Buffett Does It. Most Value Investors Don’t | Robert Hagstrom on the Real Key to Compounding [Excess Returns Podcast]

Matt Zeigler and Bogumil Baranowski join Robert Hagstrom for a very special hour-long discussion. The episode originally appeared on Excess Returns Podcast, and it is reposted here with permission from the podcast hosts. Enjoy!

Legendary investor and author Robert Hagstrom joins Excess Returns to explore timeless investing principles—and how they’ve evolved in today’s market. In this wide-ranging conversation, Robert shares stories from working with Bill Miller, insights on Warren Buffett’s approach, and the philosophical foundations of long-term investing. He also issues a stark warning about the rising popularity of private equity for retail investors.
Whether you’re a Buffett disciple, a fan of focused investing, or just curious about how great investors think, this is a conversation packed with insight.
🔍 Topics Covered:
• How Robert accidentally became a money manager
• What Buffett’s 1983 letter taught him about investing
• Lessons from 14 years working with Bill Miller
• Why absolutes in investing can be dangerous
• How Robert learned to truly read later in life
• Buffett vs. Modern Portfolio Theory: The real debate
• Why investors misjudge tech stocks and “value”
• Hagstrom’s framework for judging long-term compounders
• The real reason most active managers fail
• Why private equity returns are misleading investors
• The emotional difficulty of running a concentrated portfolio
• What Buffett’s surprise CEO handoff really means
⏱️ Timestamps:
00:00 Intro: "Drawdowns don't matter"
01:35 Falling into money management by accident
04:55 The Berkshire letter that changed everything
07:00 Lessons from Bill Miller and pragmatic investing
09:50 Why rigid value investing missed a decade of returns
12:10 Learning how to read and consume information deeply
14:55 Charlie Munger's feedback on Robert’s books
18:00 Buffett’s surprise retirement as CEO
21:00 The legacy Warren still brings in a crisis
24:00 Why Buffett’s consistency stems from deep reading
25:25 Why focus investing works—but is hard to live through
27:45 Performance vs. volatility: Slugging % vs. batting average
33:45 Why active management fails—and how to fix it
36:50 The false promise of private equity for retail
44:55 Why public markets offer better opportunities
50:30 The hardest lesson Hagstrom had to learn
53:00 Why competitive advantage duration is mispriced
55:00 Why investing is Darwinian—and selection still matters

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Blue Infinitas Capital, LLC is a registered investment adviser and the opinions expressed by the Firm’s employees and podcast guests on this show are their own and do not reflect the opinions of Blue Infinitas Capital, LLC. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice.

Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed.

Information expressed does not take into account your specific situation or objectives, and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.