R P STEVENS | The Sloth Investor

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Lethargy bordering on sloth the cornerstone of investing. R P Stevens  The Sloth Investor
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Investing can often seem like a daunting task filled with jargon and complexity, but what if it didn’t have to be? In our latest podcast episode, we sit down with R P Stevens, author of "The Sloth Investor" to discuss how a slow and steady approach can lead to financial success.

Roy has been living in Hong Kong with his family for the past six years. He shares his journey from a non-investor to a passionate advocate for simple, low-fee investing. Inspired by his father-in-law and books like Andrew Hallam's "Millionaire Teacher" Stevens began to understand the power of compound interest and the benefits of a long-term investment strategy.

The Sloth Investor R P Stevens

Stevens also touches on the psychological aspects of investing. He explains that our brains are wired to take action, which can often lead to overthinking and poor investment decisions. By adopting a "sloth-like" approach, investors can avoid the pitfalls of action bias and recency bias, allowing their investments to grow over time without unnecessary interference.

The concept of time is another crucial element in Stevens' investment philosophy. He shares the story of Grace Grunner, a humble secretary who amassed a fortune of seven million dollars through consistent, long-term investing. This story underscores the idea that successful investing is more about time in the market than timing the market.

In addition to discussing his book, Stevens shares his admiration for various financial thinkers, including Andrew Hallam, Morgan Housel, Eric Balchunas, and Will Rainey. Each of these individuals has contributed to his understanding of investing and has helped shape the principles outlined in "The Sloth Investor." We've had Will Rainey on the podcast and you can find out about his book Grandpa's Fortune Fables in my interview with him.

Whether you’re a seasoned investor or just starting out, this episode offers valuable insights into how you can simplify your investment strategy and achieve long-term success. So why not take a page out of the sloth’s book and slow down your investment approach? Tune into our latest episode to learn more.

Millionaire Teacher Andrew Hallam
The psychology of money morgan housel
broken image
Grandpa's Fortune Fables Will Rainey

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Chloe: Shares for beginners. Phil Muscatello and Fin pods are authorized reps of Money. Sherpa. The information in this podcast is general in nature and doesn't take into account your personal situation.

Roy Stevens: What I wanted to get out there for people, I wanted to kind of like get young people, people of all ages to know that investing isn't something that's full of jargon and it isn't something that, you know, needs to be kind of really complicated. So that's why, for example, the slogan my book is simplifying investing, or I want to kind of demystify investing as many people as I can invest in. That's, ah, really the key, really.

Phil: G'day and welcome back to shares for beginners. I'm Phil Muscatello. What animals are usually associated with the stock market? I'm thinking bulls and bears. But what about the humble sloth made famous by a quote from Warren Buffet? Like so many great investing quotes. And he said, lethargy bordering on sloth remains the cornerstone of our investment style. Joining me in this episode is mister Sloth himself, RP, uh, Roy Stevens. G'day, Roydehe.

Roy Stevens: G'day. Good to see you. It's a pleasure to join you. And I see this as a great opportunity to enable more australians to learn the benefits of investing like a sloc. I've got quite a few buddies in Australia, and I think this will be a great chance for my, uh, australian friends and others to learn about the benefits of investing like a sloc.

Phil: Yes, well, I can see you've taken the opportunity to mention that you have a friend in Australia who said he actually wanted to hear you on a local podcast. Hence, you're coming onto this podcast. So I feel used. But that's okay. I've been used before. Now, you're the authorization of the sloth investor, and I believe it's just released today, isn't it? June 28, 2024.

Roy Stevens: Yeah. Hot off the press. Yeah. June 20, 2024. So this is an extremely busy day for me. There's a lot going on, but I had to definitely come on this podcast. I've heard good things about it, and I'm looking forward to kind of, yeah, having my Aussie friend hear about the book and so on. So, yeah, really good job.

Phil: And you're in Hong Kong, aren't you?

Roy Stevens: Yeah, in Hong Kong. My wife and I, we've been here for the past, uh, six years. We've got two young children, and we actually work in education. Integration. Education here. We've really enjoyed our time. We've worked abroad for around about 14 years, but I would say Hong Kong has actually been the best fit for us. We joke because we used to work in the Middle east for five years. Over there it was like 50 shades of beige and there's so much beige. So when we came to Hong, um, Kong, our kids could finally get used to colour. Greens like an abundance green. We live in a new Territories region, probably about an hour from central, so quite far away from the skyscrapers. But our kids love it here. We love it. You get the best of both worlds. We live quite close to a beach, we've got beautiful mountains nearby. You're going for hikes. And one day I would like to actually visit Australia. My wife was actually fortunate when she was younger. She lived in, uh, Port Macquarie for one year when she was 13. I've yet to, uh, visit Australia now the age of 41, I'm ashamed to say that, but seeing as we're over this side of the world, you know, quite far away from the minidity of UK. Looking forward to eventually visiting Australia over the next few years, we kind of like it.

Phil: Yeah, let's talk about the book. Now, one of the premises about human psychology is that we're taught from an early age to strive and to exert ourselves. Why is it different for investing?

Roy Stevens: Yeah, that's a really good point. Yeah. And I make that point at the very beginning of my book, actually. You know, I happen to be a big Beatles fan and I think it's come quite widely known, I guess. But, you know, there's a book written by Malcolm Gladwell outliers. He came up with kind of like 10,000 hours, you know, or he popularized it anyway, you know, 10,000 hours. I touched upon John Lennon, Bruce Lee, of course, took many hours and hours of activity and practice. And I also mentioned Serena Williams, of M course, because I happened to write a large chunk of the book when, uh, I think it was King Richard came out, destroyed, the Williams sisters, race aside. And of course, all three of those individuals, what did it take to get them to become the experts that they were? Energy, activity, effort. But this is something that I find really, really fascinating about in investing. It's one of those counterintuitive things of which I think there are many. And that's the fact that when it comes to investing, it's less effort, it's less activity. There was actually a really famous study many years ago by fidelity and they looked into who are the most successful investors. The study found that the most successful investors were those that either passed away or had forgotten about their portfolio. And I just think that one of the key reasons why so many people get themselves into problems is because they tend to kind of tinker. Uh, they tend to kind of like, analyze too much. And I think technology, contemporary technology, is a double edged sword, because on the one hand, I think it's great now, the kind of democratization of information. You know, it's so easy now to open up brokerage account, to buy shares and so on and so forth. But the other hand, I guess at times there's too little friction. It is easy to go in, isn't it? And just check to see how your portfolio is doing, to want to tinker and so on. And I like what Buffett says about the bar of soap, that famous answer, your portfolio is somewhat akin to a bar of soap. What happens


Roy Stevens: to a bar of soap? The more we play it in our hands, the more we tinker with it. It gets smaller and smaller and smaller. He makes that point about our portfolio. Yeah, I'm really, you know, and again, this is why I chose an humble slope as my investing spirit animal, because I really do fundamentally believe that that is the best animal to characterize successful investing, because really, investors, less is more, you know, get on with your life. I love reading. You know, I'm going to be spending some time in the UK this summer. I'm looking forward to diving back into some non fiction, some history. I've got a fictional book over there I'm going to read and get all of your life. Spend time with your kids. You have kids, play sport, read whatever you want to do, but just don't succumb to kind of analysis paralysis. Just get on with your life and let the stock market do its work that it has over the last hundred to 150 years.

Phil: Yeah, I just want to point out that this juncture that you often end up talking about music and you'd mention the Beatles, and you're a Beatles fan. I just want to make it clear, I'm a stones guy myself here. Okay, well, can I have the Beatles? The Beatles are okay, but the Stones, really, they're a real, true rock band.

Roy Stevens: Can I be honest with you? And it's one of my regrets that I don't mention stones more because I am actually more of a Stones guy myself. I've actually, I've seen stones nine times in the past, what, 20 years? I've actually, I'm actually quite fortunate that I've met Bill Wyman many years ago in my hometown in the UK. I got an autograph by him, one of his, uh, books. And it's the stones for me, just seen of so many times. I'm even. It's quite sad, but I'm actually one of the dvd's. I went to see the Stones at Twicken and rugby stadium many years ago. My father at faulty Lickstore. And it was filmed for a dvd. Towards the end of the show, mix Dixie's tongue out to the crowd as his customary. Him, I guess. The camera pans round and there I went with my dad up and down. So the stones, I just. Yeah, absolutely love the Stones. But sometimes people ask me, gosh, he seems like the stones of the Beatles more than be. I guess for me it would be something, I don't know, 60 40. So 60% stones, 40% Beatles. I just love both those bands. But yeah, the Stones and with edge it, for me, mixed charisma. Keith Charlie, who sadly passed away a few years ago. I just love the Stones.

Phil: And there was that great book that Bill Wyman wrote about the stones. Was it stone alone, I think stone alone, that's right.

Roy Stevens: Stone alone.

Phil: Um, like they were going through. He was writing about their stages of success, you know. And after the us tour, uh, and at the end of each chapter, he would mention their bank balance at the time, and they'd come back during the United States. And the bank balance was ten pound.

Roy Stevens: Ten pounds.

Phil: Something like that, you know.

Roy Stevens: Yeah, yeah. Ah.

Phil: Like $10 was in the account at the end of the tour. And it was hilarious because they were ripped off so much.

Roy Stevens: Yeah, absolutely. And I'll tell you why I have a kind of a special affinity for stones, too, is the fact that my hometown is Orpington and Kenton, UK. And Keef went to art school in Sidcup. I also went to secondary school in Sidcup. And Mick and Keith's hometown, Dartford, Kent, is actually not too far from my hometown. I actually had some friends who went to Dartford Grammar school, which is the same as Mick. So just, yeah, deep, deep links and roots to Mickey, Keith and even, uh, just to not linger stones quite too much. But many years ago, when I was a student, I went to university in north England. I would come back home, Easter, uh, Christmas, summertime. And I was fortunate to work for a company, which I was kind of working security students, so on and so forth. And ultimate dream was in summer 2003, I got to work at the stone show at the London Astoria. I got to work at the backstage area. And I'll never forget, it was only two words, but my gosh, Charlie Watts or his drummer spoke to me. He said, good afternoon. And just like, ah, uh, that was the heart of my day, you know, just like Charlie Watts spoke to me. And I do remember Keith Richards was, uh, quite charismatic that day. He just happened to be greeting people with one love, one love. So I just love. And it's typically Keith fashion. So, yeah, deep connections to stones. And again, I think partly because my parents were more stones fans than beatles as well.

Phil: So to segue back into investing.

Roy Stevens: Yeah, sorry.

Phil: And I think Keith is an example of this, that, uh, some of the greatest music can be written to by taking your time about it, by not letting it grow by itself. And I was just talking to a financial planner, actually just about an hour before recording this episode, and he was saying, and we were talking about this particular thing about wanting to strive, wanting to do something that it's actually about the way our, uh, brains are wired, isn't it? We're evolutionarily wired to try and do something. And the idea of sitting back and doing nothing is quite foreign and actually quite hard to achieve.

Roy Stevens: Yeah, I touch upon my book as well, so I'll dive deep into later. But I've got five bedroom principles. When I explore the fifth bedroom, principal headstrong. I talk about the fact that as humans inherently, we have cognitive biases, and one is action bias. And like you quite rightly say, we are programmed to do something, we're programmed to act. And when I talk to people about this, I sometimes often think about the fang stocks, you know, the last, you know, 1015 years. What are those stocks that have been a post voice, if you like, for the stock market with Facebook, Amazon, Apple, Netflix, Google, as far as acronym Fang. And on the one hand, those stocks have been doing really well and they've


Roy Stevens: made our life easy. You can buy my block instantly on Amazon. You can get an Uber so quickly. You can watch Netflix, binge watch and so on. I do sometimes wonder if the fact that they've conditioned us to immediate gratification, what that has in our contemporary psyche, we've become so spoiled, if you like. We really have. And I do wonder if theres a detriment to that. We seem to want to achieve things so quickly. But I touched upon my book as well. You think about the achievements in your life, whether it was learning to play a musical instrument, learning a language, perhaps even learning to drive. Those things take time. And similarly, I think its so critically key to have that long term horizon, its decades, not days. And that's again going back one more bedroom printful. My fifth bedroom print was headstrong. My fourth one is time, which I'm happy to exploit as well. But, uh, yeah, time is so critical, really. It really is.

Phil: Yeah. Well, we're going to go through those in a moment.

Roy Stevens: Sure. Absolutely.

Phil: Let's get back to why did you write the book? What was it about? Are you from a finance background or.

Roy Stevens: Yeah, good question. I wish I was. I really wish I was. So I grew up in a family of non investors. Both my parents suddenly passed away now, but neither of them invested. There was little or no mention of the stock market in my house growing up. If ever I heard about stock market, it was only through maybe just occasional broadcast television, you know. Oh, you know, the stock market went downstairs, went up and so on. But I really took no particular interest, really. And it's funny because I'm not much of a romantic comedies guy, but I always think about this romantic comedy from the late nineties with Gwyneth Paltrow, like sliding doors. And I guess my sliding doors moment was when I met my father in law. So my father in law, John, was someone that had a, uh, really profound influence upon. So, you know, several months after meeting my then girlfriend who became wife, you know, she introduced me to her father, and I guess, you know, he would gradually start to talk to me about investing. And if I'm honest with you, I was quite ignorant. I really didn't want to know. For me, it was like, no, that's head you off world, you know, off limit to world. It's not for me, had a bit of a kind of imposter syndrome in that respect. Invest in imposter syndrome. I wasn't interested. And I guess gradually, after three, four, five chat, he started to kind of like, really make an effect. He talked to me about compound interest, for example, the importance of not getting to debt. This guy called Warren Buffett, who I'd never heard of and started to make a bit more sense to me. So I guess it was talking to him. And then also there was another key catalyst, which was a book that I read by Andrew Hallam. Now, he was a former intellectual teacher himself, so he's reading Andrew Hallam's millionaire teacher, which introduced me to the concept of index funds. Talking to my father in law, those were two key catalysts. And going back to your question about why I wrote a book, I guess I'm taking back to myself about wanting to sound too cool and cliched. I wanted to write a book that I would have loved to be given when I was 1819. So I started to get interested in investing when I was in my late twenties, when I met my father, and I read millionaire teacher around about 28, 29. And I look back, I think, why was there not a book out for me? Why was I not able to meet someone at 1819 that talked to me about investing? And I guess also someone else asked me a question the other day. I guess it's frustration, a sense of frustration whereby I think there are many great books by investing, but many of them are rich in theory, but perhaps lacking in utility. And that's something I do in my book, is the fact that I give sample portfolios, whether you're an Aussie, a Brit, an American, a Canadian, wherever, around the world, sample portfolios that you can put to you some kind of invest like a slough in that way. So, yeah, I guess it stems from what I wanted to get out there for people. I wanted to kind of like get young people, people of all ages, to know that investing isn't something that's full of jargon and isn't something that needs to be kind of really complicated. So that's why, for example, the slowdown, my book is simplifying investing, or I want to kind of demystify investing and get as many people as I can. Investing. That's Rita kiri.

Phil: Okay, well, let's run through the five principles. And, uh, sloth is the mnemonic, I guess, for it, which is simplicity. Low fees, owning the world, time and headstrong run us through. Let's go. Let's start with simplicity.

Roy Stevens: Yeah. So simplicity, really, for me, stems from the late, great Jack Bogle. This is someone who I believe has, um, had such a monumental influence on the world of investing. I think back to a great book I read a few years ago by Robin Wigglesworth. He wrote a book called trillions. And in that book, he talks about Bogle's notion of index fund in the Manhan project of financial management, which I love coming to Honey Hills or Oppenheimer last year. I think it's a really good term for me, simplicity is key, because if you think about most realms of life, most of us, life can be quite complex. If you are, uh, taking exams, drive a car and so on, it really can be. But again, this is one of those counterintuitive points about investing that fascinates me. It's the fact that professionals don't always necessarily know the best you can. Going back to esops fable, the hedgehog and the fox,


Roy Stevens: which I guess I can get to later, you can achieve success through simply investing in a low fee, globally diversified portfolio. You keep things simple. In chapter, uh, one of my focus on simplicity, in the book, I referenced a bogle conference, um, he spoke at conference, I think it was the talent of 1999, and he spoke about simplicity as being the ultimate sophistication in terms of investing simplicity. So simplicity for me is critically key. And then naturally, what follows is low fees. So if you're going to adopt a simple approach to investing, investing broadly, index funds, then naturally what should follow is that that should require high fees. So low fees for me is key. And then going back to compound interest, if you're paying high fees, well, those high fees are going to compound. They really are. And again, going back to one of those counter tuitive points, by investing, you think about most realms of life. If I have a back issue, I might pay a little bit extra to get a superior medical professional to look at. If I've got a dental work problem in the past, have had dental issues, I may want to pay that little bit extra to go for that superior level dentist, for example. But when it comes to investing, this is one of those domains in which actually low fees are likely to bring you greater wall, you know, high fees, like I mentioned, going to compound. So low fees. And again, we can attribute that to the late, great Jack Bogle and Vanguard, his company owner, world. This really stems from, for example, a great book that I read several years ago by a chap called Lars Croyer called investing demystified. Now, Lars was a, ah, hedge fund manager who worked on a London stock exchange. He wrote a lovely book called Invest in Demystified. And in that book he spoke about the importance of globally diversified portfolio. He was the one that really introduced, I guess, built upon what Adri had mentioned about having a portfolio that is representative of the world stock market as a whole. I talk in a book, none of us have a crystal ball. How do we know which percentage of our portfolio to apportion to Australia or the UK or the US or Japan and so on? But last queried talks at length about these kind of low fee, globally diversified portfolios by vanguard that mirror the kind of percentage representation of the world stock market. So there's one I investing on the London Stock Exchange, the Vanguard Ftsegel World Fund, and about 65% of that fund is allocated to us, 4% to UK, 7%, Japan and so on and so forth. So yeah, owner world keen, for instance, meet Lars Croyer and Drew Hallam. People even such as, uh, Daniel Crosby have spoken about that. And then just coming back to time, we briefly touched upon it earlier, but I speak in my book about someone called Grace Grunner. And I think about, I speak about three ordinary people that became extraordinary investors in my chapter called Once upon a time. One of them is Grace Gruner. Now, she was a secretary, just a humble secretary, and she passed away in 2010, I believe it was. And when she passed away, she left seven, uh, million us dollars. And that was held in a trust for a local school, a series of scores, I believe, in Chicago, I think it was in state. And the point I want to make about her in time is that from a young age, she continued to invest it again and again and again in the stock market. So just, yeah, time is critically key. I mentioned on my book, a, uh, book that I read several years ago. Bye, Carl Honore. It's h o n r e. I'm probably butchering a pronunciation. But he wrote a great book called in praise of slowness. In praise of slowness. And again, he talks about the fact that, you know, in our contemporary world, we're so keen to rush around, get things done, we're really just taking a slow approach. Getting things done, not necessarily multitasking, just taking it slow is the way to go. So, yeah, I think time is particularly hard in this day and age, but you know, the younger you start, uh, the better it's going to be. And just I go back to what I think Charlie Munger says. The first rule of compounding is not to let it stop. Don't let compounding stop through thick and thin. Just keep on investing through the good times and the bad.

