10 Years of Money Wisdom in 51 Minutes | Morgan Housel

**SPEAKER_1** (0:00)
Today, we're talking about money with the guy who's been studying money for like the last 10 years. He's the author who sold more books about money than pretty much anyone on earth. It's Morgan Housel. He wrote The Psychology of Money, The Same as Ever, The Art of Spending Money, and we talked to him about Warren Buffett, about the behaviors that drive people to either make money or lose a bunch of money, about spending money, about how much money is enough. It's just a good, honest conversation between a bunch of dudes about money. What more do you want? Morgan, you tweeted out something that broke my brain. In fact, I thought it was like an AI deepfake. It's like when Luca got traded and people were like, this must be fake news, there's no way this is possible. You said that my favorite Buffett stat is that Berkshire Hathaway could lose 99% of its value tomorrow and still have outperformed the S&P 500 since Buffett took over.

**SPEAKER_2** (1:04)
And the truth is, I was understating it, it's actually like 99.6% or something like that, that it could decline.

**SPEAKER_1** (1:10)
That is so, how is it even possible? We don't do public math here, but that sounds mathematically impossible.

**SPEAKER_3** (1:15)
And he only outperformed by seven points, right? It was like, or he's done like 20% annual versus...

**SPEAKER_2** (1:22)
It's about that. His was about 20 And I think the S&P nominal with dividends is probably like 11 or 12 So maybe it's eight or 9% outperformance, but he did that outperformance over 60 years. And so the cumulative performance, I'm pretty sure I'm saying this off the top of my head. If I'm getting this a little bit wrong, I'm sorry. But I think the S&P 500 is 35,000% since Buffett took over and Berkshire's return was five and a half million percent. And so even if it's only quote unquote, only 9% per year, over 60 years, it just gets insane, preposterous. Buffett's current net worth is, I think, 130 billion, but he's given so much away to charity that if you count that in, it's something like 500 billion.
If he hadn't given money away to charity, he'd be worth 500 billion.

**SPEAKER_1** (2:09)
He'd be the richest man alive by far.

**SPEAKER_2** (2:11)
And he started with 10,000 bucks and turned it into half a trillion. And so that's, but I think the biggest lesson here, and this is the most important for ordinary people, is that, like, look, you can't pick stocks like Buffett. You can't analyze businesses like Buffett. He's smarter than you, and he operated in a different era than all of us. So don't try to emulate that. What you can emulate, especially for young people, of course, is the most important and powerful thing that he did, is that he was a good investor for 80 years. And it's just the time that he was doing it for that made all the difference in the world. So I pointed this out in my first book, if you look at his net worth, 99% of it came after his 60th birthday. 99% of his net worth was accumulated after his 60th birthday. So if he had retired when he was 60, when he was worth a couple hundred million bucks, like pretty good, you would have never heard of the guy. The whole reason he became so famous and so wealthy is that he started investing when he was 11, and he retired last week when he was 95

**SPEAKER_3** (3:13)
You're very lucky that you get to talk to all these amazing, successful people, and investors are really cool because it's not always about investing that you're interested in. It's about, like you said, behaviors. That's why Shaan and I love talking about two investors. We had Howard Marks on. It was one of our favorite things ever, and we don't know anything about bonds. With Buffett, is that the attribute, other than time and market, that, I mean, what other attributes separated him from the hundred, a thousand other people? Because there's definitely hundreds or maybe even thousands of equally probably smart people. What other attributes allowed him to be who he is versus the rest who are pretty good?

**SPEAKER_2** (3:44)
I think there's quite a bit. One is, I think, what Berkshire did, what Buffett did for 60 years is, on one hand, so unbelievably simple, and on another hand, almost impossible to replicate. It's hard to square those two. But what it required was an unbelievable amount of patience, an unbelievable amount of goodwill in terms of the trust that he had among all other businesses, among his investors, among regulators, because everybody around him just left him alone to do his thing because they trusted him.