TIP765: What the World’s Great Philosophers Can Still Teach Us About Wealth and Wisdom w/ Kyle Grieve
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode explores how timeless philosophical wisdom can transform your approach to investing and life. Kyle Grieve examines lessons from great thinkers like Spinoza, Nietzsche, Hume, Pascal, and Bruce Lee to reveal how concepts like persistence, skepticism, and adaptability shape better decision-making. (02:18) Drawing from Ethan Everett's "The Investment Philosophers," Kyle demonstrates how these philosophical insights connect to modern investing through examples from Warren Buffett, Voltaire, and even poker players like David Einhorn.
- Main theme: Philosophy provides essential frameworks for understanding market psychology, managing emotions, and making rational decisions under uncertainty
Speakers
Kyle Grieve
Kyle Grieve is the host of The Investors Podcast and co-host of the We Study Billionaires show since joining The Investor's Podcast Network. He brings a deep passion for value investing and philosophical approaches to finance, having discovered investing during COVID after initially struggling with cryptocurrency trading. Kyle is known for his thorough research approach and ability to connect complex philosophical concepts to practical investing strategies.
Key Takeaways
Think in Terms of Eternity Like Spinoza
Benjamin Graham famously began his investing courses by referencing philosopher Spinoza's principle: "you must look at things in the aspect of eternity." (03:03) This means zooming out from daily price movements to focus on enduring intrinsic value. When applied to investing, this philosophical lens helps separate temporary market sentiment from permanent business fundamentals. Graham's Mr. Market analogy was born from this concept - understanding that market prices are impermanent while intrinsic value represents the eternal truth about an asset's worth.
Embrace Healthy Skepticism, Not Excessive Skepticism
David Hume distinguished between healthy skepticism and excessive skepticism in ways that directly apply to investing. (17:10) Healthy skepticism involves questioning consensus while maintaining common sense and reflection. Excessive skepticism, however, leads to blindly arguing against everything without reaching helpful conclusions. The key is being skeptical enough to avoid herd mentality and emotional investing, while not becoming so contrarian that you miss obvious opportunities. As Howard Marks suggests, deploy this skepticism strategically during extreme market euphoria or fear.
Understand Your Emotional Conatus
Spinoza's concept of "conatus" - the striving force that drives everything to persist - applies powerfully to both businesses and individual investors. (05:47) In companies, alignment issues arise when different stakeholders (employees, CEOs, shareholders) have conflicting versions of conatus. The best investments occur when all parties are aligned in their striving. For individual investors, emotional conatus can corrupt rational decision-making. Kyle shares his experience with Simply Sovereign Concentrates, where his emotions shifted from optimism to anger, leading to poor timing decisions that cost him money.
Accept the Role of Luck with Humility
Blaise Pascal's experience with his family's fortune being wiped out by government bond defaults taught a crucial lesson about luck's role in wealth. (30:42) Pascal understood that "all rich people exist under a significant degree of conditionality" - meaning wealth often depends more on luck than pure skill. Kyle reflects on his own journey to TIP, acknowledging the numerous fortunate events that had to align for his success. This humility about luck's role prevents investors from getting too high on successes or too low on failures, leading to better long-term decision-making.
Be Water - Adapt Your Investment Strategy
Bruce Lee's famous philosophy "be formless, shapeless, like water" offers profound wisdom for investors. (67:03) Rigidity in investing strategy can blind you to opportunities, just as rigidity in martial arts leads to exhaustion and poor technique. Kyle admits his own rigidity - initially avoiding technical analysis entirely due to bad crypto trading experiences, but later finding value in using charts for better entry points. The key is absorbing what's useful, discarding what isn't, and adding what's uniquely your own to create a personalized but flexible approach.
Statistics & Facts
- The Dutch East India Company, at its peak valuation in 1637, had an inflation-adjusted market value of around $7.5 trillion, making it more valuable than today's NVIDIA at $4.2 trillion. (05:07) This historical context helps understand the massive scale of speculation that has occurred throughout market history.
- In Germany during Nietzsche's time, the number of publicly traded companies exploded from 72 firms on the Berlin Stock Exchange in 1869 to 441 companies by 1873, representing 25% of Germany's GDP. (15:18) However, sentiment shifted and the number decreased to 387 over the following decade, illustrating the boom-bust cycles that philosophers like Nietzsche observed.
- The average stock price fluctuates with a peak-to-trough range of about 50% despite underlying business fundamentals, demonstrating the disconnect between stock prices and business reality that creates second-order simulacra. (41:03) This statistic reinforces why common stock ownership represents a blurred reality between ownership and actual business operations.