Phil: ETF's are great products. We all know that they're great products. But then again, you can start overthinking, uh, even just simple things like that. Now you mentioned that particular vanguard. So that covers basically stock markets around the world, but there's many investors who go, okay, well, I'm here in Australia and I'll, you know, do an ASX 200 ETF, then I'll let the, you know, s and P 500 ETF. Oh, I better get the Nasdaq as well. Oh, uh, what about bullion? Okay, I better get it a gold ETF. And just found out about fixed income and bonds, you know, maybe a bond ETF as well.

Roy Stevens: Yeah.

Phil: And suddenly becomes active management. And that's the idea. We want passive management, we don't want active management. How would you suggest people sort of think about that and in terms of, again, simplifying their own investment process.

Roy Stevens: Yeah, I mean as best as possible. What I would say is you want to kind of like reduce the funds that you're buying. So someone said to me, one of my friends back in UK, we've seen a phone conversation. So, okay, I'm going to buy. India's


Roy Stevens: looking really good. I'm going to buy an India ETF and I'm going to buy an emerging markets fund with South America. I'm going to buy the US and SMB.

Phil: You've seen this too, have you?

Roy Stevens: Yeah, yeah, yeah exactly. And the point Im trying to make to people is that you can catch all of them in one fund. So the fund I buy gives you exposure to developing markets, emerging markets, if you like. But one thing I would say is im flying to the UK tomorrow. Were talking about this pride podcast. Um, one thing I love in the UK is going for a nice curry. I love going for a nice curry with my wife and kids. But the interesting thing is ive got quite a spicy pud. I love food and spicy. My kids, my wife, not so much. So to bring it back to investing, the point I would make is that we've all got our own unique investing palette. So I would never be one of these. To be a die hard, every single investor must have a low fee, globally diversified index fund. It must be 100%. So I make the point on my book that it may well be that you might want to be someone that chink is at the edges of. Maybe, I, um, don't know, 1015 percent of your portfolio in individual stocks. Maybe you do want to go, you know, for a bit of gold, whatever it might be. So I'm very much not someone who's a devout, you know, everyone must invest in a way, I say kind of guy. But I do fundamentally though, that for investors, a significant percentage of your portfolio should be in the stock market as a whole. Because over time, you know, I love in presentations getting out that stock market chart showing people how over time the stock market's gone up. So yeah, if you do, if you want to kind of like invest in some fang stocks or hot, uh, stock that you're, you know, it's a company that your uncle works for and he thinks it's great, go and do that. But I tend to be quite conservative as investor myself. I'm someone who very early, uh, on, you know, and this again stems back to my father. My father tends to be someone that he himself doesn't tend to invest in index funds. Um, he tends to invest in individual stocks as opposed to Andrew Hallam, whose book I mentioned earlier. Ah, so yeah, by all means, if you want to kind of like think at the edges of individual stocks, by all means do it. But going back to what you said about the various different funds, you just have to be careful again that those fees are going to rack up. If you're going through an Aussie index fund, japanese one, South America and so on, you want to reduce fees as much as possible because the lower your fees, the more your overall portfolio is going to compound. So how dark was able to answer your question there really?

Phil: No, no, it's very well, very good. It's also fees compound as well.

Roy Stevens: Yeah, exactly. Absolutely. Yeah.

Chloe: Super is one of the most important investments you'll ever make. But how do you know if you're in the best fund for your situation? Head to lifesherpa.com dot au to find out more. Life Sherpa, uh, Australia's most affordable online financial advice.

Phil: So you've kind of covered simplicity, low fees, owning the world in time, what's the h? Headstrong, what's that all about?

Roy Stevens: Yeah so the, hey, just headstrong. So for me, I make the point at the beginning of that chapter on headstrong that investors dont need to look far to see what their biggest obstacle is. They just need to look in the mirror. I make that point because something I speak to my friends back home in the UK about is that many of them, particularly those who dont know much about investing, think its not for me, its a numbers game and I need to be good at crunching numbers. Whats this thing, a pig ratio? P ratio? I said no. Excuse me, you don't need to worry about those ratios for example, you just need to make sure you've got it right upstairs. So psychology. Psychology is absolutely key. And this again, I touched upon a brief video, but this is where cognitive biases come into play. We're programmed as sentient beings to tell me. So action bias, even things like recency bias. I touch upon the fact that very often investors will look at how the stock market has performed for the past two years and that will dictate how to behave. Oh, you know, the stock market's not been doing so well. I'm not going to invest or, oh, the stock market's been on a really good run, it's going to continue to be like that. I'm going to go all in and it's great and so on. Um, so you know I made quite a few movie references in the book as well and I happened to be a big Tarantino. I found a lot of movies at Quentin Tarantino. One of his favorites is Once Upon a time in Hollywood. And I make the point about, you know, Brad Pitt, his character in one point of time in Hollywood was he played a stunt double, didn't he? And I make the point in my book that very often what investors need is they need their own stunt double to behave in terms of those intermittent periods when the stock market is extremely volatile and so on. Um, and even I think it's important to remember that none of us are perfect. One of my favorite books, I mentioned it several times in my own book, the simple puffed worth by JL Collins. And he touches upon the fact that even, I think Black Monday, I think it was 87 or 89. I think 87. Black Monday. He mentions that Black Monday, that famous day back in the late eighties, he succumbed. He sold a high percentage of his portfolio, and he speaks quite frankly and honestly about that. So I can talk at length about cognitive biases in my book and the fact that we will be a stuntman, but I've made mistakes in the past as well. I sold when I shouldn't have


Roy Stevens: done, and I've definitely made mistakes in the past as well. Having a short term mindset. This, for me, is, I guess, it's quite cathartic process. I'm trying to point to this book references to mistakes that I've made as well. But some people often pin me down and say, hey, roy, you had to kind of, like, pick your one or two favorite bedrock principles. Headstrong is always, like, one or two. Simplicity, I think, is key. But headstrong, given, um, the psychology, investing is so critically key, and we think about what is one of the, if not the most famous investing book, personal finance book of past five years. It's the psychology of Money. Great title. And I think the reason why Morgan House has done so well that block is because it just touches upon such a great point that, you know, our brains and how we think and what we do of our brains, you know, so critically key to one success as an investor. So, yeah, in headstrong, I really, really delve deeply into a series of cognitive biases, you know, in group bias, for example, sunk cost fallacy, recency bias. So, yeah, as long as your stunt.

Phil: Doubles, not Brad Pitt in Fight Club, you know, we are talking about the cool, calm collected once upon a time in Hollywood. Great movie. I love that movie.

Roy Stevens: Oh, I love that. I love that. I love Tarantino.

Phil: We all need to have channel our own Brad Pitt to be the cool guy looking out for our, uh, best interests.

Roy Stevens: I think my wife would be far happy if I was Brad Pitt. But sadly, I'm not. Sorry, Justine.

Phil: So uh, on your website, you have your four favorite investors to follow. Who are they?

Roy Stevens: For example, I absolutely love Andrew Hallam. So Andrew Hallam would be absolutely one of my favorites. I've spoken to him, spoken about him a few times already. So he's written a millionaire teacher, he's written millionaire expert, and one more recently, he's written his balance. And um, that's interesting because yes, he talks about investing, but he also talks about, for example, what can we do in life to kind of be successful? How can we achieve success in our life? Not just kind of for your investing, but physiologically as well. So having healthy lifestyles, looking at the importance of experiences rather than things which I can touch upon as well, another person would be, for example, I might even change some of the investors from that website because theres one also that comes to mind. I think its on the website you reference. But one of them would be Morgan Hausel, that ive touched upon as well. So Morgan Hausel is probably my favorite investment writer. Uh, the psychology of Money ive mentioned. I love what he has to say in a psychology of Money about wealth is what you dont see. He makes the point very often, and I think about my father in law here as well, in that respect. John, my father in law lives in Germany now, but originally from the UK. He's always been quite frugal with his money. He doesn't time, you know, kind of spend his money on lavish things. And also circling, uh, back to Morgan household. Yes, many people know him now for the psychology of Money, but I actually love the articles that he wrote during his time at the Motley fall in the US. So I've read many of his articles during his time at the Motley fall. And uh, one of my favorites that I mentioned in my book is um, the tyranny of the calendar. Within the article, he mentions the fact that many investors, many institutional corporations, tend to focus upon the one year return, maybe the two year return, but that's a very arbitrary time period, isn't it? One year. So this is why he talks about the tier of the calendar that is, too many people become really fixated and obsessed and stuck on the one year return, when really what matters is that day in the future multiple decades down the line. Morgan, how is what I love. I would also touch upon, for example, it's a toss up number three, between JL Collins and Eric Baucunis. I'm actually going to go for Eric Baltunis. So I think I'm going to veer away from those four investors. Ah. On our website, Eric Baltunis wrote a great book several years ago called the Bogle effect. I've had him on my podcast myself. Now, I thought I knew quite a bit about Jack Bogle, but Eric Botulis just writes at length about why Bogle merits so much acclaimed and attention. Um, he touches upon, you know, serious kind of analogies that Bogle used, for example. So Eric Baltunis is someone that I admire a great deal for his book Bogle effect, and I guess a fourth person that I admire. And again, I don't think this is a person on the website, but this is constantly changing. I guess that my running stone songs, constantly changing. My top five. I'm actually going to go for Will Rainey. I'm going to. This is for the kids and for the parents out there because this is a book that I bought for my own children. I've got a six and a nine year old, and I absolutely love grandpa's fortune fables. My nine year old is just about the age where I'd love to begin reading it to him. We're going on holiday to Europe, um, tomorrow, actually, and I'd love to begin reading grandpa's fortune fables to him. So for what he's done in terms of writing about financial principles, getting kids interest in personal finance, I probably going to go for Will Rainey, because I'm a big fan as well. On a final point of people that kind of can help to demystify personal finance. So, uh, they'll be my four Adrian Morgan, Hausel, Arabella Tunis, and Will Rainey.

Phil: And I'll put a link into the blog post as well in the episode we've had, um, will on the podcast as well, talking


Phil: about his fortune fables. Yeah, he's a great guy and does a really good job of simplifying things, things as well for kids as he does.

Roy Stevens: Absolutely.

Phil: I just want to circle back a little bit because you mentioned failure and how you failed a couple of times. And I'm just putting out this point now because we've just announced in Sydney on July 25, I'm doing a seminar with Vince Scully from life Sherpa, uh, and Fiona Balzer from the Australian Shareholders association. And we're calling it confess your financial failures to father Phil and brother Vince. And we're just going to actually talk about failure so if anyone's interested in coming along to that event, please sign up at the share site. I'll put a link in the episode notes as well about that. But you mentioned some failures. What are some of your favorite failures?

Roy Stevens: Yeah. So I think I'm going to mention two that come to mind immediately. One would be, for example, after having spoken to John, I then went on a bit of a book binge. He really got me interested in investing. So I started to kind of read JL Collins, Andrew Hallam. I even really became a bit of a, uh, Warren Buffett geek. And this is again how I first learned of that great investment quota you mentioned at the beginning. You know, letter G Bord remains a cornerstone of investment style. That's for me. 1990 letters, shareholders. So I read various shareholder letters from Buffett and others, but I really, really suck my teeth into index funds, purely particularly because of JL Collins and Andrew Hallam. But looking back in hindsight, I actually annoyed myself because in my early years of investing, yes, I would invest in index funds, but I would also like to dabble a fair, uh, bit in individual stocks. Too much, I think, looking back now, and I actually think, why did I not commit more to my first bedrock principle? Simplicity. Yes, to be honest, I was successful with some individual stocks. But to put it frankly, for one of a better term, I had some stinkers. I had some individual stocks that did not go really well. I look back and I think, you know what? If I just allocated the money that id put into those individual stocks into a simple low fee, broke into diversified index fund, that wouldve been far better for my overall portfolio. So I think that would be a regret not adhering to what has now become my five bedroom principle, simplicity in particular. And I think another one would be the initial hesitance and reluctance that I had to not really fully listen to John circling back to cognitive biases. A key one for me was in group bias. So I'd listen to John on those first two or three occasions, and he'd sit me down, have a coffee, speak about investing. And I was like, well, I'm not so sure. Inwardly, my inner voice, I wouldn't say it's strong, but in my inner voice, I'd be thinking, gambling. Investing's gambling. You don't want to do it, Roy. So, uh, remember, it was really mentioned at home, but whenever it was, investing is gambling. Don't invest. And now looking back, I think I was a victim of ingroup bias. I let my ingroup, that is, my family, dictate my views on investing, and I was naive and ignorant there. And, uh, luckily, I was humble enough to kind of have, you know, the presence of mind to kind of eventually see the error of my ways. You know, I go back if I just go into something that I love viewing. I don't know why every now and again, but there's a, um, british italian chef called Marco Pierre White. Have you heard of him at all? Marco Pierre White?

Phil: Yeah, definitely been on tv here.

Roy Stevens: Uh, he's got this great talk that he does at Oxford, and I, uh. He should be, if he's not in the culinary world, and why he should be a storyteller, because he did this 1 hour talk at Oxford, and it's about 25 minutes in, and he talks about presence of mind. He speaks about, for example, you know what? He's got all of these undergraduates, postgraduates on tent hooks, all literally on the edge of their seat. And he speaks about. It's reading this book. It's watching the chefs. It's knocking on that one particular restaurant, why he got lucky. Success is about luck. It's born out of luck. It's what you do with that luck that makes a difference. So it's having presence of mind. And when Marco Pierre White used that phrase presence of mind, that struggle called me. And that's a point I want to make. I also make to my students, as well as an educator, have presence of mind. You know, there are some opportunities that will come your way in life. Don't look them up, you know, don't disregard them. You know, don't kind of think, ah, you know, it's not for me, you know, had that presence of mind. And I'm grateful now, looking back, that I had the presence of mind to kind of finally be open minded enough and humble enough to kind of, like, take on John's advice and to really dive deeper into investing. So, uh, yeah, there are two things for me. So, a, it's investing too much individual stocks from the outset, and then, b, it's not taking John serious enough. When he spoke to me about investing, those are two key ones you've been referring to.

Phil: John, is this your father in law or your. I should have signified.

