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Being happy personally is the pathway to help everything else make sense, and that is around mental health. And I think the key unlock for mental health is just finding a resource to talk to. And when you first start talking, it's going to be just kind of blather bullshit and it's going to be imprecise and it's going to be super awkward and you're going to feel like, what is this? And then over time, it's like anything like when you start to get good at it because it's really good..

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Welcome to the Knowledge Project podcast. This is Shane Parrish, this podcast and our website, F-stop blog, help sharpen your mind by mastering the best of what other people have already figured out. If you're hearing this, you're not currently a supporting member and are missing out. If you'd like access to ad free versions of the show, early access to full episodes, transcripts and so much more, you'll have to subscribe at F-stop Blogs podcast. There you'll find our private RSS feed and other subscriber only content.

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Check out the show notes for Link. My guest today is Chamar Polly. Puppeteer Kamath is the founder of Social Capital, part owner of the Golden State Warriors. And so much more. We talk about what it means to be an observer of the present, how to think in first principles, the behavior and psychology of successful investing and so much more, including the best public company CEOs, get comfortable. It's time to listen and learn.

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The Knowledge Project is sponsored by Medlab for a decade, Medlab has helped some of the world's top companies and entrepreneurs build products that millions of people use every day. You probably didn't realize that at the time, but odds are you've used an app that they've helped design or build apps like Slack, Coinbase, Facebook Messenger, Oculus, Lonely Planet and many more. Medlab wants to bring their unique design philosophy to your project. Let them take your brainstorm and turn it into the next billion dollar app from ideas sketched on the back of a napkin to a final ship product.

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Check them out at Medlab Dutko. That's Medlab Dutko. And when you get in touch, tell them Shane sent you Ravid.

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This episode is also brought to you by 80, 20, 80 20 is a new agency focused on helping great companies move faster without code. The team at 80 20 can build your next app or website in a matter of days, not months.

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It's been a long time coming.

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It has been. We've tried to organize, I think for many months. Maybe it's not a year. I just I think both of our schedules were a little tight, but then I had to reschedule once or twice. I'm sorry, the no.

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Originally we were supposed to do it in Toronto. And then all the changed world has changed.

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Every time I look around, you're on the news, man. What's up with that?

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Well, I think that it's sometimes valuable when you can actually just like, speak the truth, that sometimes all the time. And I think that those people are pretty guarded because they have to be. I don't think they're necessarily always in a position to be as candid as they want to be. And I think that in moments of sort of just clarity, I have constantly just tried to say what I feel. And I think that that resonates with a lot of people.

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It definitely does.

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I tweeted out today that you were coming on the show and I think we had like over a thousand replies and people everything from, like, asking what I should do with my life to how should I think about the future to what should I invest in? You're like everybody's guru, man.

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I mean, I think Nepal is the guru, but the brown brother from another mother. I think of that. I think that I've gone through a lot of, you know, kind of like ordinary people shit. And I think I talk about it in really simple, plain spoken terms. And I think that's really useful to people because it demystifies a lot of things and just makes it kind of more normal. And, you know, that's been a real theme of my life is just realizing that a lot of the things that I went through is normal and feeling part of the pack is really helpful.

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Actually, it's been really helpful for me. It's helped kind of like regulate my sense of self-worth and lifted up and moments where I felt pretty crappy about myself and that's just resulted in better outcomes. So I think like a lot of what I talk about, I think folks relate to because I speak to it from. So that ends and. They just think that's a really good place to be, actually. It's taken me a long time to get to that place, but it's a good place.

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Double click on that for a sec. I mean, you've got an interesting background, right? You worked at AOL, you went to Facebook. You're a billionaire at thirty two. You're a sports team from the outside looking in. You've had the most amazing life, but on the inside looking, you didn't feel that way. Yeah, I think a lot of people have to do things that are motivated by other people's perceptions of them and also motivated by the pressure that's exerted by the people that are very closely around you that sometimes can be your friends, your family.

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And I was very much of that category, so I was kind of just meandering through life. Now, that meandering turned out to have really good outcomes in some respects. The problem was that all it was doing was just sort of like avoiding the inevitable. And the inevitable is this moment that I think everybody goes through where they're asking themselves whether they've lived a completely fulfilling life the way that they defined it. What I'm saying is that I think that sort of not even necessarily millennials, but Zimmers underneath them, they're the most honest of any generation about what makes them happy.

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And you see that in the way that they dress the music, that they listen to the media that they consume, the way that they sort of like push back on, kind of like a more corporate kind of tone and things. And they're willing to be happy in a way that they've defined for themselves. In my generation, I'm forty four. That's not how it goes down the way that it goes down. You go to the best school you can.

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You take on as much debt as you need to do. Try to get the most credential job after college. You kind of just check the box. You find a reasonable person that you marry. You have two point five kids. You buy a house in the suburbs, you save for retirement. And I just think for a lot of people, they've realized that that's not the path of maximum fulfillment and that being happy actually generates also better outcomes. You get better artists or better engineers, better everything if people are ultimately just happy.

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And I think that generation of people know that a lot more inherently than people. My generation or boomers the generation ago.

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What did you come out of that with? How did you define happiness, the end of this? You sort of went through this journey.

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There's a great article. It's not sorry, it's not even an article. It's it's the obituary of Steve Jobs written by his sister. And she wrote it, Mona Simpson. She wrote it in The New York Times upon his death. And there's just a paragraph in there. But I think the phrase that he said was like sort of like, oh, wow. And he just kept repeating a while as he was passing away. And I interpreted what that may have meant.

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I have no idea, obviously, because he's not around to tell us that that's what happened. But I have this idea, the sensation that he sees his family, he thinks about the totality of his life lived and he was happy. But think of what that happiness was able to create, not just for his family, but for the entire world. And so I do think that on the one hand, you could say he was fanatical, he was a tyrant.

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It was hard to work for, et cetera, et cetera. But on the other hand, maybe there's a different way of saying it, which is that he was very content. He had a family that loved him. He had a family that he loved. And as a result of that happiness, he was able to leave that sanctuary, go to work and take that happiness and channel it into doing amazing things for the people. That's a pretty cool idea.

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And so I think that what I would like to live through is that version of the truth for me, that oh wow, wow, wow idea and how do I define it? And I didn't even know that that should be a way to live my life earlier on. And when you're talking to me today as a forty four year old guy is, I've learned that there are things that give me these wow. Sensations that I just absolutely love of.

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Just name a couple in there. Even today this happened. I'm working a lot these days, just really kind of grinding on a lot of stuff. And, you know, these are high pressure decisions that I'm making a lot of the time for me. And so they consume a lot of my mental mind with bandwidth. And it's really exhausting. And there's pressure and sometimes honest. I just feel like like I just need to just, like, cry.

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Like, I'm just like I feel really stressed out these moments and fighting uphill, I feel like. And today, I was driving to the office and I was having one of those moments and I turned around and I went back home and I went to see each of my four children and I kissed them and I went to see my partner and I kissed her. And I felt just this moment of just sheer happiness. Like I felt like that's what I have accomplished.

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I built a sanctuary for my family, filled with love and cut it to the beach, to the office. And that's why every summer now I have these lovely moments because my Italian and I had never really spent a lot of time in Europe. But in the last four years, I spent a lot of time in the summers and my children and I have fallen in love with the times. I mean, and what have we learned? We've learned to love the food, love the culture, the boisterousness, the loudness, the love, the intensity, the energy.

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I think about it now. And I just it's like, wow, I love. So I learned to find things that I really appreciate. A third one. And I just thought, that is I have a group of friends and we play poker together. And if I think about how happy it's me, there's a thing that we do, which is we show up at four o'clock, we play until about six thirty, and then we have a dinner together, like a family dinner and a long table.

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And then we go back. We play for a few more hours. That stopped when the coronavirus pandemic started because we couldn't come together. We we've been able to get a bunch of rapid tests. And so for the first time, the Saturday, we're going to come together and play. And I think about this and I'm just like, oh, wow. Like, I can not wait to see that. So I think about this. None of that is about CNBC or a good successful company.

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Those are important and those are good demarcations of progress. But those aren't my oh wow moments. And when I put too much pressure and value in those being the wild moments, I got distracted and I became happy. And as long as I stay centered on these other things, I have so much energy to come and work on those first order of business priorities and get things done. And I am trying to achieve something that is at the very early stages, which is not done yet.

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I want to talk about that before we get there. There's a couple of rabbit holes that I sort of want to explore there. You mentioned Zimmers are willing to speak truth there, truth pretty easily. And it was harder for our generation. But you're also, you know, you're full of controversy.

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Sometimes it doesn't strike me that you have a problem speaking your truth or you've ever not said what you felt is flop.

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It's not that I've always not. I think that I I learned to lie at a very young age because lying, I think, is one of the most simple coping mechanisms that we all have. And lying manifests in all kinds of very subtle, corrosive ways. When I was growing up, I had a I have a family who fundamentally we all love each other, but it's a very complicated, contorted form of love because it's punctuated with some mental health issues of alcoholism, depression, poverty.

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And so when I was a young person, the way that I coped is to lie. Are you OK? I'm fine. Did you do that? I didn't do that. Where were you? Nowhere. How did you do on that test? Fine. I learned to be evasive and what that created was a deep seeded pattern of lying and avoidance. And people can say maybe lying is not what that is, but at the basic gist to simplify it and learn to lie.

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I think that at some point I think almost sort of at a very physiological biological level, that's not what any of us want to be. And so I think that I had almost this form of organ rejection. And so I had to almost go to the other end of the spectrum, almost in a way of atoning for all of the years of lies and all of the accumulated mistruths or half truths or evasiveness, whether that was in my personal life or my business life.

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And the first moment of clarity around that was actually when I went to work at Facebook because for the first time I was unbelievably candid and it was such a cathartic release because I could be almost curmudgeonly in my candor, so much so that it's probably I was a bit of a caricature because there was this guy who seemed very almost acerbic at times, just a little rough around the edges. And I took it to an extreme there. And then in the early parts of social capital, I actually think I reverted and I was lying again because I was I was filled with a new level and a new kind of insecurity around, you know, I felt like an impostor in venture capital.

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I felt like I didn't earn the right to start a fund again. And I gave myself all of these hurdles that I put in front of me mentally. And my solution was to try to be evasive and to lie. And then in twenty, sixteen and 17, again, I think I had an even much more cathartic form of organ rejection. It and I had to sort of recalibrate the life around me so that I could stop lying and. I think in that I think you're finding a person that tries to be truthful as often as I can.

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And oftentimes what that means is seeing the uncomfortable thing. But it's the thing that needs to be said. And I think that there's a lot of people who appreciate that because they themselves feel like they're sometimes caught in positions where they have to be evasive or they have to lie in order to cope. And if they themselves aren't in a position to do it, I think they appreciate when others can be. And I think that a lot of people have a very positive reaction to that.

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And I think that's part what I think people get a sensation when they interact sometimes. So I'm not sure I'm necessarily controversial. I do think that I'm behaving in a way that I think a lot of folks would love to be in a position to do as well. I, I don't think it's actually correlated to money. I think that it's more correlated to self-worth and the comfort that you have with yourself, the limitations that you have, and then the ability to love yourself despite those limitations.

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That's a process that too few of us start. And it's like I said, it's not a money thing. It's it's a happiness. So closing the loop on how you started, I think that Zimmers and this interesting way, see all these generations of folks that are older than that 30 year old, 40 year old, 50, 60 year old, 70, 80 year olds. And we live long enough now where they see multiple generations of evasiveness and unhappiness, really, and they see similarities in all of us that they're smart enough to decide that they don't want to exhibit.

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Because it would be one thing if you saw an 80 year old, well, you could say, oh, I'm not going to be like that person. But then you see 70 year olds and you're like, wow, that's just a junior version of the 80s. And then you're a 60 year old and you see that and a 50 year old. And because we're all alive, you know, the 20 year old sees eight generations of people ahead of them and they're like, wait a minute, something here is wrong.

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And they're smart enough to say, what are the commonalities of all these folks? And they choose to be different.

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Do you still deal with Imposter's all the time? What do you tell yourself in those moments?

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First of all, I talk to my partner and she has been my spiritual partner, my co-pilot, because she really has an enormous level of empathy and care around her own mental health and the mental health of our family. So we talk a lot and we talk about nonsense and serious things and everything in between. But we just talk. And I found that as a man, I was taught that talking is weak. I also found that as a immigrant man, I was taught that talking about emotions was WB and that I was sort of taught as kind of, you know, like in this industry, that talking is awkward.

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You put all these things together. And the biggest thing that I found that is help me is just talking and being open. And it starts with her. My kids, I'm really open and transparent with my kids. They think I'm basically a fucking loser. I think that that's really cool. They just they just roll their eyes every time they start talking because it's like some stupid diatribe. But all of these things help me stay really connected to the goal of being truthful.

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That helps me stay connected to the goal of being happy to celebrate these kind of moments in my life that helps me. But to be honest with you, that has to be an active process for me, because that thing that you just said is overpowering. For me, the sense of being an imposter is overpowering. And it's like this dragon that I've been trying to slay my whole life and I haven't been able to. And the more I don't want to say success against, the more notches up the ladder I go, the more severe it feels and the harder it is for me to fight back.

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So I had this conversation with Matt yesterday and I said to her, like, I feel like this is why so many people just give up, because it's easier to do it and to fight and to solve the real root cause of what allows you to get to the next level of success. That's really why you have to look at folks that have really overcome the stuff, however way they've done it and achieved a level of success and really celebrate them because they're they have a level of mental fortitude that is exceptional.

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But, yeah, I'm I'm dealing with. Right. This imposter syndrome, and it's I think it'll be a battle like, you know, some people, other people have different battles, but that that is definitely what keeps you going.

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I mean, you could just fold up, walk away, live an amazing life, you and generations of your heirs. What keeps you sort of pushing through this, confirming this dragon?

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I do think that I get a level of enjoyment from it. This idea of like, how can I beat it? I like how I feel when I'm more connected to the things that make me happy. I like how I feel when I think like when I think that I am doing things that a younger version of me would be proud of, not the older version. It's interesting, like a lot of people think, like, you know, like at your deathbed.

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And I think the exact opposite. I think like with the twenty two year old self interacting with this person, with the 16 year old person, I think, wow, that guys, that's a legit human being. Like he's he's putting himself out there trying. So I'm motivated to keep kind of grinding and getting better, just seeing what the upper bound is.

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It's interesting. A lot of a lot of people are like, oh, if I just had like ten million dollars or something, I just walk away and I'm like, well, that's probably the reason you might never have ten million dollars, right?

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Because the people that achieve that keep pushing and keep struggling and can't actually walk away.

