Rating: ★★★★★

 

Reading time: 6 min.

 

Summary

Tony Robbins bases his concise guidebook on Ray Dalio's notion of uncorrelated investments – the "Holy Grail" of investing. The Holy Grail is a diversified portfolio of eight to twelve uncorrelated investments that can mitigate market risks while maintaining returns. In short, diversification on steroids.

 

Robbins especially emphasizes private investments, which were once out of reach to smaller investors, stressing their potential to outperform typical stock and bond portfolios.

 

Robbins identifies seven such investment classes:

 

1. GP stakes: Investing directly as a general partner (GP) into private equity firms themselves, not just their funds, will be new to even savvy individual investors. These stakes represent future profit shares, including management fees and carried interest.
2. Pro sports ownership: Direct ownership in professional sports teams, including stadiums, broadcasting rights, and merchandising.

3. Private credit: Credit arrangements negotiated directly between lender and borrower, outside traditional banking or public markets.

4. Energy: Investments in energy sector companies or assets and related infrastructure.
5. Venture capital: Equity investments in early-stage, high-growth startups.
6. Real estate: Ownership or financial interest in large residential or commercial properties.
7. Secondaries: Picking up discounted investments made by other investors, who have to exit because they need liquidity. These transactions involve existing private company or fund investments, bought and sold on a secondary market.

 

Note that Robbins is transparent that he and his co-author Christopher Zook themselves benefit through running an investment firm that assists investors to execute on these investments. They aren’t shy about promoting their services with a link at the end of every chapter. Yet, the larger points of the book are relevant irrespective of the money manager one might choose.

 

We will overview two themes of the book in more detail, pro sports ownership and energy.

 

Pro sports

Our editors found the chapter on pro sports investing to be remarkable and relevant to a broad audience of individual investors as Congress removes the limitations currently shrouding these investments. Robbins points out that this sector has historically beat the stock market while maintaining resiliency through market downturns.

 

Robbins quotes Ian Charles of Arctos Sports Partners: “I don’t know which SAAS (software as a service) company will be around in 5 years, but I know that 50 years from now, there will be a World Series in October.”

 

Robbins explores how professional sports leagues split broadcast and sponsorship earnings among teams. They collaborate to secure the best deals, benefiting from changing viewer habits.

 

He further identifies that live sports remain popular amidst declining cable viewership: “Networks and their advertisers are becoming increasingly desperate as cord-cutting is eroding their ability to reach their target customers via cable television." In other words, cable TV viewship is dropping.

 

Live sports are the only broadcasts bucking this trend and are also the highest-rated. Advertisers covet sports programming because live sports is one of the few broadcasts where mainstream audiences are willing, or in some cases even eager, to watch ads.

 

In 2019, ninety-two of the top hundred highest-rated programs on TV were sportscasts. Leagues capitalize on this exclusivity with lucrative media contracts.

 

Robbins highlights a second driving force, the increasing popularity of North American sports internationally. He writes, that the NFL will have “a record five regular season games on European soil during the 2023 season. The NBA schedule now includes games in Mexico City, Japan, and Paris. North American sports are also going viral worldwide on social media."

 

The NBA recently exceeded 75 million Instagram; 70% of those followers are from overseas.

 

Finally, Robbins reveals that streaming services such as Netflix are now competing for sports rights due to their audience appeal and low production costs. Robbins predicts that league revenues could nearly double by 2024, with sports emerging as a major winner on streaming platforms.

 

Energy

The world is still reeling from energy investigations such as Siddharth Kara’s book “Cobalt Red: How the Blood of the Congo is Powering Our Lives” and the winner of the American Documentary Film Festival, Planet of the Humans, which was the first to expose green ESG funds and to reveal how our environmental movement is losing the battle through well-meaning but disastrous choices.

 

The Holy Grail of Investing continues this thread but from a financial angle.  Robbins’ assessment of our global energy predicament is sobering, grounded, and remarkably comprehensive -- required reading for anyone who wants to understand the very foundations of economy and global affairs with a clear mind.

 

Robbins concedes that the trend toward renewable technologies will attract investment but that so-called “green energy” may be neither “green” nor “energy” in many cases: “Most of the world's cities with populations over 1 million are not ideally suited for industrial-strength, renewable power generation," Robbins rightly explains, “thus, any solar or wind farms that power them must be placed far away, and transmission lines have to be built to transport the electricity. This is less than ideal and incredibly expensive when compared to other available sources.”

 

He concludes, “I don't mean to take the wind out of anyone's sails, but at the end of the day, there is a consensus among experts that solar and wind have very real limitations at scale.”

 

Robbins further explains that electric vehicles (EVs) may have had their moment in the spotlight. “It's undeniable that producing them is incredibly taxing on the environment.”

 

Robbins points out the same is true of wind turbines and solar panels, and continues, “the reality is that ‘green machines’ must be manufactured using traditional sources of energy. Oil, natural gas, and coal are needed to produce the necessary concrete, steel, and plastics. For example, the energy equivalent of one hundred barrels of oil is required to fabricate a single EV battery that can store the equivalent of one barrel of oil.”

 

He outlines the critical minerals that are needed for batteries, solar panels, transformers, generators, and other inner workings of these green tech and concludes that the “process of finding, mining, refining, and transporting these minerals is not at all green.”

 

His views contradict recent historical sentiment toward these technologies but align well with multiplying headlines exploring the very real limitations of these technologies in practice.

 

Overall, The Holy Grail of Investing not only introduces readers to the world of alternative investments but also offers invaluable insights into who we are and what we value, delivered in truehearted Tony Robbins style. These insights will form the foundations for investment over coming decades, making his book a worthy financial guide.