Roy Stevens: Yeah. So John. John is my father. John is someone who. That was the person that really, really got me into investing. He was a catalyst. He was the one that sat me down and started to get me into investing. So I have my father in law to thank in that respect. And it's funny, actually, because he visited us here in Hong Kong several months ago. Now, about springtime, he said, oh, you know, Roy can quite face him from the book. And you actually even haven't admitted, I think you actually know m more about investing than I do now, he said, the fact that I referenced Jack Bogle, Eric Baucunus, Vanguard


Roy Stevens: and so on. So I've become, uh, it's funny, actually, you know, I really have been on the journey of investing, and I think I've become a tremendously knowledgeable by investing, hence the book and my podcast and so on. And, yeah, so John was a key figure there, really.

Phil: So what is the name of your podcast? How many episodes have you got and who have some of the guests? You've had JL Collins on the podcast, haven't you?

Roy Stevens: Yeah, um, it's the Sloth Investor podcast. I've been lucky to have other financial authors on, such as JL Collins, Andrew Hallam, Eric Balchunis, Brian Ferroldi, a lovely woman called Nikki Dunn as well. And just circling back to Eric Baltunist, he was a great guest to have on because he actually introduced me to some kind of concepts that I wasn't so familiar with. So he speaks in his book about how Jack Bogle was really keen on this Aesop's fable, the hedgehog and the Fox. So that was something I wasn't familiar with. But he makes the point that Bogle loved this fable because he made the point that, well, what is it about the fox? Fox is a sly economy. They're very shrewd, quite devious. Whereas a hedgerow has just that one thing, that one weapon, if you like, that it can use to deter the fox. It can curl itself up in a ball. It can use its spikes to deter the fox. And, uh, he makes a point to invest in energy. The fact that we can have these really complex ideas about how to invest derivatives and this emerging market and this India ETF looks hot this year and so on and so forth, purely investing in a low fee, globally diversified index fund. Keeping it simple, one fund is the way to go. So Eric Bartrin has probably explained it way better than I just did in my podcast, but I love that. And another great point he makes that he touches upon how Jack Bogle would use this term, relative predictability, whereby Jack Bogle M makes m. Why is it that so many vanguard investors are inherently so well behaved when it comes to geopolitical strife, when it comes to the inherent ups and downs of the stock market? Vanguard investors, they inherently know that the long term trajectory of the stock market has been to go up. Yes. The stock market can fall down like an elevator, uh, but the stock market gradually moves up like a staircase. And I love that notion of the relative predictability of the stock market. And I speak in my book about this kind of swan approach. You know, index funds allow you to sleep well at night. I love that kind of analogy. You know, sleep well at night acronym, if you like. So, yeah, they were great takeaways from, um, my interview with aerobic trainer. So if anybody wants to learn more about Jack Bogle, I recommend his book the Bogle effect. And just to go to jail Collins. He's been, you know, going back to kind of psychology as well, something that I take from JL Collins and Andrew Holland. But J. Collins particularly is optimism. So J. O'Collins is a really avuncular guy. Very charismatic, quite humorous, loved having a chat with him. Lovely guy and just really optimistic. That's something that I really was able to imbibe from his book the simple path to wealth and more recent Pathfinders. It's just the overriding sense of optimism. You know, the stock market, there are going to be times where there's geopolitical strife, tariff issues between China and the US, and talks about the Middle east and so on and so forth, but just keep on plugging away, stay the course. And the optimistic mindset is a really critically key. Yeah, so that's something I really take away from Joe Collins. Not only his approach to simplicity, but also optimism as well.

Phil: Yeah, so tell listeners about the book and where they can find it.

Roy Stevens: Yeah, so thanks so much, Phil. So the sloth invest is out today. It's available on Amazon Australia, Bictopia, I believe you have as well, don't you? Biptopia is where my Aussie buddy in Melbourne been buying it from. Yeah, Amazon Australia. And yeah, I've got quite a few followers on Twitter that Aussie. I've always had a, uh, kind of a deep affinity for Australia. And of course, us being Stones fans, we would know that Mick Jagger's mother, I believe, has australian connections as well. So, yeah, and so, yeah, I'd love to maybe at some point in the future head on over to Australia, maybe give some talks there, but yeah, excited that the stuff investor is out around the world and looking forward to it growing in Australia.

Phil: Um, RP, uh, Stevens, let's quote the Rolling Stones again. You can't always get what you want, but if you try sometime, you'll find you get what you need. That's right, isn't it?

Roy Stevens: Thank you so much that quote has given me much satisfaction. Thank you so much.

Phil: It really has myself there.

Roy Stevens: Two stone sounds yeah.

Phil: Absolutely fantastic. Thank you so much, Roy. I really enjoy chatting with you.

Roy Stevens: Pleasure. Thank you.

Chloe: Thanks for listening to shares for beginners. You can find more@sharesforbeginners.com if you enjoy listening, please take a moment to rate or review in your podcast player or tell a friend who might want to learn more about investing for their future.


TONY KYNASTON is a multi-millionaire professional investor thanks to the QAV checklist he developed . Tony's knowledge and calm analysis takes the guesswork out of share market investing.

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