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And somewhere I think that money accelerates the point at which you can declare yourself free and feel emancipated. Like I do think that money is a it liberates people, it gives them freedom. But going back to what we were saying before, it doesn't make you happier. And if you are ill equipped to then run that race to happiness race and you do it with money, it's destructive. It's it's more destructive than if you do it without money, because if you're unhappy and you're constructively trying to find your happiness, if you have cash, you'll end up, you know, gambling drop dead high, like it's all the typical cliches.

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And they played themselves out over many generations and they'll continue to do so. Yeah, I think that this is why I think people can separate these two parts and actually work on them concurrently. One is the path to freedom and the second is the path to happiness. I think the path to happiness is an internal process, but the path to freedom that I can help because I think I've learned accumulated amount of knowledge here and it's readily transferable. The happiness path is not because each of us have our own lived experience, which is so different from everybody else's.

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And so all you can do is kind of listen to other folks and decide you're going to start for yourself. But the answers are not obvious and it's all iteration. A path to freedom is easily copied. And I think that that's sort of sort of what what motivates me as well. This idea that I can sort of all that accumulated knowledge base, I can just hand it off to folks. And if they can benefit from it, that would be great.

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What is the path to freedom? What sort of financial freedom, so I think I think I think that if more people believe that they could be economically self-sufficient, I think that it would solve a lot of the societal. Implications of inequity today, we have kind of like this very polarized body politic, really, where on one hand there are folks that have over sort of indexed on. What I would call absolute freedom and intent, but it has no plan, and on the other side, it's sort of over indexed on a nanny state with no plan.

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Both of them are very much the same and that neither of them have a credible plan. And in the middle, there's a plurality of people that are just exhausted. And that's that's a perfect boundary condition for a lot of the inequity that that exists today in society and a lot of the frustration that people feel as a result of it. So to me, if we can give people a more reasonable roadmap where they can execute it, they can learn and they can have a community of other like minded folks that can put in the time and the work and help each other over five, 10, 15, 20 years to compound capital, no matter how small.

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But just to start. I think you'd be surprised at how many people are intellectually capable of achieving financial freedom on their own, and in that I think that there's there's a path out of this kind of like, very depressing kind of state that we're in that I think is the opportunity is. So I'll give you an example. In two thousand and fifteen, I think we've started to really pay attention to Tesla and we bought these convertible bonds and we thought they were really great risk adjusted because we weren't sure whether the shorts were going to win and drive the company into the ground.

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But we really wanted to bet on Elon. Long story short, it all kind of worked out. And now you look back and you're like, gosh, this is incredible. But there was so much knowledge that helped us feel like we were making the right decision that existed in this long tail of people who took it upon themselves to build a community of people that wanted to understand the company, not necessarily just to be a blind cheerleader. But they would really go and double click and they were doing the level of work that was incredible and I thought that was so interesting because I thought to myself, typically what would happen is you would put your money into a bank account, you would open up a brokerage account, maybe you would get access to some research from one of the banks, you would read it, or maybe an adviser would recommend something to you, or maybe you'd end up on some random community and read some random form by something.

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But instead, these were like physicists and chemists and financial people all coming together to understand this. They were writing research notes. They were putting out YouTube video clips. And if you took the time to understand it, that community was helping you understand something really important that was happening in the world. And you could have financially participated because you could just go and buy that and it would have worked. Now, let's extrapolate that idea. Forget Tesla for a second.

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There is this incredible thing that's happening, which is that we are starting to financials everything. We're starting to create financial instruments attached to anything you could imagine. Meaning it used to be the case that you would only buy sneakers. Now you buy and sell sneakers and the marketplace that that that is the leader in that goal today just announced that they raised two hundred million dollars at an almost two billion dollar valuation. So is it a sort of e-commerce marketplace?

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Maybe I look at it as a financial market, a fractionalized shoes, essentially, and they fractionalized and they've wrapped a financial transaction layer around taste and taste making. There is there's a company called Pipe. There's a company called Rowley Road. All these folks are fractional ownership of all kinds of things. There's Cryptococcus, there's stocks, there's a specific bond. So the point is the surface area, the investable universe is growing. Some of it is still very regulated.

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Some of it is really unregulated. But the trend is obvious. So we're going to financials everything. And we're going to fractionalized ownership of probably everything. And so what there is an opportunity now to do is to curate and cultivate a community around that to help people. And that's really what I would like to do. I think that it would be a really useful thing to level the playing field so that whether you're mom and pop schoolteacher with five or 10 K, you're a new grad with a thousand K that they had saved up, or whether you're an accredited investor, I don't judge.

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I would like to treat them all equally. And I would like to say, look, I've made some mistakes. I've had some winners. I've really learned how to allocate capital. Here's how I see the world. And here are ways in which I think that you could participate beside me as my partner. And if you want to, you can't. And I'll always put my money on the line so that you know that I am not trying to surreptitiously become an agent.

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I am a principal. And I think that if we can organize that in some useful way, I think that we can help a lot of people achieve freedom. And if they're concurrently working on happiness, I think you really fucked up shit up and fix some stuff.

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You said in a previous interview or maybe on Twitter that your job was to be an observer of the prison. I was wondering if you can double click on that.

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I'll give you something that we drive your listeners and viewers crazy. Let's look at the twenty twenty election from First Principles. Let's really look at it from first principles. Well, let's think about foreign policy and foreign policy, I think are really four things, but it really comes down to three things. So number one are sort of nefarious state actors. Right. Let's just use an example, illustratively Russia. I think most people feel like Russia is pretty sketchy and they're generally, quote unquote back.

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OK, well, let's let's let's think about another state after North Korea. I don't think you're going to see a lot of people jump up on either side of the aisle supporting North Korea. Let's think about China. I think that we've all realized that the bloom is off the road, off the rose, and that we've allowed globalization, a strain of globalization that has put America strategically on our back. And that doesn't make any sense. We may not have access to our own semiconductors.

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We don't have access to critical rare earth metals to drive electrification. We have outsourced critical parts of our health care infrastructure to folks that can dictate whether we can take care of our own people. That that doesn't make any sense. Right. Everybody believes that. Let's take the Middle East. The Middle East was incredibly critical because a handful of Western countries coming out of World War Two, essentially, if it up and built some artificial maps, essentially to make sure that we had access to this precious resource oil by 2020, we now have a 20 to 30 year shot clock where we've decided that we're we're going to stop burning.

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We've essentially already stopped burning coal. And it's just a matter of time to stop dirty fossil fuels. But at that point, the strategic relevance of the Middle East decays significantly. So think about that now. So from a foreign policy perspective, both sides basically see the world in the exact same way. Democrats and Republicans, they both hate Russia, they both China, and they both think that energy independence means that the Middle East won't matter. Wow.

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That's observing the president. Let's take a different example. Think about monetary and fiscal policy, whether we like it or not. We used to be in a world where fiscal policy and monetary policy were separate. Sometimes they would be along the same lines, but they were separate bodies acting independently. Now the Treasury and the Fed are inextricably intertwined. And it's not just in the United States. If you look at this problem in Western democracies and in Europe, it's the same situation.

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This is crazy. We have inexorably brought together fiscal and monetary policy. That's just the facts. Now let's look at spending. Whether you call it the Green New Deal on the left or the infrastructure bill on the right, we are going to spend the next decade, tens of trillions of dollars to try to dig ourselves out of this unemployment and GDP hole that has been exacerbated by the coronavirus pandemic that's going to happen. Neither candidate will come to the American people and say, we want to spend a trillion dollars on digging up coal from the ground and burning coal fired power plants.

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It's not going to happen. One's going to call it a green new deal. The other person is going to call it infrastructure spending. But we're going to radically change the face of how America operates as a functional economy. And it's relatively predictable, in my opinion, how they're going to spend that money. So if I were a keen observer of the present, if I would put all of that together, we can all say something very controversial, which is we have an election that is now actually of style.

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And not of substance. Now, that doesn't mean it's not important. But substantively, the positions on critical matters of foreign policy, domestic, monetary and fiscal policy and spending will roughly be plus or minus the same. It takes a lot of mental fortitude to think through it and look at it that way and not let one's own biases jump in because it will tear you into a thousand different mental pieces. But that's what I mean by being a keen observer of the present.

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So, OK, what does this election come down to? I think it comes down to political correctness versus council culture. If I had to kind of summarize it in a nutshell, that's what it is. And I think that people will vote on November 3rd about which outcome they want, because substantively in action, the spending patterns, the policy decisions will roughly be the same. And again, to such a controversial thing. And I think people can just go absolutely crazy to hear somebody say that they're going to go crazy when I don't ask you who you predict will win.

[00:36:25]

But what I really want to know is how do you take that?

[00:36:28]

And then what do you do with that in the future? You said, OK, well, this is going to be a predictable path of spending. How do you as an investor then take that knowledge?

[00:36:38]

That's a fabulous question. So this goes back to what I'm trying to do, which is if I can observe the present in a reasonably unemotional and detached way to your point, I can put a plan together and when I have a plan. That plan is specifically for me, oriented around how I'm going to make sure that the ideas that I want to see exist in the world when it and this is going to maybe turn people off the way I say.

[00:37:09]

But at my level of capital, that's what I could do. I can vote with my dollars to really make things come to life. And I think that that I really take that job seriously and I aim to do that now, which is like, OK, I'm learning how to be happy. I have achieved a level of freedom, but now it's about change. And I want to implement my form of change and I want to see that in the world.

[00:37:30]

So I'm trying to figure out how my ideas have a better chance of succeeding. And then I want to make sure that I implement a plan to make that happen. And then that adds to my knowledge base. And then my hope is to share that with other people so that they can then learn from that as they will. And maybe they can they can also do their version of the of the same thing. So if I was really I was six years old in nineteen eighty four years old in 1980.

[00:37:57]

But imagine I was thirty four years old. I would have woken up and I would have said read the paper does doesn't matter how much money and if I knew then what I know now I would wake up in nineteen eighty and say oh my God the 30 year rate is that 15 16 percent interest rate. Ben this thing if I had to take a guess, I really believe in the productivity and the ingenuity of America. I'm just going to be I'm going to take a guess that 15 percent goes to zero before 15 percent goes to 50 percent and you would have been really bright.

[00:38:33]

And eighties and nineties, the two thousands. And now the 2010s. Had you just been levered long equities, you would have made a fortune and you would have been right and you would have achieved freedom.

[00:38:46]

It doesn't matter whether you started with a dollar ten dollars, a thousand, ten thousand, ten million, you would have been unbelievably rich. And in many ways, Buffett simplicity, Warren's elegance of his mental model. And I'm not trying to diminish his skill by saying this is is a keen observer of this most important high level order idea, which is that rates are going to zero, productivity is going to go up, ingenuity, the resourcefulness of America goes up.

[00:39:19]

I want to be long that I'm long equities. It would have worked. Now, where are we? Well, work since our all cumulative knowledge and look at today, let's just be a keen observer of the present. Rates are at zero. Where are they going to go? Are they going to go to negative five or plus five? Well, now the key question is, will probably on the margin, your instinctive reaction will be plus five.

[00:39:46]

And I would say why? I mean, why is zero some artificial number where everything starts and stops? This is not like temperature. It's not like we're saying it's absolute zero. Right? It's not like there is no colder temperature than two hundred and whatever equivalent to 60 something Kelvin or whatever it is, it's a zero zero degrees Celsius. Can you have negative one degree Celsius? Of course, anybody that lives in the Midwest or the East Coast.

[00:40:14]

So it could go negative. Yeah, could go positive. Well, I don't know if I'm observing the present. What I would say is the overwhelming majority of the volume in the last 10 years has been about educating billions of people all around the world, that things are roughly deflationary, meaning as long as you wake up tomorrow and delayed gratification, somebody will show up and give you more for less. Right. I had a, I don't know, making up the name of a company.

[00:40:46]

I had a storage account to drive dotcom. All of a sudden, Dropbox showed up and said more for less, and that I was using Dropbox for a while. And then Google Drive showed up and say even more for even less. I'm pretty sure that the next person that figures out how to do storage and scale will come up with even even more for even even less. Facebook did the same thing. Spotify does the same thing. Netflix does the same thing.

[00:41:14]

All these things that create so much value are training a psychological. To behave in a deflationary ways to delay gratification or to make the cost of switching so low that even if you want to delay gratification, you can just change your mind later and hop to the next thing that gives you more for less. So it is very conceivable that we are in a deflationary posture for a long time.

[00:41:37]

Now, it's also possible that inflation to go up. So my view is, well, I need to answer this problem in a different way. And the way that I would try to answer this problem is to say to myself, well, what sectors of the economy? Will benefit irrespective of whether we go to negative five, four plus five. Because I don't know what the answer to that question is, it'll be obvious in hindsight, but it's not obvious.

[00:42:03]

And so I construct an allocation for myself to try to solve that. Well, people are going to be buying things, so they're probably going to be buying things online. So e-commerce consumption, that's a big category that will win whether you're minus five or so. People need to care about health care. So they're going to consume things and there's probably going to be pressure over time to do better and better things and more useful things just because we can't keep spending the way we are with the outcomes that we're getting.

[00:42:42]

OK, so that's that's a separate category. We probably want to have a reasonable way of equipping ourselves with skills and education. So that's another big category. We're probably going to need to have clean, sustainable energy. That's another category we're probably going to want to eat in ways that are more constructively useful for us. That's another category we're probably going to want to hedge just the chance that none of us knows what we're doing. So you need some kind of alternative asset category.

[00:43:14]

That's another thing. So you can kind of go down the line whether you use Maslow's hierarchy or something else as a jumping off point and kind of say, look, the answer's the high level answer. The framework is obvious health care, education, climate change, fintech, blah, blah, blah. And then you need to fill in an application. Then you need to figure out the mix of early stage versus late stage or public versus some of these other things.

[00:43:43]

And then you can construct an answer. So the way that I answer this is to say, well, I'm basically going to be long growth. Because whether rates or minus five or plus five, the thing that overcomes all of that noise is fast growth. And CEOs that can invest all the money they make today for the future simply because I can now lazily let that person work on my behalf, because that's less of a problem that I have. If you as a CEO, if I was an investor and you said I generate 30 percent free cash flow and I'm going to give you a dividend, I would say, fuck you.

[00:44:27]

I don't want that money. Keep this. What am I supposed to do with. We invest it. Grow faster, please. I mean, one of the most incredible insights that that we figured out in twenty twenty fourteen, I sold all Facebook, all my shares, unwritten Amazon, didn't you?

[00:44:44]

But the way we underwrote that investment, there's a guy who was working on our team who now runs a hedge fund, young guy, brilliant guy who randomly emailed me and I ended up hiring email inbox at social capital Dotcom. This kid. Great, great. Kakizaki He was a kid and we worked on this analysis. And basically he said to me, I think that Bezos is a better capital allocator than Buffett. And I was like, what the hell are you talking about?

[00:45:14]

And we constructed this really elegant chart which showed basically the Amazon and it looked at every expense line. And he had taken every single expense line, created a product around it and made it a one, and I thought that this guy is a genius, by the way, that deck is floating around. So you can see this chart out there in the wild. But that's capital allocation. That's really skillful. So you want that. You want you want a guy that's basically like, listen, guys, I got this.

[00:45:46]

We're going to generate a couple of billion dollars. I'm going to put all of it back on the ground for you and it's going to grow really well. And just trust me, and I think that those are the real high quality folks who want to get behind. So basically, my solution is you've got to be on growth, higher growth, the better in the areas that matter for people. And I think that 10 years from now, that will be a playbook that really works, by the way.

[00:46:08]

That sounds kind of like he's not saying anything. I think it is missing something because the historical model of how you would get freedom is 60 percent equities, 40 percent bonds to 60 percent. You would say you'd be long ETFs maybe. OK, well, long ETF is basically long term. And I think that you want a little bit more uncorrelated exposure than just saying, yeah, that's that's kind of what I'm working through right now, is trying to really refine the approach that I think for the next decade, 50, 20 years, and then.

[00:46:40]

Sure.

[00:46:41]

So it sounds like part of your process is to go through this and figure out what's not changing and try to allocate there. Do you also look at what do you where you see massive change and how you could possibly take advantage of that? Or is that a category you just don't evaluate?

[00:46:57]

Not a not in that language. I kind of tend to think about things that are just will they be more important? And if they're going to be more important, how can we accelerate the right outcomes? I think climate change is a really good example of that, where it doesn't matter whether you believe in climate change or not. I think that what we know to be true, we don't like, which is that, you know, the places we used to ski at, we can't get anymore.

[00:47:24]

The places we used to go and be that the beach would disappear and not exist. And so if nothing else, just because of our own selfish desire to be happy, we should probably want to better control, at least to the extent that we can, our impact on taking our own happiness. So I don't think people in the Midwest want, you know, hurricane season, and if there are experiments that we can run, where we can observe whether they help, we should run them.

[00:47:56]

And so if you have all these gigatons of carbon being emitted and you can run an experiment that takes them out, we should probably do it. And we'll know conclusively whether it'll change hurricane season. So why not just fund the experiment in an unemotional, detached way? But if you view climate change in that lens, it's multi decade, multi decade trillion dollar opportunity that the world's first trillionaire will be somebody in climate change. That's interesting.

[00:48:30]

Well, as you're saying that I was sort of also thinking there's things that we value today that are going to be massively under or overvalued in the future. Commercial real estate strikes me as something that maybe maybe that's not going to have the same future as past. What do you think of that? And what are those industries for you?

[00:48:50]

Yeah, I'll say something that actually makes me a little sad, but I think it's true. I would not view it. I don't view it as commercial real estate versus residential real estate. I would say this way. I think that architecture will unfortunately have a lot less value in the future because of climate change. Now, what does that mean? Well. For example, if you look at some of the most progressive countries in the world, Europe, on the climate issue, and you look and again start to go back to first principles, where's the carbon emitted?

[00:49:30]

Where are the greenhouse gases emitted? Well, it's overwhelmingly in cities. And then you start to look at, OK, well, what are some of the things that we can do to electrify or to decarbonise? And one thing that you get to is you have all this incredibly beautiful architecture, but it's completely gated. And the amount of carbon that these heating systems, these water systems generate, getting stuff into these very intricate, beautiful, if you walk by these piazzas, you can visit.

[00:50:00]

These things have been around for five hundred years. And on the one hand, you're like, it's amazing. But on the other hand, you're like, this is going to be really tough for the city of Paris or Milan or Amsterdam to defend historic architecture in the face of also wanting to be beautiful. And I think in the United States, it's also going to have some direct implications as well. So if architecturally, we unfortunately have to replace some of this old beautiful stuff with more simple modern stuff, we'll have a more utilitarian landscape.

[00:50:34]

Or maybe you'll just have a bunch of variations of. But that's a direct implication of climate change, I think, that nobody talks about. So how will that affect people's happiness or people's creativity that they're all living in these sort of like I don't know if you've ever been to Shanghai, but if you put on to Shanghai, you go across this bridge, it's it sort of looks like this kind of weird future state where you just have these buildings rising up every single to the horizon on each side.

[00:51:06]

They all look the same. And you think, God, that's depressing. If I had to live in. But we may have to live in that in a climate neutral. Do you want that you said successful investing is about behavior and psychology. Can you expand on that?

[00:51:21]

I think that when push comes to shove, what you're always going to be fighting is yourself panicking, overreacting, underreacting, refusing to observe the present, living too much in the past, wanting too much to believe in the future. So it's all psychological traps because the data is there. If you want to observe and then just clinically re underwriting how it sits as part of your risk equation, which bucket does it? How big is that little bet inside the bucket?

[00:51:56]

And so I try to really understand how to create an edge. And I don't think an edge comes from attending conferences or writing some crazy algorithmic software, a few people to do those things and find an edge. But what is a more kind of mainstream, accessible idea? And I think it is that if you define certain behavioral principles that protect you from the worst parts of your psychology, that's a winning strategy. And so I have like a handful of these rules that I try to live by.

[00:52:35]

And they these behavioral rules around trying to think about things like buying companies versus buying stocks and trying to think about the quality of the CDO, the quality of the business, trying to think in long duration and not looking at the stock price every day, reading annual reports, avoiding quarterly reports, all these things that try for me. To solve for my blind spots, and that's allowed me to take bigger and bigger swings because I feel like I'm practicing the things that will protect me from myself.

[00:53:12]

So I think a lot of what you need to do as a person is, by the way, notice how all these things together, it's like nobody would have ever told you that focusing on your happiness would make you a great investor. But focusing on your happiness is part of saying you're exploring who you are as a person, defining what makes you happy. But the other part of that is finding out what blind spots are your weaknesses. Right. And you're finding ways to deal with them.

[00:53:38]

Well, when you translate that knowledge of those things into business, particularly in investing, it's enormously helpful. It's a money making strategy. So I really I really think that spending time understanding yourself and then translating that into actionable targets that you write down and you stick to is really important.

[00:54:01]

I love the idea of sort of creating these correct automatic behaviors that put you on the path to success by either addressing your blind spots or sort of like showing you more. Are there are there sort of like personal rules that you have as well? Or they're like, let's let's go deep on that? Like, what do you do to overcome your blind spots in all areas of your life, not just investing, but personally to talk?

[00:54:28]

And again, I go back to the same thing. I just I just thought I am what I feel. But I find that I revert into a comfort zone where I'm repeating past behaviors that I don't like. It's because I've stopped talking to not to a couple of friends that I rely on to two therapists that I talk to on a regular basis. It's all about my mental health. The healthier I am mentally, the more I'm able to overcome these natural inclination to revert to comfortable patterns that have been very well established.

[00:55:06]

And while they're not healthy, but they're just habits by talking. What happens is people who know me, they develop a pattern recognition and then they start to tell me, hey, you're being really insecure there. Hey, why are you talking in that way or talking about this thing? And now what I can do before I would get very defensive and insecure and I would attack the person, what they would say that. So it also needs people who really deeply, at the end of the day, love you, care about you.

[00:55:38]

And that's hard to find. I mean, it's not like those folks really grow on trees. I have two people that my friend Rob and I really talk to them a lot. And then I have two therapists and I talk to them. And so that's really helpful. So it's just a pattern. It's their pattern recognition. Talking is also really good because it allows you to vent. And so if you think about sort of like plac you know, flossing doesn't stop one hundred percent of the plaque from building up, but it does prevent 90, 95 percent.

[00:56:15]

So then when the dentist gets in there, she's only or he's only cleaning out a little bit, but admire versus like all kinds of just random shit. And so for me, venting is like keeping the plaque building up, stripping away the plaque. It just allows me to get the negative energy out to reframe some of the things that are happening in my life in a more constructive way. And then I can come back to the problem at hand with a healthier mindset and help them.

[00:56:42]

I just I really think the big insight, the big unlock is it's not work and personal. I don't think these are separate worlds. They're deeply, subconsciously intertwined and interconnected. And being happy personally is the pathway to help everything else make sense. And that is around mental health. And I think the key unlock for mental health is just finding a resource to talk to. And when you first start talking, it's going to be just kind of blather bullshit and it's going to be imprecise and it's going to be super awkward and you're going to feel like, what is this?

[00:57:24]

And then over time, it's like anything like when you start to get good at it because it's really good, you need to exercise that muscle.

[00:57:32]

You mentioned pattern recognition.

[00:57:34]

I thought that was really interesting that you've interviewed thousands of CEOs over the years. What are some of the questions that us and the patterns that you recognize and how do you develop that pattern recognition to find the ones that are going to make the biggest difference?

[00:57:48]

I've learned that my pattern recognition before was too brittle, it was too superficial. I would ask some of these questions for which any good CEO will have very good practice answers. And so now I don't do that. I'm trying to solve for something a little bit more elusive, which is two things integrity and mental agility, the integrity. One can't be defined by a question. It's about subtle observations over a long period of time because people take a long time to reveal themselves.

[00:58:20]

And going back to how we first started, people are very good at lying and being evasive. Very good. And I don't mean to say that in a negative way that you can't trust people. You absolutely can. And I actually think the way to overcome all of this stuff is to actually put your trust out there and just trust with reasonable guardrails, but to trust and just to assume the best intentions of everybody. I think that's a very healthy mindset.

[00:58:41]

It just deletes a bunch of mental stress that you could otherwise have. But people reveal themselves in small, little ways over long periods of time. And when you can observe enough of those observations, you could pull them together to get a really good sense of integrity. So that to me, it's like a two, three, four, six month, nine month, one year journey. And every moment is an opportunity to just re underwrite my integrity and theirs.

[00:59:11]

Am I being completely cool and honest to them and am I giving them my best? So am I leading in with one hundred percent of my integrity? And then are they giving it back to me? And it doesn't have to be a business interaction. It could be in personal interaction. It could be how they talk to the waiter at a restaurant. Random conversations you have in their reactions to things, their openness to different points of view. So that's one thing.

[00:59:35]

And then mental agility is just more about what happens when you keep things open ended. That's not what you would do if you were interviewing someone for a very specific role in a company like Engineer or something. You know, they're there. It's about functional competence. And these two things don't matter. But when I'm evaluating a CEO, those are the only two things that matter. And so it's about a bunch of open ended conversations where you see how and when you see how they frame the problem.

[01:00:07]

And when you ask kind of seemingly dumb questions and if you're OK to ask what sounds like a dumb question and what they actually hear is a very open ended question. And that's a great way to sort of figure out mental agility because it sparks them in how their mind. Hear an answer they would get otherwise, and what you hear is a framework and a process, and I really like the way you framed questions like, so what do you think about and you just say something like random, just like random.

[01:00:41]

Like what do you think about the triangle offense? You'd be like, what the hell kind of question is that? Like, that has nothing to do with what I know. And then you just find people's mental agility. And I think CEOs are incredibly the best. CEOs are incredibly mentally agile people. They're kind of curious. They know a little bit about a lot. That's how you have to run a company a little bit, but a lot.

[01:01:06]

And you have to be good at engaging and understanding things, asking questions back. What what about the triangle offense? Asks you, makes you want to ask me that question. And then I would say, well, I just think it's like, what do you think about sort of like structured approaches that have this sort of like dynamic allocation of of resources? So the triangle offense to me is like this kind of like really cool way where you both have rigidity and flexibility.

[01:01:32]

And then, you know, then you say, yeah, well, here's a way that I think about my business that way. And all of a sudden you're having a completely random conversation. It required me to say something completely fucking dumb and like what seems like a complete non sequitur to to the average person and then be intellectually, mentally agile person, mostly out of kindness and curiosity engages you and then you end up down a totally different path. That is a great way for me to go check to see.

[01:02:00]

I like that a lot.

[01:02:01]

I'm glad you didn't put me on the spot with the triangle. I mean, I was just making it up right away. That's David. Talk to me.

[01:02:09]

A public company CEOs. Who do you think is the the the sort of like top five public company CEOs not asking for investment advice here? Just who are the best pure CEOs for the next ten years?

[01:02:21]

OK. Elon Musk. Jeff Bezos, really OK, you're really putting me on the spot. I love it, I get you thinking. I'm really thinking to try to answer this in a super thoughtful way. Toby, Toby, Toby Loki. I think Toby's really, really exceptional. He is phenomenal. He's a world class on the level of those two guys and such. Wow. I've never been asked it so well. Jack Dorsey.

[01:02:57]

Exceptional and I I really owe him actually an apology because I had a very dismissive sensation of Jack and I don't really know him that well, obviously, but it's just that just in my observations of sort of his decision making, particularly at square, particularly around Kashyap and the decision to the the idea of moving to Africa is just so smart, so genius. I mean, just goes to show you that the short term mindedness of these folks that we acted, I think.

[01:03:31]

But Dorcy. Yeah, that's for right.

[01:03:35]

Yeah, that's for Ellen deserves Toby Jackdaws, Toby, Jack me which company?

[01:03:50]

I will eventually have something that represents the totality of my intellectual capital, like you're going to go public.

[01:04:00]

I would really like to I would like to be under that pressure. And I would really like to work on behalf of everybody, everybody meeting like if I can level the playing field and give folks, but I don't know what that is. See, that's the problem. Like, I don't I don't know how to answer that question. Like, it's like some amorphous blob, like, what is it that I do? I don't know what I do.

[01:04:24]

You go public tomorrow, though. Why don't you? But I think I'm pretty good. I, I really do think I'm good and I think I'm getting better. Oh, talk to me about that.

[01:04:33]

How do you measure the difference between good and getting better for yourself.

[01:04:40]

We all like asymptote at some at some trajectory and I think that I am now one. Two, one and a half orders of magnitude away from my asymptote, so you can kind of see it, but it's very faint now. I think I have a tool kit to implement a process that can get me close to my asymptote. And I would love for me to be able to talk to you in 40 years. I'll be eighty four and so like within a couple of terms of the asymptote.

[01:05:19]

So for me, it's, it's believing in myself more. It's knowing how to take smarter risk being risk on enlarger quantum so I can write a hundred, multi hundred million dollar checks now and feel OK about it. I need to be able to do that with billions and tens of billions. And this sounds crazy but. Five or six people in the world really know how to do that. It's not it's not a shot that a lot of people get a chance to take, even if you're running like the largest private equity fund in the world, the quantum of money that people are investing, that is that is of their own, is still relatively limited and small, even if the headline numbers are big.

[01:06:05]

So I've got to learn to do that. I want to learn to feel like less of an impostor. The more I do that, I think the smarter I can get at distilling and observing the present, acting on that, and then passing that through to other people so that they can act on it, too.

[01:06:19]

And so I don't have the skill to go deep in one of these things and build one of these platforms. I think my skill is slightly different, which is sort of to organize a lot of things together in a thematic understanding. This is where I think at like I can't be a CEO of a million dollars or one hundred, ten billion dollars, hundred or even dollars billion company, because that's about functional competence. But when a company becomes ten billion dollar plus, it's all about capital allocation.

[01:06:50]

And I really think just I'm an outlier in my just maniacal desire to be really good at that. So I would want to bet on myself. So but that's not an accurate answer to your question, because you said public company CEOs and it's not. So I'm not.

[01:07:03]

I thought you were just going to break that. You're going public right here on the show. No, no, no. I have no plans, but yeah, whatever. OK, so let's take the other question. That was stupid. But see, that's me feeling like an imposter. I mean, like it's like it's it's. You're overthinking this.

[01:07:24]

Yeah. It's a cool thing. What what is your decision process for when you're making a capital allocation decision and you've made a few recently, like without any specific names. So I don't want to get anybody in trouble. But what's that process in your head like? Like how are you actually what what's what are you talking to yourself about mentally to make sure because it's all on you.

[01:07:45]

Yeah I, I, I really love it. Like we do a lot of work like I mean I have great partners, I have a team that I work with who are just exceptional people. They are the most high integrity people I've ever worked with and they give me enormous energy. I have some some folks that I partnered up with who have their own organizations as well. Those folks are super high integrity. And so all these people that I spend my day with every day are just kind, good, earnest people.

[01:08:17]

Each of us, I don't think, are the smartest ones, but when we put ourselves together, we are really, really smart, collective, and that's that's awesome. And so we all do different things and everybody's bringing different things to the table. And then what happens? It allows me to kind of synthesize all kinds of different inputs and learnings and variations on a bottle, regulatory research, market research, consumer marketing, research, all of this stuff and learn about it, which is super fun.

[01:08:47]

And in my mind, what's happening is basically like, here's how this can go, right? Here's how this can go wrong to go right. This can go wrong. A bouncing back and forth and all of these things are just oscillating. And if I have to characterize it, this is nuts, but it's like a and then that oscillation goes faster and faster, faster. And then I find a point of equilibrium.

[01:09:09]

Is that like the Matrix moment for you or like all of this data all of a sudden?

[01:09:14]

Just, you know, yeah, it is like that. It's like I know that leading into something I become. A little detached. I am a little all over the place, my mind's racing, so sometimes I'll be saying non sequiturs on calls and my partners are very patient with me in those processes.

[01:09:42]

You've made public calls you to Bitcoin in 2012. You did Amazon in twenty fourteen. You did Tesla in twenty fifteen, like you've nailed fairly, I would say, controversial things at the moment. And I mean in hindsight they've all worked exceptionally well. But at the moment they everybody thought you're crazy. Yeah, they really, really did, and that's awesome, because it's like advantageous divergence, right? You're diverging from the crowd and you're right.

[01:10:13]

Yeah. And and and what it does is it has given me confidence in my process. It's random. It's about ingesting a lot of stuff, it's allowing yourself to be influenced, but then come back home, right? That's another thing I love, meaning if I'm having a conversation or sort of a teaching kind of a situation where I'm learning about something, I allow myself to be seduced. I allow myself to sort of fall for the narrative. I allow myself to believe the totality of what that other person believes fully and completely, because I want to really start to understand the nooks and crannies.

[01:10:52]

Now, that process doesn't work. If you want to be intellectually lazy or if you find yourself being intellectually lazy and you stop when you get confirmatory, that first confirmatory meeting or that first confirmatory article, or you could joke, but that first confirmatory Googling of it doesn't work that way. But if you're willing to bounce around. And, you know, fundamentally be unoffensive, in your opinion, up front, you find that people who have extreme opinions will talk to you in a very unguarded way.

[01:11:28]

And I think I've trained myself to let myself be seduced by those folks so that I can learn from them. But I always come back home. I come back to the center. I come back to no opinion.

[01:11:38]

What's the trick for that? Right. There's this quote from Ender's Game that I was thinking. Have you ever watched the movie or read the book where he says, there's this moment where I understand my enemy better than they understand themselves. And in that moment, I sort of love them and defeat them. And it sounds like you're allowing yourself to understand somebody else's opinion so fully. But you don't get caught up in it. How do you avoid it?

[01:12:03]

I do in the moment, but I know to slow it down and then I also know to come back home. So I think I think maybe the maybe the clarifying question would be like, what is your process of coming back home? OK, so what I have to do is I have to go.

[01:12:19]

And then Bede's again, it takes none of this is possible without an incredible team that has super high integrity, the anchoring principle of which is kindness. So I will come back to my partners.

[01:12:32]

I'll be like guys jazzier.

[01:12:36]

And they're like, OK, ok, ok, ok, good. And they they delivered it. Right. So you or I'll go to next time.

[01:12:49]

She's like, ok, I gotcha.

[01:12:52]

OK, ok.

[01:12:53]

Got you know or Rob or you know like all these. And so it's, it's wonderful. And so then I go OK, I was getting a little excited there or I come back. Can you believe this. I can't believe this one that this sucks my they're like OK I've got good OK. And you know I, I've learned that I do that and so I get I get back on faster and it helps but but I do that a lot.

[01:13:24]

I allow myself to live in the persona of that person and that opinion because it allows me to understand where they're coming from.

[01:13:33]

That sounds like a superpower man, like just to be able to understand at somebody's level without bringing any of yourself into it and just be like, I really want to see the world through your eyes. I want to hear everything. I want to feel what you feel. I want to see what's valuable, all the variables. I want to see how they connect. But the way that you see the world and then coming back and then saying, now I can see the world through this person's eyes and my eyes, I have fewer blind spots.

[01:13:58]

I have a more more accurate view of reality, if you will. Yeah, are you still are you still high on Bitcoin? Yeah, really? Yeah, I just think that I think that we are dismantling financial orthodoxy and in that dismantling and in the leveling of the playing field. There will be moments of volatility. And to have a small amount of insurance that's uncorrelated to the orthodoxy, I think is just the smart. Risk management, I don't know, I'm not super, emotionally caught up in it.

[01:14:39]

It's not like I'm cheering on the failure of central banks and I'm not decrying all the money getting printed. I'm not that emotional about that stuff, but I just think it's a smart thing to have under the mattress just in case.

[01:14:53]

How do you think about all the spending, I mean, where every Western country is about to basically spend themselves into? I don't know what position, but they're going to spend more money in the next 10 to 15 years than they probably spent in the past hundred. And a lot of it on the surface.

[01:15:11]

And I haven't looked into this as much as you have, but a lot of it on the surface seems like we're going to prop up the status quo instead of investing where things are going in the future. Right. So I know some countries are writing checks to people to stay at home, but they're not requiring them to adapt to new skills that will be valuable in the future. They're sort of just propping up the way the world used to be. How do you think about that?

[01:15:35]

Yeah, I think that fortune check me like, am I completely wrong? I think in part it's not totally true what you're saying. If you look at sort of the EU budget, an enormous percentage of that budget is going to a carbon neutral EU by 20, frankly, not even 20, 50. They're trying to pull it forward and do it 20, 40 in some industries, 20, 30. So I think the spending is actually going in in reasonable places.

[01:16:08]

I think that there's always waste. And the reason is that politics and political bodies don't know enough to write specific legislation. So they get influenced by all kinds of folks. And so that's what creates waste. And so you have to be OK with that is just a natural dynamic of democracies and the way we deal with the waste, because in return we get free a different kind of thinking. Maybe you can have the most efficient thing in country, in the world, but if it's autocratic, you may not want that.

[01:16:39]

You also don't want super efficient countries like we've learned this. We want resilient companies. We want resilient countries. We want resilient people. And I think this this focus on hyper efficiency also had us, you know, manufacturing PPE in certain locations and not having a national stockpile. And we've done this in a lot of ways where we've ceded this redundancy or actually we're taught this in school like business school teaches you.

[01:17:12]

Right. Like redundancy is a waste and you can turn that waste into capital. And so we become hyper efficient.

[01:17:18]

I agree with you, which is that the small business school as an example, is tied to that. Redundancy is waste and waste can be converted into profit and profit is converted into compensation. And I think that is what people have really drank the Kool-Aid. And so when they ran out of waste that they could convert into profit, they had these ultra, quote unquote, efficient companies, and then they just redirected the middle part of that equation to generate more compensation, which was like, OK, well, we've eliminated all the ways we've outsourced everything to China.

[01:17:57]

We're generating more money than ever. Now, what should we do? And then people said, oh, we'll just start to buy back the stock. And that will also drive competition. These things, these things, I think, are cycles that that all flow from the incentives around competition. So I just I just want to know those.

[01:18:14]

Excellent. Do you think government should bail out public companies? Industries? Which ones?

[01:18:21]

I think that the government should really be plowing money into the next generation of industries. And I think that the government should always be on the bleeding edge of not needing to make money. In some critical, important industries for the future, and so in the absence of doing that, we've lost touch with the things that have really propelled the United States forward, for example. Why was the space race so important? On the one hand, it was about American determinism.

[01:18:52]

We are going to do this. This is going to happen. But it was also that it created an entire generation of industries that were derivative from the space industry because you were training people with a level of skill and precision and capability that they could then apply to the markets. So we always need to be in space. We always need to be pushing the boundaries. We need to go not just to the moon, but now to Mars and beyond.

[01:19:16]

It can't just be one task that's not fair. You know, you put him against the wall and he's got to raise an enormous amount of capital that if we had government sponsorship for, we could have we could have done a lot more sooner. In many ways that this deflationary supercycle really started in 1970 when we basically ended the space program. In the early version, it's always to. So I think that that's a really big thing. That's where that's where I think the government should be spending their money.

[01:19:48]

They should be making bold bets on other markets, too, like climate change, or they should be changing incentives around health care. They should be changing incentives around education. If you're going to spend money, why don't you just wipe out all student debt? I don't think that's such a bad thing. And in return, make people join some sort of like American Peace Corps that kind of does work in volunteers. And there's all kinds of ways that that government can allocate capital probably a little bit more productively.

[01:20:17]

Like, I'm going to switch gears and start asking some of these Twitter questions so you can you can answer Rapid Fire, if you want, of all the provocative and controversial things that you've said, which ones do you regret not?

[01:20:29]

What do you think Future Trembath will disagree with? That you would with today, anything come to mind that you're sort of on the edge of it now, but if I'm if I'm evolving, I will have. Learned so much more that my thoughts today will seem slightly immature. What's the last thing you change your mind about? Oh, my gosh. Three or four things just today. What do you think of the entire venture capital industry? Well-intentioned, somewhat misguided, somewhat low integrity in certain places, misaligned?

[01:21:09]

Is this work from home thing real? And what are some of the implications? It's partially real. I think the biggest implication is belongingness. Community can be part of the group. And so I think when we can go back to the office, we want to.

[01:21:30]

I think one thing that we miss on this is that we like to feel part of something larger than ourselves, and that's become harder not only in our communities in some ways.

[01:21:40]

I mean, in some ways it's easier because we're all going through this common struggle. But we're also it's harder in our community. And we don't feel like even though you're working for a company or you're working with people, it doesn't feel as much. And I've noticed a lot of people have started saying, well, it's becoming really transactional now. I don't see people at the office and ask about their weekend anymore. It's becoming very sort of I think that's really interesting sort of observation.

[01:22:05]

I think that's well said. I think that's a really important thing. I completely agree. How do you manage risk? I mean, I have a I have a framework. It's basically a barbell, a big chunk of the liquid. That's a big chunk of very concentrated liquid assets and then a slug in the middle, that's just more kind of like random cache or the S&P.

[01:22:27]

Five hundred for the next five years. Said you had something about why men live less long. Do you remember that on Twitter? Yeah, I tweeted something.

[01:22:39]

What was that?

[01:22:41]

Didn't have something to do with like we couldn't talk about our emotions or something. Yeah, it has to do with mental health and emotion. I really do that. I mean, I think that, you know, like. Well, let me just ask the question. Why do women live longer than. Why do women live longer and why? I mean, what what? I don't know. I think that there is something to the fact that they're able to talk about feelings in a way that is unnatural for men.

[01:23:10]

One hundred percent.

[01:23:11]

I really think people think this is like a crock of shit. I don't. But I think that your physiology is not just how your lower intestine processes, blah, blah, blah. That's not what it means. It's like the body is like a very complicated combination of emotions and sells organs and all of these biological, psychological functions interacting. And we've all seen that play up. And so it's like it's inconceivable that your mental health doesn't improve your health.

[01:23:48]

I mean, right, yeah, you sound like an idiot if you said that, and I just think that dudes don't talk and it's a little bit stigmatized than it is for women. And I think that that's a wonderful super power that women can teach the rest of us. And like I said, partners taught me how to talk and I will be eternally grateful for having top.

[01:24:13]

The next question, what are some of the lessons you learned from the book, The Adult Children of Alcoholics, which you recommended a few times?

[01:24:20]

The most important one is how I was normal. And it's again, it's pretty obvious or not obvious, but it may sound bland, like, you know. To feel so deeply insecure and somewhat of an imposter my whole life. Always the outsider, you know, that's the first book that's. There's an entire group of people that will behave this way based on these inputs. And I was like, wait a minute, I believe this is what you're telling me, that I'm not this deficient, broken person, that I'm a byproduct of this.

[01:24:57]

And this is well studied and it's like it's actually normal and you can improve where you are. Was it was a profound moment. All right.

[01:25:08]

Last question. What's the most valued asset in the world today, either high or low or.

[01:25:15]

Wow, this is a really good question. OK. You can pick the most undervalued or most overvalued. Oh, my gosh. Wow. See, I really take these questions seriously. I would love that. I want to know, but I want to give you, like, a right answer.

[01:25:30]

And I don't really know how you can just say, I don't know. I mean, yeah, I don't know.

[01:25:37]

I don't know. I don't know how to answer that question. It's a really good question.

[01:25:41]

I love the video thing. We just started doing this, but I can see the wheels turning in your head. I love it. This has been an amazing conversation.

[01:25:48]

Jim, I want to thank you so much for taking the time. Thanks, Ben. I really appreciate it. Thanks for having. Hey, one more thing before we say goodbye, the knowledge project is produced by the team at Farnam Street. I want to make this the best podcast you listen to, and I'd love to get your feedback. If you have comments, ideas for future shows or topics or just feedback in general, you can email me Ashin F-stop blog or follow me on Twitter at Chainey Parish.

[01:26:18]

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[01:26:23]

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[01:26:29]

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