Joe Rogan’s Accidental Investing Tip That’s Backed by Warren Buffett
“The Joe Rogan Experience” is an immensely popular — albeit controversial — podcast, with 14.6 million subscribers as of April 2023.
While not particularly known for its investment advice, on one episode host Joe Rogan “accidentally” gave solid investment advice to his listeners in the course of relaying a personal story. A transcript of that podcast could have been mistaken for something out of the mouth of the “Oracle of Omaha” himself, billionaire CEO of Berkshire Hathaway Warren Buffett.
Read on to learn what Rogan said, how Buffett himself has framed the topic and how the advice itself can help you with your own investment strategy.
Rogan’s Podcast Quote
In the middle of one of Rogan’s podcasts, he began relaying the story of an investment tip he heard about someone who was going to “revolutionize a form of travel,” and that Rogan could get in on the ground floor. When he discussed this with his business manager, he brought up the failure of biotech company Theranos, which promised a revolutionary blood analysis machine that could identify a host of potential health problems with just a single prick of the finger. That company’s CEO, Elizabeth Holmes, was sentenced to 135 months in prison, or slightly over 11 years, for criminal fraud.
Rogan went on to explain to his listeners that he had no interest in any “groundbreaking” technology or products until they have proven themselves to be true. As Rogan sees it, there’s no point in investing in something that you don’t understand. If you have to go to school or read books to understand what someone is even trying to do with their innovation, Rogan says for him the answer will always be “no way, not worth it.”
Warren Buffett’s Version of the Advice
Although in a different format, Warren Buffett has long espoused the same idea that Rogan mentioned in his podcast. As Buffett once told Forbes magazine, “Investment must be rational; if you can’t understand it, don’t do it.” That is often colloquially translated to “never invest in something you don’t understand.”
Buffett himself acknowledges that he has missed many opportunities in the market by sticking to his mantra. For example, Buffett is famously averse to technology, not because he doesn’t like it, but because he doesn’t understand it. The Berkshire Hathaway CEO had admitted to missing out on big moves in companies like Alphabet and Amazon for this very reason.
But that doesn’t mean he was wrong. On the contrary, Berkshire Hathaway has vastly outperformed the S&P 500 by investing in things that Buffett understands, like banks, oil and railroads. From 1965 to 2022, Berkshire Hathaway actually doubled the return of the S&P 500, returning 19.8% annually, vs. the S&P 500’s 9.9%.
How You Can Apply This Investment Tip to Your Own Portfolio
While it’s true that billionaire investors such as Warren Buffett might have access to more information than the average investor, this doesn’t mean you can’t profit from the same techniques they use. In fact, you might even be able to outperform these investment giants by applying what you already know.
For example, if you work at a company, you might have firsthand knowledge of its efficiency and understand how that is going to translate into future profits. While you can’t trade on insider information that is not public, it’s not a crime to take note of how a company operates and whether or not it has what it takes to succeed.
Adopting a similar principle from famed investor Peter Lynch, if you shop a lot at a particular store, you might be able to note things that take time to decipher in an annual report that other investors might be reading. For example, you might note that the retailer rarely discounts its merchandise but it still has shoppers buying all the company has and coming back for more. While you’ll have to supplement your firsthand observations with actual data from company reports, you might have a leg up when it comes to investing by noting positive trends.
The point is that if you believe in investors like Warren Buffett — and on that given day, Joe Rogan — you shouldn’t waste your time gambling on hot stocks in industries you don’t understand. While you may luck out and bag a winner, that’s not a solid long-term investment strategy.
Just ask investors in the thousands of cryptocurrencies that have disappeared, or even in banks like Silicon Valley Bank, which due to its investment strategy went from Wall Street darling to the second-biggest bank failure in U.S. history virtually overnight. If you truly understand what you’re investing in, the likelihood of this happening to you is very low.
Investment grade will boost realty
The local property market stands to reap significant benefits, both short-term and long-term, from a likely credit rating upgrade to investment level for Greece.
Industry executives say that would be a very positive development, as, after 14 years, the Greek real estate market will return to the “elite” of investment destinations and it will become easier to attract foreign investment groups and funds.
