Guy Spier: The Importance of Process Over Outcomes in Investing

In this interview, Guy Spier discusses the importance of having a robust decision-making process when investing, as good processes can lead to bad results and vice versa due to uncontrollable external factors. He emphasizes structuring decisions to account for multiple possibilities and uncertainties, aiming for a good life regardless of investment outcomes.

Spier references a friend’s book and uses the analogy of running through a bomb factory with a match – one might get through unscathed by chance, but the process is flawed. His goal is to make decisions that increase the likelihood of a positive outcome overall.

Here’s an excerpt from the interview:

We could do a sort of Matrix of many different possibilities. In one I’m actually… so there’s also referring back to a book of our friend Ken Schoenstein that I believe you edited, you can have a good decision-making process and a specific say investment idea and get a bad result because the world unfolded in a different way.

And that doesn’t mean that your process was wrong, that just means that you got a bad result.

By contrast you can have a terrible decision-making process in a particular investment. Make the decisions for all the wrong reasons. And end up with a spectacular result and the idea that we have is somebody running with a match through a bomb factory.

You might get through on the other side but it might have all exploded.

So I need to structure my decision-making in such a way that given that… So I could be a good investor and the environment was not good for me. I could be a bad investor and the environment was not good for me, multiple different options.

I need to take all of those into account and all of the uncertainty about how the world unfolds and make decisions such that on the other side there’s a there’s a good life and a happy life.

You can watch the entire interview here: