RWH054: Billionaire Brit w/ Terry Smith

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 9 February 2025

⏱️ 142 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode, William Green chats with British investing legend Terry Smith. Terry, a member of Bloomberg’s index of billionaires, manages the Fundsmith Equity Fund, which is the UK’s largest stock fund. Since 2010, it’s returned more than 600%, beating the MSCI World Index by over 200 percentage points. Here, Terry talks in depth about the skills, personality traits, & principles that catapulted him from poverty to the pinnacle of the investing world. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 04:01 - How Terry Smith was shaped by poverty & violence. 35:17 - How he achieved fame by exposing financial deception. 39:26 - What he looks for when identifying great businesses. 46:54 - Why many of his favorite companies are 100 years old. 51:56 - Which sectors he shuns & which he likes. 58:42 - How Microsoft embodies what he loves in a business. 1:00:29 - Why it’s worth paying up for the best companies. 1:20:15 - Why the US is his favorite place to invest. 1:21:44 - How being a CEO made him a better investor. 1:32:07 - What he learned from Sir John Templeton. 1:35:46 - Why he refuses to speak with brokers or read their research. 1:40:30 - Why it’s hard to be successful professionally & personally. 1:52:46 - Why he’s deeply skeptical about Tesla. Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Terry Smith’s investment firm, Fundsmith. Terry Smith’s book, Investing for Growth. Terry Smith’s book, Accounting for Growth. William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book. Follow William Green on X. Check out all the books mentioned and discussed in our podcast episodes here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter. Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: SimpleMining Netsuite Unchained Hardblock Found Fintool The Bitcoin Way Vanta Onramp TurboTax PrizePicks Vanta Fundrise HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:02.7	Hi there, it's wonderful to be back with you on the richer, wiser, happier podcast.
0:07.5	Today's episode is one of my all-time favorites.
0:10.5	Our guest is a legendary British investor named Terry Smith, who manages the Fund Smith Equity Fund.
0:17.5	Since his fund's inception in 2010, Terry has racked up an average return of 14.8% a year
0:24.9	by investing in a global portfolio of high-quality companies that are extremely durable.
0:31.3	Cumulatively, he's beaten the MSCI World Index by more than 200 percentage points over the last 14 years.
0:39.6	The Financial Times describes Terry as one of the UK's most renowned stock pickers.
0:45.4	Bloomberg, which includes Terry on its list of billionaires, calls him the UK's most
0:50.4	popular money manager.
0:52.4	Territ's success, both in markets and business, is even more
0:56.5	impressive when you consider the odds that were stacked against him. As you'll hear, he grew up as
1:02.3	the son of a truck driver in the 1950s and 60s, in a very rough and tumble area of East London
1:09.0	that was best known for poverty and deprivation and
1:13.2	bomb damage from World War II and plenty of violence, including the criminal enterprises run by
1:19.0	the infamous Cray Twins. In this conversation, Terry talks in depth about what it took to drag
1:26.0	himself out of that environment to the pinnacle of
1:29.1	the investment game. You'll get a keen sense of the analytical skills, the investment principles,
1:36.3	and the sheer grit and determination required for him to become an investing legend. He's come a
1:43.2	long way, both literally and figuratively.
1:46.5	Now, in his early 70s, he lives on the tropical island of Mauritius, off the coast of Africa,
1:53.1	about 6,000 miles from London. In his spare time there, he practices martial arts, spars regularly
	...

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