Robert Hagstrom – ‘Investing: The Last Liberal Art’


Robert Hagstrom, Legg Mason – ‘Investing: The Last Liberal Art’


Exclusive: York Capital to wind down European funds, spin out Asian funds

Jeffrey Aronson Crossroads CapitalYork Capital Management has decided to focus on longer-duration assets like private equity, private debt and collateralized loan obligations. The firm also plans to wind down its European hedge funds and spin out its Asian fund. Q3 2020 hedge fund letters, conferences and more York announces structural and operational changes York Chairman and CEO Jamie Read More

Robert is the author of The Warren Buffett Way and Portfolio Manager for Legg Mason, Inc. (NYSE:LM).


  • Noted Munger’s 2007 USC commencement speech
    • Attempted to diagram the liberal arts of investing

Robert Hagstrom -  'Investing: The Last Liberal Art'

  • Isaac Newton
    • Wrote Principia Mathematica
    • People latched onto physics model for how things work
    • Chesterton wrote …”nearly reasonable, but not quite…” (like EMT)
  • Markets more like Biology than Physics
    • Learns and adapts
    • No stable mean
    • Non equilibrium system
    • Recommended book ‘Origin of Wealth’ Eric Beinhocker
  • Need paradigm shift in economic thinking
    • Alfred Marshall gave the biology analogy in the 1920’s
    • Thomas Kuhn ‘Structure of Scientific Revolution’ (old model resists the new)
  • Ludwig Wittgenstein
    • Not a straight line & changes constantly
  • The meaning of a word is its use in the language
  • Description of Amazon
    • Barnes & Noble wrong….
    • Wal Mart model wrong….
    • Dell model closer….
      • Amazon is the second largest cloud space provider
      • Potential new BIG business
  • “Failure to explain is caused by failure to describe” -Mandelbrot
  • ‘How to Read a Book’ Mortimer Adler (cannot read everything, pare down)
    • Inspectional (taste)
    • Systematical (skim)
    • Analytical
    • Synoptical
  • Risk tolerance (must get it indirectly because people cannot describe themselves accurately)
    • Gender
    • Age
    • Achievement motivation
    • Personal control orientation
    • How you view the risk environment
      • Complex
      • Trustworthy
      • Fear of Loss
      • Inability to persuade
  • Math (beware of averages)
    • Little thought to variables
    • Trend of the system vs. trend in the system
    • Data is non stationary
  • ‘Rethinking Undergraduate Business Education’ Aspen Institute
    • Catching up with Munger


  • Q&A
    • Paradigm Shift?
      • Physics model to Biology model
  1. 70’s/80’s Inflation comparison?
  • Businesses had better pricing power then vs. now
  • More global now


Value Investor Conference: Omaha, Nebraska – 

Dustin Hunter, SunRift Capital Partners (

(These notes are to the best of my recollection.)