Compounding Beats Competition

Guy Spier shares his philosophy on investment management, emphasizing the importance of sustainable compounding over competitive performance metrics. His approach prioritizes long-term stability and personal well-being over the pursuit of market-beating returns.

Key Points:

• Investment Philosophy:

  • Focus on compounding rather than beating indexes
  • Cannot jeopardize compounding for the sake of beating benchmarks
  • Understand you're playing an "infinite game" not a "finite game"

• On Performance Pressure:

  • Has underperformed S&P for 7-8 years but maintains strategy
  • Acknowledges uncertainty about whether past outperformance was skill or luck
  • Values maintaining a "really good life" over straining for superior returns

• The Infinite Game Perspective:

  • Investment management is an infinite game without clear rules or endpoints
  • Less than 2% of funds survive long-term
  • Goal is to avoid implosion rather than achieve spectacular success

• Personal Philosophy:

  • Doesn't aim to be "the next Warren Buffett"
  • Focuses on compounding well and living well
  • Believes in writing your own story rather than copying others' paths

• Decision Making Framework:

  • Asks "If I did this action every time in similar circumstances, where would it lead?"
  • Considers impact if everyone made the same choice
  • Avoids "just this once" type decisions that could compromise long-term stability

• On Success:

  • Success doesn't require being on magazine covers
  • True success is about sustainable practices and personal satisfaction
  • Values doing satisfying work that has inherent worth over achieving grand scale

This perspective represents a deliberate choice to prioritize sustainable success over short-term glory, acknowledging that while it might not generate headlines, it leads to a more satisfying and stable long-term outcome.