Podcast Summary: The Long View – "Jason Zweig: Revisiting ‘The Intelligent Investor’"
Release Date: May 27, 2025
Hosts:
- Jeff Patak, Managing Director for Morningstar Research Services
- Christine Benz, Director of Personal Finance and Retirement Planning for Morningstar
Guest:
- Jason Zweig, author of the "Intelligent Investor" update and writer for the Wall Street Journal's Intelligent Investor column.
1. Navigating the Current Market Sell-Off
Discussion Highlights: The episode begins with the hosts addressing the current sharp market sell-off triggered by President Trump's sweeping tariff plan. They seek Jason Zweig's insights on historical precedents and advice for investors feeling uneasy during such turbulent times.
Key Points:
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Unprecedented Nature of Current Events: Jason notes the unique combination of events, making direct historical comparisons challenging. He references the 1930 Smoot-Hawley tariffs and the COVID-19 pandemic but emphasizes the complexities in drawing parallels.
"The unprecedented nature of this, the unilateral sort of out of the blue enormous magnitude of these tariffs... doesn't really give us any past reference points." [01:44]
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Investor Advice: Emphasizes returning to basic investment principles, understanding portfolio holdings, and avoiding panic-driven decisions.
"What do I own and why do I own it?" [01:44]
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Managing Perceptions of Loss: Jason advises investors to reassess perceived losses, highlighting that long-term investors likely purchased holdings at lower prices.
"If you're a longtime investor, you surely paid much less for your holdings than they're worth today, even after a 15 or 20% decline." [01:44]
2. Overcoming Doubts in Market Stability
Discussion Highlights: Christine Benz raises concerns that current market upheavals might lead investors to believe there are no reliable investment principles left.
Key Points:
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Resilience of Markets: Jason expresses optimism about the resilience of human and economic systems, despite acknowledging potential long-term negative impacts from new policies.
"I think human beings and businesses and national economies are incredibly resilient." [05:45]
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The Cost of Being Right: He underscores the difficulty of timing the market correctly, highlighting the myriad factors one must predict accurately to justify selling assets in response to policy changes.
"You have to be right on your timing... you have to be right about your analysis, how things will unfold." [05:45]
3. Inflation Protection and TIPS
Discussion Highlights: Jeff Patak inquires about the role of Treasury Inflation-Protected Securities (TIPS) in the context of the tariff plan and potential economic slowdown.
Key Points:
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Increased Caution on TIPS: Jason expresses heightened nervousness about TIPS and U.S. Government debt, not primarily due to tariffs but because of the "Mar-a-Lago Accord," which suggests renegotiating national debt terms.
"I am a lot more nervous about TIPS and any US Government debt than I used to be." [09:15]
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Potential Inflationary Impact: He posits that the tariff program might lead to inflation rather than deflation, which could make TIPS more attractive.
"I think we're more likely to get a rise in inflation than we are in disinflation, and I think that would be positive for TIPS." [09:15]
4. De-risking Strategies for Retirement
Discussion Highlights: Christine Benz shifts the conversation to de-risking for individuals approaching or in retirement, questioning whether selling stocks to buy less volatile assets is advisable.
Key Points:
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Gradual De-risking: Jason advocates for a measured approach to reducing portfolio risk, suggesting incremental adjustments rather than sudden changes to avoid regret from emotionally driven decisions.
"If you are 50% overexposed to stocks, then maybe reduce it 5% a month for the next 10 months." [11:08]
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Strategies for Reducing Risk:
- Tax Loss Harvesting: Selling assets at a loss to offset taxable gains.
- Switching Dividend Reinvestments to Cash: Building a cash reserve for greater comfort.
"There's a lot of ways you can do that... take those income distributions as cash and build up a bit more of a cash reserve." [11:08]
5. Revisiting Benjamin Graham and "The Intelligent Investor"
Discussion Highlights: The core of the episode delves into Benjamin Graham's enduring principles outlined in "The Intelligent Investor," exploring their relevance in today's market.
5.1. Benjamin Graham: The Man and His Legacy
Key Points:
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Graham’s Background: Born in London in 1894, Graham overcame personal and financial hardships, including his father's death and his family's financial struggles during the 1907 panic.
"Graham was not just one of the greatest asset managers...he was an extraordinary intellect and investment authority." [14:05]
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Professional Achievements: Outperformed the S&P 500 significantly and made impactful investments like GEICO.
"Graham's record was even better than it looked." [14:05]
5.2. Four Great Principles of Graham
Christine Benz summarizes Graham's four key investment principles, and Jason Zweig explains their historical context and continued relevance.
Key Points:
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Investment vs. Speculation:
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Investing involves thorough research and understanding, whereas speculation lacks depth.
"If you bought stocks just because everybody else was buying them... then you were speculating." [17:38]
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Intrinsic Value of Stocks:
- Stocks represent ownership in a business, and their value should be assessed independently of market prices.
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Market Prices Can Be Wrong:
- Prices are generally accurate but can deviate significantly, presenting opportunities for informed investors.
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Focus on Risks, Not Just Upside:
- Emphasizes the importance of understanding potential downsides alongside potential gains.
