RWH014: The Resilient Investor w/ Matthew McLennan

**SPEAKER_1** (0:00)
You're listening to TIP.

**William Green** (0:03)
Hi there. My guest today is Matthew McLennan, who is co-head of the Global Value Team at First Eagle Investments. Matt oversees an enormous amount of money, about $90 billion on behalf of millions of investors. After 14 years at Goldman Sachs, Matt joined First Eagle back in 2008, when he was handpicked to be the successor to a legendary investor named Jean-Marie Evillard. In my book, Richer, Wiser, Happier, I wrote a whole chapter about Jean-Marie and Matt, describing their distinctive approach to a challenge that all investors face, namely, how can we build wealth in a durable way over many decades in such an uncertain and wildly unpredictable world?
This question of how to become a truly resilient investor seems particularly relevant right now. As we've seen very dramatically this year, everything can turn upside down in an instant with a long and glorious bull market suddenly giving way to a vicious bear market, a brutal war in Ukraine and runaway inflation. Over the last few years, I've spent a great deal of time with Matt discussing this question of how to invest prudently for the long term in a world that's full of these unpleasant risks and surprises.
We first spoke about this for my book and have continued since I became a senior advisor to his investment firm last year. One lesson that I've drawn from all of these discussions is that really the first priority for investors should be simply to survive and stay in the game, even in extreme conditions, instead of fantasizing about getting rich quick in the short term. As Matt once told me, you want to be structured to participate in the march of mankind, but to survive the dips along the way.
This is a simple but really important truth that applies both in markets and life. You have to position yourself to survive the dips. In today's conversation, Matt shares some invaluable insights about this philosophy of what he calls resilient wealth creation. Thanks so much for joining us.

**SPEAKER_1** (2:07)
You're listening to the Richer, Wiser, Happier podcast, where your host, William Green, interviews the world's greatest investors and explores how to win in markets and life.

**William Green** (2:27)
Hi folks, I'm absolutely delighted to welcome today's guest, Matthew McLennan. Matt, it's lovely to see you. Thanks so much for joining us.

**Matthew McLennan** (2:33)
It's great to see you too, William.

**William Green** (2:36)
Thanks. I wanted to start by asking you about your early years, which were unusual, to say the least. Can you tell us a bit about growing up in Papua New Guinea and then really off the grid in Australia?

**Matthew McLennan** (2:49)
Well, my parents went to New Guinea really for adventure. They were Australian and are Australian, living in Brisbane today, but they were adventurous souls and my father was a land surveyor and he got a job up there helping to mine, survey the mining communities.
And my mother and father went up there thinking they were going to live this particular adventure. And there was one E-type Jag I heard up in Papua New Guinea that they planned to buy, but they had me instead.
And my first six years were really up there before the independence of Papua New Guinea in the 1970s. And it was an amazing place to be a child, very free, walking through the markets and a sense of adventure. When we moved to Australia, we wound up living in a little town called Montville. And Montville was a thriving metropolis of about 400 people.
And we had a beautiful little home on a block of land that my parents had found. It was a dream block of land, but like their dream in Papua New Guinea, reality turned out to be a little different from what was envisaged. The home didn't get connected to the power grid for the first seven years. So we had this beautiful little cedar home that they helped build and there was a rainforest on one side and again, a fairly idyllic place to grow up. And it was a house full of books. While we didn't have electricity, we had gas lamps and a cast iron stove. And if you wanted to shower, you could put a black plastic bag out in the sun and heat it up and hang it under a tree with some burlap around it to take a shower. So it really was living in the sticks. And it wasn't until I went to high school in Brisbane at a boarding school, because there was no high school in my town, that I got to experience the big city. So it was an unusual but a very happy childhood.