1 00:00:00,960 --> 00:00:05,720 Speaker 1: You're listening to a Sharsy's podcast. Welcome to Shared Lunch 2 00:00:05,760 --> 00:00:08,760 Speaker 1: Brutie by Sharesy's Ungarth Bray. And I'm probably on holiday 3 00:00:08,760 --> 00:00:11,360 Speaker 1: by now and a bit you are too, le Let's 4 00:00:11,360 --> 00:00:13,800 Speaker 1: take a look at what I did this year and 5 00:00:13,800 --> 00:00:16,040 Speaker 1: what you might have missed, because I think you might 6 00:00:16,200 --> 00:00:19,720 Speaker 1: quite like it now. Just before we started to hear 7 00:00:19,840 --> 00:00:23,239 Speaker 1: talk about the AI bubble, Scott Phillips from The Motley 8 00:00:23,280 --> 00:00:26,280 Speaker 1: Fool and I sat down for a chat about navigating 9 00:00:26,400 --> 00:00:29,440 Speaker 1: those uncertain waters. 10 00:00:28,440 --> 00:00:30,960 Speaker 2: Which asks another question, but really quickly, the job of 11 00:00:31,000 --> 00:00:34,960 Speaker 2: the investor is not to be right or wrong. Sounds silly, right, 12 00:00:35,440 --> 00:00:36,920 Speaker 2: The job of the investor is not to be wrong. 13 00:00:37,080 --> 00:00:39,960 Speaker 2: Why Because you can't know in advance. My crystal ball's broken. 14 00:00:39,960 --> 00:00:42,280 Speaker 2: Your crystal ball's broken. Everybody watching. If you think your 15 00:00:42,280 --> 00:00:45,360 Speaker 2: crystal ball's working, go and check yourself in somewhere. It's not. 16 00:00:45,520 --> 00:00:47,320 Speaker 2: I promise you. You don't know what the future holds. 17 00:00:47,640 --> 00:00:49,120 Speaker 2: What you can do, what you should do as an 18 00:00:49,120 --> 00:00:53,000 Speaker 2: investor is work on probabilities. Right, In other words, what 19 00:00:53,120 --> 00:00:55,040 Speaker 2: is the risk of a downside? What is the chance 20 00:00:55,120 --> 00:00:59,480 Speaker 2: of the upside? So I'm an investor who values quality 21 00:00:59,560 --> 00:01:02,000 Speaker 2: first and almost And one of the rules I try 22 00:01:02,000 --> 00:01:04,959 Speaker 2: and live by is I'm slow to buy, but even 23 00:01:05,040 --> 00:01:07,880 Speaker 2: slower to sell. Right now, What does that mean? Slow 24 00:01:07,920 --> 00:01:10,160 Speaker 2: to buy a means I want to make sure that 25 00:01:10,240 --> 00:01:12,360 Speaker 2: I feel really, really really good about what I'm buying, 26 00:01:12,880 --> 00:01:16,000 Speaker 2: both from a quality and a price perspective. And if 27 00:01:16,040 --> 00:01:18,640 Speaker 2: I've done that work properly, then I want to be 28 00:01:18,680 --> 00:01:22,200 Speaker 2: even slower to sell, because if I've analyzed them, and 29 00:01:22,240 --> 00:01:24,360 Speaker 2: I took about when I sell at different prices, if 30 00:01:24,360 --> 00:01:26,200 Speaker 2: I've got a quality business, I woant to let that 31 00:01:26,240 --> 00:01:29,720 Speaker 2: go really, really, really reluctantly. Right Warren Buffett says it's 32 00:01:29,720 --> 00:01:31,840 Speaker 2: better to pay a fair price for a wonderful business 33 00:01:32,280 --> 00:01:35,200 Speaker 2: than a wonderful price for our fair business. So if 34 00:01:35,240 --> 00:01:37,080 Speaker 2: I've got a wonderful business in my back pocket, in 35 00:01:37,120 --> 00:01:40,560 Speaker 2: my portfolio, I'm going to let that go really reluctantly. 36 00:01:40,800 --> 00:01:42,520 Speaker 2: I'll say one of the businesses too. Of the businesses 37 00:01:42,560 --> 00:01:44,560 Speaker 2: we sold from out for our members or recommended they sell, 38 00:01:44,840 --> 00:01:47,480 Speaker 2: got to price earnings ratios of eighty and ninety times 39 00:01:47,600 --> 00:01:51,240 Speaker 2: before we recommended they sell right now, which is extraordinarily high. 40 00:01:51,480 --> 00:01:53,520 Speaker 2: Why do we not pull the trigger earlier? Because we 41 00:01:53,640 --> 00:01:55,840 Speaker 2: kind of went well, the great business I really really 42 00:01:55,840 --> 00:01:57,680 Speaker 2: don't want to sell us I have to, And then 43 00:01:57,680 --> 00:01:59,880 Speaker 2: we went, well, okay, now I'm out, so we enter 44 00:01:59,920 --> 00:02:01,480 Speaker 2: your question. I'm not a value in I'm not a 45 00:02:01,480 --> 00:02:03,920 Speaker 2: capital V value investor, nor am I a capital G 46 00:02:03,920 --> 00:02:07,240 Speaker 2: growth investor. I think the distinction is really unhelpful. Frankly, 47 00:02:07,440 --> 00:02:09,000 Speaker 2: people out there can do their own thing, but for me, 48 00:02:09,000 --> 00:02:11,600 Speaker 2: it's not very helpful. So you asked the question. For me, 49 00:02:11,639 --> 00:02:13,239 Speaker 2: it's probably one hundred and twenty one hundred and thirty 50 00:02:13,240 --> 00:02:15,840 Speaker 2: percent of the value is where I sell. And someone said, hey, 51 00:02:15,919 --> 00:02:17,320 Speaker 2: why would you sell? Why would you wait for more 52 00:02:17,320 --> 00:02:20,720 Speaker 2: than it's worth to sell? Two things. One back quality, 53 00:02:20,919 --> 00:02:24,359 Speaker 2: and that's competitive advantage of the business, the quality of management, 54 00:02:24,720 --> 00:02:26,480 Speaker 2: all the things that we talked about that another day 55 00:02:26,520 --> 00:02:30,079 Speaker 2: about what quality investing looks like. So back quality. Secondly, 56 00:02:30,320 --> 00:02:32,080 Speaker 2: I don't want to be so arrogant as to believe 57 00:02:32,160 --> 00:02:35,480 Speaker 2: my calculation of value is so incredibly precise that I 58 00:02:35,520 --> 00:02:39,000 Speaker 2: know for sure arrogance and ego is the investor's absolute enemy, right, 59 00:02:39,080 --> 00:02:40,920 Speaker 2: So the humility I try to bring to it is 60 00:02:41,400 --> 00:02:43,960 Speaker 2: I think this is roughly right. But all of the 61 00:02:43,960 --> 00:02:45,920 Speaker 2: sums I have to put in the discount rate, the 62 00:02:45,919 --> 00:02:48,919 Speaker 2: growth rates, eternal values. Again, we're talking about discount of 63 00:02:48,919 --> 00:02:51,680 Speaker 2: cash flows here, really boring on video format. But all 64 00:02:51,680 --> 00:02:54,040 Speaker 2: of that stuff is assumption laid on assumption. If I 65 00:02:54,120 --> 00:02:55,720 Speaker 2: change a couple of those numbers a little bit, I 66 00:02:55,720 --> 00:02:57,959 Speaker 2: can justify paying fifty percent more or fifty percent less 67 00:02:57,960 --> 00:03:00,480 Speaker 2: for the same company. Right. So that should tell you 68 00:03:00,880 --> 00:03:03,400 Speaker 2: that this is a really, really really inexact science. It's 69 00:03:03,440 --> 00:03:07,040 Speaker 2: an inexact art. It's a guess. It's a rough yardstick. 70 00:03:07,440 --> 00:03:10,640 Speaker 2: So for me, I buy hopefully well, if I've bought well, 71 00:03:10,680 --> 00:03:12,320 Speaker 2: I want to be slow to sell, and I want 72 00:03:12,360 --> 00:03:14,320 Speaker 2: to be really really humble about how likely I'm going 73 00:03:14,360 --> 00:03:17,240 Speaker 2: to be exactly right and than intrinsic value. And if 74 00:03:17,240 --> 00:03:20,520 Speaker 2: that's the case, let it have some rope and then yes, sell. 75 00:03:20,680 --> 00:03:24,360 Speaker 2: Now have I held stuff too long in hindsight, absolutely yes. 76 00:03:25,280 --> 00:03:27,440 Speaker 2: But if I added up every company I've held for 77 00:03:27,440 --> 00:03:30,400 Speaker 2: too long and compared it against every company I sold 78 00:03:30,400 --> 00:03:35,160 Speaker 2: too early, I'm still behind. Right. Great example, I'll rub 79 00:03:35,200 --> 00:03:37,200 Speaker 2: my nose my own problems. Domino's way back in the 80 00:03:37,240 --> 00:03:39,600 Speaker 2: day went from we bought recommended to don't members that 81 00:03:39,680 --> 00:03:41,800 Speaker 2: eight bucks? I think I went about thirteen bucks, right, 82 00:03:42,200 --> 00:03:43,880 Speaker 2: And I thought, oh, maybe sixty percent gain. It was 83 00:03:43,880 --> 00:03:46,240 Speaker 2: a couple of years. I'm a genius, but yes, looking expense, 84 00:03:46,280 --> 00:03:48,760 Speaker 2: how I better get out? It went from thirteen two 85 00:03:49,040 --> 00:03:53,040 Speaker 2: hold your breath one hundred and forty dollars. Right, I 86 00:03:53,120 --> 00:03:56,800 Speaker 2: missed a tenfold gain. I could have ten other companies 87 00:03:56,840 --> 00:03:58,760 Speaker 2: go to zero, and I still would have been ahead 88 00:03:58,760 --> 00:04:01,880 Speaker 2: if I'd held Dominoes. Don't be too quick to sell. 89 00:04:02,240 --> 00:04:04,680 Speaker 2: But if you own quality and don't get caught up 90 00:04:04,720 --> 00:04:06,200 Speaker 2: with your own humans and your own kind of you know, 91 00:04:06,440 --> 00:04:07,880 Speaker 2: I've picked the stock and it's gone up, so I'm 92 00:04:07,880 --> 00:04:09,560 Speaker 2: a genius. I'm gonna let it keep going up. Be 93 00:04:10,200 --> 00:04:13,560 Speaker 2: real with yourself, but don't don't don't. There's a great 94 00:04:13,640 --> 00:04:15,760 Speaker 2: thought saying about watering your weeds and cutting your flowers right, 95 00:04:15,760 --> 00:04:18,360 Speaker 2: don't cut your flowers to a let a bloom at 96 00:04:18,400 --> 00:04:20,280 Speaker 2: a time. Cut them and put them into ours for sure, 97 00:04:20,480 --> 00:04:23,240 Speaker 2: but give it a little bit of time. Investing involves 98 00:04:23,240 --> 00:04:25,320 Speaker 2: the risk you might lose the money you start with. 99 00:04:25,640 --> 00:04:28,200 Speaker 2: We recommend talking to a licensed financial advisor. 100 00:04:28,920 --> 00:04:32,760 Speaker 1: We also recommend reading product disclosure documents before deciding to invest.