“There is an objective problem right now regarding the implementation of investments by a number of institutional investors, as there are rules that prohibit the placement of funds in countries below investment grade. In other words, even if there was an investment opportunity and they were willing to take the risk, such an investment would be cut off by the investment committee of the respective group, because it is not allowed to invest in countries that do not have a positive credit rating,” Tassos Kotzanastassis, ULI global management committee executive and CEO of international real estate investment management company 8G Group, tells Kathimerini.
Securing investment grade means the Greek property market will get back on the “radar” of large institutional investors and state groups that have a long-term investment horizon. This is a development that contradicts speculative moves by a portion of institutions that have been placed in Greece, with a purely short-term horizon, aiming to secure a quick profit and exit from the country.
However, as Kotzanastassis warns, new investments from large foreign funds should not be expected, at least not immediately. “In this period, at the international level, there is significant uncertainty and investors appear restrained. Many are looking for investment opportunities in the form of distressed assets,” he emphasizes.
One of the market’s perennial problems is it is shallow, so it is difficult to create economies of scale that maximize the return on an investment. Another key point is that all foreign investors of this scope are looking for properties with green characteristics, in the context of the ESG policy they follow. Such properties are still rare in this market, constituting a very small minority in relation to the total stock.
Fidelity has cut Reddit valuation by 41% since 2021 investment
Fidelity, the lead investor in Reddit’s most recent funding round in 2021, has slashed the estimated worth of its equity stake in the popular social media platform by 41% since the investment.
Fidelity Blue Chip Growth Fund’s stake in Reddit was valued at $16.6 million as of April 28, according to the fund’s monthly disclosure released over the weekend. That’s down 41.1% cumulatively since August 2021 when the asset manager spent $28.2 million to acquire the Reddit shares, according to disclosures the firm has made in its annual and semi-annual reports.
Reddit was valued at $10 billion when the social media giant attracted funds in August 2021. Fidelity — which has marked down its stakes in many startups including Stripe and Reddit in recent quarters — also slashed the value of its Twitter stake, it disclosed in the filing, valuing Elon Musk’s firm at about $15 billion.
The substantial markdown of Reddit’s value by Fidelity predominantly occurred by the previous year. Nevertheless, it merits pointing out that Fidelity has persistently implemented minor reductions in the worth of Reddit’s shares in the ensuing months. Fidelity, also an investor in Indian startups such as Meesho and Pine Labs, has effected considerably less dramatic valuation cuts in these holdings in the past two years.
Reddit declined to comment.
This devaluation, part of a broader trend that has hit a variety of growth stage startups across the globe in the past year, raises uncertainties about whether Reddit will maintain its initial intent to reportedly go public at a valuation around $15 billion.
Reddit, which has raised over $1 billion to date, counts Sequoia Capital and Andreessen Horowitz among its backers. The firm was valued at as high as $15 billion in secondary markets late 2021, according to people familiar with the matter.
The current wave of valuation cutbacks sheds new light on the impact of deteriorating worldwide economic conditions on fledgling startups. Despite the diminished funding activities for startups globally over the past year, valuations of numerous larger startups have stayed constant.
First Nations Technical Institute receives $3.5 million investment
The Federal Economic Development Agency for Southern Ontario is investing $3.5 million in the First Nations Technical Institute in Tyendinaga Mohawk Territory.
The funding is planned to be used as part of the aviation recovery plan, after a disastrous 2022 fire destroyed a hangar and an entire fleet of planes.
Part of the funds is also going to support the institute’s green energy initiative, by developing solar panels and battery storage intended to power their buildings and offset greenhouse gas emissions.
Suzanne Brant, President of the First Nations Technical Institute, thanked the government of Canada for their help in recovering after the incident.
“FTNI is grateful that the Government of Canada is investing in Indigenous initiatives in
our region, providing benefits to Indigenous learners and communities across Ontario
and Canada,” said Brant.
Brant also applauded FedDev Ontario‘s decision to launch a support team with dedicated resources to help indigenous businesses in southern Ontario. The new task force is connecting with indigenous lead businesses and has a new web page to show what resources are available to help them.
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