful investors are the same ones that make for a well-run life, and Green pursues the psychological and philosophical material as much as the method. The themes include cloning good ideas rather than insisting on originality, which Pabrai treats as an explicit strategy; simplicity and the deliberate reduction of decisions, which Sleep and Zakaria took to the extreme of holding three positions; resilience and preparation for what you cannot predict, which is Marks' and Thorp's emphasis; the long-horizon patience of Rochon and Gayner; and the character work that Munger treats as inseparable from judgement.
The practical content is real but thinner than the profile format suggests, and readers looking for method will find the investors' actual processes described only in outline. Green's access is good and several of the subjects, particularly Sleep and Zakaria, had not been interviewed at length before, which is the book's main contribution.
It is admiring throughout and there is a selection problem: these are investors who succeeded, and the same practices held by investors who failed are not examined. The chapters on Bill Miller, whose fund collapsed in 2008, are the closest the book comes to confronting that.
Key takeaways 7
- Copying a good idea from another investor after doing your own work is a legitimate and underused strategy, and originality is not a source of returns.
- Reducing the number of decisions and holdings can improve results, and Sleep and Zakaria's three-position portfolio is the extreme demonstration.
- Preparing for outcomes you cannot predict matters more than forecasting, because survival determines whether you are present for the returns.
- A long holding period is an advantage available to anyone, and it is scarce because almost no institutional structure permits it.
- Investors with long records share temperament rather than method, and their approaches are mutually incompatible in technique.
- Understanding your own psychological weaknesses and building a process that removes the situations where they operate is more effective than trying to overcome them.
- The habits that produce good investment judgement, including patience, honesty about error and independence from consensus, apply outside investing as well.
Who should read it
Investors who want profiles of long-record practitioners with an emphasis on temperament and process, read with survivorship bias in mind.
About William Green
Journalist and author; host of the Richer, Wiser, Happier podcast; former editor of Time's European, Middle Eastern, African and Asian editions
Richer, Wiser, Happier distilled three decades of interviews with great investors into one widely recommended book, but his output is narrow.
Where it sits in the reference 3
Who recommended it 1 · 1 direct
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