Paul Hodges – There’s No Substitute for Judgment

My Worst Investment Ever Podcast

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1+ y ago 36:49

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BIO: Paul Hodges is a trusted adviser to major companies and the investment community and has a proven track record of accurately identifying key trends in global marketplaces. He is chairman of New Normal Consulting and a Global Expert with the World Economic Forum.

STORY: Paul invested in a company in the cinema industry, which according to his research, was a well-performing business. After investing, his bank’s asset manager advised him to sell this stock. The stock grew 10-fold after that. Paul missed out on that windfall.

LEARNING: There’s no substitute for judgment. Distinguish between opinion and knowledge. Opinions are not knowledge.

“Distinguish between opinion and knowledge. There’ll be many people who know more than you do, but they don’t actually know what they’re talking about.”

Paul Hodges

Guest profile

Paul Hodges is a trusted adviser to major companies and the investment community and has a proven track record of accurately identifying key trends in global marketplaces. He is chairman of New Normal Consulting and a Global Expert with the World Economic Forum.

His consulting work focuses on the major paradigm shifts taking place in the global economy in Demand Patterns, Reshoring of Supply Chains, Renewable Energy, Circular Economy, Advanced Manufacturing, and Financial Markets. He is a regular speaker at international and industry conferences.

Worst investment ever

Paul was lucky enough to work for one of the UK’s biggest companies, where he had access to the best pension fund advisors. Paul went to one of those advisors and told them he had 20,000 pounds to invest. The advisor gave him a portfolio of eight businesses.

A couple of years later, Paul started seriously thinking about a company he had kept an eye on for a while. It was in the cinema industry. The company was paying a very high dividend of 10%. It had quite a lot of cash in the bank, but everybody hated it. However, Paul went to the cinema a lot. He figured many other people also went to the cinema, so it would be a good company to invest in. Paul invested some money into that stock and added it to his portfolio.

One day his bank wrote to him, saying they’d happily give him an expert review of his portfolio. They told him he had an excellent portfolio but advised him to sell the cinema company, which he did. The stock went up 10-fold after Paul sold his shares.

Lessons learned

There’s no substitute for judgment.
The key to success in anything is persistence.
Distinguish between opinion and knowledge.

Andrew’s takeaways

Everybody’s got an opinion, but not everybody has knowledge.
Opinions are not knowledge.

Paul’s recommendations

Paul recommends reading a lot to continue learning.

No.1 goal for the next 12 months

Paul’s number one goal for the next 12 months is to focus on his family, especially his kids and grandkids.

Parting words

“It was great being here!”

Paul Hodges

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