5.3. The Seven Virtues of Great Investors
Jason outlines seven essential virtues that contribute to successful long-term investing, drawing from Graham’s teachings.
Virtues:
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Curiosity: A relentless desire to understand how the world works.
"If you aren't curious... you can't really make the most of yourself as an investor." [20:23]
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Skepticism: Continuously questioning and probing beyond surface-level information.
"There's something bothering us, and we can't quite put our finger on it." [20:23]
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Faith: Maintaining belief in one's own analysis despite market consensus.
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Independence: Thinking for oneself and resisting herd mentality.
"You are right because your data and your reasoning are right." [20:23]
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Discipline: Adhering to a well-thought-out investment plan.
"Having a plan and sticking to it..." [20:23]
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Patience: Allowing investments time to grow and compounds.
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Humility and Courage: Acknowledging one's limitations while having the bravery to act against the tide when necessary.
"Humility is a very difficult virtue to cultivate... you have to believe that you haven't achieved it yet." [20:23]
6. Private Assets and Modern Investment Strategies
Discussion Highlights: Christine Benz introduces the topic of private assets, discussing their increasing accessibility and the potential risks involved.
Key Points:
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Challenges with Private Assets:
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High Fees: Often range from 2% to 7% annually.
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Low Liquidity: Funds typically lock up capital for extended periods.
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Questionable Returns: With trillions invested, the supposed illiquidity premium may have shifted to an illiquidity discount.
"It's hard to imagine that these assets are now cheaper than the assets in the public markets." [48:29]
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Skepticism Advised: Unless investors have access to exceptional managers offering fair fees, private assets may not deliver the promised superior returns.
"For the typical investor... I would be extremely skeptical." [48:29]
7. Jonathan Clements Tribute and Educational Initiatives
Discussion Highlights: Jason Zweig pays tribute to his late friend Jonathan Clements, co-editing a collection of Clements' Wall Street Journal columns aimed at educating young investors.
Key Points:
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Impact of Jonathan Clements: Recognized for his integrity, clarity in demystifying Wall Street jargon, and dedication to educating the public about investing.
"Jonathan wrote 1009 columns, and never once... wrote anything that was flagrantly wrong." [37:14]
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Educational Project: Proceeds from their co-edited book will support initiatives encouraging young people to start investing, including experiments to motivate and sustain long-term investment habits.
"We want to run some experiments to figure out how we can best motivate young people... and turn them into long term, lifelong investors." [42:20]
8. Addressing Investment Scams: The Case of Next Level Holdings and Yield Wealth
Discussion Highlights: Jeff Patak brings up Jason Zweig's coverage of deceptive investment schemes, specifically Next Level Holdings and Yield Wealth, which promised unrealistic returns and left investors in financial distress.
Key Points:
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Deceptive Promises: These firms offered guaranteed returns of 10-15% annually, targeting vulnerable populations such as those with health issues or job losses.
"These firms seem to have specifically identified investors who were struggling... used some data harvesting techniques." [44:33]
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Investor Impact: Many investors, including the profiled couple Kimberly and Richard Whitaker, were unable to recover their funds and faced significant tax bills despite investing through tax-advantaged accounts.
"The Whitakers... have not recovered all their money, only a very small piece." [44:33]
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Ongoing Investigations: Federal authorities are investigating these schemes, which operate primarily out of South America.
"This investing scheme is being investigated by federal authorities." [44:33]
9. Personal Interests and Closing Thoughts
Discussion Highlights: In a lighter segment, Jason shares his passion for the visual arts, discussing recent exhibits he and his wife attended and how art intersects with his professional life.
Key Points:
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Art Appreciation: Enjoyed Dutch and Flemish paintings at the Peabody Essex Museum and Caspar David Friedrich's works at the Metropolitan Museum, drawing parallels between art and market behaviors.
"Fool and jesters... remind me of the sometimes less than perfectly rational markets we have today." [51:32]
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Integration of Art and Finance: Incorporates art into his Wall Street Journal newsletter, finding it a rewarding aspect of his work.
"Every time I work on the newsletter... it's one of the favorite times of my work life." [51:32]
Final Remarks: The episode concludes with the hosts thanking Jason Zweig for his insights and contributions, encouraging listeners to subscribe and engage with the podcast.
Notable Quotes:
- "You're not under any obligation to take the market price just because it's out there." — Jason Zweig [28:29]
- "Most changes that we make when we're under emotional stress are changes we regret later." — Jason Zweig [13:46]
- "Humility is the virtue you can possess only by believing that you haven't achieved it yet." — Jason Zweig [20:23]
- "Defining investment strategies should be driven by data and reasoning, not crowd sentiment." — Jason Zweig [28:29]
Conclusion: In this episode of The Long View, Jason Zweig provides a comprehensive revisit of Benjamin Graham's principles from The Intelligent Investor, contextualizing them within today's unpredictable market environment. He emphasizes the timeless nature of foundational investment virtues such as curiosity, skepticism, and discipline, while also addressing modern challenges like private asset investments and deceptive financial schemes. Zweig's insights serve as a valuable guide for both seasoned and novice investors navigating the complexities of contemporary financial markets.