Best of MFM: Listen To This Before You Invest Another Dollar

Key Takeaways

• •

  Compound small amounts over several decades

  “If you start with a small amount of money, like $10,000, and you are able to compound that at 25 or 30 percent, the math is staggering over thirty years. The key is not to find a thousand things, but to find the few things that can compound and then get out of their way so they can work for you without interruption.”

• •

  Buy when market fear is highest

  “When the time comes to buy, you won't want to. Usually, the best opportunities are found when the news is at its worst and everyone else is terrified of losing more money. That is exactly when the expected return is the highest because the price has been driven down so far by mass pessimism.”

• •

  Ignore outliers driven by pure luck

  “Don't study lottery winners. If you look at someone who took an enormous, uncalculated risk and it happened to pay off, you're learning the wrong lesson about how the world works. You want to study the processes that produce consistent, repeatable results over a long period of time rather than one-off miracles.”

• •

  Play games that never actually end

  “In a finite game, the goal is to win and end the game. In an infinite game, the goal is to keep playing. Investing is an infinite game where your reputation, your capital, and your relationships all compound as long as you stay in the arena and avoid the mistakes that could knock you out of the game entirely.”

• •

  Make fewer but much larger bets

  “Most investors diversify way too much because they are afraid of being wrong. But if you have high conviction in a business you understand deeply, you should circle the wagons and put a significant portion of your capital to work right there, because truly great opportunities only come around a few times in a decade.”

Episode Description

Want to invest like the best? Get Mohnish's investment playbook: https://clickhubspot.com/jbhm Episode 808: In this special episode, we’re pulling together the most replayed moments from our episodes with value investors like Mohnish Pabrai, Howard Marks and Guy Spier.  — Show Notes:  (0:00) Mohnish Pabrai: How to turn $10K into $1M (3:56) Howard Marks: The S&P 500 (9:29) Guy Spier: Finite and Infinite Games (14:47) Mohnish Pabrai: Circle the wagons (17:58) Howard Marks: Recommended Reading (23:03) Mohnish Pabrai: The most important thing (27:16) Howard Marks: “When the time comes to buy, you won’t want to”  (31:17) Guy Spier: Don’t study lottery winners — Check Out Sam's Stuff: • Hampton (joinhampton.com): My community for founders. Average member does $25m/year. Many of the guests are members. Get after it...apply: http://joinhampton.com/mfm — Check Out Shaan's Stuff: • Shaan's weekly email - https://www.shaanpuri.com  • Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents. • Mercury - Need a bank for your company? Go check out Mercury (mercury.com). Shaan uses it for all of his companies! Mercury is a financial technology company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N.A., and Evolve Bank & Trust, Members FDIC • I run all my newsletters on Beehiiv and you should too + we're giving away $10k to our favorite newsletter, check it out: beehiiv.com/mfm-challenge My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano /