← The Master Investor Podcast with Wilfred Frost
The Master Investor Podcast with Wilfred Frost
Niall Ferguson: Navigating The New Gilded Age - Debt, Gold, AI & China
00:36:22
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- [00:00]
A
The fact that gold has hit record highs this year is telling you something important about the way at least some investors are thinking about the world. It's been a long time since we had a period of sustained dollar weakness. If that's what's coming, then I think smart investors want to have gold to protect them from the nightmare scenario, which is a rerun of the 1970s. One has to be a little bit cautious here. It is astonishing that we're now looking at an average tariff rate for the United States close to that of the 1930s. I never thought I would find myself using words like that in the 2020s, but here we are. I keep asking myself, is there an 1893 moment, a kind of panic, when suddenly markets decide maybe there isn't going to be the pot of gold at the end of Sam Altman's rainbow? The pot of gold is, is marked artificial general intelligence. If it turns out that that's not actually there or that the returns on all of this investment are going to disappoint, then at the very least, I think markets are going to reprice the hyperscalers who are spending all this money on Capex. So that's the thing I keep asking myself, just how 1890s are the 2000s right now? In lots of ways, we're in a very 1890s America.
- [01:23]
B
Welcome to the Master Investor Podcast with me, Wilfred Frost, where we celebrate and learn from the success of the greatest investors, business leaders and politicians in the world, giving you, our listeners, the edge. My guest today is the preeminent financial historian of our age. He is the Milbank Family Senior Fellow at the Hoover Institution at Stanford and a Senior Faculty Fellow on the Belfer center for Science and International affairs at Harvard. He's written 16 critically acclaimed books which range from the Ascent of Money, the House of Rothschild, Empire Civilization and Kissinger Part One. And he's currently working on Kissinger Part Two, the central biography of the late Secretary of state in the U.S. he is, of course, Sir Neil Ferguson. Neil, it is great to be with you today. Thank you so much for joining the Master Investor Podcast.
- [02:13]
A
Great to be with you. I should explain that I am not a master investor. You can be a financial historian without being a master investor. I wish I were Master Investor. We'll get to that later. But health warning, I am not a master investor.
- [02:26]
B
Well, the title actually, which maybe I have confused people with, is trying to help our listeners become master investors. So you're allowed to stay.
- [02:35]
A
Well, one day I'll write an essay called why I am a terrible investor and I'll look back on some of my bad investment decisions. It is important to learn from those because the idea that investment is just a whole series of home runs and the people who make money are geniuses who always hit homers, that's actually wrong.
- [02:53]
B
It certainly is wrong. And it's always key actually, as you say, to learn from mistakes and to acknowledge them publicly as well. So it'd be great to get to some of that later. I wanted to start, if we could, with, you know, the state of play in the most important economy in the world, in the US and in particular the macro outlook. And I personally, you know, as we were discussing before we started recording, as you are as well, we've spent a lot of time in the US and would never, I would never bet against the ability of the US economy to reinvent itself and lead whatever the next wave of innovation is, and certainly leading one of those now, but shorter term or medium term. Do you look at the debt position today and do you have concerns about whether they can out innovate it, outgrow the debt problems they've got?
- [03:40]
A
Yes, but I've been worrying about the federal debt for more than 20 years. I wrote about it first in a book called Colossus, which was published 20 years ago on the eve of the war in Iraq. So the United States has been running an unsustainable fiscal policy all this century. But that's not good. That just means that we're getting closer and closer to a day of reckoning. If you calculate the debt relative to gross domestic product, we've now reached around 100%. If you count only debt in public hands, that's the highest since the period just after World War II. More worryingly, the United States is spending more on interest payments now than on defense. And that's really the first time that that has been true, apart from a very brief moment back in the 1930s. I have a law, Ferguson's Law, that states if a great power is spending more on interest payments than on defence, it probably won't be great for much longer. So there's a real issue there. And then we have a set of related problems arising from some big policy changes that have happened this year. Number one, a complete stop in immigration. Illegal and more or less legal too. There'll be zero net migration to the United States in 2025, whereas it was running in the millions under Joe Biden. That's shock one and shock two, of course, has been the imposition of tariffs, which have taken US Average tariff rates back to where they were in the 1930s. So these are two big shocks to the US economy. And it's hard to believe that they won't tend to slow growth and potentially also to keep interest rates elevated even when the Fed is cutting.
- [05:30]
B
Clearly, as you say, it's something that the warning signs are flashing. But I guess they've managed, as you said, since your book Colossus came out, to kick the can down the road for a period of time. I know you're a friend of Larry McDonald who's been on the podcast and it's a great episode people should go back to if they haven't listened to it. And you know, he says very explicitly he thinks Scott Besant and co are trying to massage interest rates below the rate of inflation to try and help them get out of this problem. Do you think that is what they are doing intentionally and do you think that's what the outcome will be? What are the implications for inflation in the dollar if that's the case?
- [06:06]
A
Well, I think the important thing to look at here is the real interest rate. If you have a real interest rate on your public debt that is higher than the real growth rate, you're in trouble. And this is a problem for a number of economies in the world today. It's not clear whether it's going to be a problem for the United States because we see the Fed cutting short term interest rates. That's already begun. And we also see inflation somewhat above the Fed's target, partly because of tariffs, but not only because of tariffs that President Trump's imposed. The real growth rate, however, is trending down and it's clear that by the end of this year growth is going to be closer to 1% than 3%. Remember, Scott Besant said 3% was his target. That's going to be hard to hit the way things are going. So it's a little early to conclude that the US Is in a debt crisis because we've got relatively low real rates but also relatively low real growth. So that's, I think the key way to think about this. Part two of my answer has to do with the dollar. Since President Trump came in, some indicators have gone on a round trip. The stock market, for example, had a huge hit, especially the Nasdaq, when Liberation day was announced April 2, the tariffs were unveiled. Somehow we're in October and markets have not only retraced their steps but actually have hit new highs. So equities aren't the thing to look at. The thing to look at is gold and the dollar. The dollar's down 8, 9% since Trump was sworn in. By the standards of previous dollar depreciations, that's actually not much. If you go back to the 70s and the 80s and the most recent period of dollar weakness, you look back at declines of 25, even 30%. So it's possible that we'll see more dollar depreciation in the coming year. That's why people who were long the dollar but not hedged got a real fright back in April. European and Asian investors, and they've had frantically to improve their hedging to cope with the possibility of a weaker dollar. So I think part of what we're seeing here is really to be understood in the exchange rate. What I think Secretary Bessant wants to do is to make the foreign bondholders pay. That was something also flagged by Steven Mirren, who's now at the Fed, in a paper that he published before he joined the Trump administration, which became the basis for the Mar A Lago Accord narrative. So I think the dollar's the thing to look at here. The fact that gold has hit record highs this year is telling you something important about the way at least some investors are thinking about the world. It's been a long time since we had a period of sustained dollar weakness. If that's what's coming, then I think smart investors want to have gold to protect them from the nightmare scenario, which is a rerun of the 1970s.
- [09:14]
B
I mean, gold, just to focus on that, it's up 47% so far this year, follows a 25% rise in 2024, which itself was at the time a very big annual rise for gold. Just snapshot what those the reasons behind that particularly pronounced. I mean, it's trading like bitcoin almost. When you talk about increases of that number, it's not just a sort of low beta safe haven.
- [09:41]
A
Gold and Bitcoin are in a kind of interesting relationship to one another. I said in the second edition of the Ascent of Money, which was published back in 2018, that we should think of Bitcoin as an option on digital gold. In other words, if we really do enter a world of digital finance in which blockchain based payments and coins become standard, then it's quite plausible that bitcoin becomes the gold in that world because of its finite supply. Finite supply is part of the reason for gold's enduring appeal. Of course it doesn't pay a return. It's a zero interest bearing asset. So you have to kind of assume that Real rates are going to be negative on interest bearing assets. Otherwise why would you hold gold? The same applies to Bitcoin. You're assuming some upward trend in the price, which implies some weakening of the dollar because you're pricing both of these things in dollars. And I think if you're a smart investor, over the last five years, you've wanted to hold both Bitcoin and gold because you want to protect yourself against what I'll call the nightmare scenario of a second 1970s. That's a world in which you have higher inflation, but you also have stagnation. So you have the nightmare combination of stagflation. Now, that's not, of course, the plan. What Secretary Besant wants is to see a period of dollar weakness, but not elevated inflation, but actually rising growth and relatively low inflation. In this scenario, the benign scenario, you're really rerunning the 1980s. You'll remember that in 1985 there was a significant dollar weakening, the Plaza Accord and markets took off. US Equity market took off. Inflation did not take off. It was an extremely good time, apart from a little Nightmare moment in 1987. So there's a good outcome here, which is we get some version of the 1980s. The bad outcome is we get some version of the 1970s.
- [11:48]
B
Just to pause on both gold and bitcoin, which is really interesting to hear you so clearly describe it as digital gold. What sort of portion should people have of those two assets in their portfolio?
- [11:59]
A
Well, back in 2018, I said 1% would be smart for Bitcoin. At that point, the average millionaire didn't have any Bitcoin. And my argument was that if every millionaire in the world had 0.2% of his or her wealth in the form of Bitcoin, the price should probably be around $15,000. If it went to 1%, then the price would be likely closer to 70. Well, we're now actually above 100. And so it seems to me there's been significant adoption since I did that second edition of the Ascent of Money. And adoption is really the key here. More and more people taking Bitcoin seriously and more and more established institutions, including banks, taking it seriously as an asset. It's not going to be money. We're not going to ever be paying for our coffees with bitcoin. But it has, I think, acquired a status comparable to gold as something that you want to own just because it's not correlated closely with other assets that you might have in your portfolio.
- [13:02]
B
I significantly recommend a cent of money, but the first one came out when.
- [13:06]
A
Was published in 2008. Originally, I was going to say just after the failure of Lehman Brothers. So it was a pre crisis book in terms of its being written. It was a television series before the financial crisis really got going. The whole point of the Ascent of Money was to foresee and explain the financial crisis. Ten years later I thought I need to update this. And one of the things I did was to write a chapter on crypto, because that had come on the scene since the book was published.
- [13:31]
B
Well, and I recommend people do read it. I remember reading it then as I graduated in 2008 as one of the books a wise old investor told me would help me in job interviews to get a job in the city. And it certainly did.
- [13:43]
A
Here you are. Thank you.
- [13:44]
B
No, genuine. I remember it very well. It's a seminal piece on that topic. Let's talk about China versus the US Because a lot of people I talk to, including recently Eric Schmidt on this topic, says they're way ahead on some areas of the innovation, like robotics in particular. He said obviously they're close behind in AI and in fact maybe their potential to innovate over the next decade is underpriced at the same time, and I know you've talked a lot about this, their demographic outlook is not great. What's your outlook on China with those competing forces, or perhaps other more important competing forces? Can they be quite strong for a couple of years and then struggle or your outlook as well?
- [14:30]
A
Far be it for me to get into a debate on technology with Eric Schmidt, but I did spend quite a bit of time in China prior to the pandemic. I was a visiting professor at Tsinghua University. I spent a lot of the last decade, couple of decades thinking about the Chinese economic challenge. In 2020, when I was writing the book Doom, I thought China was making claims that were implausible. You'll remember that at that time, Xi Jinping said, we have the best response to Covid and you're the west completely screwing it up. Not only that, but we're going to create vaccines that we'll give to the world. And then that was the era of wolf warrior diplomacy, when Chinese diplomats were encouraged to go and beat their breasts and bare their fangs. That all, I think, turned out to be heavily overhyped. Zero Covid turned into a disaster, actually, for the Chinese economy because they waited far too long to get rid of the restrictions damaging consumer confidence along the way. They didn't develop the vaccines that ended up being much more successfully done in the United States and the UK And Wolf Warrior diplomacy completely backfired and made China significantly less popular than it had been in the rest of the world, maybe at the beginning of Xi Jinping's time in power back in 2012. So at that point when I was writing Doom, I thought, you know what? I think the Chinese system has real problems, and Xi Jinping has made some serious mistakes. Five years on, you can see something that he got very right, and that was made in China 2025, which was a master plan to take China to the very top of the global manufacturing supply chain. And now China dominates in so many sectors. It's very, very impressive indeed. And I'm not just talking here about electric vehicles and batteries and solar cells. Those are the most obvious things that the Chinese are simply pouring into global markets. It's broader than that. China has, for example, is now producing double the electricity that the United States produces, and that's the result of stunning investment in all kinds of forms of electrical generation. China, as you already mentioned, Wilford, is clearly at the front of robotics hardware, though it's still, I think, challengable when it comes to software. And we're left with a software advantage. Even in software, if you think of artificial intelligence as essentially being a whole bunch of large language models harnessing huge amounts of compus, the lead that we have, the west has, that is the US Hyperscalers, is less than I would have predicted five years ago when this race was really getting going. So despite the problems that I identified back in 2020 with the way that Xi Jinping runs China, there's no question that they are now the manufacturing superpower, and that gives them dominance in a whole range of different areas, including warfare. Because if the war of the future is a drone war, then guess who dominates drone technology? That's right, China.
- [17:35]
B
And so do you think, if you look at Chinese equities broadly, it's bounced back a bit, but it's a lot cheaper with some geopolitical risk than the US Market. That needs to be in people's portfolios.
- [17:47]
A
Yes, I think that's been true for about a year, since it was clear that Xi Jinping was going to take the tech sector in China and out of the deep freeze. We've seen Jack Ma more or less rehabilitated, and we see the dear leader smiling upon AI and tech generally. This is a big change because there was a period when he acted like he didn't need the tech sector and particularly the big network platforms. So I think you've got to take A more constructive view of China tech, not least because these competitors to the US hyperscalers are so much cheaper by comparison. I think China's problems don't lie there. They lie in the real estate sector, which it's proving extraordinarily difficult to sort out, rather as happened to Japan after 1989. 90. Then there's the demographics, which you mentioned. I think it's reasonable to estimate that China's population will fall by about half between now and the end of this century. It might even be more than that if the fertility rate doesn't recover. It's fallen well below replacement. And so China is looking at a period of really significant contraction in its workforce. And that's a problem. It's certainly a problem if your economic model involves urbanization. Building of tower blocks. Who are these tower blocks for? For is a pretty legitimate question. Bridges to nowhere have been replaced by tower blocks for nobody. And robots don't need tower blocks. So I think those are China's problems. They're long term problems. They'll become more obvious 10, 20 years down the line than they are today. But they are a reason not to be too confident about where China's going With all the extraordinary achievements of its industrial revolution. There's something wrong with Chinese society that people don't want to have children. There's a gloom that hangs over the Chinese consumer market still, which the government really can't figure out.
- [19:52]
B
So clearly President Trump is trying to compete back and get the US industrial sector going again, and the tariffs are part of that. Are you a buyer of the domestic US industrial space as a result of this or not?
- [20:07]
A
One has to be a little bit cautious here for a couple of reasons. One is just my predisposition to believe Adam Smith over any challenger. Moving away from free trade rarely benefits an economy. And the US has moved decisively away from free trade this year. It is astonishing that we're now looking at an average tariff rate for the United States close to that of the 1930s. I never thought I would find myself using words like that in the 2000 and twenties, but here we are. And I think that is going to lead to the things that tariffs generally produce historically. Inefficiency, less productive sectors. Being protected from competition tends not to be beneficial, as well as the kind of corruption that comes when big companies can come and strike deals at the expense of lesser companies. Everybody wants an exception, especially if they're Apple or Nvidia. So I have a kind of theoretical resistance to the idea that protection can really benefit the US economy. But the other reason is that it's hard to say, replicate tsmc, the semiconductor manufacturer in Taiwan, in Arizona. It's hard because the United States is not as easy a place to build high end manufacturing as it was 30, 40, 50 years ago. US labor costs are high, US permitting costs are prohibitively high, especially in blue states. And so I think it's going to be harder than it looks to replicate the manufacturing that moved over to East Asia in the period after China joined the World Trade Organization. This is going to be difficult. And I would say if you just look at manufacturing jobs this year, they've actually fallen in number, not increased. So you have to be a little skeptical that the tariffs are going to re industrialize America in ways that will reward efficiency and enhance productivity growth.
- [22:14]
B
Let's talk a little bit about Europe and kick off with the obvious topic. Russia, Ukraine. You've been clear in recent weeks and months that you think people haven't realized sufficiently the extent to which the Trump administration has cut off the level of aid, military and financial to Ukraine that had been flowing beforehand. What is your snapshot as to what the likely outcome is off the back of that? And I guess as we look at sort of markets broadly, do you think there will be peace in inverted commas, whether it's very unfair on one side or the other in the foreseeable future? And I guess I wonder what happens to risk assets, even if geopolitically the long term implications of the settlement are quite worrying. What happens to risk assets when there is no longer any fighting.
- [23:03]
A
President Trump came into office saying that he was going to end this war. He's now admitted, as some of us warned at the time, that this is much harder than it looked. And he's almost washed his hands of the problem. He said on his Truth social media platform just last week, good luck to everybody, which I translate as I'm outta here. This is now your problem, Europe. So I think there's a big difference between the United States selling missiles to Europe that the Europeans can give to Ukraine and the United States giving missiles to Ukraine. The United States has been responsible for not quite, but nearly half of of all the aid that Ukraine has received since the Russians launched their full scale invasion in February 2022. That that is now over. From now on it's going to be the EU plus the uk, maybe some others who are providing the aid that Ukraine desperately needs. Because Ukraine can't win this war on its own. It's dwarfed by Russia in terms of both population and gdp it's just that the Europeans haven't fully grasped, I think, that this is now their war. They, plus the UK are going to have to be the principal sources of support for Ukraine. Now, that's not an impossible prospect because Europe is rich, it's economically vastly larger than Russia, and it ought to be easy for Europe to step in and take over from the United States as the principal source of aid. The problem is the Europeans don't have the military capabilities that the US has, and therefore a lot now hinges on European rearmament, which in effect means German rearmament, since it's clear that the UK and France are too fiscally constrained to do terribly much here. So watch carefully how successfully the German Chancellor, Friedrich Merz, rearms. If he uses the additional money that's now been made available since he came to power wisely, then quite quickly Europe can develop the kind of military capabilities that will really help Ukraine. And I mean by that, drones, drones are the key to this war. It's increasingly a drone war at the front, and it's all about drone defense. If the Europeans use their considerable financial resources greatly to expand their drone defenses and Ukraine's drone offensive and defensive capability, then that's serious trouble for Vladimir Putin. The problem is, I don't see that happening fast enough. Last point I'll make, Wilfred, is just that under these circumstances, why would the war end? Putin can still see victory in sight. He thinks that ultimately Ukraine will run out of men and the frontline will simply crumble because of the sheer weight of manpower that he can deploy. And he is extraordinarily wasteful of Russian soldiers lives in the pursuit of additional territory. So Putin's not incentivized to settle. And as long as that's the case, the war is going to keep going. And it will all depend on how far Ukraine can hold out, given that it is David, Russia's Goliath, and it's only in the Bible that David tends to win those fights.
- [26:24]
B
I guess the implication of that is German defense stocks, even if they've run up a bit over the last 12 months, could have a a lot further to go if Frederick Mertz really steps up to the playground.
- [26:34]
A
Well, I just interject that it's not clear to me that you want this to be a win for the established defence primes in Europe, because in fact, what you really need is to see Ukrainian defense technology scaled with European and British capital. It's the Ukrainians who are now at the cutting edge of drone warfare. Their companies are clearly the best in the world. The Americans acknowledge that they're capital constrained, though, as is the Ukrainian government. Ukrainian government can only afford to buy about a third of the drones that Ukrainian companies make. So I don't necessarily want to see established German defense companies doing well here. If this is just Rheinmetall's war, I think Putin ultimately wins it.
- [27:15]
B
That's a really important and interesting take to add to it. And by the way, in terms of Trump's motivations towards his tactics on that war, we're going to talk more about that in a bonus episode coming at the Weekend with Neil as we Explore the Nixon vs Trump comparison with Neil for a bonus episode. Just one quick question, or a couple quick questions on the UK economically. You mentioned that point about Ferguson's Law, when interest costs rise above defence costs. I guess we crossed that threshold a while ago. Yes, and the gap is much bigger. Are you concerned about the outlook here for the UK economy?
- [27:54]
A
I am concerned. I mean, I'm concerned because for that reason Britain is ceasing to be a meaningful military power. We probably haven't had a navy this small since Elizabeth I's reign. And the army is also an extraordinarily reduced force. So one has to worry about Britain's ability to play its part in the defense of Europe. But there is a broader problem in Britain, and that is one of relatively poor performance. Extraordinary inefficiencies in the labor market, millions of young people essentially not in the labor force, subsisting on benefits because of somewhat casually diagnosed mental health problems. There are all kinds of structural problems in the UK economy which desperately cry out for fixing. Unfortunately, successive Conservative governments, plus the new ish Labour government respond to the problems by raising taxes. And this is of course only going to make matters worse. So when I look at the UK economy today, I'm unpleasantly reminded of my childhood in the 1970s. Sure, the inflation rate isn't as high and the unemployment rate isn't as high, but there is a kind of atmosphere of underperformance and low expectations that that really does remind me of Britain in the 1970s. If you look at who's performing well in the UK economy in recent years, it's actually pensioners who seem to be doing well and young people who seem to be faring badly. And you can't help feeling that an economy that's principally good for seniors, for retirees, probably has a fundamental structural problem right at its heart.
- [29:42]
B
Still a long term believer in the uk, what's the quickest bit of advice? How do we bounce back?
- [29:47]
A
Well, the lesson of the 1970s is that Britain could bounce back and under Margaret Thatcher did bounce back. But until we have a government that approaches Britain's economic problems the way Margaret Thatcher approached them in 1979, I don't think we're going to get anywhere. Just to be clear, the fundamental ideas of Thatcherism still hold good. You need to incentivize innovation and entrepreneurship and not punish it with with higher taxes. And you need to encourage the free market and not expect the state to deliver growth. So I would like to see a revived Thatcherism. I think it's the only way out of this really rather miserable equilibrium of low growth and low expectations. But that's not going to come from Nigel Farage, who's offering, it seems to me, a completely unrealistic combination of increased state involvement and American style policies on immigration. I would say looking at our options today, labor has no solution to the problems of the British economy. Reform has phony solutions, and it's actually probably Kemi Badenoch's Conservatives who are most likely to achieve the kind of reforms that Margaret Thatcher achieved in the 1980s. Of course, the world's different and Britain's different from Britain in 1979, but certain things hold good. And you've got to deal with the fiscal problems, you've got to deal with the excessive tax burdens on business. You've got to start encouraging innovation and entrepreneurship in a way that simply doesn't go on today.
- [31:20]
B
And we'll of course see what the Chancellor comes up with in her budget in late November and be seeing as this episode drops, what the Tories are announcing and if it punches through and gets a lot of coverage at their conference. As we wrap up this first part of our conversation, Neil, I wondered, when you look back at history, as you do better than anybody else, financial history, is there a moment that you keep thinking this could be similar to and what does that imply to what's coming next? Or is it too hard to pinpoint something like that?
- [31:51]
A
Well, I wrote a piece for the Free Press not so long ago saying this is the Gilded Age and it certainly is in the United States with this extraordinary Capex boom around AI. Data centers account for a huge proportion of of investment in the US right now. In fact, you begin to think that without the AI boom, there wouldn't really be much growth going on in America. Now the Gilded Age had its periods of crisis in the late 19th century. There was a huge financial crisis in 1893. Back then it was railroads. And the Capex boom around railroads and the heavy industry that went with it really was much larger in relative terms than what we see today. But I think I keep asking myself, is there an 1893 moment, a kind of panic, when suddenly markets decide maybe there isn't going to be the pot of gold at the end of Sam Altman's rainbow? The pot of gold is marked artificial general intelligence. If it turns out that that's not actually there or that the returns on all of this investment are going to disappoint, then at the very least, I think markets are going to reprice the hyperscalers who are spending all this money on Capex. So that's the thing I keep asking myself, just how 1890s are the 2000s right now? In lots of ways, we're in a very 1890s America.
- [33:14]
B
Well, it's a really interesting comparison and one that Jeremy Grantham made for us in one of our early episodes. I encourage people to go back to and listen to and a reminder to stay tuned for a bonus episode with Neil coming in a couple of days as we reflect on Trump versus Nixon comparison. Neil, for this part of the conversation, my final question. We asked this to everyone that comes in what is an overriding, your key overriding piece of investment advice for our listeners?
- [33:38]
A
Well, I mentioned at the beginning of our conversation, Wilfred, that I don't regard myself as a master investor. In fact, I'm really quite bad at it. My favorite example of this is selling a quite large bitcoin position right at the bottom of the market when Sam Bankman Fried had blown up and I thought that the whole sector, the whole crypto sector was really irretrievably damaged. I should have remembered to hold on for dear life. So that was a good example of a bit of bad timing when I'd actually got in at a reasonably good point and exited at the worst possible point. What does that teach me? Broadly speaking, you want to have a diversified portfolio and do not trade in the moments of fear. You've got to avoid selling in a climate of fear that nearly always is a mistake. One of my strategies when I thought we would have a relatively inflationary decade in the 2000 and twenties, was to load up on real estate. So I am rather long real estate on both sides of the Atlantic. Too long if I look at my portfolio objectively. Too much real estate, not very liquid, vulnerable to the vagaries of monetary as well as fiscal policy. I wasn't sufficiently diversified. I wish I had fewer bricks and mortar and more bitcoin. So diversification is the key, and making sure that you do not liquidate a position in moments of fear is another key takeaway. These are simple principles. I'm not telling you anything original here, but I tell you I've lived it and I've learned from my mistakes. How easy it is to bungle good positioning because you get caught up in the moment of panic.
- [35:17]
B
Well, we can't improve without acknowledging our mistakes. And it's very gracious and telling in an incredibly positive way that you've done it with us today. Neil on the Podcast thank you. Thank you so much for joining us. And thank you for sticking around as well for the bonus episode. We really appreciate it.
- [35:31]
A
My pleasure.
- [35:32]
B
That was Sunil Ferguson on the Master Investor Podcast. As I said, we'll have a bonus episode coming for you later this week. As a reminder, nothing you've heard on the Master Investor Podcast should be considered direct financial advice. There's more on that in our show notes if you'd like to refer to it. The Master Investor Podcast is produced by by Paradine Productions and Master Investor Podcast Ltd. In association with Birdline Media. If you've enjoyed the podcast, please do subscribe on YouTube or click follow on your podcast platform, and then you'll be automatically notified each time a new episode drops. And again. Join us later in the week for more as we compare Nixon and Trump with Neil. Neil, thanks again.
- [36:17]
A
Thank you.