Bill Brewster is a private investor who runs a podcast, The Business Brew, of which I’ve found a number of episodes to be interesting (principally his first two, Mike Mitchell and Dan McMurtrie). I feel some level of kinship with Bill, as he is investing for his own account in support of his lifestyle. But more specifically, he isn’t a traditionally trained financial analyst, more a person who has stumbled through the knowledge curve via self-education and “own-goals” (mistakes). In that, I’m much the same.
However at this point, it seems that Bill is experiencing a period of self-doubt:
This is where I believe that my own thought process has diverged from Bill. And I think it’s because we have different goals. His, without asking him directly, appears to be to beat the market. Mine, is to generate consistent and growing investment income from a diversified pool of investments.
I’m not looking to regularly check the chart of my performance versus the S&P500. I regularly research existing and new investments across debt / real estate / public stocks, tally up investment income as it comes in, and evaluate earnings of our portfolio companies and watchlist companies quarterly. The output of this is a clear budget of what we can spend for the year without excessive stress of whether the market will go up, down, or sideways.
Perhaps more importantly, my focus on investment income is a strong eliminator of FOMO. I’m not going to chase investments others make, simply because most businesses today don’t pay out their earnings to shareholders. Furthermore, I’m honest with myself that as a solo analyst, the limits of my analytical ability are are very real. I just won’t have a differential view on the valuation and business model of Peloton, Twitter, etc – especially when there are absolute pros on the other side of the fence (see above podcast episodes). I’m shameless about letting others be the investing experts and act more as a capital allocator (like a pension fund manager) versus investment underwriter. In fact, most of my public stock investments are just that, effectively publicly traded private investment funds that are generally somewhat diversified.
To conclude, as I’m running out of steam, I hope that Bill finds an equilibrium between being able to engage his deep interest in finance, his talent for building his network and podcast, and the realities of the investment goal(s) he has set for himself. Life is too short not to have a lot of fun when you’ve got the gift of financial independence.